President Scott comments on state revenue projections & proposed budget cuts

On Thursday, PSU President Steve Scott issued a message to the campus community about budget cuts proposed by Gov. Sam Brownback in response to the most recent consensus revenue estimates. In a message to faculty and staff, Scott wrote,

“On Wednesday, the Kansas’ Consensus Revenue Estimating Group released its report for the remainder of FY16 and FY17. In what has become an all-too-familiar pattern, the group lowered its estimates by a combined $290 million.

At the same time, state budget director Shawn Sullivan announced three options the administration believes the legislature should consider in response to the nearly $300 million shortfall. Each of these options includes a 3 percent cut in funding for Pittsburg State University and a delay in the planned expansion of Highway 69.

The continuing cuts are placing our university and our community in an untenable position. Pittsburg State’s base funding has already retreated to levels we haven’t seen in more than a decade, and the delay of the Highway 69 project is a significant loss to our region. Its expansion over the past decade has contributed to our university’s growth, and the planned expansion is essential for the safety of many of our students, parents and alumni from the Kansas City region.

As a Kansan, and as the leader of Pittsburg State University, I am deeply troubled and concerned about the state’s lack of stability and predictability in its finances. It is making it nearly impossible to manage the budget of the university. Clearly, this environment threatens to undermine the positive momentum that is so evident on the campus and in the broader Pittsburg community.

In the coming days, we will work with our local legislators to express both our frustration and opposition to the cuts outlined by the state’s budget director. We will call on them to seek other solutions that will preserve the university’s funding and ensure a strong future for Pittsburg State. I’m optimistic they will be receptive to our pleas.

Lawmakers will return to Topeka next Wednesday to consider all options for closing the state’s deficit. In addition to local legislators, we will actively work with state legislative leaders to oppose these cuts.

The next few weeks are vitally important to the future of our university and our region. I encourage you to stay informed about the work of the legislature and, when appropriate, to reach out to your local lawmakers to let them hear your voice.

We have scheduled a Legislative Town Hall at 3 p.m. on Monday, April 25, in room 102 of Yates Hall. Shawn Naccarato, our director of government and community relations, will join me for an update on the state budget and other legislative matters. We will livestream this event on  pittstate.tv for those unable to attend.

I know you have many questions and concerns about our state’s financial issues, and how they will impact Pittsburg State. At this point, it’s too early to know for certain. Rest assured, we will continue to advocate on behalf of our university and our focus remains on the success of our students.”

PSU President Scott Responds to Higher Education Funding Cuts

On Wednesday, Pittsburg State University President Steve Scott responded to Gov. Sam Brownback’s announcement that funding for higher education would be cut to deal with continued lower-that-expected state revenues. In a message to faculty and staff, Scott wrote,

“On Monday of this week the University celebrated the completion of its 2007-15 strategic plan. Following a review of our key accomplishments, I revealed the newly adopted plan that will guide our efforts through 2022. Focusing on academic excellence, student success, partnerships, and innovation, I noted the University is well positioned to accomplish even more.

As we strive together to achieve prominence in all that we do and to define a path to achieve this vision, I recognize daily what a special place this is. We are making a difference in the lives of our students and in the life of this community. As I closed the meeting, I felt a strong sense of pride in what we have accomplished and optimism for what was to come.

Within the context of Monday’s celebration and announcement, it was painful to receive news from Topeka Tuesday afternoon that the block grant for FY16 (the year we are currently in) would be reduced by more than $1M. This reduction follows the release of the state’s February revenue figures, which were more than $53M below projections.

As you can imagine, I am both disappointed and frustrated by this development. As the Governor noted in his press release, his goal is to “help the Kansas economy grow.” We share that goal, and it’s evident we are contributing to its realization. However, this latest reduction in funding will impact our ability to contribute to the Governor’s goal. I’m sure you agree with me that investments in higher education are an essential component for moving a state forward, enhancing a state’s economy, and improving the quality of life for its citizens.

Let me be clear…our capacity to ensure academic excellence and a transformational experience for our students will be hampered by these cuts. Furthermore, the instability of state funding is impacting our ability to plan and operate the university.

With all of this noted, I recognize that we have a new reality for the FY16 budget, and we will get to work in the coming days to formulate a path through the remainder of the year. It will not be easy, and it will take all of us working together.

As we know more, we will be communicating via the shared governance structures and additional releases.

Thank you for all you do to make this place so special, and for giving me the confidence we can overcome just about anything that comes our way.”

GLN Week 5 Legislative Update

Much earlier than usual, the House and Senate budget conference committee came to a compromise budget agreement this week. Each Chamber passed the bill, and it’s now awaiting the Governor’s signature. The rest of the week was spent hearing final reports on the state’s efficiency study and committees working and debating bills before the Turnaround deadline that has been moved up to next Tuesday.

