By John Hanna, The Associated Press, December 13, 2009
TOPEKA | Gov. Mark Parkinson’s efforts to keep Kansas’ budget balanced appear to continue his administration’s drift toward proposing higher taxes next year.
The Democratic governor imposed $259 million in cuts and other budget adjustments last month to prevent the state from having a deficit when the fiscal year ends June 30.
But he avoided even deeper reductions in aid to public schools and other spending by tapping $86 million in federal stimulus funds. Those dollars had been set aside previously by him and the Republican-controlled Legislature for the fiscal 2011 budget.
Parkinson did inflict some real pain: Schools and universities will get less money than they were promised; social programs will be hit, and the state will do fewer highway repairs. But he also pushed part of the state’s problems from fiscal 2010 into fiscal 2011.
And problems in fiscal 2011 can be addressed by raising new revenues, as unpopular as that now seems among legislators. Some Democrats, educators and social service advocates already are talking about closing sales tax exemptions and what they view as business tax loopholes granted in years past.
Kansans shouldn’t be surprised if Parkinson proposes such revenue-raising measures after the Legislature opens its next session on Jan. 11. For now, of course, his aides are noncommittal.
"We’re reviewing all options available for responsibly balancing the 2011 budget," spokesman Seth Bundy said last week.
A sour national economy and lower-than-expected tax collections in Kansas have led this year to five rounds of budget adjustments, including Parkinson’s in November.
In the current budget, as revised, the state’s general tax revenues cover about $5.35 billion in spending. That’s almost 12 percent less than in the previous fiscal year, but the state is using federal stimulus funds to close much of that gap.
Before Parkinson’s actions in November, the state had $276 million in federal stimulus available to plug into the budget in fiscal 2011, which begins July 1. Now, there’s $190 million left.
State officials predict Kansas’ tax collections will drop in fiscal 2011 by about 3 percent, to less than $5.2 billion, giving legislators another projected deficit to tackle.
Some GOP leaders argue there’s little reason to postpone budget cuts because the state’s financial problems are likely to linger. Tapping stimulus dollars now — or even in 2011 — only postpones some tough decisions, they note.
"You pay the piper at some point," said Senate Ways and Means Committee Chairman Jay Emler, a Lindsborg Republican.
But Parkinson’s statements in announcing the latest round of adjustments last month suggest where his administration is headed. Even as he trimmed spending, he decried the effects of what he was doing.
He said social service programs faced potentially "crippling" cuts and that public school classes would get larger. He said supervision of former prison inmates would become more lax and roads would be less well-maintained.
"He now has a straw man to go to the public and say, 'I made all these cuts, now let’s increase taxes,'" said House Appropriations Committee Chairman Kevin Yoder, an Overland Park Republican.
Parkinson’s administration also sent a message to legislators and others by using stimulus dollars to avoid deeper cuts in fiscal 2010. The $86 million will supplant state dollars for general aid to public schools.
Before this year, the state had been ratcheting up spending on public schools, a response to Kansas Supreme Court rulings in an education funding lawsuit.
The state’s base aid rose $570 per student, or nearly 15 percent, from the 2004-05 school year to 2008-09. At the start of 2009, it was $4,433 per student.
Now, even with the stimulus funds, it’s dropped back down to $4,012 — a decline of $421 per student, or nearly 10 percent off its high point.
And State Budget Director Duane Goossen said: "We’re operating from the presumption that this is as deep as we should go."
Goossen didn’t say specifically that the same presumption carries forward into the next fiscal year.
But fellow Democrats — and Parkinson’s secretary of revenue — have distributed charts about various tax breaks granted over the past 15 years.
The charts show that the tax breaks will cost state government $869 million in general revenues in fiscal 2010. The figure even takes into consideration tax increases approved in 2002 to help close a budget gap that year.
In 2002, then-Gov. Bill Graves used similar charts in pushing for tax increases. The message was the same as it is this year: The state was generous in the past with tax breaks and now needs to take a small part of them back so it won’t cripple schools and programs.
Of course, plenty of legislators, particularly Republicans, disagree and worry that any revenue-raising measures will slow an economic recovery.
But Parkinson’s administration still is drifting toward proposing such measures next year.