Gov. Sam Brownback will issue $62.6 million in budget cuts and fund transfers to shore up the state’s cash reserves, his budget director announced Thursday.
The biggest cut will come from the SCHIP program, which provides free or affordable health insurance to children of low-income families. The program will see its state funding reduced by $17.6 million. However, that will be offset by an equal increase in federal aid made possible through the Affordable Care Act.
Budget director Shawn Sullivan said that the federal increase was meant to enable states to increase the benefits from the SCHIP program so that they’re closer to Medicaid, the federal program that provides health insurance for low-income and disabled residents. He argued that was unnecessary to do in Kansas since the programs are already closely matched.
However, he confirmed that if the state did not cut its funding, “then the other options would be to provide other services, expand eligibility, those sorts of things.”
Shannon Cotsoradis, president of Kansas Action for Children, a nonprofit advocacy group, said in a statement that “Kansas children and families continue to foot the bill for an unsustainable tax plan.”
“It’s difficult to believe that access to children’s health coverage won’t be put at risk by today’s actions when we know Kansas’ youngest children have been dropping off the state’s Medicaid rolls at an alarming rate since 2012,” she said.
Senate Minority Leader Anthony Hensley, D-Topeka, criticized Brownback for shoring up the state’s finances with money that “could be used to add additional children and families and give them health insurance.”
“I find it ironic that he has spent the last five years blaming President Obama for everything, but for today he is using federal match money to fix the state budget,” Hensley said.
The state also will sweep $8 million from the Kansas Department of Transportation. Sullivan said that this was money from the Department’s operational budget that went unspent last year and would not impact its construction projects.
Secretary of Transportation Mike King said in an e-mail that he was “proud that we were smart in how we spent money last year and created some savings…As a result, we can make this reduction without layoffs or canceling or delaying projects.” Part of the savings, he said, come from a mild winter that meant the department spent less money plowing and treating roads.
Economic Lifelines, a group that advocates for road and highway spending, criticized the sweep, arguing because it comes on top of previous cuts to transportation funding it will lead to “the deterioration of Kansas roads and postponed projects.”
“Year after year the state takes from the highway fund to balance the budget. Enough is enough,” said Johnnie Koger, the organization’s co-chair.
The Kansas Department for Aging and Disability Services said in a release that it was determined to eliminate a waiting list to provide services for those with physical disabilities. without using an additional $1 million the state had appropriated for that purpose – putting that money back into the state’s general fund.
Other budget reductions and fund transfers include:
▪ $4 million reduction to the Department of Health and Environment’s healthcare access improvement fund, which the Legislature created in 2004 to improve and expand health care for low-income residents.
▪ $2.8 million that will be swept from the Department for Children and Families that represents money from a reading program that cost less than expected in 2015.
▪ $500,000 saved by delaying maintenance to Department for Children and Families’ KEES or Kansas Eligibility Enforcement System, a computer system the state uses to determine who is eligible to receive health and family services programs.
▪ $1.25 million cut to the Commission on Veterans Affairs
▪ $2 million reduction to the Kansas Department of Corrections – representing reduced juvenile caseloads and unexpected grant funds.
▪ $500,000 in savings by delaying renovations at a building at Larned State Hospital
▪ $250,000 cut to the Kansas Bureau of Investigation’s fund for meth lab cleanup.
▪ $9 million in unspent money from “various agencies.”
▪ $3.9 million swept from several of the Kansas Department of Commerce programs, including the Disability Employment Incentive Program.
▪ $500,000 swept from various funds at the Kansas Department of Wildlife, Parks & Tourism, including the roads and bridges funds.
▪ $1.9 million from a Kansas Board of Regents incentive grant for General Education Development programs, which was previously announced
▪ $150,000 savings from vacant positions at the Kansas Department of Agriculture
▪ $1 million in savings from “policy changes” at the Kansas Department of Revenue
▪ $500,000 in operational savings from the Kansas Department of Administration.
▪ $1 million fee fund transfer from the Kansas Department of Aging and Disability Services.
If the state did not make these additional cuts it would be left with less than $20 million in its coffers by the end of the fiscal year in June. These budget moves will leave the state with a $78 million ending balance - if it meets its revenue projections.
The governor has the power to issue across-the-board cuts if the state’s ending balance is projected to fall below $100 million. However, the Legislature gave the governor temporary power to make targeted cuts to shore up the state’s finances and safeguard education funding.
“I’m glad to hear that the cuts announced today will not touch core state services, or impact K-12 education,” said Rep. Ron Ryckman, Jr., R-Olathe, the House Appropriations chair, in a release. “This is what the Legislature envisioned when we passed HB 2135, which allowed the Governor’s office to make line item cuts, but also ensures education funding cannot be affected.”
The Kansas Department of Revenue will release tax receipts for the month of July on Friday. Sullivan said he would continue to monitor the state’s revenue situation and said he appreciated Kansans’ frustration about the fact that the state has repeatedly missed estimates in the past two years.
He said that sales tax would be the biggest variable as consumer spending remains volatile throughout the country.
The governor was not present at the news conference because he was meeting with representatives from the Wichita Metro Chamber of Commerce on Thursday in Sedgwick County.
“Ultimately, he’s the governor, it’s his decision…he was heavily involved in this,” Sullivan said when asked about the governor’s role in the budget moves.