Brownback’s office announces $63 million in Kansas budget changes

Kansas Budget Director Shawn Sullivan on Thursday outlined $62.6 million in budget adjustments to shore up the state’s tiny surplus.

The biggest line item was a $17.6 million cut in state money for a program that provides health insurance for uninsured children. Sullivan said the reduction in state funds could be made because the federal match to the program increased by that amount.

While the move did not reduce the total money going to the State Children’s Health Insurance Program, called SCHIP, Sullivan acknowledged that with the additional federal money the state could have expanded services or eligibility.

After a legislative session that stretched to a record 114 days because of a stalemate over how to fix a projected budget deficit in the hundreds of millions of dollars, lawmakers left the Capitol in June with the understanding that the governor would reduce the budget by about $50 million. The administration was authorized to make up to $100 million in reductions, Sullivan said.

In a news conference at the Capitol, Sullivan said he wanted to bump up the adjustments beyond $50 million as much as possible because without changes, the state would end the fiscal year in June with a surplus of only $17 million to $30 million.

Sullivan characterized many of the adjustments as the movement of excess funds from some agency and program budgets, offsets from other revenue sources, and lower-than-expected agency spending.

For instance, the budget director said $8 million in operations savings were found in the Department of Transportation, and some unused fee dollars were shifted into the state’s general fund.

Sullivan said said none of the changes affected K-12 or higher education, the Kansas Public Employees Retirement System or debt service.

“We really tried to take the line as much as possible to minimize the impact on Kansans,” Sullivan said.

In a statement, House Minority Leader Tom Burroughs, a Kansas City, Kan., Democrat, called the budget changes “a continuation of Gov. (Sam) Brownback’s failed fiscal policies.

“Once again, the governor is relying on one-time funds and fee sweeps,” Burroughs said. “For the state to return to firm financial footing, we need a responsibly balanced budget accompanied by sustainable revenue.”

Rep. Melissa Rooker, a Fairway Republican, also criticized continued transfers from agencies to the general fund. The moves don’t bode well for next year’s budget process, she said.

“It’s dangerous to sweep that money away just because today it’s not needed,” she said.

Rooker also questioned a $500,000 savings from delaying the opening of a building at Larned State Hospital, a psychiatric facility.

Sullivan’s budget plan said the opening could be delayed from January to July next year because census trends indicated the beds wouldn’t be needed until summer.

“I would take issue with that,” she said. “If you look at the system as a whole, there’s tremendous need.”

Brownback was criticized earlier in the week for his decision not to attend the announcement.

Asked about the governor’s absence, Sullivan said the budget changes needed to be made by Friday because of some state bond requirements, and the governor had a previous work commitment in Wichita.

“It was more of a timing issue than anything else,” Sullivan said.

In an interview with The Associated Press, Brownback said his goal was to ensure that the state maintains a small cushion of cash reserves in its main bank account without any effects on government services.

“It’s more efficiencies of government,” Brownback said. “We need to be as efficient as we can. It’s a never-ending process.”

At the news conference, Sullivan acknowledged that the state needed to do a better job at estimating revenue. The biggest variable generally is sales tax receipts, he said.

The previous fiscal year ended with tax collections $26 million short of expectations.

“Should we look at the estimating process? The answer is yes,” Sullivan said. “We need to continue to look at how we do it compared with other states.”

The cuts announced Thursday were in addition to reductions going back to December to fill an enormous revenue hole for the previous fiscal year, which ended in June.

Lawmakers increased sales and cigarette taxes to help balance the current budget, a move that was hard to swallow for many lawmakers after they had slashed personal income taxes in 2012 and 2013 at Brownback’s urging.

The increases preserved the tax reductions for some 280,000 business owners and 50,000 farmers.

Brownback had campaigned on deep income tax cuts to boost jobs and the state’s economy. But the revenue reduction opened a $280 million budget hole last fiscal year and a projected deficit of more than $400 million for the current fiscal year.

Brownback and legislators also agreed earlier to hire an outside company to find efficiencies in state government. Requests for proposals could begin in the fall. The cost could be up to $3 million.

For more details about the Brownback administration’s budget changes, go to http://budget.ks.gov/files/FY2016/FY2016_SGF_Reduction_Revenue_Plan--7-30-2015.pdf.

This story was originally published July 30, 2015 at 4:12 PM with the headline "Brownback’s office announces $63 million in Kansas budget changes."