Senators propose 'rainy-day' state fund

TOPEKA — Two state senators have proposed amending the state constitution to require that lawmakers set aside money when Kansas is flush with cash.

Sen. John Vratil, R-Leawood, and Sen. Laura Kelly, D-Topeka, unveiled a proposal Tuesday that would automatically set aside up to 1 percent of state revenues in years when the state's funds increase by more than 3 percent.

"It's smart personal finance to set aside money for times when revenue is short," said Vratil, vice chairman of the Senate Ways and Means Committee.

The amendment would require the state to collect up to 7.5 percent of the total state general revenue, which currently would equal about $465 million, Kelly said.

Lawmakers would be able to tap into the fund only when the state collected less money than the year prior.

To amend the state constitution, the resolution would have to pass by a two-thirds majority in both chambers — 84 votes in the House and 27 in the Senate. The measure would then go on the November 2010 general election ballot.

Derrick Sontag, Kansas director of Americans for Prosperity, said it is significant that Vratil and Kelly acknowledge budgeting needs to change in Topeka.

"If the legislators were to enact this, they are doing the best thing they can to protect themselves from their own actions," Sontag said.

Ideally, the move would come with restraints on state spending increases and the ability to return money to taxpayers if too much was collected, he said.

Lawmakers and the governor have had to cut about $1 billion from the current budget, which began July 1.

That was after the state had depleted about $1 billion in cash reserves that had been built up over several years.

The 2011 budget, which lawmakers will start wrestling with next week, is projected to have a further $358.7 million shortfall.

A rainy-day fund would have helped lessen some of the more recent cuts, the senators said.

Kansas is one of a handful of states that do not have some sort of rainy-day fund, Kelly and Vratil said.

It does have a statute requiring that the state maintain a 7.5 percent reserve at the end of each year. In recent years, lawmakers have waived the statute and dipped into general fund reserves to offset plunging state revenue.

The Legislature could not waive the requirement if it is part of the constitution.

The fund is not a new idea. Last year, a proposal for a rainy-day fund passed the Senate.

Gov. Mark Parkinson, a Democrat, praised the idea and the collaboration.

"Senators Kelly and Vratil have looked at the mistakes of the past and found lessons to be learned," the governor said in a statement. "This bipartisan effort demonstrates the progress that can be made when politics are set aside for sound policies."