TOPEKA, Kan. (AP) — Kansas legislators must close projected budget gaps totaling about $290 million when they resume their annual session this week, and top Republicans aren’t sure lawmakers will be tackling much else.
The Legislature is scheduled to return Wednesday from its annual spring break. The leaders of its GOP supermajorities hope to remain in session for less than a week.
Key budget issues as legislators prepare to reconvene:
HOW KANSAS GOT HERE
Last year, lawmakers approved the initial versions of the state’s current $15.7 billion budget and its $16.1 billion budget for the next fiscal year, which begins July 1. When tax collections proved disappointing, they revised both spending blueprints in March.
State officials and university economists issued a more pessimistic fiscal forecast last week, slashing projected tax collections by a total of $348 million through June 2017. The new numbers created the projected shortfalls in the current and next budgets that lawmakers must close because the state constitution doesn’t permit budget deficits.
Kansas has struggled to balance its budget since Republican lawmakers slashed personal income taxes in 2012 and 2013 at GOP Gov. Sam Brownback’s urging to stimulate the economy. Even some of his past allies concede that the tax-cutting experiment hasn’t worked as envisioned, but Brownback blames the state’s budget woes on national slumps in agriculture, energy production and aircraft manufacturing.
NO MORE TAX INCREASES?
Democrats and some Republicans want to reverse a key Brownback policy that exempts more than 330,000 farmers and business owners from personal income taxes.
The Senate tax committee plans to have a hearing Thursday on a bill that would narrow the exemption, and its House counterpart had a hearing on reversing the exemption in March.
“The only long-term solution is rolling the exemption back and then figuring out how we bridge the financial gap until that tax money starts coming in,” said Rep. Mark Hutton, a Wichita Republican. “We’ve dug a pretty good hole.”
But Brownback has shown no signs of budging.
“The governor doesn’t believe that it’s useful to have a debate at this point about raising taxes on small businesses or anyone else,” said Budget Director Shawn Sullivan.
GOVERNOR’S BUDGET FIXES
Sullivan last week announced Brownback’s plans to divert $185 million from highway projects to general government programs, which would force the state to delay 25 major projects.
Also, the governor plans to carry forward $17 million in immediate cuts he ordered at state universities into the next fiscal year.
Brownback also proposed selling off the rights to part of the state’s annual payments from a national legal settlement with tobacco companies that was reached in the 1990s. The funds would back bonds that would then be issued to give the state a one-time infusion of $158 million.
Lawmakers have been cold to the idea, and the governor outlined two alternatives. One is to delay $99 million in state contributions to public employee pensions due in the next 2½ months until July 2017. Another is to cut spending by $139 million in the next fiscal year, including Medicaid and aid to public schools.
UNFINISHED FISCAL BUSINESS
Lawmakers still have unfinished business tied to the budget legislation they approved in March.
That measure assumed the state would reduce the costs of providing prescription drugs for poor and disabled residents in the Medicaid program by nearly $11 million during the next fiscal year. The state would do so by using “step therapy” with prescriptions, requiring patients to try less expensive medications and have the treatment fail before obtaining more expensive drugs.
A state law bans step therapies in Medicaid. The Senate approved a bill to repeal the prohibition in February, but the House has yet to act on it.
Also, the state expects to raise $25 million by selling off the assets of the Kansas Bioscience Authority. The agency was created in 2004 to nurture emerging biotech companies but has had a mixed track record.
The Senate approved a bill in March to allow the sales, but the House hasn’t taken it up.
Kansas Legislature: http://www.kslegislature.org
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