TOPEKA, Kan. (AP) - Kansas legislators are working to solve a complicated puzzle to fix the state’s serious budget problems. They’re trying to decide how much to increase taxes without being certain about how much they’ll spend on public schools or government programs.
Lawmakers hope to make progress next week toward closing projected budget shortfalls totaling more than $1 billion through June 2019.
They expect to increase taxes, but they’re struggling with the amount because they’re still working on spending blueprints for state government. And they can’t finish those blueprints until they agree on how much they must increase aid to schools to satisfy a Kansas Supreme Court decision last month.
The pieces must fit together by July.
BESIDES SCHOOLS, WHAT ARE SOME OF THE SPENDING ISSUES?
The main issue is that the state would have to spend about $6.4 billion each of the next two years to maintain services as they are, but the state expects to collect only about $6 billion in taxes each of those years. So the state has to decide what to cut or which taxes to increase and how much.
Legislators can plug some holes with internal government borrowing and by adopting proposals from Gov. Sam Brownback to short the state’s annual contributions to public employee pensions in the 2018 and 2019 budgets. They also can divert money from highway projects.
But even after doing all that, they’d need to raise taxes by at least $240 million a year before factoring in extra money for public schools.
Many lawmakers would like to boost pay for state workers because there hasn’t been an across-the-board salary increase for almost a decade. The Senate has approved a 2 percent raise; the House is considering a different plan.
And they feel pressure to roll back past spending cuts in higher education spending and to increase spending on social services.
In all, with all sources of funding, including money from the federal government, the state’s total budget is likely to be roughly $16 billion for the 2018 budget year, which begins in July, and fiscal 2019, which begins in July 2018.
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WHO WOULD PAY FOR ALL THIS?
Lawmakers so far are focused on raising income taxes.
Brownback vetoed a bill in February that would have raised more than $1 billion over two years by rolling back past income tax cuts that he has championed. Much of the new revenue would have come from 330,000-plus farmers and business owners who would have lost a tax exemption, but rates would have risen for many people.
Republicans are working on proposals for a “flat” income tax with a 5 percent rate for all filers to replace separate rates for lower- and higher-income filers. The House could debate such a plan next week.
The simplified tax system would generate more dollars for the state. Farmers and business owners still would lose their exemption, but Democrats and GOP moderates contend poor and middle-class families would see big hikes, too.
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WHAT ABOUT SCHOOL FUNDING?
Legislators aren’t likely to know until May or even early June.
The state Supreme Court ruled last month that school funding is inadequate and that policy makers must come up with a new funding plan by June 30. Lawmakers are still debating how much extra is needed.
A special House committee is working on a per-student funding formula. It hopes to vote on a plan Monday, and so far its work would require the state to boost its aid by at least $100 million a year.
Some educators think the figure should be much higher, perhaps approaching $800 million, though they’ve also said such an increase could be phased in over several years.
But legislators won’t arrive at a figure until they settle on the details of a new formula that resolves issues such as how much extra money schools get to help at-risk students.
The bigger the increase, the more taxes will have to rise.
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