By Nick Gosnell 
January 11, 2017 

Kansas Budget Director Shawn Sullivan presented the Governor’s Budget proposals Wednesday morning. To fix the nearly $350 million hole in what’s left of FY 2017, he recommended liquidating the long-term investment fund and returning to the Pooled Money Investment Board. This move will siphon off the $45 million in interest earnings to the State General Fund and also transfer $317 million in principal into SGF to fill in the current shortfall, with the goal of repaying that $317 million loan over the next seven years.

“That’s job one,” said House Taxation Committee member Republican Les Mason of McPherson. “The recission bill was introduced this morning in that joint committee. I think it’s going to move very fast. It needs to.”

Following that, the 2018 and 2019 budget was proposed. As part of that proposal, the securitization of the tobacco settlement was brought up in an effort to create more revenue to prevent larger tax increases. There would also be increases on taxes on tobacco and alcohol and a freeze on the contribution level made to KPERS each year.

“I think there’s going to be probably more pushback on the Governor’s Budget than I’ve seen in my three years,” said Mason. “I think there are more people who ran on an anti-administration sentiment and were elected on that sentiment. I think they’re emboldened.”

One such emboldened opponent of the budget proposal is House Appropriations Committee member Democrat Kathy Wolfe Moore. She says the long-term budget proposal is damaging.

“It’s damaging to KPERS. It’s damaging to the highway fund, it’s damaging to schools,” said Wolfe Moore. “The CIF Fund is particularly worrisome to me.”

The Children’s Intiatives Fund has been funded in the past through the tobacco proceeds. Sullivan said that the money is still in the budget, just as part of the State General Fund.

Kansas Action for Children responded to the budget proposal.

“It is disappointing that Governor Brownback is doubling down on his efforts to dismantle the Children’s Initiatives Fund, yet he’s still completely unwilling to consider fixing the cause of our fiscal problems….which is failed tax policy. Kansas kids didn’t create this budget crisis, and they shouldn’t be forced to pay for it.

Legislators overwhelmingly opposed securitization in 2016, and for good reason. Securitization requires selling Kansas’ most prized asset and will wreck a thriving Kansas legacy. It will rob our premier early childhood system of its only revenue source at a time when there is absolutely no room in the state general fund to support these programs long-term. CIF services in every Kansas county that catch developmental delays, provide high-quality child care, diagnose autism early, and many others could all be lost.

If the Governor’s proposal is intended to serve a ‘bridge’ for the Kansas budget, we’re leaving our littlest and most vulnerable Kansas kids stranded on the wrong side.”

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