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March 18, 2010
House GOP leaders today released their plan for a balanced budget without tax increases.
The plan relies heavily on reduced spending for highways and K-12 schools. It also counts on an influx of federal dollars for Medicaid that has not yet been finalized by Congress.
The plan was described at a press conference by House Speaker Mike O’Neal, R-Hutchinson, and Appropriations Chairman Kevin Yoder, R-Overland Park. Also present were House Majority Leader Ray Merrick, R-Stillwell and Education Committee Chairman Clay Aurand, R-Courtland.
“It’s a balanced budget without draconian cuts and does not require a tax increase,” O’Neal said, calling the spending blueprint the result of “behind-the-scenes” work that started at the beginning of the session.
Up until Wednesday, House budget committees had only come up with about $6.3 million in budget cuts, though House leaders have consistently said spending reductions were the way to balance the budget instead of raising taxes. Wednesday, the education budget subcommittee agreed to not replace $170 million in temporary federal aid earmarked for public schools as recommended by the governor.
Lawmakers are trying to close an anticipated $450 million budget gap for the fiscal year that begins July 1, after two years of budget cutting have reduced state spending by about $1.3 billion.
Gov. Mark Parkinson and Senate GOP leaders have been calling for tax increases since the Legislature convened in January and remain at odds with top House Republicans on the best way to craft a budget for fiscal 2011.
“The Senate’s inclination to fill three-fourths of the budget hole with tax increases is flawed and contrary to the mantra of the Democrats the answer to a spending problem is not taxes, taxes and more taxes,” O’Neal said.
House Republican leaders have insisted tax increases during a major economic slump are a bad idea. But none among them proposed increases when the economy was humming, either. Instead, as the governor noted in a recent political war cry, the Legislature has cut taxes by billions of dollars over the past 15 or 20 years.
“Governor Parkinson has been unwavering in his position that cuts to education, cuts to public safety and cuts to vital services for the vulnerable are unacceptable,” spokesman Seth Bundy said in response to the House GOP plan. “House Republican leadership should turn their attention toward working our way out of this recession by determining what revenue options are available for protecting these critical assets, rather than proposing cuts which would permanently harm our schools, communities and elderly citizens.”
The House Republican plan would cut all state budgets 1 percent across the board except for prisons, K-12 education and caseloads for social services such as Medicaid.
It would restore in the coming fiscal year the 10 percent reduction in Medicaid reimbursements to care providers that became effective Jan. 1.
It would add $3.3 million for services for the developmentally disabled and $3.6 million for services for the physically disabled.
It claims $21 million in savings from a one-year, 5 percent reduction in pay for all state employees, which the plan’s authors claimed could be achieved by closing all non-essential state offices at 3 p.m. every Friday. It also would impose a hiring freeze for all state agencies including universities and the courts.
It would reduce the budget of the Kansas Department of Transportation by $50 million by shifting money currently earmarked for roads into the state general fund.
The plan also assumes passage of a primary seat belt law, a new bed tax for nursing homes and privilege fees collected from the state’s managed health care contractors.
Included in the plan's bottom line was $131 million in extended federal Medicaid assistance that passed the U.S. Senate last week but still needs approval by the U.S. House.
But Yoder said the budget plan includes provision for a $300 million reserve fund or ending balance at the end of fiscal year 2011 and if the federal Medicaid dollars don't come through then the state would still have $170 million left over.