Budget agreement for this year reached as work continues on future years

House and Senate budget committee leaders Tuesday struck a deal to balance the current year budget, while the Senate today will debate a two-year budget plan that would result in a nearly $900 million deficit over two years without a tax increase.

The budget proposed by the Senate Ways and Means Committee in Sub SB 189 significantly differs from Gov. Sam Brownback’s budget recommendations. Over Fiscal Years 2018 and 2019, it restores nearly $350 million in KPERS funding, adds $139 million in K-12 state aid the governor reduced for procurement and insurance savings the Legislature determined cannot be implemented, and does not “securitize” the state tobacco settlement.

Based on November consensus state revenue estimates, the appropriations in the bill would result in a state general fund deficit of $400 million in FY 2018 and $470 million in FY 2019, which means the budget plan could not be funded without additional revenue.

The governor had proposed small business taxes and an increase in cigarette and liquor taxes, which the Senate rejected. The House and Senate passed Sub HB 2178, which raised state income tax rates and repealed business tax exemption, but was vetoed by Brownback and the Senate failed to override.

The Senate budget plan assumes a beginning balance of $50 million next year, and spreads revenue borrowed from the long-term investment fund under the pooled money investment board of two years. The House and Senate conference committee on S Sub for Sub HB 2052, appropriations for the current year, agreed to that proposal yesterday.

House Appropriations continued work on its budget yesterday and is scheduled to keep working Wednesday. Earlier this week, the House committee reversed an earlier decision and removed the additional KPERS funding, to delay considering until the veto session May.

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