FY 2010 Budget Update: Sorting through stimulus dollars

March 22, 2009 (Read Update for March 29, 2009)

The House Appropriations Committee kept busy this week debating House Bill 2373, which is the FY 2010 mega budget bill. This bill makes many changes to the budget proposal put forth by the Governor in January and resulted in heated debate.

The primary source of controversy in the development of the FY 2010 budget has been the utilization of federal stimulus dollars.  Kansas has the opportunity to receive hundreds of millions in aid for a variety of expenses, including K12 education, transportation, children’s health insurance, and higher education.  In order to qualify for these funds, however, Kansas must meet certain requirements.  This week, many on the House Appropriations Committee voted not to accept federal dollars on some items (such as children’s health insurance, or SCHIP) and then made cuts in other areas that will prevent Kansas from even qualifying for stimulus dollars (such as K12 funding).

Following is a more “issue-by-issue breakdown” of what transpired this week in the House Appropriations Committee.  We are expected to debate the budget bill on Monday; I will update you on any changes next week.  Please be aware that the budget bill passed out of committee rejects a significant amount of money from the federal government.  Although the American Recovery and Reinvestment Act cannot serve as our final solution to the budget crisis (we must still make cuts and scale back), it can serve as a lifeboat in a budget year that will otherwise sink our state and our most important investments.  Stimulus money cannot stimulate our economy unless that money is utilized.  To reject it is both senseless and irresponsible. 

K-12 Education
The federal guidelines for receiving K-12 stimulus money are clear: we must not cut below the 2008 funding level. To make any cuts exceeding this level will seriously jeopardize our opportunity to receive the financial help.  Nonetheless, some on the House Appropriations Committee voted to cut the base state aid per pupil (BSAPP) by an additional $33 (for a total $66 cut).  This is well below what was allocated for 2008 and coincidently the same reduction attempted earlier in the year that was line item vetoed by the Governor. 

We have already endured this battle once this session: a $66 BSAPP cut would be detrimental to school districts across the state.  It will force school districts- especially rural schools- to cut programs, lay off teachers and will dramatically decrease the quality of public education.  We cannot balance the budget on the backs of Kansas schoolchildren.  I will stand adamantly opposed to legislation that puts our children’s education in jeopardy.

Unemployment Insurance
The American Recovery and Reinvestment Act will provide an important opportunity to expand unemployment benefits to Kansans struggling to make ends meet.  This is not part of the budget bill specifically, but it does require legislative action in order to qualify for the $69 million in federal money.
House Bill 2374, which received a hearing in the House Commerce and Labor Committee this week, would lengthen the period of employment that can be considered in deciding whether a laid-off worker is eligible for benefits. It would also allow workers to receive unemployment benefits if they voluntarily leave their jobs to care for a sick or disabled member of their immediate family.  These are minor legislative changes that will increase the number of workers eligible for unemployment benefits.  The bill has not been worked as of yet, but must be acted upon soon in order to get unemployed Kansans (the most in 25 years) assistance to pay for basic necessities.

Higher Education
Last week, the House Appropriations Committee voted to reject money for our universities, community colleges and technical colleges.  This money would have gone toward holding off projected tuition increases and the creation of jobs through repairing crumbling buildings on our campuses.  Currently, there are over $700 million in deferred maintenance projects at our higher education institutions awaiting repair.

SCHIP (Children’s Health Insurance)
Although it is not directly a part of the stimulus package, Kansas has the opportunity to receive federal dollars for children’s health insurance.  Unfortunately, the House Appropriations Committee voted not to accept the Governor’s recommendation to take advantage of the recent federal reauthorization of SCHIP, a program that would have provided health insurance for 8,000 additional children.  This decision was particularly troubling, as most of the Legislature last year voted to fund this program if new federal dollars were doled out to the states.  Now that it has been federally authorized, many legislators choose to go back on their vote, leaving thousands of children without insurance coverage.  If we do not utilize these federal dollars for children’s health insurance, they cannot be allocated elsewhere in the Kansas budget and will be forfeited to other states

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