Archive for Tuesday, June 9, 2015

Kansas budget chief lays out possible cuts

June 9, 2015

— Kansas would likely be forced to lay off prison guards, cut aid to public schools and reduce payments to health care providers and nursing homes if legislators don't increase taxes, Republican Gov. Sam Brownback's budget director told GOP lawmakers Monday.

Unable to agree on how to tackle a budget shortfall that arose after the state slashed personal income taxes, lawmakers over the weekend still approved a spending measure for the fiscal year that begins July 1 that includes a $400 million deficit.

Because the Kansas Constitution requires the budget to be balanced, Brownback has three options if no tax plan passes: veto the budget measure, which raises the threat of a partial government shutdown; use his power to veto individual spending lines, although those often contain most or all of an agency's state funding; or invoke a state law that allows him to avert a deficit by cutting spending when lawmakers are not in session.

Budget Director Shawn Sullivan told lawmakers Monday that unless they increase taxes, Brownback is likely to choose the third option. "The most likely option is across-the-board cuts" of 6.2 percent of the amount lawmakers budgeted for each agency or program, Sullivan said.

The state's budget problems arose after lawmakers cut personal income taxes in 2012 and 2013 at Brownback's urging in an effort to stimulate the economy. The governor and many GOP legislators want to preserve as much of those tax cuts as possible by boosting sales and cigarette taxes.

Sullivan discussed details of potential cuts during a meeting of 27 House Republicans after the chamber postponed a debate on a bill raising sales and income taxes that the Senate approved Sunday. The meeting was private, but an Associated Press reporter who wandered in was allowed to stay after declining to leave.

Republicans in the GOP-dominated Legislature are deeply divided over raising taxes to close the budget shortfall, and legislators in both parties don't think the House will pass the Senate's measure. Sullivan said he was asked to brief the GOP group on what would happen if no tax bill passed.

The budget approved by lawmakers would allow state spending to rise, but Brownback said Monday the state must cover rising social services costs, bolster its public pension system and comply with court mandates on school funding. GOP leaders also don't think there's support in either chamber for cutting enough to close the budget gap.

The Senate has approved increasing the state's sales tax to 6.55 percent from 6.15 percent and boosting the cigarette tax by 50 cents a pack to $1.29. That tax bill also would raise taxes for business owners by $24 million during the next fiscal year — the top amount Brownback will accept, but a figure many House Republican see as too low.

Lawmakers were in the 109th day of their annual session, making it the longest in state history. The impasse raised the possibility that they might not be able to pass any tax bill.

Sullivan said schools would lose $197 million of the more than $4 billion in state aid they were set to receive during the next fiscal year. That would wipe out increased funds lawmakers allocated last year to meet a Kansas Supreme Court directive to provide extra aid to poor districts.

He also said health care providers who serve poor and needy Kansas residents covered by the Medicaid program would see payments from the state drop from 7.5 percent to 8.5 percent.

The prison system has already reduced administrative expenses, so its operations would be affected by any cuts, Sullivan said.

"You'd have to cut back on your corrections officers and your front-line staffing," he said.

Democratic Rep. Tom Sawyer, of Wichita, said the cuts would be "devastating" for public schools and would threaten public safety.

Republican Rep. John Rubin, of Shawnee, who supports reductions in government spending, said an across-the-board cut is "lazy and totally inefficient." Still Rubin said he believes the threat is a real possibility if the deadlock over taxes continues.

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