Kansas lawmakers will face difficult budget decisions when they return to the Statehouse for the 2014 legislative session. The Kansas Health Institute has produced an issue brief that details this situation and projects the combined impact on revenue that the 2012 and 2013 tax bills will have over the next few years.
A preliminary budget has already been approved for fiscal year (FY) 2015, which runs from July 1, 2014, to June 30, 2015. However, policymakers will need to consider extensive revisions in order to balance expenditures with projected revenue and leave a 7.5 percent ending balance, as required by Kansas law.
A change in Kansas tax laws in 2012 and 2013 caused projected collections to be significantly lower in FY 2014 and beyond. This has created a budget shortfall for the upcoming fiscal year. Last session, legislators modified some of the tax cuts and tried to reduce spending in order to close the gap. However, even with those changes, approved spending exceeds revenue. Projections show that the gap between expenditures and receipts will widen over the next several years, unless difficult decisions are made to bring them into closer balance.
To further complicate matters, there is pressure to increase spending. For example, a lawsuit before the Kansas Supreme Court could produce a ruling that requires the state to increase school funding levels. Medicaid spending and contributions to the Kansas Public Employees Retirement System (KPERS) are also likely to increase yearly. And there have been specific requests to increase funding for corrections, higher education, the judicial branch, state employee salaries, and other state services.
“Kansas lawmakers face difficult choices concerning the budget in the upcoming legislative session,” said Duane Goossen, KHI vice president for fiscal and health policy and a former state budget director. “Their decisions will provide a visible reflection of their policy priorities as we head into an election year.”
The Kansas Health Institute is a nonprofit, nonpartisan and independent health policy and research organization based in Topeka, Kansas. Established in 1995 with a multi-year grant from the Kansas Health Foundation, the Kansas Health Institute conducts research and policy analysis on issues that affect the health of Kansans.