Budget Bill to Governor

The House and Senate budget conference committee began their meetings on Monday afternoon, and by 7:00 p.m. that night had come to a compromise budget package. On Wednesday, the House accepted the conference committee report by a vote of 68-53 and the Senate by a vote of 22-16. The bill is now on it’s way to the Governor’s desk for his signature. As adopted the budget holds funding to Pittsburg State stable. It leaves an ending balance of $6.5 million for fiscal year 2016 and $89 million for fiscal year 2017. However, it may need amending during the Veto session when the Consensus Revenue Estimating Group comes out with their revenue numbers in April.

The most contentious items during negotiations and amongst some legislators included the provision to allow the Governor to delay the $100 million fourth quarter payment to the Kansas Public Employee Retirement System (KPERS) to balance the budget for this fiscal year if necessary. Other hot button topics included the STAR bond prohibition that halts the moving of the American Royal to Kansas from Missouri, and whether or not the funding source for Parents as Teachers will restrict the program to lower income families only.

Efficiency Study Experts Propose Top 21 Recommendations

The staff at Alvarez & Marsal (A&M), the the chosen consulting company by the legislature in 2015 to conduct an all agency efficiency study of Kansas government, presented their final report to the House and Senate budget committees on Tuesday. They narrowed down their 105 total recommendations into three categories: highest value, transformational and long term impact. The highest value group of their top 21 recommendations would represent 87% of the total cost efficiency opportunities and where the legislature plans to spend most of their time studying the remainder of the session. Their report also included an implementation schedule and timeline.

A&M’s top recommendation to the state was to hire 54 additional tax collection agents to fill current vacancies, which could potentially produce $54 million in collections annually. Another top recommendation was to use excess cash reserves in certain school districts to offset future education funding over a five-year period. Other key recommendations revolved around consolidation of administrative services and K-12 benefits, changes to the state employee health plan, and the creation of a Governor’s Grants Office to maximize the amount and use of federal funds available to the state.

The full initial report on the efficiency study can be found here.

Session Calendar Adjusted

In an attempt to prevent a repeat of the 114- day legislative session of 2015 and to show constituents that their elected leaders are making the best use of their time, the session calendar has officially been adjusted and all deadlines moved up.

Turnaround day – when all bills must be
passed out of their respective House of origin – is on Tuesday and the first major deadline that looms three days earlier than originally planned. After Tuesday, the legislature will take a week break and return on March 2. First adjournment will now be on March 25 (originally April 1), giving legislators an entire month off between first adjournment and Veto session. Veto session will still begin on April 27, but it will only be day 69 of the legislative session. The goal is to adjourn before using the statutorily approved full 90- day window.

Senate Passes Bill to Shorten Session

Staying consistent with the theme, the full Senate on Thursday passed by a vote of 25-11 a bill that would limit the number of days in the legislative session to 100 in odd- numbered years and 60 days in even-numbered years. In a biennial budget process, a full two-year budget is written and approved in the odd year and balanced in the even year.

As previously reported, the House Appropriations committee approved a similar bill – only it contained a 75-day limit every year, should the Governor move to an annual budget process – but it has yet to be debated by the full House of Representatives.

House Tentatively Approves Resolution for Constitutional Convention

The House on Thursday approved by a vote of 77-44 a concurrent resolution that requests of Congress to call a convention for the purpose of proposing constitutional amendments and imposes limits on the federal government. Supporters of the resolution want to be the sixth state to send this message to Washington that Kansans are tired of the federal government’s overreach. The measure needs 84 votes to be adopted on final action.

Looking Ahead

With the budget completed before Turnaround, the Legislature can spend the rest of the session working through the efficiency study recommendations – paying closest attention to the ones that require legislative action – and evaluating their next move to address the Kansas Supreme Court’s ruling last week regarding equitable funding for schools.

Critical Action Alert –  KS Higher Education at Risk: Contact Lawmakers & Demand they #FundtheBudget

This afternoon, during a rare joint caucus of the Kansas House and Senate, Governor Sam Brownback warned he may have to veto all public funding of state universities if legislators are unable to agree by Monday upon a tax proposal to fund the FY16 budget.

This end result would be a loss of nearly $36 million for Pittsburg State University and $400 million dollars for higher education. 

“The governor’s announcement this afternoon of a possible veto of all public higher education funding puts the state of Kansas in an unprecedented situation,” said Andy Tompkins, President and CEO of the Kansas Board of Regents. “To completely defund higher education will have a devastating and long-lasting effect on students, families, businesses, and the entire economy of the State of Kansas.”

Call to Action: We are at a critical moment in our state’s history. State law mandates a funded budget. If our elected officials are unable to come to an agreement Pittsburg State will suffer devastating cuts. The momentum we have generated, together, is at risk. We need your help to ensure GorillaNation remains strong. Contact your elected officials. Tell them it is time to Fund the Budget.

Fund the Budget 

Last week, the House and Senate passed legislation to avert furloughs. They also passed a budget which maintains investment in higher education, including Pittsburg State University. These were vitally important steps forward. Today, that progress is in serious jeopardy.

