Kansas Legislature may leave large budget cuts to Gov. Kelly, until after election

When the Kansas Legislature returns for a rare special session Wednesday, lawmakers will confront a massive budget shortfall estimated at more than $650 million. But they aren’t expected to make significant spending cuts to close the gap.

Instead, legislators will try to impose oversight or control over how Gov. Laura Kelly spends hundreds of millions in federal coronavirus aid.

The budget hole for the upcoming fiscal year, which begins July 1, has been largely missing from discussions leading up to the special session. Lawmakers say they don’t expect it to surface this week.

Inaction by the Republican-controlled Legislature would leave the Democratic governor to respond to a looming financial crisis – the size of which Kansas hasn’t experienced since the depths of Gov. Sam Brownback’s tax experiment.

Lawmakers, for the most part, are fine with that. With a few exceptions, both Republicans and Democrats much prefer that Kelly make unpopular, painful cuts during an election year.

Sen. Tom Hawk, a Manhattan Democrat, said better data will be available in six months once the Legislature returns and that lawmakers will make better decisions then.

But he also acknowledged political reality.

“And I guess, selfishly, this is an election year and I’d rather see the executive branch take the public relations hit as opposed to the Legislature,” Hawk said.

Until the Legislature reconvenes in January, Kelly would have sole responsibility for making potentially devastating cuts if tax revenue craters as projected under the weight of the economic crisis caused by the pandemic. Closing the shortfall would require sharp cuts to agencies still recovering from years of austerity and possibly to K-12 public schools, which only achieved constitutional levels of funding last year.

Kelly would wield wide ranging power over spending after Republicans fought fiercely to restrict her powers in other areas, including her ability to control business activity to slow the spread of COVID-19.

Lawmakers who are happy to let Kelly cut point to past crises, when Brownback made unilateral reductions. They said the likely short nature of the special session (expected to last only a handful of days) is also reason not to reopen the budget.

Kelly has made no comments suggesting she wants lawmakers involved. Instead, she has urged them to focus on a rewrite of the state’s emergency management law better than the one passed in May after a marathon 24 hours of legislating.

Kelly vetoed a hastily-crafted bill that would have restricted her emergency authority and given top lawmakers the power to block requests to spend federal relief dollars. Legislative leaders have been in discussions with Kelly about a new proposal, but few details have emerged.

On Tuesday, Kelly said negotiations with lawmakers would likely result in the State Finance Council – a body comprised of top legislators but chaired by Kelly – having some role in how coronavirus relief dollars are spent.

“I’m feeling pretty good about that,” Kelly said.

Shortfall known since April

The budget shortfall has been anticipated since April, when state officials and university economists projected a staggering drop in tax revenues because of the pandemic. After years of growing revenue following the repeal of Brownback’s income tax cuts in 2017, the predictions shocked lawmakers.

“The slowdown in the economy brought on by the spread of COVID-19 has caused our state budget situation to deteriorate rapidly,” Kelly said in April.

But while not calling on state legislators to act, the governor has pleaded with federal lawmakers to give Kansas more flexibility in how it spends federal relief funds. Kansas has received $1.25 billion, but under federal rules it can’t be used to backfill budgets.

Kelly has asked Kansas’s congressional delegation to support legislation to allow the money to make up for lost revenue, but Congress so far hasn’t taken action. U.S. Rep. Ron Estes, a Republican representing Wichita, said last month that federal aid had provided much-needed relief to Kansas but wasn’t intended to fill budget holes “for items unrelated to this pandemic.”

Kansas received a hopeful sign Monday, however, when the state Department of Revenue released May tax collection figures that weren’t as bad as initially predicted. Tax collections were down 20 percent from the same month last year, but overperformed estimates by nearly 7 percent.

Rep. Don Hineman, a Dighton Republican who decided against running again, said May collections were an indication that changing the budget now would be premature.

“We’ve been through this before,” Hineman said. “You have a budget crisis and the governor is empowered to act until the Legislature comes back in January.”

But Rep. Troy Waymaster, a Bunker Hill Republican and chair of the House Appropriations Committee, said the budget to him personally felt like “unfinished work.” But he said he hasn’t been informed by House Republican leaders that state spending will be addressed.

“Obviously, on July 1, if there is no legislative action on the budget, the governor is going to have to make some allotment,” Waymaster said.

Rep. Kathy Wolfe Moore, a Kansas City Democrat, said she trusts Kelly to make appropriate cuts if needed, but that she is happy to address the budget if necessary. Whoever decides, cutting will be a “no win” task.

“Someone will get hurt that we think is doing very good work with the funds that we give them,” said Wolfe Moore, the ranking Democrat on the budget committee.

Rep. Jene Vickrey, a Louisburg Republican who isn’t running for re-election, said the Legislature “should discern what priorities are and to help get the state through a tough budget time.”

Will that happen?

“It’s an election year,” he said.

This story was originally published June 2, 2020 at 4:55 PM with the headline "Kansas Legislature may leave large budget cuts to Gov. Kelly, until after election."