Research published by Kansas Policy Institute found that the state’s counties and the 25 largest cities had $6 billion in cash reserves at the beginning of 2024. In addition, about $1.8 billion of that total is tucked away in non-budgeted funds. The Sentinel is owned by Kansas Policy Institute.
Collectively, those entities spent $8.2 billion that year. On average, they had 73% of the coming year’s expenses already in the bank.
To put that in perspective, that is a little more than twice the 36% average held by school districts, and even that is unnecessarily high.
The analysis is limited to 2024 because Kansas law allows cities and counties to utilize non-budgeted funds and only report activity in those funds two years in arrears, so fund balances and activity were not reported in non-budgeted funds for 2025 and 2026. Further, unlike the General Fund and other budgeted funds, non-budgeted city and county funds do not require a formal published budget hearing or specific appropriation limits in the routine annual budget document submitted to the county clerk.
All but seven counties (Doniphan, Greeley, Jackson, Jefferson, Lyon, Nemeha, and Woodson) and two Class A cities (Manhattan and Olathe) use this opportunity to delay reporting spending and cash balances in non-budgeted funds.
Significant spending and cash reserves withheld from public scrutiny
The rationale for the Legislature allowing cities and counties to accumulate cash reserves and spend money without formal budget approval, and to delay reporting for two years, is unknown. The report also notes that excessive cash reserves indicate unnecessary property taxation.
Non-budgeted funds contain significant spending in many cases. The adjacent table of just ten cities and counties accounts for more than $665 million.
Activity in the non-budgeted funds is also related to property tax increases.
Cities and counties routinely transfer money from their General and other property-tax supported funds to non-budgeted funds. Operating expenses would be lower without the transfers, and the funds would require less property tax support. Examples of such transfers include:
- Prairie Village transferred $8.9 million to its non-budgeted Capital Projects Fund, including $6.7 million from its General Fund.
- Overland Park transferred $17.2 million from its General Fund to the non-budgeted Capital Improvement Fund, and most of that transfer merely increased the cash reserve balance.
- Douglas County diverted $22.6 million from its General Fund.
Local government budget reforms needed
Beyond banning the use of non-budgeted funds, KPI says the Kansas Legislature could take additional steps to improve transparency.
- Include a summary of cash reserves in each fund in the published budget, along with a certification that the total represents all cash holdings.
- Require accurate reporting of projected ending cash balances for each fund. Currently, the budget does not show proposed property tax revenue in each fund, so the ending cash balance cannot be calculated.
- Require more detailed expenditure reporting, rather than the broad categories used by many cities and counties (e.g., Personal Services, Commodities, and Contractual).
