Sen. Jeff King gave a perspective of how dire Kansas’ financial situation is.
During the Great Depression, Kansas revenue fell from one year to the next only once.
During the recent recession, the state has taken in less money three years in a row.
King and Rep. Bill Otto addressed about 40 citizens Saturday afternoon at the Allen County Farm Bureau’s legislative forum.
Highest on their agenda is the legislature’s $550 million deficit facing fiscal year’s 2012 budget, which starts July 1.
“There’s no way we can hold K-12 education harmless,” said King. “It’s 54 percent of the budget. Cuts will be tough,” but will have to be made. Proposed are base per-pupil state aid cuts of $75 before June 30 and $157 next school year. Accumulatively they would lower per-pupil state aid to $3,780.
Otto noted that legislators had abdicated responsibility by not agreeing on cuts, which put the decision in Gov. Sam Brownback’s lap.
In response to a question from Martin Luther of Luther’s Smokehouse, Le Roy, about multiple layers of meat plant inspectors and supervisors, Otto said Brownback had assembled “an excellent team” to consider how to streamline government but, just two months in office, the governor had had little time. “I think that and other things will get a look,” he said.
Iolan Donna Houser said she’d “hate to see the one-cent sales tax removed” and feared for the survival of the Kansas Arts Commission, which Brownback has proposed to eliminate in favor of it becoming a private entity.
“Losing state financial help for the arts would be a killer for Iola” and the Bowlus Fine Arts Center, she said.
King said he would oppose closing the arts commission and would vote against the governor’s recommendation.
Both legislators said they thought there was little likelihood the one-cent sales tax passed a year ago to deal with budget shortages would be rescinded.
“The math doesn’t work to cut taxes,” King said.
“I’m a solid ‘no’ on a sales tax cut,” Otto said. “It may pass the House, but it has little chance in the Senate,” or being signed by Brownback, who has said it should remain in place.
Otto thinks there is a “glimmer of hope” for approval of an ad valorem levy to fund an equalized statewide activities fund for schools, which would put more money into education through local taxes.
It is a reach, Otto said, “but it might work.”
KING NOTED that the Kansas Public Employees Retirement System (KPERS) is underfunded by $7 billion, but with $12 billion in reserve those drawing monthly checks can be assured of receiving benefits at least for the next 12 years.
Today’s obligation to retirees is $1.1 billion a year, for which the state annually dedicates $700 million.
Kansas’ underfunded liability is the second highest in the nation, next to Illinois.
Two things have led to the off-balance sheet.
First is that an actuary miscalculated the amount needed to fund the retirement program to the tune of $2 billion. Second, is that the state has failed to fund even that too-low number.
By 1993, KPERS was $3 billion short. That grew to $7 billion by 2008, with investments in stocks that didn’t perform well having a role.
Among measures taken to deal with funding problems are a greater infusion of money by the state and changing the threshold for participation to a minimum age of 60 and 90 points — age plus tenure — for those entering the system after July 1, 2009. Previously, age 55 and 85 points were the thresholds.
King also said a shift to individual retirement accounts for younger workers was not likely in the foreseeable future, because “we need money coming into KPERS until it is fully funded. I could see a hybrid system at some point,” an approach he called “incredibly complicated.”
Initially KPERS was for state employees only. Those in education came aboard 35 years ago, which increased numbers and obligation substantially.
IOLAN RAY Shannon asked about Medicaid funding and Brownback’s assignment of Lt. Gov. Jeff Colyer to cut up to $200 million in state funding in the medical program that aids the poor, including those in nursing homes. It is funded jointly by the state and federal government.
King said Medicaid cuts would be troubling for southeast Kansas, with it having six of seven of the least healthy counties in the state.
“We need preferential treatment in southeast Kansas and Lt. Gov. Colyer understands that, but Medicaid funding is unsustainable at 14 to 20 percent of the state budget,” as it has been over the past five years, King said. “That’s uncontrollable growth.”
“We have to balance cuts with essential services and loss of jobs,” he added.
Register Editor Susan Lynn wondered about the curtailing of tax exemptions.
Not likely “if they increased the tax burden,” King said, and that talk about adding sales taxes to services, such as those provided by attorneys and accountants, was tempered by concern that those close to borders with Missouri and Oklahoma might move out of state.
Otto said there was consideration of shifting tax burdens to help small businesses, but “no large effort to remove exemptions.”
OTTO SAID a bill to enable consolidation of city and county governmental services was being considered in the House.
Rural areas need consolidation opportunities to survive, he added.
King agreed that legislators from six urban counties could vote in concert to force school consolidation or anything else they wanted, and that the ongoing shift of votes in both houses would favor urban areas more in 2012 with redistricting.
“Those urban counties probably will gain three senators and nine or 10 representatives,” he said, but that rural counties’ salvation may be traditional disagreements between blue-collar Sedgwick County and white-collar Johnson County.
King said he didn’t think it would be prudent to consolidate school districts, by closing buildings. Doing so with administrative teams and other things to take advantage of economies of scale could lead to savings, he said.
“There are limitless ways to consolidate services,” he said, and predicted that if nothing were done, after the 2020 Census there would be enough agreeable voters in urban counties to force some school consolidation.
THE LEGISLATORS agreed with Iolan Joe Hess that bullying in schools was an issue that begged resolution.
King asked whether a legislative anti-bullying policy had helped.
Houser, a former Iola Middle School teacher, said she had seen no evidence that it had and that the problem was exacerbated by teachers and administrators “not being able to control what happens outside of school. You never see the parents,” whose cooperation was essential in changing students’ behaviors.
“I’m sorry the policy wasn’t effective, but I’m not surprised,” King said. “I hear more about bullying than any other issue in the schools.”
As the son and brother of five teachers, King said he is well aware of today’s educational needs.
“Mom was more of a mother figure than many of her students own mothers. The problem is, she could be there only so much, and much of what she did was lost when they went home.”
He concluded that a solution to bullying, as with other social issues, would linger until “we can find a way to address home situations.”
