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Federal Money to the Rescue

Posted By Joseph N. Molina III, Tuesday, August 4, 2015

Last Thursday, Kansas Budget Director Shawn Sullivan announced over $62 million in budget transfers. View the full report online at http://budget.ks.gov/files/FY2016/FY2016_SGF_Reduction_Revenue_Plan--7-30-2015.pdf. The largest transfer was from federal funds earmarked for the Children’s Health Insurance Program ($17.6 million). The state reduced its contribution without reducing services by using this federal money. Had the state kept the money in CHIP, they could have expanded services but currently the state meets federal guidelines.

These are one-time money transfers that cannot be used again should state revenues falter again. Moreover, legislators were expecting cuts that would decrease the size of government and help with discussion back home when asked why the increase in sales tax.

See http://www.therepublic.com/view/story/65244c7630cb4965b75315e2b80cb548/KS--Focus--Kansas-Budget; see also http://www.kansas.com/opinion/editorials/article29708905.html; and http://www.kansas.com/news/politics-government/article29585017.html

Furthering the issue is poor first-month revenue numbers for fiscal year 2016. How this plays out will depend on revenue numbers going into the 2016 session. However, revenue is already down $3.7 million. Clouding the picture is that the sales tax increase has not been fully implemented and employees may not have changed their W-2s to account for losses in itemized deductions. A better accounting should be available when a full month is in the books.

See http://www.bizjournals.com/wichita/morning_call/2015/08/kansas-revenue-in-july-3-7-million-below.html?utm_source=dlvr.it&utm_medium=twitter.

In the meantime, please take a look at Kansas Legislative Research Department’s legislative highlights, online at http://www.kslegresearch.org/KLRD-web/Publications/LegislativeHighlights/2015-legislative-highlights.pdf.

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