Kansas House of Representatives - District 28

Newsletter, March 15, 2002

March 15, 2002

FROM: Rep. Doug Patterson, Dist. 28, Leawood

DEAR FRIENDS:

The mood at the Capitol is somber after new budget numbers were released last week that show the state in an even more precarious fiscal position. While the budget is a big issue during any Legislative session, it is fast becoming the issue in 2002.

More than any other, this session is about priorities. We face tough votes – to raise taxes, cut programs, or both. Legislators are beginning to direct their full attention to the budget as we come to grips with the magnitude of the problem and work together to find a solution.

REVENUE ESTIMATES WORSEN BUDGET OUTLOOK

The state’s budget picture is even more bleak with the addition of new revenue estimates last Friday from the Consensus Revenue Estimating Group. This group of economists meets twice a year to update its forecast of state tax collections. The CREG revised its estimates down another $253.6 million, creating a total state budget shortfall of almost $700 million. Corporate and personal income tax represented the biggest declines in the revenue estimates. In fact, together, they accounted for a $265 million decline. (Other tax accounts were up slightly, which is factored into the final number.)

CONSIDERING REVENUE OPTIONS

In light of the new CREG numbers, the House this week spent considerable time looking at various proposals to raise revenue. These plans were examined individually and in several increments, giving legislators the opportunity to choose which plans they thought would best help us reach budget resolution. Today’s debate centered on cigarette and alcohol taxes; property, income and sales taxes were discussed earlier this week. None of these measures passed the House.

With no new revenue in sight at this point, the Appropriations Committee now begins work on a budget that operates on existing revenue. This means making an additional $300 million in cuts to the governor’s so-called "green book" budget, which is the budget he was required to submit at the beginning of the legislative session. That means cutting $300 million from a budget that already cuts $158 per-pupil in K-12 spending, eliminates spending on the transportation plan and makes substantial cuts in all areas of state government.

This "no new revenue" budget will then be sent to the floor of the House. If it does not pass, it’s back to the drawing board until the right combination of revenue and expenditures can be found – a process that will consume the rest of the legislative session.

NO-CALL LIST PROPOSAL ADVANCES

Substitute for Senate Bill 296 has passed out of the Senate Judiciary Committee and is headed for debate on the Senate floor. This bill would create a no-call list for telemarketing companies in the state. Kansans could add their names to the no-call list free of charge, either by telephone, mail or Internet. Better yet, the program would not require any new state money. It would be funded through fees charged to telemarketing companies. This bill is similar to a measure that passed the House last month.

A PIECE OF THE PIE

One way to describe the appropriations process is: "Everyone wants a piece of the pie." In this budget year, the size of the pie is smaller, but there still are plenty of discussions about how that money should be divided. The total state budget is more than $9 billion – including federal money for programs like Medicaid and transportation. The state general fund is our "pie," and the recent revenue estimates predict a $4.464 billion SGF in fiscal year 2003. Our budget deliberations are made very challenging by the fact that such a large portion of state money is dedicated to education – making it impossible to find $700 million in cuts without touching K-12 and higher education funding. This chart (figures are in millions) illustrates the breakdown in SGF spending from fiscal year 2002, and provides a graphic reminder of the important role education plays in our state budget.

Paid for by the Committee to Elect Doug Patterson, Dave Imhoff, Treasurer