Legislators to review budget issues in advance of session

A panel of legislative leaders will review the challenging state of the state budget Friday, less than a month before the start of the 2017 session.

The Legislative Budget Committee will be briefed on last month’s consensus revenue estimates, which lowered expected revenues by almost $350 million below the amount budgeted last Spring. That has created a similar projected deficit in the state general fund budget for the current year ending June 30.

The forecast also calls for slow tax revenue growth in the next years, and indicates continuing deficits unless the Legislature continues to rely on pulling funds from other areas of state spending, such as the highway fund.

Gov. Sam Brownback says he will propose steps to balance the budget in the current year and propose a two-year budget plan for 2017-18 and 2018-19 at start of the Legislative session in January.

Compounding the problem will be a report from the Kansas Public Employees Retirement System. To balance last year’s budget, the state delayed approximately $100 million in employer contributions. Failure to make that payment increases the “unfunded liability” of the KPERS system. In addition, the KPERS Board of Trustees has lowered its future earning expectation from an 8.0 percent annual return to 7.75 percent. That means the Legislature will have to put more money into the system each year to pay future benefits at promised levels.

The committee will also receive an update on implementation of proposals from last year’s state efficiency report by Alvarez & Marsal, performance-based budgeting, closure of a state corrections facility, the concept of a state “rainy day” fund for revenue shortfalls and emergencies.

Two of the most significant recommendations by the A&M efficiency study concerned school districts but have not been implemented. A proposed mandatory health insurance program for school districts has been assigned to study by the Legislative Post Audit Division. The second proposal would have cut state aid to districts with high carryover balances over a five year period. Hearings were held but no bills were advanced.

Most members of the committee, who have lead the House and Senate budget committees for the past several sessions, will be in different roles for 2017, or will not be in the Legislature. House committee chairman Ron Ryckman, R-Olathe, has been chosen Speaker of the House. Fellow House members Jerry Henry, D-Atchison, unsuccessfully ran for Senate; Marvin Kleeb, R-Overland Park, was re-elected but will resign the first week of the session, and Sharon Schwartz, R-Washington, did not seek reelection.

Senate Ways and Means Chair Ty Masterson, R-Andover, was not appointed to head that committee by President Susan Wagle. Vice Chair Jim Denning, R-Overland Park, was elected Senate Majority Leader. Ranking Democrat Laura Kelly, D-Topeka, could keep that position but Senate committee assignments have not been released.

December 15, 2016