Gov. Sam Brownback, after hearing consensus revenue numbers had decreased $228 million, presented three budget-balancing options for the Legislature to consider.
In a news release today, he ruled out raising income taxes or taxes on businesses. Democrats responded that none of the governor’s proposed solutions addressed the underlying problem – a lack of revenue.
“I am prepared to take executive action to help reduce expenditures, however, the Legislature has a constitutional obligation to balance the budget and we are hopeful they will work with us on one of the three options Director Sullivan presented today,” Gov. Brownback said.
“After carefully reviewing the final CRE numbers I do not believe it would be useful to have a debate about raising taxes on small businesses or anyone else. Instead, we will focus our support and attention on controlling government spending more efficiently,” he stated.
The governor’s three proposed options:
• The first option reduces most of the remaining sales tax going into the state highway fund, transferring $70 million to the state general fund for 2016 and $115 million in fiscal year 2017. The governor also would carry forward into fiscal year 2017 the 3 percent reduction to universities in place in fiscal year 2016. In addition, “tobacco securitization,” future tobacco settlement payments of over $42 million would be used, estimated about $158 million for fiscal year 2017, with the approval of the Legislature. Those funds originally were scheduled to go to the Children’s Initiative Fund, which would continue to receive funding at its current level of $42 million a year.
• The second option would transfer sales tax from the state highway fund to the general fund, and would delay the fiscal year 2016 fourth quarter Kansas Public Employees Retirement System (KPERS) payment, delaying its repayment until fiscal year 2018. The governor would make an additional $25 million in cuts or savings.
• The third option would transfer sales tax from the state highway fund to the general fund. The Legislature would pass a budget with expenditure reductions of 3 percent to 5 percent for most state agencies for fiscal year 2017.
Democrat House Minority Leader Tom Burroughs issued this statement:
“None of the three options proposed by Gov. Brownback address the underlying problem – a lack of revenue. In fact, these short-term ‘fixes’ create a larger long-term problem. Kansans are going to be paying for the mistakes of the Brownback Administration for years to come. The only question is how much it will cost,” Rep. Burroughs said.