As the Kansas Legislature weighs Governor Kelly’s budget proposals during the current session, the Kansas Policy Institute — which owns the Sentinel — and sister organization Texas Public Policy Foundation have a few suggestions.
The organizations released what they call the Responsible Kansas Budget, which has more than a few ways to organize the state’s finances in a manner consistent with both paying necessary expenses — and being fair to the taxpayers who actually foot the bill.
The RKB report notes that Kansas has a history of “boom and bust” budgeting — overspending when collections are good, and then being forced to scale back when tax revenues inevitably drop.
“Motivated by a large budget surplus in the early 2010s, the Kansas Legislature cut income taxes in 2012. But that policy, combined with increased government spending, created a fiscal deficit resulting in the largest tax hike in Kansas history in 2017 to close the budget gap. Democrats and Republicans alike learned the hard way during the Brownback era that not balancing revenue intake and spending can quickly sour economic conditions.”
TPPF Chief Economist Dr. Vance Ginn, along with KPI Policy Manager and Analyst Gannon Evans, suggest that the Legislature should approach the budgeting process differently this year.
The authors say legislators should set a maximum threshold for the state’s All Funds appropriations, based on population growth, plus inflation.
“This is a simple calculation of finding the growth rate of the state’s resident population and adding it to the growth rate of the state’s Consumer Price Index [a common measure of inflation],” the report notes. “In 2021, Kansas’ CPI inflation increased 2.36% and its population growth declined 0.04%.
“The sum of these values, an increase of 2.32%, serves as the maximum growth rate for All Funds appropriations in FY 2023. With a base All Funds budget of $20.5 billion for FY 2022, the FY 2023 RKB is a maximum of $21.0 billion.”
The RKB report used the state’s July Comparison Report for the approved FY 2022 budget; the Governor’s Budget Report released after the RKB was published shows a higher budget of $21.6 billion. The state’s revised budget places the FY 2023 Responsible Kansas Budget at $22.2 billion; Governor Kelly is proposing $22.6 billion.
This system is one that Texas, with one of the fastest-growing economies in the nation, has already adopted.
It is worth noting as well, that this system does not cut the state budget — it would set an all-funds budget a half-billion dollars higher than the previous budget — but simply caps the rate of increase at a sustainable level.
“Kansas has an opportunity to cement strong budgeting practices,” Evans said in a release.
“This aims to be a model which limits the growth of government spending to the sum of the state’s population growth and inflation.”
Ginn concurred.
“We’re excited to continue to work with legislators and grassroots and others to say ‘this is the maximum amount that should be spent,'” Ginn said. “There’s good reason even to spend less than that … but this sets the marker early on during the legislative session.
“The ultimate burden of government is how much it spends of taxpayer dollars. This is why any increase in the state budget should be less than the average taxpayer’s ability to pay for it. We have seen the success of this approach in Texas and resulting in increased opportunities for people to flourish for many years so I’m excited to partner with the Kansas Policy Institute in ensuring Kansas is a great place to raise a family and start a business.”
