By Jim McLean
November 13, 2015

A nonprofit advocacy group that frequently tangles with Gov. Sam Brownback on policy issues is charging that his latest plan to avert a budget shortfall will shortchange some of the state’s poorest and most vulnerable children.

Shannon Cotsoradis, president and CEO of Kansas Action for Children, said the Brownback administration’s plan to sweep $9 million from a fund earmarked for early childhood programs will reduce their funding by about $1.3 million over the next 18 months.

The sweep of the money was one of several adjustments announced last week by State Budget Director Shawn Sullivan to fill a $124 million budget gap created by ongoing shortfalls in revenue collections. At the time of the announcement, Sullivan said the sweep would not reduce funding to any of the organizations supported by the block grant.

“Really, no one outside of state government will notice an impact from this change,” Sullivan said. “It’s more of an accounting transfer.”

Cotsoradis is challenging Sullivan. She contends that grant letters already sent will have to be revised to reflect reductions in available funding of 6.5 percent in the current budget year and another 3 percent next year.

“The reality is they (the programs) will definitely feel these reductions,” Cotsoradis said. “It’s not just an accounting maneuver where we’ve moved money from one period to the next — it’s gone.”

At-risk children

Organizations potentially affected by the reductions include school districts, mental health centers, public health departments and Head Start programs that provide or help fund initiatives for at-risk children and their families.

“It (the block grant funding) is dedicated 100 percent to at-risk children,” Cotsoradis said. “So, in many communities across the state, we are taking money from the most vulnerable and youngest children who are often living in the poorest families.”

The money for the early childhood grants comes from payments that the nation’s major tobacco companies agreed to make in 1998 to settle a lawsuit filed by Kansas and 45 other states. The settlement payments are deposited into the Kansas Endowment for Youth, or KEY fund, from which annual transfers are made to the Children’s Initiatives Fund.

Impact disputed

Sullivan and others in the Brownback administration continue to insist that the planned sweep will not reduce funding for the early childhood programs.

“This one-time adjustment should not result in a reduction in grant funding or (in) the services delivered through them,” said Eileen Hawley, the governor’s spokesperson. “This adjustment allows the Children’s Cabinet to meet its obligations under its current grants; aligns these grants with the correct accounting period; and ensures the state remains in compliance with its cash basis and budgeting law.”

The reference to “the correct accounting period” is a key phrase in Hawley’s statement. At issue is money that was reallocated from fiscal year 2015 to fiscal year 2016.

Sullivan insists that money could only be spent to cover expenditures made in 2015.

“It was discovered over the summer that the Children’s Cabinet had been doing what we call encumbering funds from the last fiscal year … inappropriately,” he said at last week’s briefing on the budget.

The use of the reallocated funds by the Children’s Cabinet violated state law, Sullivan said.

But Cotsoradis said the nine-member Children’s Cabinet, which administers the block grant program, was led to believe it was OK to use the carryover money in 2016.

“We knew there was money reallocated from 2015 to 2016 and we included that in our grant awards slate,” she said. “The budget division was well aware of that. Then, they swept the money after the grant-award letters went out without doubling back to make sure all those grantees would be whole.”

Arguing that the sweep had been planned for months, Cotsoradis points to a decision made by state officials requiring several grantees to change their operating calendars to align with the state’s fiscal year. The state’s sudden insistence on a common operational calendar created a pool of unspent money at the end of the 2015 budget year

“In retrospect, it certainly looks like the fiscal year was altered to free up resources that could be swept by the administration,” she said.

Because the amount the state recieves from the tobacco settlement can change from year to year, Cotsoradis said the diversion of money from the CIF is jeopardizing the long-term funding of children’s programs.

“These financial gimmicks are more irresponsible than payday lending,” she said. “The state is borrowing against something it doesn’t even know it has and, ultimately, children will pay the price.”

In recent years, the Brownback administration has diverted nearly $50 million from the CIF to help address budget problems, Cotsoradis said.

Read more from the Kansas Health Institute.