Brownback proposes expenditure reduction of $72 million

From CJ Online

By Tim Carpenter

timothy.carpenter@cjonline.com

Gov. Sam Brownback submitted a budget amendment to the Legislature on Thursday to reduce state general fund expenditures by $72 million and ease the burden of producing balanced budgets in the next two fiscal years.

The recommendation to members of the House Appropriations Committee was in response to a bleak revenue analysis demonstrating lawmakers had to close a $400 million revenue shortfall for the fiscal year starting July 1.

Tax collections to Kansas’ treasury collapsed in accordance with major business and individual income tax reductions approved by Brownback and Republican legislators in 2012 and 2013. A state economist estimated the state would have $1 billion in extra revenue in the next fiscal year if the tax reform bills hadn’t been adopted.

Big part of Brownback’s budget plan is in trouble

By John Hana
Associated Press

An $80 million piece of Republican Gov. Sam Brownback’s plan for balancing Kansas’ next budget is in trouble because a major health insurance company opposes it.

“The bill overall is in trouble,” House Insurance Committee Chairman Scott Schwab, an Olathe Republican, said Wednesday. “He’s going to have to come up with a different proposal.”

The proposal would increase a fee paid by HMOs to 5.5 percent from 1 percent. The state would use the new revenues to capture additional federal funds for its Medicaid program, which provides health coverage to about 368,000 needy and disabled residents.

Brownback’s budget misses the mark

A blog by former Kansas Budget Director Duane Goossen

(EDITOR’S NOTE: Duane Goossen served as the Kansas Budget Director for 12 years in the administrations of three governors — Republican Bill Graves and Democrats Kathleen Sebelius and Mark Parkinson.)

What to do? Income to the Kansas general fund has fallen so low that it no longer comes close to supporting normal, reasonable expenses, and the bank account is empty.

The governor (Sam Brownback) has sent the Legislature a proposed budget to address the situation, but his recommended solutions do not strike at the cause of the crisis.

Here’s the problem: Kansas general fund expenses currently total about $6.4 billion, and those expenses are growing. They will continue to grow. To cover expenses, Kansas needs a revenue stream that is also at least $6.4 billion and growing. But the Brownback tax policies, put in place in 2012 and 2013, cut income tax receipts dramatically. The governor’s own Department of Revenue estimates the loss of income tax revenue to be $886 million in this fiscal year, and more next year. As a result, overall general fund revenue has fallen below $5.8 billion. Under current policy, prospects for that income stream to increase remain slim.

To read the entire blog, click here.