State Agencies Asked to Sacrifice to Make Up Budget Deficit

TOPEKA, Kan. - Governor Kathleen Sebelius (D-Kan.) wants to solve budget issues without raising taxes, but that means asking all state agencies to cut back.

"Everybody is bearing a piece of the pain, but the reductions and the solutions are strategic so that they try to keep state government operating, keep basic services and still protect education and human services where possible," said Budget Director, Duane Goossen.

The governor's strategy involves freezing aid for K-12 public schools at the $3.7 billion amount that was approved during the 2008 legislative session. She also proposes cutting universities' budgets, including the suspension of $15 million in deferred maintenance funds for FY 2010.

Regent Donna Shank of Liberal, Chair of the Kansas Board of Regents, issued the following statement in response to Governor Kathleen Sebelius’s Fiscal Year 2009 and Fiscal Year 2010 budget
recommendations:
“The Board certainly understands the harsh reality of the state’s economic environment and the realistic and overall context in which the Governor’s budget recommendations should be viewed. Due to careful planning undertaken over the past few months, the state’s higher education system is prepared to absorb Fiscal Year 2009 budget reductions. However, it will not be easy or painless; these reductions will have a serious impact, and there will be consequences as a result.
Nonetheless, we understand that every state governmental entity must share in the pain so we are prepared to do our part.”

Local governments are also being asked to do their part. They'll take about $80 million in tax revenue that would instead be put in the State General Fund. That includes a proposal to eliminate the Community Service Tax Credit for FY 2010, and attributing all liquor taxes to the State General Fund. Goossen said that $80 million represents about two percent of the amount local governments actually plan to use in their budgets for things like parks and recreation. The plan also suspends a Property Tax Slider of $45.3 million in FY 2010. That cost would also be transferred to local government.

"Given that we are asking state agencies and others to cut back substantially more than that, it seems reasonable to have that much of our solution be something that local governments help us with," said Goossen.

The governor also proposes eliminating the Kansas Technology Enterprise Corp and Kansas Inc, which would mean the loss of 21 jobs total in 2010. Those positions would be absorbed by Commerce.

A 14-week, or seven pay period, moratorium on payments into the state employee health plan would free up $23.7 million. Goossen said there is enough money in the health plan fund that suspending the payments would not affect current health benefits of state employees.

A number of tax cuts planned for FY 2010 would be suspended indefinitely.

Department of Correction facilities to close include Toronto, Osawatomie, Stockton, Labette concentration camps and two day reporting centers - one in Wichita and one in Kansas City. Goossen isn't sure how many jobs would be lost with those closures.

The plan calls for three waivers to be frozen: the Frail Elderly, SRS-HCBS PD, and Developmentally Disabled.

$56.7 million in revenue is added to the FY 2010 budget from unallocated gaming revenue. That money is expected to come from two $25 million privilege fees paid out by two casinos expected to be built in Northeast Kansas and South Central Kansas.

Goossen said the 2009 revised budget bill has been drafted and was introduced in both houses Tuesday. Both are expected to hold hearings Wednesday.

The 2010 budget is in the process of being drafted.

For more detail on the Governor's FY 2010 Budget Report, visit http://budget.ks.gov or contact the Division of the Budget at (785) 296-2436.


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