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Borrowing is not a good solution

Senate bill would solve immediate problem

By The Mercury

Perhaps the best thing about the budget bill the Kansas Senate approved last week is that it wasn’t as bad as it might have been.

Senators didn’t, for example, cut funding for public schools; that’s largely because they have learned better than to cross the Kansas Supreme Court, which recently ordered lawmakers to increase funding. Senators also turned down not one, not two, but three attempts at across-the-board spending cuts.

Senate President Susan Wagle argued for a 2-percent cut to help offset a budget shortfall of $281 million by June 30. She said that when Kansas families find themselves in financial trouble, cutting spending is among their first options.

She’s right, but legislators didn’t buy it because they’ve already cut spending multiple times in recent years and in the process created hardships for many Kansas families.

What’s more, Sen. Wagle’s proposed 2-percent cut would have forced agencies to make drastic reductions because almost three-fourths of the fiscal year has gone by. Senators overwhelmingly rejected her amendment as well as proposals by state Sen. Dennis Pyle for 1-percent and 0.5-percent across-the-board funding cuts.

Unfortunately, given Gov. Sam Brownback’s disdain for repealing income-tax cuts — he prefers increases on alcohol and tobacco — the bill the Senate approved looks more like something he would support than most senators would like.

For example, the bill delays a payment of about $150 million to the Kansas Public Employees Retirement System. It also delays — by one important day - the payment of $75 million to the state’s public schools. Making the latter payment July 1 instead of June 30 puts the transaction into the next fiscal year. Much like delaying the KPERS payment, it’s a short-term solution that doesn’t actually solve much. Additionally, the bill calls for borrowing enough money from idle investment funds to ensure that the state has an ending balance June 30 of $50 million. It’s more of a paper solution than a real one.

In short, this bill’s salient feature is that it would balance this fiscal year’s budget. A better solution would involve something closer to the House bill that the Senate seconded and that Gov. Brownback vetoed. That would have generated more than $1 billion over two years and constitut ed a step toward the structural balance in the state budget that is lacking in the Senate bill.

The budget the Legislature eventually sends to the governor is expected to be drawn up this week by Senate and House negotiators. It ought to include another try to at least scale back the income-tax cuts that played an important role in gouging the financial hole lawmakers are now trying to dig out of.









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