Lawmakers concerned about budget but leery of another tax debate

Gov. Sam Brownback will need to make another round of budget cuts before the Legislature reconvenes in January, some lawmakers, including other Republicans, predicted Monday.

The governor said last week that he did not expect to cut the budget or raise taxes after the state missed revenue projections by $32 million in September.

Sen. Michael O’Donnell, R-Wichita, who sits on the Senate Ways and Means Committee, doesn’t think that’s realistic. He said Brownback probably will have to enact automatic cuts known as allotments before the session starts Jan. 11 based on “the trends that we’re seeing right now.” Other Republicans said they did not want to even talk about the possibility of a tax increase after raising sales and other taxes earlier this year.

The state is below revenue estimates by $42.5 million after the first three months of the fiscal year. The budget had predicted the state would end the year next June with just $78 million in cash reserves, spurring fear the state could face another shortfall.

“I’m concerned that we could be in the 9-digit range of being more than $100 million off of estimates by the end of this year,” O’Donnell said. “I hope that’s not the case, and I’ve said many prayers to God that we are not in that situation, that revenue does come in like we had initially projected.”

Asked about O’Donnell’s comments, the governor’s office issued a short statement that indicated Brownback could be looking for other ways to free up money.

“As the Governor has said previously, he is not planning an across-the-board allotment; however, the Governor has asked Budget Director Shawn Sullivan to prepare options for balancing the budget without a tax increase,” said Eileen Hawley, the governor’s spokeswoman.

Sen. Laura Kelly, D-Topeka, said that statement suggests “no fund is safe.” She predicted that the governor’s office would have to sweep – or move – dedicated funds to fill in a budget hole.

“They’re going to lift every rock everywhere … to avoid having to raise taxes,” said Kelly, who is the ranking Democrat on the Ways and Means Committee, which oversees the budget. “The highway fund’s history.”

O’Donnell said people around Wichita keep telling him: “Just shoot straight with us. Let us know where we are today.”

“And I tell them, ‘Well it’s not pretty.’ I wish I could be more optimistic. I’m not trying to be a doomsday, negative individual,” he said. “I’m just trying to be realistic that unless something dramatically changes in the next couple months, we’re going to be forced to make cuts.”

Alternatives to tax increases

The Legislature passed a combination of budget cuts and tax increases during the last session to plug an $800 million revenue shortfall. It took 113 days – and some tear-filled nights – before lawmakers could agree on tax increases.

O’Donnell said he doesn’t think the votes are there to pass another tax plan and that many Republicans who voted for the one in the past session feel burned.

“It was twisting arms – and that’s putting it mildly – to get to 63 votes in the House and to get 21 votes in the Senate,” he said. “I think people are living in fantasyland if they believe the Kansas Legislature, in an election year, is going to vote to raise taxes again.”

That would leave spending cuts or fund sweeps as the alternatives.

Fears about a budget shortfall are just speculation at this point, said Senate Majority Leader Terry Bruce, R-Hutchinson. But he added that lawmakers are not anxious to renew the debate on tax policy.

“I have talked to numerous people within the caucus, and they would be exceptionally reluctant to look at taxes,” Bruce said. “And that’s not just to raise taxes; they don’t even want to talk about taxes.”

Republican lawmakers would even be afraid to talk about tax cuts after last session’s lengthy debates, Bruce said.

“People are just a little weary of debating tax policy,” he said.

‘That’s our job’

Rep. Barbara Bollier, R-Mission Hills, a moderate who often breaks from her party, said it’s wishful thinking to believe lawmakers won’t have to tackle tax policy in the coming session.

“We should always be discussing it. That’s our job,” Bollier said, explaining that Kansas residents are concerned about taxes and lawmakers shouldn’t avoid the issue.

Kelly also said a conversation about taxes needs to happen.

Some lawmakers hope that an efficiency study to be conducted by New York-based consulting firm Alvarez and Marsal will identify cost savings, eliminating the need to raise taxes.

Within hours of the governor’s comments last week, House Speaker Ray Merrick, R-Stilwell, released a statement touting the study as a way to ensure the state provides “quality services but at a better value for taxpayers.”

Bruce said he looked forward to seeing the consultants’ recommendations, but he was cautious in his expectations.

“You know, we have trimmed the state budget significantly in recent years. I don’t know how many more couch cushions there are to look underneath for change,” he said. “But if they find any, we’ll be sure to have hearings on it.”

This story was originally published October 12, 2015 at 6:46 PM with the headline "Lawmakers concerned about budget but leery of another tax debate."