The 2010 Budget Process

Legislative researchers estimate the state faces a nearly $800 million budget shortfall based on the November Consensus Revenue Estimates. That number is expected to increase in the coming months. With the growing deficit in mind, the Senate Ways and Means Committee spent much of the last two months carefully prioritizing state funding and studying how agencies spend their allocations.

Early on the committee set budget guidelines for agencies that required most to submit budgets reflecting a 10% reduction to the Governor’s revised 2009 budget recommendations. They were asked to prioritize the cuts and provide other detail to the subcommittees.

K-12 Education, Department of Corrections, Juvenile Justice Authority, Board of Indigent Services, and some programs within SRS were excluded from the 10% requirement.

This priority budgeting process forced state agencies to come forward and share with Legislators information on their least productive programs. While recommending the necessary cuts was very difficult, Kansas will benefit in the long run. It will allow us to do away with inefficient or out of date programs and reallocate some of those resources to better use and restructure state government. The Proposed Bill

• Based on current revenue expectation, early figures show the Senate budget will have an ending balance of approximately $5 million.
• The Senate bill embraces all federal stimulus funding for Medicaid, K-12 Education and Higher Education.
• K-12 Education is a top priority for the Legislature.
  • The Senate bill fully funds at Governor’s Budget Amendment recommendation for Base State Aid Per Pupil $4,400 – totaling more than $3 billion.
  • $71 million in additional Title 1 funding will put approximately five schools over their previous funding levels.
• Agencies were asked to decide how reductions to their budgets could be implemented. They are in the best position to decide what is best for the Kansans they serve.
• The Senate bill continues the transfer to the Special City and County Highway Fund. Local governments are counting on the $10.1 million to repair their roads and bridges. This means jobs for local economies. Funding for the Business and Machinery Tax Slider will be reconsidered during Omnibus.
• The Senate bill continues the phase out of Corporate Franchise Tax. Tens of thousands of Kansans are out of work. Most businesses are struggling to keep their doors open. They are counting on these phase-outs so they can meet payroll and keep production going. It would be more harmful to our state’s economy to suspend the phase-outs.

• We will receive an update on the state’s financial picture in mid-April. We expect the state’s finances to worsen and the projected debt to grow from the November Consensus Revenue Estimates. This will govern how the Legislature proceeds with the Omnibus budget bill.
• We hope to be able to maintain the proposed funding level for K-12 Education but it all depends on the April revenue update.
• By trying to hold K-12 harmless, other state agencies and programs must carry more of the burden and absorb deeper cuts. While most must cut their budgets 6% - 9%, some agencies reduce their spending 10-20%.