January 10, 2016
Kansas Republicans and Democrats huddled separately Sunday away from the Capitol before start of a legislative session falling between passage of the largest tax increase in state history and opening of the next election cycle.
The minority party’s House and Senate members met for budget and education briefings at a retreat in Jayhawk Tower near the Statehouse. Senate Republicans convened without House colleagues at Topeka offices of the Kansas Bankers Association for dinner and conversation with the state budget director and other administration insiders for Gov. Sam Brownback.
The Democrats’ event was open to journalists and the public. The Senate GOP meeting was scheduled to be closed to media but reporters were allowed inside.
“Many people believe we are the representatives of the people,” said Rep. Annie Tietze, a Topeka Democrat. “They have a right to know what we’re doing and what’s going on.”
Interviews at both gatherings revealed angst about instability of the state government’s budget after deep income tax cuts in 2012 and 2013 were followed by spending cuts and a surge in the sales tax in 2015. Revision to the current fiscal year’s budget will be required to keep it balanced until June. A deficit of $175 million exists in the proposed budget for the fiscal year starting in July.
“Most senators are very concerned about the structural deficit we’re facing right now,” said Senate President Susan Wagle, R-Wichita. “Clearly, the economy — both the state and the nation — has not picked up. You can’t tax your way out of recession.”
Duane Goossen, a former Kansas House member, state budget director for three governors and now a senior fellow with the Kansas Center for Economic Growth, told Democrats that state’s revenue shortfalls would require the Legislature to adopt a fix.
“We’re broke right now. The state general fund is under water at this point,” Goossen said.
A legislative committee was told the projected balance at close of the current fiscal year in June could be as little as $5 million. Legislators left Topeka this past June assuming it would be closer to $70 million.
Brownback said in recent interviews there was no reason to wade into tax reform during the 2016 session, meaning any deficits would need to be addressed through spending cuts or cash transfers. That would allow legislators to avoid votes on tax hikes in an election year.
“We can’t spend money we don’t have,” said Sen. Les Donovan, a Wichita Republican and chairman of the Senate Tax Committee. “There’s not much appetite for more taxes, except for those who get the funds.”
The 2016 Legislature convenes 2 p.m. Monday. On Tuesday, a consulting firm hired by the Legislature will reveal more details about recommendations for saving state tax dollars.
Brownback, re-elected to a second term in 2014, is scheduled to deliver the State of the State speech at 5:30 p.m. Tuesday in the House chamber. He won’t make public his strategy for amending the state budget until Wednesday’s joint meeting of the House and Senate budget committees.
The entire House and Senate enter this session aware they will go before voters in the August primary and November general elections.
Several Republicans have expressed optimism the 2016 session could be shorter than the standard 90-day affair and far more brief than the 114-day session in 2015 by avoiding debates on Medicaid expansion and tax reform.
The 2015 Legislature closed out business in June with an increase in the state’s general sales tax from 6.15 percent to 6.5 percent, elevation of the cigarette tax, cash transfers from the highway fund, infusion of federal funding and other adjustments to cover a deficit. That package hiked Kansas taxes by more than $400 million annually.
The state’s treasury repeatedly has failed to meet revenue projections after implementation of 2012 and 2013 state income tax reductions. The state’s estimate of tax collections was lowered again in November, but December receipts fell below those diminished projections.
During the Democratic caucus, legislators received briefings from Goossen on the budget and from Dale Dennis, deputy commissioner of the Kansas Board of Education, on K-12 budget topics.
Dennis said school district administrators were struggling with budget problems amid a teacher shortage and realization salaries ranked 38th in the nation. He said local districts were anxious about pressure from legislators to privatize business operations, soften resistance to administrative consolidation and spend down cash reserves.
“Some boards of education are afraid to spend down the cash because of the unknown,” Dennis said.
Brownback and the Legislature repealed the state’s school finance formula and adopted a block grant system that won’t expire until 2017. Potentially, legislators could bypass real work on a new formula until the next session.
“At the end of the day,” said Senate Minority Leader Anthony Hensley, D-Topeka, “they will just punt.”
An interim committee has been working on a report for how to improve efficiency of K-12 education, while the Kansas Supreme Court continues to consider a lawsuit challenging the level of state aid to public education.
Read more from the Topeka Capital Journal here.