FY 2010 Budget Update: Committee Debates Stimulus Funds

March 15, 2009 (Read Update for March 22, 2009)

This week the House Appropriations Committee more carefully reviewed components of the American Recovery and Reinvestment Act.  Specifically, the committee (and subcommittees) debated the Governor’s budget amendments that reflect how to apply the federal dollars.  We are nowhere close to finished with this process, but here is an update of some components that have been considered to date:

Higher Education

On Monday, Republicans on the House Appropriations Committee voted to reject federal stimulus money that would have been tremendously beneficial to Kansas colleges and universities.

Had the committee accepted the stimulus money for higher education, more Kansans would have been able to afford college with increases in the higher education tax credit; an increase in the maximum Pell Grant by $500, for a maximum of $5,350 in 2009 and $5,550 in 2010; and the addition of $200 million to the vital College Work-Study program.  Additionally, the money would have provided the funding of several deferred maintenance projects at crumbling universities across the state.

“Kansas is facing a $1 billion budget gap for 2010,” said Rep. Bill Feuerborn, Garnett.  “The Legislature cannot afford to turn down help from the federal government.  We made the decision to utilize stimulus money for K-12 education and transportation projects, yet we decide to turn down this help for our universities.  It makes no sense.”

“Rejecting these funds was a bad policy decision that will most adversely affect the very Kansans this money was allocated to help: folks out of work, students struggling to pay for college and the business community relying on an educated workforce to help strengthen our economy,” said House Democratic Leader Paul Davis, Lawrence.  “After spending the first six weeks of the session just trying to figure out how to stay afloat until July, we are not in a position to turn down federal dollars.”

In a recent study, the Docking Institute of Public Affairs noted that every $1 million spent on university deferred maintenance projects, $2.2 million is generated in increased economic output of goods and services, $644,600 in increased state earnings and 19 new jobs created in Kansas. 

If the entire $439.7 million in “shovel-ready” campus infrastructure projects were addressed, they would produce an immediate and profound statewide impact, increasing the economic output of goods and services by $967.3 million, increasing earnings by $283.4 million and creating 8,254 new jobs statewide.

K-12 Education

An estimated $367 million is available to Kansas to maintain minimum levels of state support for local schools and higher education.  To access this money, Kansas must maintain, at a minimum, higher education and K-12 school finance at the FY 2008 or FY 2009 level, whichever is greater.

The Education Budget Committee voted to accept the Governor’s recommendations for application of Federal Stimulus Money to the 2010 K-12 Education Budget.  This will allow us to hold per pupil funding at $4400 for FY 2010 and FY 2011 and maintain eligibility for federal recovery funds.  The Senate Ways and Means Subcommittee also voted to accept those budget recommendations.

To delay in accepting those recommendations- or ignoring them altogether- will simply place an added burden on local school districts in making staffing plans for contract personnel for no good reason.

Accepting the recommendations will allow the 2010 budget to balance and end with money in the bank and not raise taxes.

Medicaid

Throughout the span of nine quarters, October 1, 2008 to December 31, 2010, the federal share of Medicaid will increase by 6.2 percent.  As a result, Kansas is estimated to receive an additional $103 million in FY2009, $200 million in FY 2010 and $102 million in FY 2011. 

To receive the additional funding, Kansas must maintain current eligibility standards, but the new federal funding directly offsets planned State General Fund appropriations.  On Thursday, the House Social Services Budget Committee voted not to accept the Governor’s recommendation that would have enabled Kansas to take advantage of the recent federal reauthorization of SCHIP.  This would have moved eligibility for Kansas children to 250 percent of the federal poverty level, providing health insurance for 8,000 additional children. 

The action not to fund SCHIP is deeply troubling to me, as most of the Legislature last year voted for this measure (when SCHIP was unfunded and essentially just an empty promise), but now that it has been federally authorized, many legislators choose to go back on their vote, leaving thousands of children without coverage.

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