No school finance cuts in Gov. Kelly’s draft allotment plan; arguments erupt over certificates of indebtedness

K-12 finance has been spared cuts under preliminary budget reductions unveiled Thursday by Gov. Laura Kelly’s administration. Meanwhile, a battle erupted between Kelly, a Democrat, and some Republican legislative leaders, who thwarted her effort on the State Finance Council to approve $900 million in certificates of indebtedness for cash flow purposes as the fiscal year neared an end.

Kelly said the rejection of the certificates could jeopardize critical state services, including paying teachers.

“The same Republicans on the State Finance Council who voted against the certificates of indebtedness rubber-stamped every action Sam Brownback took as he drove our state’s finances into the ground, including approving several previous certificates of indebtedness. Without this certificate we threaten the future of our state — we can’t pay our teachers, we can’t pay our 40,000 state employees, we can’t get PPE we need to protect Kansas from the threat of COVID-19. I won’t let that happen,” Kelly said in a statement.

Republicans said they wanted more time to analyze proposed budget reductions before voting on the certificates.

On the proposed budget cuts, Kelly’s Budget Director Larry Campbell presented a draft plan to avoid a $700 million budget deficit in the next fiscal year caused by the loss of revenue related to the COVID-19 pandemic and accompanying economic downturn. 

Campbell said the plan doesn’t reduce the state’s commitment to operate schools. However, it would delay a payment to schools by one day, moving $77 million in funding from the current fiscal year into the next fiscal year, which starts Wednesday. And the allotments would reduce an $8.5 million increase for career and technical education and $5 million increase for school safety grants.  

The plan relies heavily on delaying a $264 million in payments on a no-interest loan the state made to itself from the Pooled Money Investment Board, a long-term investment fund that was raided to cover budget holes under Gov. Sam Brownback.  

Campbell presented Kelly’s plan during a meeting of the State Finance Council, which is chaired by Kelly and includes House and Senate leaders and budget chairs.  

Republicans on the committee said the budget cuts didn’t go far enough, with some complaining they needed more time to study the plan.

“This is inadequate for the crisis we are facing,” Senate President Susan Wagle, R-Wichita, said of Kelly’s budget allotments. 

But Kelly and her fellow Democrats on the panel said the governor’s plan was proper given current information. “We have no idea right now what our economic situation will be as we move forward,” Kelly said.  

The meeting provided a preview of what promises to be bruising battles over the state budget between Kelly, a Democrat, and the Republican-dominated Legislature. With school funding making up about half the state budget, education officials should remain aware about the developing budget situation.  

After the meeting, Kelly said she would call another meeting of the Finance Council on Friday (June 26)  “and every morning until our Republican colleagues approve this certificate of indebtedness.”



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