Kansas House, Senate pass budgets after court order on school funding

The House and Senate both passed budgets Thursday that will likely fall short of closing a projected budget gap in the wake of a court order that lawmakers fix funding inequities between school districts.

The House budget bill would enable the governor to delay payments to the pension fund and place restrictions on the University of Kansas’ spending. SB 161, which passed 68-56, increases funding for the state’s psychiatric hospitals and funds a 2.5 percent pay raise for corrections officers.

The bill allocates $15.5 billion, including federal dollars, in 2016 and $16.1 billion the following year.

The Senate’s budget bill, HB 2365, with similar amounts, won approval Thursday night after three hours of debate. The bill passed by a vote 24-15.

“It’s very tight,” Senate President Susan Wagle, R-Wichita, acknowledged after the vote. “But I think it’s a reflection of the financial times that we’re in … and I think that the governor’s going to have to look at it. He’s going to have to look at our continuing economic conditions and if there’s a shortfall he’s going to have to deal with it.”

The House budget would leave the state with a cash balance of $6 million in its general fund at the end of the 2016 fiscal year in June. The Senate budget would leave about $6.7 million.

Neither amount would be enough to address the Kansas Supreme Court order, which gave the Legislature until June 30 to fix inequities or face a statewide shutdown of schools. The order could cost more than $100 million over this and next year.

Sen. Ty Masterson, R-Andover, called the court opinion irrelevant to the budget debate. He said lawmakers have until June 30 and dismissed attempts to bring up the issue as political grandstanding.

In the House, Rep. Jim Ward, D-Wichita, tried to send the bill back to the Appropriations Committee for more work in the wake of the court ruling.

“Please, Republicans, do not risk closing schools,” he said.

His motion was voted down. A similar motion failed in the Senate.

Rep. Ron Ryckman, R-Olathe, the House Appropriations chair, said sending the bill back to committee would hold the rest of state government hostage.

“We have additional work to do,” Ryckman said. “That’s a reason to finish that piece today, not to move backwards.”

Funding sweeps, budget cuts

Both budgets use a combination of cuts and funding sweeps – including a $25 million sweep from the state’s highway fund for the 2017 fiscal year – to fix the shortfall the state faces for the current and next fiscal year.

The House bill enables Gov. Sam Brownback to delay payments to the state’s pension fund this fiscal year but would require the state to pay that money back with 8 percent interest during the first quarter of next fiscal year. It would bar the governor from sweeping money from the pension fund in 2017.

The Senate bill originally would have allowed the governor to delay pension payments, but Senate Vice President Jeff King, R-Independence, brought an amendment on the floor to protect pension funds in both 2016 and 2017.

It passed on a voice vote.

Lawmakers have been inundated with complaints from public school teachers and state workers about the proposed delay to pensions.

Sen. Jim Denning, R-Overland Park, the lawmaker who had offered the proposal, said he had fielded phone calls from many constituents who were upset with it. He agreed it should be dropped from the bill.

“We’ll do what our constituents want,” he said.

Senate Minority Leader Anthony Hensley, D-Topeka, called the amount of one-time money being used to balance the budget astounding. He presented a document from the state’s Legislative Research Department that showed that nearly $367 million in the 2017 budget represented short-term fixes.

Some Republicans also called the budget fiscally irresponsible and refused to support it.

“I cannot continue to support budgets that use fee sweeps, expend one-time money, continue to take money from transportation, overestimate revenue and savings, and leave virtually no ending balance,” said Sen. Jeff Longbine, R-Emporia, in explaining his no vote. “My hope is that this Legislature can one day return to a fiscally responsible budget with a tax policy that supports the citizens of the state of Kansas.”

Funding for state hospitals

The House bill adds $3 million for the state hospitals in Osawatomie and Larned, which have been plagued by high staff turnover and questions about safety.

The Senate budget allocates an extra $2.4 million for Osawatomie State Hospital, which recently lost its federal Medicare certification and stands to lose about $1 million a month as a result.

Both bills include provisions to prevent the governor from privatizing the hospitals, an idea that has been floated in recent weeks, without legislative approval.

“A company’s motive is often not the common good,” said Sen. Caryn Tyson, R-Parker, whose district includes Osawatomie and who brought the amendment in the Senate. “It’s the profit, and we must keep this in mind.”

Tyson went on to quote extensively from the 1998 movie “Armageddon,” which starred Bruce Willis, about an asteroid on a collision course with Earth.

“You know we’re sitting on 4 million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder,” she read. “Makes you feel good, doesn’t it?”

KU spending limits

Both bills have measures to restrict the University of Kansas’ spending after the university avoided the need for legislative approval by going to a Wisconsin agency last month to issue $326.9 million in bonds.

The House bill would restrict KU from spending beyond its approved budget without permission from the Legislature. The Senate bill would forbid the university from using any tuition or state dollars to pay off the bonds.

The university’s chief financial officer told lawmakers this week that the Senate’s bill could cause the university to go into breach of contract on the bond deal.

This story was originally published February 11, 2016 at 9:45 PM with the headline "Kansas House, Senate pass budgets after court order on school funding."