Kansas Governor Wants To Steal Money From State Investment Fund To Cover Budget Disaster He Caused



Gov. Sam Brownback wants to tap the state’s long-term investments as part of his budget fix, according to the majority leader of the Kansas Senate.

Brownback has been tight-lipped about how he plans to address the $930 million budget shortfall the state faces over the next 18 months. The governor will roll out a budget proposal during the second week of January when Kansas lawmakers officially begin their 2017 legislative session.

One source of money that the governor is eyeing is a long-term investment fund, according to Senate Majority Leader Jim Denning, R-Overland Park.

 Denning said the governor plans on using the roughly $360 million fund “to get out of the crisis” for the next six months “without having to do deep, deep cuts to K-12.”

It’s one of several budget fixes being discussed.

Among the other possibilities:

▪ Selling off future proceeds from the tobacco settlement, money that is currently used for children’s programs.

▪ Rolling back the state income tax exemption for the owners of pass-through businesses.

▪ Raising the state income tax rate on wealthy residents.

▪ Instituting a flat state income tax of 5 percent – a move that would almost double the tax rate on married couples earning less than $30,000 a year.

Denning said tapping the state’s long-term investments would allow the state to avoid having to cut nearly $350 million before the current fiscal year ends in June.

“The governor’s on board and all the budget folks are on board,” said Denning, a member of the Senate’s budget committee. “And all the legislators that have read about it – that I’ve talked to – they’re on board because they know that if we don’t do this one-time money with such a short time frame left in fiscal year ’17 that we’d have to take almost that entire cut to K-12. There’s no other place to go.”

Brownback’s office would not confirm that the idea is part of the governor’s budget plan, saying only that the governor will present a balanced budget in January.

Lawmakers of both parties have bristled at the governor’s reliance on one-time budget fixes in recent years, but Denning said he thinks the idea will find broad support in the Legislature.

“You’ve got to take your hat off that they’ve looked under another sofa cushion and found another one-time solution,” Denning said. “But this one, I think, is important, and I think all the legislators will support it.”

However, the Senate’s new budget chair, Sen. Carolyn McGinn, R-Sedgwick, said she opposes the idea of tapping the state’s long-term investments.

“It looks to me like we’re taking a payday loan,” McGinn said. “We’re borrowing against ourselves again internally, and I think it’s just going to put us further away from where we need to get to.”

Senate Minority Leader Anthony Hensley, D-Topeka, called the idea of tapping the investment fund “another gimmick” that wouldn’t “even come close” to fixing the state’s budget problems.

McGinn said that for the current fiscal year, the state needs “to make some very serious cuts as quickly as possible to help us get our head above water so we can even look at the next year.”

Even after lawmakers close the nearly $350 million budget gap for the current fiscal year, they’ll face the question of how to close an even bigger budget gap – estimated at more than $580 million – for the following fiscal year, which starts July 1. They also need to figure out how to put the state on more secure financial footing for the long term.

“We’ve been constantly just trying to plug a hole year after year, and nobody’s looking at the two to four years down the road,” McGinn said.



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