Kansas legislators advanced a new budget-balancing plan Tuesday aimed at allowing the state to pay its bills through June without cutting spending on public schools while it waits for new revenue from raising taxes to flow.
The state Senate Ways and Means Committee unanimously endorsed a bill to authorize internal government borrowing and temporarily short contributions to public employees' pensions to cover a gap in its current budget, for the fiscal year ending June 30. The full Senate expects to debate the bill Thursday.
Kansas faces projected budget shortfalls totaling more than $1 billion through June 2019, and lawmakers are looking at rolling back past personal income tax cuts championed by Republican Gov. Sam Brownback. But new revenue wouldn't arrive before July, and the state projects a $281 million deficit on June 30.
The Senate committee plan would trim nearly $152 million from the state's contributions to public employee pensions before June 30, promising to pay the funds back over 10 years. It would borrow $103 million in idle state funds and delay $75 million in June aid payments to schools for a few weeks.
"It's a good solution for the pieces we had to work with, so I think everybody's comfortable with it," said Senate Majority Leader Jim Denning, an Overland Park Republican.
The House last month approved a plan that would short pension contributions $86 million and authorize $317 million in internal borrowing to be paid back over seven years. The final version is likely to be written by negotiators for the two chambers later this month.
Senate GOP leaders initially pushed to cut aid to public schools to help get the state through June and conservatives could still seek spending reductions. But talk of education funding cuts inspired bipartisan resistance, and the state Supreme Court ruled earlier this month that Kansas is not spending enough money on its schools.
The state has struggled to balance its budget since GOP legislators slashed personal income taxes in 2012 and 2013 at Brownback's urging. Many voters turned last year on Brownback's conservative allies, and Democrats and GOP moderates now have solid majorities in both chambers if they work together.
The Senate committee's plan assumes that legislators would raise $763 million over two years through higher taxes and authorize another $214 million in internal borrowing after July 1. The plan also assumes the state would divert $581 million from highway projects over two years and it doesn't include any increase in aid to public schools.
Legislators last month passed a bill that would have increased income taxes to raise more than $1 billion over two years, but Brownback vetoed it. He favors boosting cigarette and liquor taxes and annual business filing fees, along with the other fixes lawmakers are considering.
Lawmakers in both chambers also are working on a new education funding law to satisfy the Supreme Court.
"We're just going to have to find some additional sources of revenue for school finance above and beyond, I think, what we can do to sustain the 2018 and 2019 budgets," said Senate Minority Leader Anthony Hensley, a Topeka Democrat.
