Politics & Government

Reserves a big focus of budget talks

TOPEKA — Kansas lawmakers dickered Thursday over building up the state's cash reserves while they negotiate over a $14 billion budget.

Work stalled on a spending plan for the fiscal year beginning July 1 that will trim overall spending by between 5 and 6 percent.

The three senators and three House members drafting the final version of the budget still must reconcile dozens of differences between their chambers — and they failed to resolve any major spending issues Thursday. Their talks were scheduled to resume today and were expected to go into next week.

Legislators 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. Thursday was the 84th day of lawmakers' annual session, out of 90 scheduled.

"My concern at this point is whether or not we're making progress," said lead Senate negotiator Carolyn McGinn, R-Sedgwick, and chairwoman of her chamber's Ways and Means 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 argued Thursday 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 lead House negotiator Marc Rhoades said the state needs at least a small cushion in case revenue doesn't meet expectations. The state expects to collect $6 billion in revenue 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," said Rhoades, R-Newton, and chairman of his chamber's Appropriations Committee. "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 a 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."