May 5, 2012

 

Tax Plan Plus School Finance Hike Puts State in Large Hole by 2018

by Peter Hancock | The Kansas Education Policy Report

(May 4, 2012) New projections from the Kansas Legislative Research Department show the state would be in a large financial hole within five years if lawmakers approve both an increase in school funding and the package of tax cuts that has been approved by a conference committee.

Those projections, prepared at the request of a legislator who shared them with KEPR, show that if lawmakers pass both the $74 per-pupil increase in base funding that the Senate approved this week and the $2.8 billion tax cut approved in a tax conference committee, the state would have a negative ending balance of $120 million in Fiscal Year 2017.

That deficit would grow to $359 million in 2018.

Furthermore, those projections are based in part on the assumption that Gov. Sam Brownback’s proposed overhaul of Medicaid — a program known as “KanCare” — will result in significant savings. But that proposal has not yet been approved by federal Medicaid officials.

If that assumption is removed from the formula and budget projections are based on normal growth in Medicaid costs, the budget outlook becomes worse: a deficit of $183 million as early as Fiscal Year 2016, growing to $487.6 million in FY 2017, and $846 million in FY 2018.

On Thursday, the Research Department released figures showing that if revenues were to grow 4 percent each year and state spending were held at 2 percent growth, the revised tax plan would leave the state with a positive ending balance of $166.4 million.

But many lawmakers, including moderate GOP leaders in the Senate, have said that’s unrealistic because 2 percent annual growth in state spending is not enough to cover the mandatory increases in KPERS contributions plus any reasonable estimate of rising Medicaid and other social service costs. It would also preclude any future increase in school funding, state employee wages or funding of higher education.

Officials: Redistricting Deadline May Already Have Passed

Kansas Attorney General Derek Schmidt said today that he still hopes lawmakers can reach agreement on new district maps for Congress, the legislature and the State Board of Education. But he conceded that they may already have delayed too long and thrown the entire issue to federal courts. “Redistricting is in the courts; the lawsuit was filed this week,”

Schmidt said after a bill-signing ceremony in the statehouse today. Schmidt was referring to a federal lawsuit filed in U.S. District Court in Kansas City by an attorney who previously worked as chief of staff to Republican House Speaker Mike O’Neal. The suit was filed on behalf of Robyn Renee Essex, a Republican precinct committeewoman in Johnson County.

Both Attorney General Schmidt and Gov. Sam Brownback said today that they believe there is still time for the legislature to act, but they warned the time is running short.

“It’s past time,” Brownback said. “It needs to be done. Kansas is the last state in the country in getting this (done). I really want to urge the legislature coming back next week to get very serious and aggressive about resolving this redistricting issue.”

But Democrats and moderate Republicans argue that Brownback himself has caused much of the problem by orchestrating a campaign to have conservative Republicans in the House file to unseat moderate Republicans in the Senate. But Brownback today flatly denied that charge, saying he was not involved in any such effort.

Until now, virtually every major issue in the legislature, including school finance and the budget, has been bottled up because of redistricting. In particular, House conservatives, led by O’Neal, don’t want to make any deals on the budget or school finance until there’s agreement on a new Senate map that would let certain conservative House members challenge moderate Republican senators who are running for re-election.

Earlier this week, the Senate thought it had reached a bargain with O’Neal and passed a bill that included new maps for the House, Senate and State Board of Education. But O’Neal later said there never was such a deal, and the House rejected the Senate proposal using procedural measures to kill the bill entirely, sending the entire process back to square one.

“It’s dead,” one state senator said today of the entire redistricting issue. “We’re done with it.”

© 2012, Hancock Publishing Co. All rights reserved. Posted here with permission.


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