Gov. Sam Brownback’s Kansas budget proposal avoids dramatic cuts and new taxes

A hole in Kansas’ next budget can be fixed by rearranging state funds and other maneuvers, including selling assets of the Kansas Bioscience Authority, Gov. Sam Brownback said Wednesday.

The Republican governor’s budget proposals would make up a $170 million shortfall in the $16 billion budget that begins July 1 without cuts to schools and without tax increases. The proposals would result in a general fund ending balance of $35.1 million this fiscal year and $87.9 million for fiscal year 2017.

But as outlined by his budget director Wednesday, they do include more multimillion-dollar diversions from the state highway fund, a practice coming under increasing fire.

Revenue shortfalls and budget gaps have become common for the state. Many blame a tax policy championed by Brownback and conservative Republican legislators that cut income tax rates and eliminated income taxes for many small business owners.

But Brownback and allies attribute the revenue problems largely to the economy, particularly the slumping aviation, agriculture, and oil and gas sectors.

On the morning after Brownback’s State of the State address, budget director Shawn Sullivan presented proposed changes to the current 2016 budget and the fiscal year budget for 2017 to a joint budget committee.

The proposals include a change in the Parents as Teachers program that would require families above a certain income to pay for the services, as well as additional money shifts from a children’s program fund.

In the Parents as Teachers program, Sullivan said, families with income below 200 percent of federal poverty guidelines would continue to receive those services free. Those above the threshold would have to pay.

That idea drew the ire of Rep. Stephanie Clayton, an Overland Park Republican, who said the proposal would hit many middle-class families in Johnson County.

“Just because you have a higher income or a college degree, that doesn’t mean you’re an expert in early childhood education,” Clayton said. “Parents as Teachers really helps families. And it helps those with one parent staying at home who might not have the resources for preschool.”

The program typically includes screenings and home visits with parents of young children by a parent educator.

“The Parents as Teachers organization would set its own fee or charge,” said Brownback spokeswoman Eileen Hawley.

About $51 million would move from the Children’s Initiative Fund, which pays for programs such as Early Head Start and Parents as Teachers, to the general fund.

“Every existing childhood program funded by CIF continues to be fully funded in this budget,” Sullivan said.

The CIF is funded by money from a settlement with tobacco companies. The state will spend $6.5 million on early childhood programs and put about $44 million into its general fund.

Having the money in the general fund makes it more transparent for taxpayers, Sullivan said. Critics worry the money, no longer in a separate fund, could eventually be used for other purposes.

The budget proposals affect a host of state agencies and programs.

The Department of Health and Environment would save $10.6 million by implementing “step therapy” for Medicaid patients. Step therapy begins patients on lower-cost drugs and moves them to higher-cost therapy only if necessary.

An estimated $25 million would come from the Kansas Bioscience Authority, which decided in December to shift its mission to stimulate bioscience enterprises to the private market. The money would come from the sale of KBA assets to private investors.

The governor’s proposals did not include more money to boost corrections officers’ pay, which some lawmakers have called a priority because of staff attrition at state prisons.

And it didn’t include a proposal from the Kansas Highway Patrol to boost the motor vehicle title fee from $10 to $17.50 to pay for 75 additional troopers.

Sullivan said he hadn’t received those requests yet, but the administration would work with lawmakers.

The governor’s plan would shift an additional $2.1 million in the current fiscal year and $25 million in the 2017 budget from the Transportation Department’s highway fund to the general fund.

The KDOT money transfers have been controversial — the “bank of KDOT,” some have called them. But the administration has said that lower project costs and agency efficiencies have kept financing for road projects on track.

“Despite the rhetoric and the billboards, the highway system is still in good shape,” Sullivan said, a reference to billboards by the Kansas Contractors Association that call the transfers “highway robbery.”

This story was originally published January 13, 2016 at 12:26 PM with the headline "Gov. Sam Brownback’s Kansas budget proposal avoids dramatic cuts and new taxes."