A Look at Some Kansas Budget Adjustments

Page 3 of a document titled “Overview Presentation FY 2010 Governor’s Budget Report” (download it from this page: www.budget.ks.gov/gbr.htm) holds two tables: one titled “State General Fund Outlook — Without Solutions,” and a second with solutions.

One of the differences between the two tables is a line in the second table captioned “Governor’s Revenue Adjustments” and holding the amount $99.2 million. This is one of the ways the Governor — to the extent she actually did — “balanced” the fiscal 2009 budget. (The fiscal 2009 budget is for the year ending June 30, 2009. We’re just a little past the mid-point of this year.)

Page 4 of this report is titled “Steps to Resolve Budget Gap,” and it holds the detail of what the revenue adjustments mean. They’re not quite what you might expect.

The largest of these adjustments, at $30.9 million, is “Stop Highway Fund Loan Repayment.” What this refers to is that the state has borrowed from the highway fund — money raised to be spent on highways — and spent it on the general operations of government. As reported in the Topeka Capital-Journal last November, “This fact has KDOT officials thinking the state won’t make an expected $62 million in loan repayments to the state highway fund over the next two years. Legislators loaned the state money from the fund during the economic downturn in the early 2000s.” (Highway projects on hold across state, November 13, 2008) This prediction by Kansas highway officials turned out to come true.

But is failing to repay a loan really an adjustment to revenue? And please don’t say this is just failing to repay money we borrowed from ourselves. (That reminds me of the $20 I owe my wife.)

Next on the list is “Transfer Other Special Revenue Balances” at $29.0 million. This is explained as “Expenditures in special revenue fund agencies are reduced and the resulting savings plus any other balances transferred to the State General Fund.” Again, is this really a source of revenue? Balances are money that’s already been collected, money that’s sitting in an account to provide a cushion. They’re necessary. Spending balances as though they were revenue fixes things only once, as revenue is something that is recurring, but balances simply exist. They don’t refresh.

Then, at $19.1 million, is “Suspend Transfers to SCCHF, SWPF, Health Care Stab.” These refer to Special City and County Highway Fund to aid local governments in road construction, the State Water Plan Fund, and the Health Care Stabilization fund.

It’s things like these that AFP’s Derrik Sontag was referring to when he said “This proposal uses accounting tricks and relies on one-time-only funding sources that serve as a band-aid approach to our budget situation.”

More budget coverage can be found at Kansas Liberty in Governor’s budget recommendations panned by critics.

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