Kansas Speaker Mike O’Neal at AFP Summit

Representative Mike O’Neal, Republican from Hutchinson, is the new Speaker of the Kansas House of Representatives. He spoke on January 10 at Americans For Prosperity‘s Defending the American Dream Summit in Wichita.

His speech warned of tough times ahead, with a difficult job for both the legislature and citizens. Part of the problem is that we’ve been spending a lot in recent years: “Kansas is a cash basis state. We have spent more in the last four years than we’ve taken in, primarily because we’ve had healthy balances, and because we have had, historically, some decent economic growth. That, however, is not, and should not be, the justification for growing government and continuing to spend money without looking out on the horizon to see what economic markets are going to do.”

He said that the current year deficit (the fiscal year ending June 30, 2009) is around $190 million. But the number to aim for is $290 million, so that there is an ending balance. Then for fiscal year 2010 (July 1, 2009 to June 30, 2010), somewhere near $1 billion.

That’s the bad news, he said. “The good news is that presents us with an excellent opportunity to do things fundamentally different with the way we look at state budgets. … It would probably surprise many of you in this room to learn that we do not conduct financial audits of the state budget, and have not done that for a number of years.”

“We simply spend our session looking at the governor’s enhancement budget for those agencies, and determine what, if any, enhancements we’re going to allow. That is not going to happen this year. … We are looking at making fundamental cuts in the budget.”

He went on to say that we’ve known of the trouble with the budget for about 90 days. So why hasn’t anything been done? The legislature couldn’t do anything because it wasn’t in session. But, Governor Kathleen Sebelius can do things when the legislature is not in session. She can make targeted cuts. With permission of the finance council, she could make across-the-board cuts. But she’s not done either.

The Wichita Eagle provided coverage of O’Neal’s talk, including some remarks made afterwards, in the article Speaker says cuts will be painful.

7 Comments

  • The Speaker is partially correct. The Governor can make across-the-board cuts with the permission of the State Finance Council or targeted cuts. What I did not see in this blog post is that the Governor has already directed state agencies to reduce their budgets earlier this year.

    We can debate whether the Governor’s recommended cuts go deep enough, but to be fair she has directed state agencies to make cuts.

  • This is a confusing situation. Here’s reporting from a Lawrence Journal-World story, November 5, 2008:

    In the face of dropping tax revenues, Gov. Kathleen Sebelius on Wednesday directed state agencies to cut $60 million and warned that deeper reductions could be on the way. “Agencies have already begun hiring freezes, they’ve stopped capital purchases, they’ve been making other changes, but those efforts need to be increased and extended,” Sebelius said. She said the 3-percent cut, which would include higher education, represented a first step and that bigger cuts “are almost certain to be necessary” in the next fiscal year.

    But here’s reporting from the Topeka Capital-Journal from November 28, 2008:

    Two of the Legislature’s top Republican leaders are convinced Democratic Gov. Kathleen Sebelius must immediately order cuts in state spending in response to sputtering revenue collections. … After the November election, the governor put agencies on notice that planning should reflect a possible 3 percent reduction in appropriations this fiscal year.

    Legend, do you know which is the correct news story? Did she, or didn’t she order cuts? Or did she order agencies to only prepare for cuts?

  • Gov. Sebelius will not make the tough financial decisions nor will she consider larger cuts in the bureacracy. It is not in her DNA to take political risks. Education and Social Services are the largest drivers of the budget and once you exempt them there is no where else to cut. Expect higher taxes.

  • Bob, the Governor ordered 3% cuts to state agencies in the current fiscal year. The story from the LJ World is more accurate than the other one.

  • Cybex, can you tell me where in the Governor’s budget she is recommending higher taxes? I can’t seem to find it.

  • Legend, I can’t find any evidence that the governor ordered the cuts you say she did. Can you direct us to where we can find such evidence?

  • Bob, I thought you followed all of this. Here is a story from the Associated Press from June 2008. The article stated the Governor asked cabinet agencies to reduce spending. Again, we can debate whether she cut enough out, but my point is she was pro-active back in the summer before the economy really went down the tubes in September.

    The other article is from the LJ World on November 5 stating that the cuts would now be 3%. Bob, do you need any more evidence?

    http://www2.ljworld.com/news/2008/jun/28/gov_asks_agencies_reduce_spending/

    http://www2.ljworld.com/news/2008/nov/05/sebelius_asks_3_percent_budget_cuts_across_state_h/

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