Governor Brownback Proposes Structurally Balanced Two-Year Budget

Budget Director Shawn Sullivan today outlined the Governor’s two-year budget proposal for Fiscal Years 2016 and 2017 that provides long-term budget stability and continues to position Kansas as the best place in the nation to grow a business and raise a family.

The budget proposal address structural challenges that address the three major budgetary cost drivers: K-12 school finance formula, KPERS pension system and Medicaid.

“We have listened to Kansans and we know they want quality services, good schools, good roads and low taxes,” Sullivan said. “This budget proposal manages spending, continues the path to becoming a zero-income tax state and has revenues that exceed expenditures in the next two fiscal years.”

The proposed budget emphasizes fiscal responsibility while funding government services and continuing to put more money into the pockets of hard-working Kansans. The proposal includes:

· A recommendation to sunset the current school finance formula, effective July 1, 2015, and work with the Legislature to reform K-12 financing with a new – and sustainable – formula. Until a new formula becomes law, the Governor recommends use of a block grant to distribute state education funding.

· $50 million in State General Fund savings in FY 16 and 17 related to Medicaid that will be realized through policy and contractual changes. These efficiencies will reduce the growth rate of costs while continuing to provide services and improving outcomes for Medicaid members.

· Structural reforms related to the KPERS pension system designed to sustain the integrity of the retirement system.

· Maintains stable funding for higher education.

· Provides essential services for the most vulnerable Kansans.

· Completes all announced T-WORKS programs.

“The budget proposal identifies structural reforms that address the major cost drivers of the budget,” Sullivan said. “It is fiscally responsible and will bring long-term stability through much-needed reform.”

On Jan. 1, individual income taxes for 620,000 Kansans decreased an additional 4.2 percent. Taxes for the bottom income bracket will further decrease to 2.66 percent on Jan. 1, 2016 putting $11.7 million back into the hands of working Kansans’ pockets.

The plan also provides for a budget stabilization fund, which will provide a fiscally responsible foundation for the future. As the state’s economy grows, tax receipts between 102 and 103 percent above the prior year’s automatically will go to a budget stabilization fund, until it reaches 5 percent of expenditures. Income tax rates will decrease if revenues grow 103 percent above the previous year.

Kansans can read more about the Governor’s budget at http://budget.ks.gov