The last week of the Regular Legislative session is here. Friday, April 7, is scheduled as first adjournment. Talk was we may even adjourn on Thursday, April 6 but when Thursday came it was apparent that would not be the case. Then we have about three weeks off before returning for veto session on May 1st.
This is the time of the session where we ‘hurry up and wait’. What I mean by that is that conference committees meet and work out the differences between House and Senate versions on legislation that has passed. Conference committees have been slow in arranging to meet, so most of the action will occur later in the week.
The Senate has taken care of most of their intended business so they only debated a flat tax bill on the Senate floor this week. The House, however, has not finished what is referred to as the mega budget yet. The House sent back the rescission budget for more work and the mega budget remains on the calendar for action at some point in time.
Earlier this session the legislature passed a rescission budget which makes final adjustments for the current FY 2017 year ending June 30. Wednesday the House sent back the Rescission bill to conference for further work. When that is finally finished, we will work on the mega-budget, putting together most of the agency and department proposals into one package for consideration by the full House. Normally when we come back for Veto session, we will consider the omnibus budget. The omnibus budget puts the finishing touches into the budget. By that time we have the revenue estimates for the next year and we can make budget adjustments accordingly. However, none of the budget seems to be making progress, so everything may wait until May, including school finance.
One of the big unknowns is the revenue for the next two years. Earlier this session the Governor successfully vetoed a tax increase the Legislature passed. The next two years’ expenditures and revenues are between $300M and $500M out of balance, and that is even with KDOT transfers and no fourth quarter KPERS payments. If KDOT and KPERS were made whole, the number is more in the $800M to id="mce_marker"B range. Rumor is that the Governor will veto any tax plan that comes along. After all, the Governor has successfully vetoed an earlier tax plan and the Medicaid expansion, so his power over the Legislature is still intact.
All of the tricks we can think of to transfer or borrow money have been used. In looking at where the State spends its money, I would say if a tax increase fails, the lowest hanging fruit may be higher education. The Constitution requires funding K-12 education. Many of our social services are tied to matches with Federal funds. Public safety is something that everyone is interested in keeping. The rest of the budget spending, other than higher ed, is a combination of many smaller organizations, at least in comparison to K-12, public safety and social services.
Even if several of those smaller organizations were completely closed down, the amount saved would not cover the deficit. Since higher ed is not something constitutionally required, and because higher ed does not have public safety implications, that is the reason I suspect it may be seriously scrutinized as a source of revenue to fund the remaining budget items, especially if a tax increase does not occur.
It’s unsettling that so many issues will be put off until May. We have done some good things modernizing corrections and health programs, but much remains. As we will not be in session again until May 1, there will not be any further reports until the first week of May.