Kansas budget talks break off until next week

TOPEKA | Kansas legislators on Friday broke off negotiations over a $14 billion budget, with dozens of big differences unresolved and the House and Senate still haggling over building up the state's cash reserves.

Three senators and three House members met for only a few minutes before deciding to suspend talks until Monday on the spending plan for the fiscal year beginning July 1.

Lawmakers can't wrap up their business for the year until the negotiators agree on a budget and each chamber approves the spending plan in an up-or-down vote. Monday will be the 87th day of the Legislature's annual session, out of 90 scheduled.

"It's just getting a little frustrating with the fact that we're running out of days to work," said lead Senate negotiator Carolyn McGinn, a Sedgwick Republican and chairwoman of her chamber's Ways and Means Committee.

The next budget will trim overall spending by between 5 percent and 6 percent. It's also certain to cut general aid to the state's 289 school districts, something that drew a public rebuke Thursday from Kansas Democratic Party Chairwoman Joan Wagnon, a former state revenue secretary and House member.

Lead House negotiator Marc Rhoades shied away from saying the budget talks hit an impasse.

"It's just that we've reached a point — a plateau — where we have to figure out what the next moves are," said Rhoades, a Newton Republican and chairman of his chamber's Appropriations Committee.

The next budget will cut overall spending by between $770 million and $870 million to meet the state constitution's requirement of avoiding a deficit. Much of the decrease in spending will be triggered by the disappearance of federal economic stimulus funds.

House Republicans argue that the next budget also must provide cash reserves of at least $50 million at the end of June 2012.

That's actually a relatively low figure because guidelines developed in the past would lead to cash reserves of more than $450 million. Few legislators want to build a cushion that large now because it would come at the expense of schools, social services and other government programs — or force tax increases.

But Rhoades said the state needs at least a small cushion in case revenues don't meet expectations. The state expects to collect $6 billion in revenues to help finance state government, along with federal funds, special fees and other funds, and a 1 percent shortfall would amount to $60 million.

"They say they are always off at least 1 percent. It could be to the good, which would be great, but it could be to the bad," he said. "To the bad, we're under water."

McGinn said senators agree on the need for cash reserves but don't want to have a target govern all spending decisions. She also noted that the state's tax collections in April were $22 million more than anticipated.

"We're looking at good public policy and a way to run the state and be as efficient as we can," she said. "I really think that perhaps they should focus on our core services."

Wagnon had a news conference Thursday to criticize the potential cuts in aid to schools. She said the reductions being considered would mean teacher layoffs, larger classes and higher fees for parents. She said the budget could be a "death knell" for rural schools.

The Senate's version of the budget would cut the state's general aid to schools by $226 per student, or about 5.6 percent. Gov. Sam Brownback, a Republican, proposed a $232-per-student cut, and the House passed a $250-per-student cut.

The current aid figure is $4,012 per student. Any of the proposals would drop the figure to its lowest mark since the 1999-2000 school year.

"It's time to contact legislators and express your priorities before these decisions are finalized," Wagnon said. "I am appalled at the state of funding for public schools."

Wagnon said legislators could consider any number of revenue-raising measures, such as rethinking past corporate tax breaks, to head off such deep cuts.

But the GOP-controlled Legislature isn't considering any such proposals, seeing them as tax increases, something Brownback and other Republicans strongly oppose.

McGinn said senators are trying to keep the education funding cuts as small as possible.

Rhoades said that if lawmakers don't reduce education funding, "the cuts would have to come from some other place."