- Policy & Research
- About KHI
December 21, 2012
Kansas faces a very challenging budget picture next year. Policymakers must resolve a large imbalance between revenue and expenditures, but how? Should they raise revenue or cut spending? Would maintaining a 6.3 percent sales tax rate solve the problem? What about cutting education funding? You can begin to answer questions like these by playing the fiscal year 2014 Budget Puzzle.
The Kansas Health Institute created the Budget Puzzle as a tool that allows you to fashion your own version of the next state budget. Cut taxes or raise them. Increase spending or downsize government. But make sure to solve the imbalance.
A Budget Puzzle player can make decisions about revenue and expenditures by choosing selections from a list of options or by writing in a new option. The numbers in the puzzle correspond to the real numbers in the State General Fund.
You start the game with a beginning bank balance of $472 million and add on expected revenue of $5.464 billion. If you make no changes to revenue, you then have $5.936 million to work with. However, the current spending level already reaches $6.170 billion, so if you make no changes to expenditures, your budget will be $234 million in the hole.
Increasing taxes by $234 million or making $234 million in spending cuts will move the ending balance of your budget up to zero. At minimum, you should try to achieve that goal when you play because that’s the minimum result that policymakers must achieve. However, a zero ending balance is not a very good place to land. State law requires an ending balance equal to 7.5 percent of expenditures. To reach that you will need to adjust your budget until incoming revenue and expenditures balance. (After the governor releases his recommendations, the Budget Puzzle will be updated to include the options he chose.)
Good luck! Play more than once. There is not just one “right” answer.