Kansas Senate passes $15.5 billion budget requiring tax increases to balance

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TOPEKA, Kansas — The Kansas Senate passed a $15.5 billion budget proposal Wednesday, but lawmakers won't take steps to balance it until late April.

The spending cuts in the Senate's budget, along with transfers from other funds, erase most of the state's nearly $600 million shortfall for the fiscal year beginning July 1, but the budget would still come up about $130 million short without tax increases.

Senate Majority Leader Terry Bruce, a Republican from Nickerson, said that approving the budget, which passed on a 26-13 vote, would help focus discussions on what revenue adjustments can be made to fill the remaining hole.

"All the pieces to the puzzle are laying out there on the table for us, and from here on out we spend our considerable talents, I think, trying to put them together and get the best policy we can," Bruce said.

One piece is an increase to alcohol and tobacco taxes proposed by Kansas Gov. Sam Brownback amounting to $1.50 more per pack of cigarettes, while taxes on other tobacco products would increase to 25 percent from 10 percent and the tax on alcohol at liquor stores would jump to 12 percent from 8 percent. This is projected to raise a total of $394 million over two years.

Other proposals would offer an amnesty that waives penalties for people who owe back taxes, eliminate sales tax exemptions and impose excise taxes on renewable energy production.

The House has not yet voted on a budget bill.

Republican Sen. Les Donovan of Wichita, who chairs the Senate Assessment and Taxation Committee, said the Legislature is also waiting for an April 20 report by state officials and university economists projecting state revenues through June 2016, which may allow the Legislature to soften some tax hikes.

But Democratic Sen. Laura Kelly from Topeka said the Legislature had never before voted on a budget that doesn't balance during her 11-year tenure, and she worries that the plan is based on short-term maneuvers that make it unsustainable.

"There is too much one-time money, there's too much stealing money from other agency entities and using it to plug the holes in the budget," Kelly said.

Budget Director Shawn Sullivan said he would only be concerned if both chambers had passed the document before the April 20 report comes out, but pausing it halfway through the process still allows for flexibility.

Much of the Senate debate over the nearly 140-page budget focused on provisions shifting a larger proportion of state scholarship money to private schools and setting aside $3 million to outsource an efficiency study into government waste.

Currently, state universities and private colleges share about $13.3 million for student financial aid with a 50-50 split, but the Senate bill would shift 75 percent of that money to private institutions while Board of Regents colleges would get 25 percent. Supporters said this would drive more students to private colleges, which would save taxpayer money.

Several senators also balked at the cost of the proposed efficiency study, saying that existing state agencies could better handle it, and similar private studies into state finances in the past were ignored.

Republican Sen. Ty Masterson from Andover, one of the main architects of the budget, said it is important to hire an outside firm to look for efficiencies because legislators and government auditors are too constrained by time and habit to find creative solutions.

"We come into this building, we have 90 days to absorb a budget that is 50 miles wide and 30 miles deep," Masterson said. "We come in with our hands behind our back and blinders on our face and we need an entity with a new look."


Proposed Budget Bill: http://goo.gl/Ga8hXF

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