Governor's Budget Balancing Options:  (From the GBA memo)

In order to balance the FY 2016 and FY 2017 budgets, I offer the following three choices to the 2016 Legislature:  

Option One Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017. 

The Governor would also carry forward into FY 2017 the 3.0 percent reduction made to Universities in FY 2016, which would be $17.7 million in reduced expenditures. 

Legislative Approval Required 

In option one; the state could securitize future tobacco settlement payments in excess of $42.0 million for an estimated one-time revenue infusion of approximately $158.0 million in FY 2017. Children’s programs currently financed through the Children’s Initiatives Fund would continue to receive funding of $42.0 million per year. Legislative approval to securitize future tobacco settlement payments would be provided to the Governor through a budget proviso. 

Option Two Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017. 

The Governor would also carry forward into FY 2017 the 3.0 percent reduction made to Universities in FY 2016, which would be $17.7 million in reduced expenditures. 

The Governor would also utilize the special allotment authority to reduce expenditures or transfer $25.0 million in targeted efficiency savings. 

Legislative Approval Required 

In option two, the FY 2016 fourth quarter KPERS payment would be delayed, as provided for in 2016 House Substitute for SB 161, but repayment would not be made until FY 2018. Legislative approval to reduce KPERS contributions and delay repayments would be provided to the Governor through a budget proviso. 

Option Three Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017. 

Legislative Approval Required 

In option three, three to five percent expenditure reductions would be made to most state agencies for FY 2017 and would total $139.3 million. Following is a summary of the reductions that would be made to state agencies: 

3.0 percent reduction 

Department for Aging & Disability Services (excludes HCBS appropriation) – $11,001,850 

Department of Agriculture – $296,831 

Department of Administration (excludes debt service) – $282,047 

Fort Hays State University – $1,016,467 

Office of the Governor – $201,225 

Kansas Guardianship Program – $34,389 

Health & Environment—Environment – $133,228 

Historical Society – $130,885 

Department of Labor – $9,363 

KSU—Veterinary Medical Center – $452,898 

Kansas State University—ESARP – $1,422,673 

Emporia State University – $948,769 

Pittsburg State University – $1,085,716 

State Library – $120,751 

Board of Regents (excludes debt service) – $5,930,603 

Court of Tax Appeals – $23,837 

Department for Children & Families (excludes caseloads) – $4,225,999 

Department of Education* – $ 57,262,285   

* The Department of Education reduction excludes KPERS, bond/interest aid, LOB aid and Capital Outlay aid. 

University of Kansas Medical Center – $3,365,797 

Kansas Water Office – $34,637 

5.0 percent reduction 

Health & Environment—Health – $35,636,050 

Kansas State University – $5,122,604 

University of Kansas (excludes debt service) – $6,814,504 

Wichita State University – $3,728,210