Legislature approves $326M deficit plan

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Posted: Saturday, February 14, 2009 1:04 am

TOPEKA (AP) — A $326 million budget-balancing plan won final legislative approval Thursday, bringing Kansas closer to joining other states in trimming education funding to deal with recession-related financial problems.

The House passed the bill Thursday morning on a 70-51 vote. The Senate approved it seven hours later, 27-11, sending the measure to Gov. Kathleen Sebelius, a Democrat who has tried to avoid cutting aid to public schools.

The bill eliminates a projected $199 million deficit for the fiscal year that ends June 30. Slightly less than half the adjustments consist of cuts in spending, with accounting changes and refinancing of state bonds making up the rest.

Public schools would lose almost $28 million in base state aid plus more than $4 million in funds for special education programs. Those reductions were endorsed by the House, but senators wanted to reduce base aid by less than $7 million and leave the special education funds unchanged.

Republicans hold majorities in both chambers, and their leaders said the cuts in school aid were necessary to avoid deeper cuts elsewhere, including public safety and social services. House Appropriations Committee Chairman Kevin Yoder said the plan that emerged from talks between the two chambers contained “a proper mix of cuts.”

Many states are struggling this year as revenues fall short of the projections on which their budgets were based. Mississippi, New Mexico and North Carolina have all placed cuts in school aid into their budget-balancing plans.

“Nobody wants to make the cuts, but we know there is a deficit,” said Senate Education Committee Chairwoman Jean Schodorf, a Wichita Republican. “Everybody’s in the same situation. We can’t wait any longer.”

Sebelius and many fellow Democrats argue that cuts will be difficult for Kansas’ 295 school districts to absorb. A few have predicted some districts will have to borrow money to finish the school year, then impose special property taxes to pay off the debt.

“This bill bankrupts many school districts,” said Rep. Ann Mah, a Topeka Democrat.

Sebelius could veto the cuts in school aid and let the rest of the bill stand, and spokeswoman Beth Martino said Wednesday that the governor “remains concerned” about its education reductions.

But on Thursday, Martino said only, “We are going to take a very close look at the bill.”

Legislative researchers estimate that the bill will not only eliminate the deficit but leave the state with $127 million in cash reserves as of June 30. But many legislators believe revenues will fall short of expectations in coming months, causing any potential cushion to dwindle or even disappear.

Higher education and many state agencies will have their operating budgets reduced 4.3 percent. The Department of Corrections has already announced plans to close minimum-security prison units in Osawatomie, Toronto and Winfield and to suspend some programs for inmates by April 1.

The reductions are smaller for social service agencies, where some programs are protected from reductions. The bill even adds new dollars for in-home services for the disabled.

Aid to public schools is a key issue because, at $3.79 billion, it consumes half of the state’s general tax revenues. Even freezing it, as Sebelius wanted, would force the state to reallocate dollars because of how costs shift among districts.

Some states so far have avoided cuts in public school aid in addressing their financial problems, including Arkansas, Michigan, New Hampshire and the Dakotas.

But Mississippi Gov. Haley Barbour cut his state’s school aid by 3 percent, and North Carolina Gov. Beverly Perdue ordered schools to reduce their spending 2 percent by June 30. New Mexico’s legislature trimmed 1 percent.

The cut in Kansas also is about 1 percent of schools’ total aid.

“We certainly haven’t seen the impact that some states have had,” said Mark Tallman, a lobbyist for the Kansas Association of School Boards.

But Tallman said districts still face difficulties because they’re locked into contracts with most of their personnel. He said they’ll delay equipment purchases, restrict travel and deplete their cash reserves. A dozen districts have no cash reserves, according to the state Department of Education.

“Districts are not going to want to interrupt programs,” he said. “You may not be able to fund the summer school program.”

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