Kansas delays contribution to public employee pensions

Kansas is delaying an April contribution of $92.6 million to its state pension system, a move that could be used to help balance the current budget.

The delay won’t affect current retirees’ benefits, nor should it affect the long-term financial health of the Kansas Public Employees Retirement System, assuming the state catches back up.

The contributions go toward pensions for school teachers and employees at the state’s community and technical colleges.

Brownback spokeswoman Eileen Hawley said it’s not yet clear how long the contributions will be delayed. It’s possible, she said, that it might not be more than a few weeks.

“It just maintains flexibility,” she said.

The state has struggled to balance its budget since the Republican-dominated Legislature cut income taxes in 2012 and 2013 at Brownback’s urging in an effort to boost the economy. Critics contend the tax cuts didn’t provide enough of a stimulus, while Brownback said the effects have been offset by slumps in agriculture, energy production and aircraft manufacturing.

Since the fiscal year began, the state’s month-to-month tax collections have fallen a total $81 million short of expectations, a shortfall of 1.9 percent. The state has missed its projections 11 of the past 12 months.

Brownback last month ordered $17 million in immediate cuts in state university budgets, but Kansas is still projected to end its fiscal year on June 30 with a $31 million deficit in its $15.4 billion budget. Delaying the contributions to KPERS until July would prevent a deficit but push the problem into the following fiscal year.

“It kicks the can down the road 90 days and gives the governor the chance to see what the revenue estimators come up with,” said Sen. Jim Denning, a conservative Overland Park Republican and a member of the chamber’s budget-writing Ways and Means Committee.

Senate Minority Leader Anthony Hensley, D-Topeka, said that because Brownback won’t consider changing the tax cuts he championed, the administration has few options for a short-term budget fix.

“For people who claim to be conservatives and wanting to balance the budget, they’ve done a very poor job of it,” Hensley said.

Budget director Shawn Sullivan, members of his staff, Department of Revenue officials, legislative researchers and university economists meet April 20 to draft the new revenue projections to be used in budgeting. The new forecast is likely to be more pessimistic.

Hawley said after the new forecast is released, Sullivan will discuss the options for keeping the budget balanced.

Brownback’s office said that the administration has significantly increased the state’s contributions to the retirement system. The average yearly general fund contribution from 2012 to 2015 during Brownback’s administration was $388 million. It was $181 million a year from 2001 to 2010.

This story was originally published April 8, 2016 at 5:08 PM with the headline "Kansas delays contribution to public employee pensions."