Kansas Budget Sparring Begins (KS)
January 25, 2011
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Failing to come up with another $16.7 million in help for special needsstudents in Kansas to balance the state budget could trigger federal penaltiesthat would cost $70 million, the incoming head of the Kansas School Superintendents Associationwarned Monday.
S keptical lawmakers said they wonder why schools wouldn’t tap into whatappear to be larger unused cash reserves, formally called unencumbered funds,to avoid those federal penalties.
Welcome to day one of an unfolding budget battle expected in the KansasLegislature. Members of the House Appropriations Committee Monday began takingtheir first official close look at some second-half changesin the state’s battered current budget that Republican Gov. Sam Brownbackoutlined a week and a half ago.
Kansas tax revenues in the final months of fiscal 2010 came in $100 millionbelow levels projectedas recently as April, which forced former Democratic Gov. Mark Parkinson’sadministration to delay $132 million in school aid payments past the June 30end of last fiscal year to keep the state’s books officially balanced.
As it was, balance was near thing, Landon Fulmer, Brownback’s policydirector, told legislators Monday. Kansas began the current fiscal year July 1with just $876.05 cash in the state’s nearly $6 billion general fund.
To avoid running that low again next June, the Brownback administration isproposing to use $86 million, or 85 percent, of some $92 million in federalstimulus money the U.S. Congress approved for creating jobs in Kansas schoolsto plump up the general fund and free additional general fund money to help payhigher required Medicaid and social services costs, Fulmer said.
That isn’t a choice anyone wants to make, but it is one that is necessary tobalance the budget next June 30 and to build a $35.7 million cushion then incase tax revenues again fall short of projections.
<p& gt;Kansas schools can live with those proposed cuts, Mike Mathes,superintendent at Seaman Unified School District 345 and also president-electthis year of the Kansas School Superintendents Association.
The proposed reductions will trim base state aid, which collectivelyaccounts for more than half of all state spending, to a projected $3,937 perpupil from $4,012 currently. (Schools on Kansas average also receive anotherapproximately $8,000 per pupil in combined federal help and local property taxsupport.)
"It often has been suggested we run our schools more like businessesand we do," said Mathes, who said his northern Topeka district has cut itsoverhead about $1.9 million annually.
But the proposed budget changes for this year do nothing to provide $16.7million in additional special education funding needed to meet current minimumfederal standards for Kansas, he said. And without that, federal penaltiesthreaten to reduce U.S. help for Kansas special education students by at least16 percent, or $70 million, he said.
"There is a principle in business that you have to spend money to makemoney," Mathes said. "We are imploring the legislature to fund thefiscal year 2011 shortfall."
Kansas tightly balanced next budgets won’t allow that, Fulmer said."You’d end up in the red again."
Some appropriations committee members asked whether schools themselves mightpick up some of the cost; state education department statistics indicated thatas a group, Kansas schools were carrying nearly $1.14 billion in what are knownas unencumberedfunds on their books last June 30, the same day that the state’s cashsupply dwindled to less than $1,000. Mo re than $127 million of thoseunencumbered funds are earmarked especially for special education.
It’s not clear just how much of that moneyactually might be available, Mathes said. Some of the funds are dedicated tospecific purposes such as building repair or paying off capital improvementbonds; others must be kept in reserve to pay ongoing overhead costs thatcontinue between the peaks and valleys of tax revenue flow.