FROM THE CAPITOL

News for the 118th District
By Representative Don Hineman

May 4, 2009 Volume 1, Number 9

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House fails to pass Omnibus Budget

On Friday, May 1, the Kansas House of Representatives defeated the proposed Omnibus budget bill by a vote of 53 Yea, 62 Nay, with ten members absent. I was one of those voting no. I have several serious reservations about the content of the budget and the approach used to fill the significant hole in the budget caused by revenue shortfalls. As we look for ways to make the budget balance we must cut expenditures wherever possible, but avoid moves that cripple the ability of state agencies to deliver essential services. We must also look for ways to enhance revenue while causing the least possible burden to the citizens of the state. In addition, it is critical that we not take steps that would hinder the ability of commerce and industry, the economic engine of the state, to grow, expand, and pull all of us out of this economic crisis. I addressed the members of the House Friday afternoon to express my dislike of the budget proposal. The following is a transcript of my remarks.

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Remarks to the Kansas House of Representatives, May 1, 2009

First off, I want to thank the members of the Appropriations committee for their long hours and hard work in putting this budget together. You were charged with crafting a balanced budget by concentrating on expenditure cuts to achieve that objective. You tried, and made cuts where possible. But when you learned what an additional 5% cut would mean to the public safety and corrections portion of the budget you restored most of that funding because you understood that a 5% cut would have serious consequences and would cripple the ability of those departments to deliver essential governmental services. Cuts in other areas of the budget will have similar consequences. Did you notice all of the people in the statehouse Thursday who were wearing blue T-shirts, or have they really become invisible? (These were folks representing Kansans with developmental disabilities, who have been conducting lobbying efforts focusing on the notion that they have become “Invisible Kansans”) This document says they are. How can we feel good about that? Talk to folks from the mental health community, and comprehend how the cuts we would impose will prevent them from carrying out their responsibilities and produce greater cost to the state and society in future years. How is that responsible government?

I want to talk about K-12 education for a moment, but let’s not focus on urban schools, because they are not the norm in Kansas public education, they are the exception. The schools out in District 118 will never hassle about the contract for laying turf on the football field because they don’t lay turf on the football field. Instead they throw out some grass seed and unroll the sprinkler hose. Some folks say the schools can get along just fine with larger cuts; they just need to cut out the fat. But when the Information technology person is let go and the custodian takes over IT duties, you’ve moved well beyond cutting out the fat. When the school board adds 25 minutes to every school day starting in February and dismisses school for the summer on May 1, you’ve moved well beyond cutting out the fat. In fact, you’re in survival mode. Those are just two examples of how the fourteen school districts in District 118 are trying to cope with the cuts we are imposing. These small rural school districts have long ago cut out the fat and are looking for ways to hang on.

How did we get in this fix? How did the hole in the budget get so large? Obviously it’s the economy. State revenues are down. Right? We all know that’s only part of the answer. We all know that in recent years the state has been spending more than it has been taking in. We’ve been living beyond our means and have been unwilling or unable to correct that systemic problem. So once again the “revenue enhancements” in this budget are all one-time money. It amounts to financing state government by turning our pockets inside out and checking under the cushions of the couch for loose change. And each time we scrounge around for sources of one-time money so we can kick the can a little farther down the road, the use of that one-time money becomes harder and harder to justify ethically or from a governmental policy standpoint.

When we break our promises to local government and retain funds that were meant for them we force them to raise property taxes. The same thing happens when we must expand school districts’ local option budget authority because we cut the state funding. In both instances the net result is a shift in governmental funding in Kansas from sales and income tax to property tax. Problem is, the three-legged stool of funding Kansas government with sales, income, and property tax is already seriously unbalanced. In FY 2008 total property tax receipts in Kansas were 20% greater than total income tax receipts and 31% more than total sales tax receipts. That is a significant burden for many Kansans, and is a powerful disincentive to economic growth. It is simply not good tax policy to continue to shift tax burden from other sources onto the backs of property owners.

When we try to finance state government by gathering up loose change in agency accounts we are training those agencies to never carry an ending balance in their funds because we will come along and take it from them. We are training them to spend every dollar they take in. Is that responsible government?

When we tell school districts they can survive if they will just use up their reserve funds we are telling them it is OK to operate without a rainy day fund, at the same time that we have constructed our own rainy day fund that is years away from ever getting funded. Is that responsible government?

I like to construct my own budget profiles and run “what if” scenarios to gain an understanding of the budget. I’ve done that with the current proposal we have before us. I have extrapolated it out to 2011 and 2012, retaining all the budget cuts made in the current proposal. The one-time money sources are all used up as we enter 2011, so I look at what level of revenue growth would be necessary to leave us with minimal positive ending balances in those years. It would take revenue growth rates of 8% in 2011 and 7% in 2012 to keep us in the black. This means an expanding economy is not going to bail us out, because no one expects the economy to recover that quickly and that strongly.

It’s time to quit kidding ourselves and address the systemic problem of spending more than we take in. It’s time to have a serious discussion with all of Kansas about how much state government we collectively believe is appropriate, and then set about financing that government adequately and appropriately with well thought out tax policy instead of gimmickry.

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Interesting Websites

Kansas Unclaimed Property Website for unclaimed property in Kansas. I have been notifying some residents of the 118th District of unclaimed funds that are held in their name. However the total list of claims from the 118th is over 3400, and most of the addresses are no longer valid. I would encourage each of you to check this site, not only for your own name, but for the names of family members who may have moved or passed on. In some instances there is really significant money waiting to be claimed.

Kansas Works This website exists to serve as the best source for posting and finding jobs in Kansas. As more folks are laid off I expect traffic to this site should pick up. Check it out.

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You May be a Western Kansas Farmer if:

You sometimes rinse off in the backyard with a garden hose before your wife lets you in the house.

You remember the fertilizer rate, seed population, and yields for 10 years back, but not your kid's birthdays.

You have used a tractor front-end loader as scaffolding for roof repairs.

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Quote of the Week: A wise man does not need advice and a fool won't take it.