May 26, 2015
“The state of Kansas is in some deep financial trouble and is now experiencing a budget that is badly out of balance.”
That’s the message from Duane Goossen, former Kansas Secretary of Administration and former Director of the Kansas Division of the Budget, now the Senior Fellow at the Kansas Center for Economic Development. Goossen is also a former 7-term state representative and most recently worked as the Vice President for Fiscal and Health Policy at the Kansas Health Institute, from which he retired in July 2014.
KCEG is a non-profit, non-partisan organization that conducts research and analysis to promote responsible balanced budget and tax policies in Kansas. Goossen, who also contributes to HaysPost.com as part of the Insight Kansas series, spoke recently at a meeting of the Hays Rotary Club.
The state general fund, at $6.3 billion, is the biggest portion of the Kansas FY 2015 budget of $15.3 billion. Most state tax dollars go into it; it’s also the fund for which legislators have the most discretion.
Most revenue for the state, 84.5%, comes from sales taxes and individual income taxes–which are nearly equally divided.
The individual income tax used to bring in about half of state general fund revenue; now it’s fallen to 42.2% and continues to fall.
Half of the state budget is spent on K-12 education funding; 12.6% goes to post-secondary education, including Fort Hays State University. Another 20% is for the state’s share for Medicaid, and another 6.7% for other human services. The result is 90% of the state’s general fund spending is for education and human services.
Those expenses are going up.
“We’ve got a situation in Kansas where the revenue to the state general fund, because of tax policy, has plummeted,” Goossen said, “and it’s staying down at a low level. At the same time, we have expenses, such as Medicaid, which are growing and will continue to grow.
“So far in FY 2014 and the current FY 2015, Kansas has bridged the gap by cleaning out the savings account and by transferring money from the Highway Fund (Kansas Department of Transportation) which has resulted in a cutback of road maintenance projects.
“For next year (FY 2016, which starts July 1), the legislature is struggling to put a budget together where the gap between expenses and revenues has grown to about $800 million. There’s no savings or reserves left to bridge the gap. It’s possible to still transfer some money from the Highway Fund but it doesn’t come close to closing the gap,” Goossen explained.
“The legislature is faced with little alternative but to try and raise taxes back up or in some way to find revenue to meet expenses, and they’re having a hard time doing that,” he added.
Goossen and KCEG Executive Director Annie McKay were invited to speak at a recent Hays Rotary Club meeting as the guest of former 36th District state senator Janis Lee, who served nearly 22 years, and is now retired as Chief Hearing Officer for the Kansas Court of Tax Appeals.
“I had the honor of serving with Duane for quite a number of years while I was in the legislature. Duane became the Budget Policy Director for 12 years for (governors) Republican Bill Graves and then Democrats Kathleen Sebelius and Mark Parkinson.
“One of the things I always appreciated working with Duane was whether or not you liked the message Duane brought from the governor, you knew it was the truth, and that’s very, very important when you’re dealing with government policy,” Lee said in her introduction of Goossen.
In 2012 and 2013, Kansas passed the largest tax cuts of any state in the nation.
Read more from the Hays Post here.