Politics & Government

State facing $350 million budget gap

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Kansas faces a nearly $350 million budget gap for the current fiscal year, which runs through June. Gov. Sam Brownback will not say how he plans to address the budget problems until January, when the Legislature convenes.

Shawn Sullivan, the governor’s budget director, said the governor had not ruled out raising taxes. He offered few details about what areas of the budget Brownback might seek to cut in January, explaining that the administration would be reviewing that over the next two months.

The governor has the power to make automatic budget cuts on his own, a power he exercised last November and April, but Sullivan said Brownback would not be exercising that power this year.

“What he’s going to do is he’s going to present a budget proposal in January ... and then we will work, both he and I, and other members of the administration, will work with the Legislature on the best way to close the gap,” Sullivan said when asked whether the governor was deferring to the Legislature to fix the problem.

Sen. Laura Kelly of Topeka, the ranking Democrat on the Senate Budget Committee, accused the governor of shirking his duties by waiting until January to address the budget gap, contending that shortening the time frame will make it more difficult to address the problem.

“I think it’s chicken, and I think it’s payback,” Kelly said. “He lost a lot of his allies in the last election, and I think he wants to put the onus of these cuts on them (lawmakers).”

Senate President Susan Wagle, R-Wichita, said lawmakers will be ready to work on the issue, although she in effect chastised Brownback for waiting until January to address the budget gap.

“Senate Republicans are committed to fixing the significant problems our state faces,” she said in an e-mail. “Despite the Governor’s predictable and unfortunate decision to delay addressing the shortfall until January, we are ready to get to work and focus our collective abilities to create balanced, long-term and, most importantly, common-sense solutions for our citizens.”

House Majority Leader Jene Vickrey, R-Louisburg, said it would be politically easier if the governor made cuts now, but he thinks the Legislature should play a role in the decision-making process.

“It’s good for the Legislature to roll up their sleeves and be involved in the dirty work,” Vickrey said. “It’s politically easier if someone else does it, but it’s better for our constituents if we do it, because then we can have that debate over what the priorities would be and need to be for our constituents.”

Vickrey, who plans to run for House speaker, said he was shocked by the budget numbers. “It’s going to be another very difficult budget reality,” said Vickrey. He said the Legislature will certainly look at tax policy to solve the long-term budget issues but that it will have to enact spending cuts for the current fiscal year.

The state’s economists downgraded revenue estimates for the current fiscal year, which ends in June, by $345.9 million from estimates made six months ago. A combination of factors were cited for the downgrade, including the state’s recent job losses, deflation and a precipitous drop in farm income. Farmers do not pay Kansas income tax, but Sullivan said that the drop in farm income has severely affected spending power in the state’s rural counties and has hurt sales tax revenue.

Raney Gilliland, the director of the state’s nonpartisan Legislative Research Department, confirmed that tax changes made under Brownback also contributed to the shortfall. The state lowered estimates for individual income tax by 4.1 percent and reduced estimates for sales tax by 4.9 percent. Estimates for corporate income tax, which has struggled nationally, were lowered by 31.8 percent.

The state’s fiscal situation will become even more dire the following year, when total revenue is expected to drop by another $443.7 million, or 7.4 percent. Legislative Research estimated that the budget gap for that year would be $582.6 million.

The budget numbers were a cause for concern for Diane Gjerstad, the lobbyist for the Wichita school district, who attended Sullivan’s briefing.

“The state simply does not have enough money to pay its bills,” Gjerstad said. “And when Shawn is talking about the economy being difficult for people, that’s when you need more state resources to help families and to help people who are having difficulties in life. And (in) schools, we deal with those. The difficulties that families have walk into our school doors every day. These number are – it’s deeper than I thought it was going to be.”

The 2015 session stretched to a record 114 days as lawmakers struggled to pass a tax increase in the face of another budget hole. The incoming Legislature will include numerous freshman lawmakers from both parties.

Many moderate Republican and Democratic candidates who were elected to the Legislature this week campaigned on promises of tax fairness and greater budget stability. They’ll be faced with the choice of how to close the gap for the current year almost immediately upon taking office in January.

“One of the things that I talked with folks on doorsteps was this was undoubtedly going to be hard, and you just confirmed it,” Democrat Elizabeth Bishop, who won a House seat in Wichita on Tuesday, said upon hearing the latest budget news. “I hope that with the various changes that have happened both in the primary and the general election, there will be some cooler heads that will begin to prevail, that we will look at the reality of things.”

Bishop said she was on her way to a neighborhood meeting Thursday night and would likely discuss with her constituents how they would like to see the situation resolved.

Bryan Lowry: 785-296-3006, @BryanLowry3