The fiscal year 2004 budget will be debated by the House and Senate in late March. The real budget debate will be held in late April after the Consensus Estimating Group (economists from KU, KSU, WSU; the Governor’s Budget Director; and the Legislature’s chief fiscal analyst) analyzes the tax collection and projects how much money the state will collect in FY 2004. The Governor and Legislature will use those numbers to construct our final budget.
The state’s general fund pays for general government operations (e.g., state employee salaries and benefits) and aid to local governments (e.g., aid to schools). The SGF is approximately $4.3 billion. Tax and fee collections occur on different schedules than do financial obligations. As a result, one day in early February the state had $2.86 left in the SGF–-at that point the state stopped paying its bills.
The State Legislature by law must pass a budget with a 7.5 percent ending balance (reserve). To avoid raising taxes very much in 2002, the Legislature passed a one-year requirement for an ending balance of 5 percent. With the state’s fiscal problems, the state reserves were not enough to avoid program cuts by Governors Graves and Sebelius. Governor Sebelius’ proposed budget has a zero ending balance (instead of the $313 million statutorily required).
In order to bridge the transition from FY 2003 and FY 2004, Governor Sebelius will most likely delay payments due schools, nursing homes, and other recipients from June to July (i.e. from FY 2003 to FY 2004). Governor Graves utilized the same technique last year.
The failure or inability to pay the state’s bills in a timely manner have direct consequences for local governments and citizens. It also has indirect consequences, such as the reduction in the state’s Standard and Poor’s bond rating. Furthermore, the FY 2005 and 2006 budget projections do not look very good, so the problems we face will not simply “go away.” The national economy must improve before Kansas’ economic prospects will permit significant new investments in education, environmental protection, and other programs valued by most Kansans.
It does not seem reasonable to me to reduce the budget of agencies that actually “make” money for the state. Other Budget Committee members agreed and we have recommended that the Lottery’s budget not be reduced.
In 2002, then-Attorney General Stovall issued an opinion that fee-funded agencies may be assessed a reasonable charge for state services, but the Legislature cannot take more than such an amount to fund other government programs. The opinion recognized that fees are paid by specific interest groups (e.g. barbers and beauticians) to pay for regulation of those businesses and protect the public’s health and safety.
Governor Sebelius recommends that $4 million be taken from the FY 2002 Worker’s Compensation Fund administered by the Insurance Commissioner. This budget recommendation is in addition to $7 million taken in the current fiscal year by Governor Graves.
I unsuccessfully opposed this effort because it will result in an increase in worker’s compensation fund assessments against Kansas businesses in FY 2005. This increase is unrelated to worker compensation claims, and directly related to the “sweeping” of these funds by the Governor and Legislature.
I support funding education, services to persons with disabilities, state employees, and other essential services. But I am opposed to hidden taxes and accounting “tricks” that do not address our fundamental needs and that border on unethical behavior.
This situation struck me as being silly, so I introduced HB 2068 to remove the donating and recipient fire departments’ liability for useable equipment donated/accepted in good faith. The House agreed with me and passed the bill to the Senate.
Last year I attempted to impose an E911 fee on cellular users so that communities can purchase the equipment necessary to locate cellular callers. When 911 calls from landlines are made, the signal to the dispatcher includes the address from which the call is made. Unfortunately, at least two people in Kansas have died because 911 dispatchers were unable to locate the cellular callers. One of the persons who died was a Sprint employee traveling on an interstate highway in Kansas City.
While no one wants to pay higher telephone service fees, the public safety issue is paramount for me. If my family or yours has an emergency in Douglas County or while driving to Colorado, I want EMS personnel to find them. Thus, I continue working with other legislators and key interest groups to develop an affordable, universally effective E911 system. EMS personnel, the League of Kansas Municipalities, Kansas Association of Counties, and most of the telephone companies and Governor Sebelius are supportive of this effort.
If you wish to receive future newsletters by email, please send the appropriate information(name, home address, email address) to me at sloan@house.state.ks.us.