John Masterson, president of Allen County Community College, told Sen. Derek Schmidt and Rep. Bill Otto here Monday this was the first year in the 17 that he had prepared budgets for ACCC that numbers were shrouded in fog so late in the season.
“This is the first time this late in a session I haven’t been able to see where the pieces are going to fit together,” he said.
Schmidt, in the middle of his third four-year term in the Senate and seeking the GOP nomination for attorney general, said “I haven’t given up on a tax increase,” to close a $510 million shortfall for the 2011 state budget. However, Schmidt said he doesn’t know how a financial resolution will be reached by legislators. “An income tax increase is a non-starter, but I’d probably be receptive to some sales tax increase.”
A majority of House members have maintained they won’t accept a tax increase. Making cuts sufficient to balance the budget is “beyond reasonable,” Schmidt said. The Legislature reconvenes Wednesday.
“It wouldn’t be responsible to vote for a big additional cut in K-12 funding,” he said.
Comments from Schmidt gave hope that USD 257 won’t have to make reductions as severe as those proposed. The assumption has been, if House members have their way and base state aid is cut to $3,726 per pupil, the local district will face a $902,000 reduction in budget authority. That would be on top of $1.1 million USD 257 has lost since September 2008.
For USD 257’s worst case scenario to play out — and similarly for other area districts — cuts to K-12 funding would have to be an additional $170 million.
“The House is more interested in cutting than raising taxes, but a cut that big isn’t going to happen,” Otto chimed in.
Another piece of the budget puzzle for school districts is that state aid in Kansas can’t tumble too far without jeopardizing federal funding, Schmidt observed.
“The threshold was established in 2006 (under Gov. Kathleen Sebelius) and we’re very close to that point,” at today’s $4,012 per-pupil funding, he said.
There is a means of circumventing the threshold, though.
“You could cut weighting,” of low enrollment and at-risk students, Schmidt said. “But that would be disproportionate for districts across the state and would really hurt those here and elsewhere in southeast Kansas. And, it would open a whole new school finance debate.”
Weighting factors are in place to equalize funding across the state.
Schmidt thinks $96 million in additional cuts to K-12 education is the maximum possible without risking loss of federal funding.
In response to Masterson’s budget concerns, he said “there’s no support for a higher ed cut in the Senate,” although a 5 percent reduction had been mentioned in the House.
EDUCATION, K-12 and post-secondary, along with Medicaid funding, make up more than 80 percent of the state’s general fund budget, which was $5.5 billion this year before revenue shortfalls led to cuts that reduced it to about $5.2 billion.
While much attention is focused on education, Schmidt said Medicaid is a concern for poor residents and elderly Kansans who depended on state assistance to live in nursing homes.
Medicaid is a cooperative program between states and the federal government. In Kansas, the state pays 40 percent of costs, with the rest coming from the feds.
When budget problems mounted, Gov. Mark Parkinson ordered provider assumption of 10 percent of Medicaid costs. That led to health care concerns throughout the state and the possible loss of local medical services in one of the poorer counties in southeast Kansas, Schmidt said. The 10 percent local write-off put the doctor’s practice in the red, he said. Additional cuts, floated as part of an overall budget package, would exacerbate the problem, he said.
Schmidt thinks Congress will increase Kansas Medicaid funding by $130 million in 2011, or enough to meet the 10 percent provider write-off. That puts the Legislature in a anxious holding pattern.
OTTO, often critical of the way things work in the Legislature, said a partial solution to Kansas’ financial problems could be found in a change of leadership.
He contends duplication of services and bureaucracy have combined to create a multi-tentacled beast in Topeka.
“We have too many boards and too many commissions,” he said. “When an agency comes with a request for appropriations, leadership doesn’t look at services,” or where they are provided.
He also said that some agencies — he mentioned Kansas Department of Health and Environment and the federal Environmental Protection Agency — were circumventing the Legislature and “making laws themselves.”
“We need the Legislature to grow a backbone and take control, micromanage if that’s what needs to be done,” Otto said.
Schmidt, too, believed changing leadership might be the best approach.
When asked about several states’ efforts challenging the constitutionality of recently passed federal health care legislation, primarily because of provisions to make individuals responsible for having health insurance, Schmidt noted, “The attorney general (Steve Six) says there’s no violation of state’s rights in the federal health care bill,” Schmidt said. “I don’t agree. I think there are problems.”
But, he added, “I don’t think it’s in our best interests to try to change the attorney general’s mind. I think we should change the attorney general.”
Six, a Democrat, has not joined attorneys general from other states to file lawsuits to test the constitutionality of the health care reform law.