Kansas House approves budget fix

The Kansas House gave initial approval to a bill to close the state’s budget gap Wednesday.

The bill passed on a voice vote after five hours of heated debate. A final vote will take place Thursday, the same day that the Kansas Supreme Court plans to rule on a school finance case.

The House’s bill, SB 161, would leave about $6 million in the state’s general fund at the end of the 2016 fiscal year if the state meets its revenue estimates through June. The fiscal year ends June 30.

That $6 million cash balance could be completely wiped out if the court orders the Legislature to put more money toward K-12 education.

The state would spend $6.4 billion from its general fund in the 2017 fiscal year, which begins in July, and spend a total of $16.1 billion from all funding sources, including federal money.

The Senate will debate its own bill – which spends about the same amount – Thursday afternoon.

The House bill would enable the governor to delay a payment to the Kansas Public Employees Retirement System at the end of the 2016 fiscal year in June as a way to cushion the ending balance and prevent cuts to state agencies.

That could add up to $100 million to the state’s 2016 ending balance, depending on whether the governor decides to delay the entire June payment to KPERS.

“This is just giving the governor the flexibility to delay a payment … not taking it out,” said Rep. Ron Ryckman, R-Olathe, chair of the House Appropriations Committee, during a GOP caucus meeting Wednesday morning.

House Minority Leader Tom Burroughs, D-Kansas City, accused Republicans of trying “to steal from KPERS” in a blistering speech on the House floor.

“When will we stop and really address the true issue? We put ourselves on a glide path to zero,” Burroughs said, referencing the state’s march to zero income taxes that have been blamed for budget woes. “Zero growth. Zero faith in government.”

Burroughs warned that Kansas was in danger of following the example of Flint, Mich., where residents were exposed to lead-tainted water after state officials changed the city’s water source as a cost-saving measure.

House Majority Leader Jene Vickrey, R-Louisburg, pushed back on Burroughs’ rhetoric and said the budget was focused on the priorities of Kansans.

“Our priorities are the priorities of Kansans: public safety, funding schools,” Vickrey said. “We are funding the priorities of our taxpayers and the bottom line is we’re doing it without a tax increase. We’re making our budget work.”

House Speaker Ray Merrick, R-Stilwell, told Republican lawmakers that the bill would ensure that K-12 education and other state services would be protected from across-the-board cuts.

Strong opposition from teachers, state workers

The proposal to delay pension payments has been sharply criticized by state employees and teachers, who have inundated lawmakers with so many e-mails opposing it that Merrick’s office drafted a form e-mail for lawmakers to send in response.

“This is designed to be a cash flow strategy that provides state agencies and school districts with the greatest certainty and flexibility as to what their budgets will be,” the e-mail states.

The Kansas Organization of State Employees, the union that represents state workers, warned that delaying payments to the pension system will endanger the state’s ability to pay off its unfunded liability, which stands at about $9.5 billion.

“Any move to either short pay or defer payments to KPERS is very, very concerning,” said Rebecca Proctor, the union’s executive director, last week. “The only way that KPERS will ever get to a healthy funded status is for the state to make the contributions that it’s made all these years. … They’ve been knowingly underfunding the plan.”

Rep. Steve Johnson, R-Assaria, brought an amendment on the floor to require the governor to repay the delayed money in August 2016, and require that the state pay 8 percent interest. Another amendment would bar the governor from sweeping money from the pension system in the 2017 fiscal year.

Ryckman said these amendments would give KPERS greater protection than current law, which allows the governor to make cuts to the pension fund when the state faces a shortfall.

Both amendments passed, but Democrats expressed skepticism that the money would be fully repaid.

“If you believe that we sweep KPERS today and that money will be put back … I’ve got land I’d like to sell you or a bridge,” said Rep. Ed Trimmer, D-Winfield.

‘Sweep, borrow and spend’

Kansas House Republicans spent their caucus meeting hashing out the proposal – versions of which are in both the House and Senate budget bills – ahead of the floor debate.

Rep. Les Osterman, R-Wichita, compared it to “floating money on a bill” if you can’t afford to pay it one month and paying it off the next.

“That happens all the time. I know I’ve had to do it in the past,” Osterman said.

Rep. Stephanie Clayton, R-Overland Park, on the other hand, compared the proposal to handing a bottle of vodka to an alcoholic.

“This is enabling. This is a type of budgeting that the Kansas citizens do not deserve,” Clayton said. “This is sweep, borrow and spend. It is not responsible. We should not be disrespecting them by treating their money in this manner.”

The bill would use a combination of budget cuts and fund transfers to close the budget hole, including a $25 million sweep the state’s highway fund in 2017.

Fight over Medicaid averted

Rep. Jim Ward, D-Wichita, offered an amendment to expand Medicaid under the Affordable Care Act, which he said would bring more federal money to the state and offer health coverage for 150,000 uninsured Kansans.

The House Rules Committee decided that Ward’s amendment violated the chamber’s “pay-go” rule that requires if a lawmaker adds spending to an area of the budget he must take away an equal amount from somewhere else.

Ward challenged the ruling, but it was upheld by a vote of 85-37.

This story was originally published February 10, 2016 at 10:22 AM with the headline "Kansas House approves budget fix."