January 13, 2016
Borrowing more money from the highway fund, making medicaid patients take generic drugs to save money, and hiring more auditors to go after back taxes. Those are just some of the governor’s proposals to fix the budget which has a predicted $190 million deficit.
Wednesday the governor’s office unveiled it’s plan to make up the difference. It’s essentially an adjustment to a two-year budget passed last session.
Here’s where some of the money will come from: borrowing more from the highway fund to help cover gaps, selling the Kansas Bioscience Authority to the private sector, and moving tobacco settlement money used to pay for a series of early childhood programs from its own account to the state’s general fund.
While the governor says those programs won’t change supporters of the Children’s Initatives Fund (CIF) programs believe this is the beginning of the end for them.
The programs we’re talking about deal with children from birth to age five, things like hearing aids for newborns and parent education. The funding comes from the settlement with tobacco companies of states’ lawsuits over medicaid costs for health problems caused by tobacco use.
The governor’s proposal would move the funds for those programs into the state’s general fund account, out from under the special, non-partisan board that operates them right now. They would also split the programs up among at least four different departments, from Education to Children and Families.
“The governor’s proposal today will dismantle the Kansas Endowment for Youth and the Children’s Initatives Fund and we believe it will have significant repercussions for children across our state,” said Shannon Cotsoradis, president of Kansas Action for Children, which supports CIF.
She says this move would be the beginning of the end for what has been hailed as the gold standard for early childhood development.
The governor’s office says this is about being more efficient.
“I would argue that putting the CIF money in the state general fund actually provides them with a more certain, sustainable path moving forward because the tobacco settlement money is scheduled to decrease in future years,” said Shawn Sullivan, Kansas Budget Director.
“The state general fund is the most highly accountable fund,” said Sen. Ty Masterson, (R) Andover.
In addition to changing where the CIF programs get their money, the governor’s proposal also would change the rules for the popular Parents as Teachers program.
It would put in financial limits or means testing. Those who make too much would have to pay to participate in the program as administered by the Department of Education. Others would get the program paid for out of DCF funds.
Another proposal many aren’t happy about is the idea of dipping into the state highway fund again.
Some have taken to calling the KDOT highway fund the Bank of KDOT because the state has borrowed from it so often to fill budget holes and critics say Kansas’ roads are starting to show the wear and tear from lack of maintenance.
“We, I understand, are spending, what? A 6th of what we had spent before on highway maintenance?,” said Sen. Marci Francisco, (D) Lawrence.
The governor’s proposal would take an additional $25 million from the state highway fund, after taking hundreds of millions from the fund last year.
The governor says gas tax dollars have to be used for highways but the other money is free to be used elsewhere.
While many say roads and bridges are falling into disrepair because of all that borrowing over the years, the governor’s office says that’s just not the case.
Rather, they say Kansas roads are doing better than our neighboring states.
“When you actually look at the metrics of the percentage of roads and interstates and bridges that are in good condition they are the same or have improved,” said Sullivan.
Some of that, one lawmaker said, is because of the high maintenance levels that were already in place before the borrowing began. The governor says Kansas’ roads were recently ranked second best in the country.
The governor’s office presented his proposals to lawmakers Wednesday morning.
As the governor’s budget director presented Brownback’s proposals for fixing the budget hole in the 2016 and 2017 budget years lawmakers listened intently. But when it was their turn to ask questions they wanted to know about the estimates everyone in Topeka uses when building a budget, estimates that have been too low for nearly every month over at least the last two years.
Lawmakers say it’s hard to balance the budget when the target is constantly moving.
“They tell us this May we’d have $6 billion, so you pass a $5.85 billion budget. Then, in Novemberv they tell you you have a $5.7 billion budget,” said Masterson, who chairs the Senate Ways and Means Committee in charge of developing a budget.
And some say, even after an adjustment in November, the estimates are still too low.
“When they came back and adjusted those numbers in November of 2015 they still put the price of oil too high to where we’re going to be missing the mark,” said Rep. Troy Waymaster, (R) Bunker Hill.
From Russell County, Waymaster says the biggest problem he sees in the estimates is the taxes coming from oil and gas sales, which have been falling along with prices. He says it’s really hurting his county.
“We’re not seeing a lot of drilling so we’re seeing a lot of layoffs in our area,” said Waymaster. And, he says, that’s started to snowball. “Your services, they’re starting to layoff people.”
The lawmakers wanted to know what the governor’s office is doing to fix the problem.
One potential solution? Look for ideas in the efficiency report released earlier this week, a report few have had time to do more than skim so far.
For now, the governor’s office is hoping the new estimates and a little time will solve the problem.
“We need to monitor revenue closely and determine whether what we saw in December was a trend or whether we need to do something differently moving forward,” said Sullivan.
Lawmakers don’t think ‘wait and see’ is a good enough plan. They’ve got their own ideas.
One says he thinks they should base estimates at least partially on the previous years revenues, since those are actual, hard numbers. Another wants to study what other states are doing that they aren’t having the problems Kansas is having.