Capitol Comments
March 25, 2003
GOVERNOR SEBELIUS ADJUSTS THE STATE BUDGET
In these difficult times at home and abroad, it is very important that Kansas take measures to provide the services and programs needed to keep the state strong while making sure that the citizens do not carry the burden. Governor Sebelius understands this, and on Tuesday introduced a budget plan that maximizes government efficiency and minimizes the economic hardships by looking elsewhere for revenue.
The Governor highlighted steps her administration has taken to create a streamlined bureaucracy including slashing printing and transportation costs thanks to new technologies, renegotiating state contracts, and closing unnecessary state agency offices. She also cited the FAIR SHARE program, which was created to collect unpaid back taxes owed to the state. In only 72 days, that program has collected almost $7 million in unpaid taxes to the state. These are small things that Kansas has already done to protect citizens from the budget crisis.
Once the Governor finished highlighting the success of her very new administration, she began to outline the various components of her proposed budget plan. The largest source of revenue received by the state under this plan would be through the sale of bonds taken from the tobacco settlement receipts. Creating bonds from these receipts makes them tax-exempt and would create $175 million in additional revenue. These funds will not only be used for the Kansas Endowment for Youth and the Children's Initiative Fund as they currently are, but also for improvements to Kansas roads and highways. The proposed budget also calls for changes in the schedule for property tax payments that would save the state $161.6 million in FY 2004 and calls for changes in income tax filings that would add $9 million annually. Finally, the Governor called for legislation to expand gaming in Kansas. The Governor estimates that gaming would yield $30 million to the State General Fund next year alone.
AGREEMENT TO PURCHASE MEDICATIONS
Governor Sebelius hopes to enter into an agreement by July 1 with Michigan, South Carolina, Vermont, and Wisconsin to buy prescription drugs for needy Kansans at a discount. Kansas would potentially save millions of dollars a year. This program would cover the cost of prescriptions for the poor or disabled Kansans who cannot afford their necessary medications. No Kansan will likely be denied any medications they are currently using because the list covered by this agreement is quite extensive.
Rising costs for medical services have made the state's budget problems worse in recent years. Federal and Kansas law requires the state to provide services to whomever is eligible under the Medicaid program. The governor has proposed spending nearly $1.15 billion on such services, an increase of $125 million, or more than 12 percent.
REVENUE BONDS TO STRENGTHEN RETIREMENT FUND
In an effort to avoid a future tax increase, the Senate approved by a vote of 29-9 a proposal to issue $750 million in revenue bonds to strengthen the state pension fund for teachers and state government workers. There is enough money to pay pensions in the short term but the Kansas Public Employees Retirement System is not collecting enough annually to cover benefits for the next forty years. The projected gap over that span is $1.5 billion.
The state is putting $179 million into KPERS in the current fiscal year. According to the officials of the pension fund, $280 million a year is needed to remain solvent in the long term. The issuance of these revenue bonds by Kansas Development Finance Authority would allow the state to avoid raising its contribution to KPERS for an additional two years while dealing with the budget problem.
KPERS' investments have declined in value in the past two years causing some senators to believe the approach is risky. KPERS would invest the bond proceeds, and would have to earn a higher return than the rate of interest paid on the bonds. Argument is that with interest rates low, KPERS would not have any difficulty earning more on their investments than it would have to pay on the bonds. The Governor has not taken a position on this proposal.
IN CONCLUSION
I had the pleasure of having two students from Dexter High School, Rebecca Shelton and Sarah Fanning, shadow me for an entire day. This is an excellent way for students to follow the entire legislative process. I appreciate Mrs. Nancy Fanning for providing transportation so the girls could take advantage of this unique experience.
The regular session is scheduled to end on April 4. You can continue to contact my office in Topeka during this period; however I will be out of the office most of the day due to full days spent on the Senate floor. Betty will continue to take your telephone calls and messages. Your input is important to me.
You can reach me via e-mail at ggoodwin@ink.org
or Goodwin@senate.state.ks.us. My address
is State Capitol, Room 403-N, Topeka, KS 66612; telephone (785) 296-7381 or
1-800-432-3924.
Copyright © March, 2003 by Jamiebro Publications. All rights reserved.