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Posted on Fri, May. 08, 2009

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Kansas budget bill trims nearly 3% from most programs

BY JEANNINE KORANDA

Eagle Topeka bureau

TOPEKA - Lawmakers forged ahead in closing a $328 million budget gap Thursday, approving spending cuts and tax changes.

Schools and most other state programs would see 2.75 percent cuts in funding under a bill on its way to the governor.

A separate proposal would grant delinquent taxpayers amnesty. It would suspend or decrease several tax credits, but would not delay the phasing-in of business tax cuts. It still must go to the House after receiving approval in the Senate.

The budget-cutting bill would trim $138 million. Human services caseloads in the departments of Social and Rehabilitation Services, Aging, Health Policy Authority and Juvenile Justice Authority would be exempt from the across-the-board cuts.

"Everybody shares pain and it's a lot of pain," said Rep. Tom Sawyer, D-Wichita. He called the proposal a good compromise.

The tax package is expected to net $61 million. Lawmakers say they hope additional revenue can account for an estimated $9 million needed to forestall a deficit.

A divided Senate approved the tax measure, Senate substitute for House Bill 2365, by a 25-14 vote.

"We're leaving the problem on the table. We are not fixing one darn thing. This is one-time money," warned Sen. Susan Wagle, R-Wichita.

The tax package would:

• Waive penalties to get delinquent taxpayers to pay up about $35 million in back taxes.

• Shorten the time people can file for sales tax and use tax refunds from three years to one year, to bring in about $13.7 million in fiscal 2010.

• Suspend a tax credit for film production companies working in Kansas for two years, netting $1 million each year.

• Decrease other tax credits 10 percent for two tax years to save $9.2 million in the next fiscal year.

"While I don't really relish nicking these various entities, trust me, nicking is better than decapitation anytime," said Sen. Les Donovan, R-Wichita, who chairs the Senate tax committee.

More work to be done

Overall, the state will spend about $13 billion, including $5.6 billion from state funds.

Unlike the tax measure, the budget-cutting bill goes to Gov. Mark Parkinson for his signature.

Parkinson said that while there's more work to be done, he's pleased with passage of the budget bill and considers it more responsible than other proposals.

"This shared approach is the right approach, and this budget reflects the sacrifice all Kansans must make in this difficult economic time," he said in a statement.

The House, in an unusual move, voted to accept the Senate's bill instead of debating its own proposal.

The motion to concur with Senate substitute for House Bill 2373 passed 64-60 with Democrats and moderate Republicans voting for it.

Several House members said they were voting for it because they feared a House proposal would carry greater cuts for schools.

"I have a major concern, and it is education," said Rep. Annie Kuether, D-Topeka.

Some House members had discussed cuts of 4 or 5 percent.

The approved cut to public schools will mean a $116 decrease in the amount districts receive per pupil, to $4,284.

That will mean a cut of about $8 million for Wichita schools in 2010, in addition to a $3 million cut already approved for 2009, said Diane Gjerstad, the district's lobbyist.

But she said the school board had recognized schools would have to sustain cuts for the state to balance its budget.

"In a tough time, this is about the best scenario we could have hoped for," she said. "It is obviously less (in cuts) than many of the alternatives that have been discussed."

House Speaker Rep. Mike O'Neal, R-Hutchinson, said he thought some people voted for the measure based on the education cuts, even though they didn't like other components.

Appropriations Chairman Rep. Kevin Yoder, R-Overland Park, urged House members to vote against the Senate bill, saying the chamber would have a second chance to debate its own proposal later Thursday afternoon.

"What we are doing here is we are taking the House completely out of the process," Yoder said.

On top of prior cuts

The state has already had two rounds of spending cuts and other adjustments to keep from running a deficit.

In this latest round, state universities, community colleges and vocational schools would see their funding cut by $22 million.

The bill also diverts state funds from cities and counties and counts on the state receiving $50 million in licensing fees from yet-to-be-chosen developers for state-owned casinos in Sumner and Wyandotte counties. In addition, it pulls some of the fees paid to regulatory agencies, which are deposited in special funds, into the state's main bank account.

Although caseloads were exempted from the cuts, departments like Social Rehabilitation Services had their general budgets cut by 2.75 percent.

The cuts in disability funding will mean that Rainbows United, which provides services for disabled children in the Wichita area, will lose about $750,000 from a $10 million budget, said Deb Voth, Rainbows vice president.

"It's sad, it's very sad," she said.

Rainbows gets funding from multiple sources. Voth said this is the first time it has ever seen cuts in all of them. In addition to the state aid cut, the recession has meant reduced charitable donations.

The cuts will "impact all our services for families," she said. Most affected, she added, would be efforts to supply medical equipment and respite care, which gives parents a break from the physically and emotionally draining responsibility of providing constant care for a disabled child.

"There will be no extras," Voth said. "And we're not talking about frills or fluff. These are basic needs... that prevent families from being in crisis."

Contributing: Associated Press