The budget and the State’s economy continue to dominate the news in Topeka. Thursday the Senate passed its version of a FY 2009 rescission bill, reducing current year expenditures by some $200M and making another $134M in one-time adjustments to help balance the books for the current year. Our House Appropriations Committee, which had been having hearings on the budget the past two weeks in anticipation of the Senate budget plan coming over, worked quickly to pass a House rescission bill out Friday. The bill will be printed and read in Monday but by rule, must lay over two days before debate, meaning we’ll have the bill on the House floor for debate Thursday.
In the Senate, the leadership plan to make at least $300M in true cuts of roughly 3.4% across the board was rejected in favor of a compromise plan that addressed the Governor’s threat to veto anything that had much in the way of cuts to K-12 education. To reduce the impact of cuts to K-12 education, however, other programs took bigger hits, like social services, public safety, higher education and help for the developmentally disabled.
The House plan makes $208M in true cuts and makes revenue and transfer adjustments totaling another $114.2M to trim some $322M in expenditures exceeding revenues in the current fiscal year. At least this much in cuts will be needed. January tax-only revenues dropped another $21M below estimates so we’re down a total of $67M now since the Nov. 4 revenue estimates were announced. Corporate tax revenues continue to be down dramatically, but somewhat surprisingly, sales tax receipts are, for now, holding their own.
Key to the House version of the ’09 rescission bill is the fact it cuts more from K-12 in the current year and uses those funds to protect social services such as home and community based physically disabled and developmentally disabled assistance. The House is uncomfortable protecting K-12 funding at the expense of this group of Kansans. As the Governor contemplates how far she will go to protect K-12 funding, she’ll need to consider the impact on other important programs that would have to take bigger hits if K-12, which gets 51% of every tax dollar, is left alone. Even in the House plan, however, K-12 still takes a significantly smaller % cut than other programs, including Higher Ed. The House plan also protects more funds coming to local units of government than does the Senate plan and takes less from public safety than does the Senate plan.
The House Energy & Utilities Committee in continuing this week to hold hearings on various components of what will become a comprehensive energy plan for the state. In visiting with the Chairman and interested parties, I believe the House bill will have well over a dozen separate components, including much of what the Governor has proposed. The plan will embrace the goal of increasing the availability of renewable energy sources and will certainly include wind technology. It will also, again, support construction of a new state-of-the-art coal fired plant in SW Kansas, one that will have the latest environmental-friendly technology. The Holcomb plant would not only provide a critical boost to the Kansas economy, it would be paid for in large part by out-of-state consumers and make Kansas a net-exporter of clean and cost-efficient energy. The project will also support wind development with its construction of part of the critical transmission component to get wind generation to the consumer. With coal being responsible for 80% of our energy and responsible for our ability to have some of the most affordable energy rates in the country, this is an important piece of legislation for the state.