In her first budget as governor, Democrat Laura Kelly aims to inject cash into what she calls critical state services.
The proposal unveiled Thursday also would start to wean the state off money diverted for years from highway construction and upkeep.
But the bill met a predictably harsh reception from some Republicans. They argued the spending plan would lead to budget deficits.
To invest in services, while preserving a savings account, the budget would stretch out payments intended to fill a deficit in the state pension plan. It also continues transfers from the highway fund, although it would take less money from roads than in recent years.
That would let Kansas plow money into schools, child welfare and an expanded Medicaid program that would offer health coverage to an added 150,000 or so Kansans.
Kelly’s budget also shoots to end a years-long school funding lawsuit. It would add $92 million a year more for schools to comply with a court decision from last year.
The budget follows a theme Kelly has repeated, that she inherited problems from her Republican predecessors and that she can’t restore state services in a single year.
“It’s going to take time for Kansas to heal from the damage inflicted over the last eight years,” Kelly said in a statement, “so we don’t have a moment to lose.”
Kelly’s budget director, Larry Campbell, told lawmakers in a budget briefing that the spending plan invests in services while allowing Kansas to weather economic uncertainty that, he said, could include a possible recession in the coming months or years.
“We need a cushion, and we need tools back in the toolbox to address the unforeseen economic challenges coming,” Campbell said.
At the end of fiscal year 2020, Kelly’s budget would leave Kansas with a $686 million reserve. That’s 9 percent of state spending and a decrease from the $761 million the state had banked at the end of fiscal year 2018.
Republican Senate Majority Leader Jim Denning said lawmakers don’t want to extend the payoff schedule in the Kansas Public Employees Retirement System, or KPERS. Without the restructured pension payments, he said, the numbers in the budget don’t work.
“This whole budget is built on a house of cards,” Denning said after the meeting.
Kelly’s also pushing to expand the health care program Medicaid. She’s budgeted $14 million, although the administration says the cost would rise in the following year.
That is an underestimate of the true cost, Denning said.
“We know that it’s impossible,” Denning said.
Yet Denning applauded the proposal to reduce transfers from the highway fund.
Medicaid expansion will likely have bipartisan support in the Legislature. A bill passed both chambers in 2017 but was vetoed by then-Gov. Sam Brownback.
Democratic Rep. Kathy Wolfe Moore said even if the cost estimate isn’t exact, Medicaid expansion is something lawmakers need to do because of the benefit it could offer to Kansans and struggling rural hospitals.
“I absolutely believe we have to invest in that,” Wolfe Moore said.
The spending plan also makes investments in a variety of other services.
- It would spend $22 million to give state employees a 2.5 percent raise.
- The plan would reverse a funding cut universities absorbed in 2016. Those cuts had already been partially restored and finishing the job will cost almost $9 million.
- To tackle problems in the state’s troubled child welfare system, the budget proposes hiring 55 more social workers at a cost of $4 million. The plan would also spend more than $7 million on services aimed at keeping children in their homes so they never enter the foster care system in the first place.
The governor’s spending plan serves as a template for state lawmakers. Now, budget writers from the House and Senate will begin digging deeper into the bill and developing their own spending priorities.
“It’s kind of a rosy picture,” said Republican Rep. Troy Waymaster, the top budget writer in the House. “We have to go back and do a complete analysis.”
Stephen Koranda is Statehouse reporter for the Kansas News Service Kansas, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. Follow him on Twitter @kprkoranda.
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