On Sunday, the Senate passed a budget funded primarily through an increase in the state sales tax. As of this afternoon, the House had yet to agree upon revenue sources that would result in a balanced budget.

State estimates are that there will be a $400 million shortfall in the upcoming fiscal year without additional revenue. If lawmakers do not agree upon funding for a balanced budget there are three likely scenarios. 

  1. The Governor vetoes the budget – likely resulting in government shutdown and furloughs;
  2.  The Governor vetoes specific agency lines – eliminating entire agency budgets;
  3. The Governor makes cuts, legally referred to as “allotments,” bringing the budget into balance – under Kansas law the Governor is authorized to make cuts necessary to insure a balanced budget. 

According to state budget director Shawn Sulllivan, the most likely option will be the third – an across the board 6.2 percent cut. This would mean a 6.2 percent cut to education spending at all levels, including a nearly $2.2 million cut to Pittsburg State University and almost $50 million in total cuts to higher education. 

In response to the threat of a 6.2 percent cut Pittsburg State University President Steve Scott stated, “A cut of nearly $2.2 million would be devastating. While we have successfully navigated challenging financial times since the economic downturn of 2008, it would be very difficult to manage a cut of this magnitude without significant impact on operations. I ask the entire Gorilla Nation to help us in urging our elected officials to fund the budget.”

Call to Action: Together we’ve built far too much momentum to have it threatened now. The choice is a stark and serious one: either legislators pass a revenue package to fund the budget or we will suffer devastating cuts. We need your help witin the next 24 hours. Contact your elected officials. Tell them it’s time to #Fund the Budget.

First Adjournment Update … and What to Expect in the Upcoming Veto Session

The first half of the 2015 Legislative Session ended Thursday April 2nd after a long week of conference committees and work on bills that stretched into several long evenings. The major accomplishment in the last week before First Adjournment was work on the budget, which is much closer to completion. The session resumes April 29th with the Veto Session, which could last beyond the 90 day threshold.

Consensus Revenue Estimates
This past Monday marked an important milestone for the 2015 legislative session with the release of consensus revenue estimates for Fiscal Years 2015, 2016, and 2017. The Consensus Estimating Group’s report revises prior estimates and represents the last such estimate of the session. Final budget and revenue decisions will therefore, be based on this report.

For FY 16, tax receipts are now projected to be $98.2m below previous estimates. Practically, the revised estimates will require the legislature to find an additional $100m in new revenue or budget cuts. You will likely recall, original estimates placed the total budget shortfall for FY16 at $600m. Adoption of the new K-12 education block grant produced $300m in savings for FY16. With the revised estimates this brings the total shortfall for FY16 to $342m. This hole must be filled either through the raising of additional revenue or through additional budget cuts.

Budget
Prior to First Adjournment, the Senate approved a $15.5 billion budget for FY 2016 that does not balance without an increase in revenue. The House has yet to take up the issue as a body since the Senate passed their budget in a House Bill following a “gut and go”, setting up the option for the House to simply vote it up or down without the opportunity to offer amendments. The final week prior to adjournment, the conference committee on the budget met several times and finally came to a tentative agreement leaving open the possibility for changes during the upcoming Veto Session. For higher education, the tentative agreement would leave base funding flat while imposing a two-year tuition freeze. We’ve engaged legislative leaders and local legislators to convey our concerns over the impact the tuition freeze would have on our campus.

What to Expect in the Upcoming Veto Session
Legislators will begin returning to Topeka next week in anticipation of the Veto Session, which formally begins next Wednesday April 29th. A handful of bills remain in committee but the most significant remaining issues are passing a budget and corresponding tax plan. While May 14th will mark the 90th day of the legislative session,  many believe the legislature may need to work past this statutory marker in order to complete their work on taxes and the budget.

Higher Education Making Headlines in Topeka

It’s only been 96 hours since our last newsletter, which shows you just how fast things can happen in Topeka. Higher Education has been a topic of choice in the capital city with committees in both the House and Senate taking up several bills this week that could impact funding and policy.

Senate Panel Endorses Bill to Require Financial Prospectus for all Kansas College Degrees

On Wednesday, the Senate’s budget committee passed legislationthat will require all public universities and colleges in Kansas to gather and produce uniform financial information related to the cost of a degree and expected earnings of graduates.

The legislation would come with an estimated price tag of $2 million that would be required for the state’s 32 public higher-ed institutions to annually compile the necessary data. That cost would triple if graduates were offered a $100 incentive to complete personal surveys as suggested in the legislation. Data collected from these surveys would be used to help compile expected earnings data for each prospectus.

Comparison shopping is important for students and parents who are selecting a university or college. Academic quality and selection, affordability, campus amenities, safety, family ties, and many other factors play in to where a student chooses to attend.

Pittsburg State believes in transparency and helping a student choose the degree program that is right for them. This is why your university currently provides much of this information in its College Portrait narrative, which is available on the front of its webpage.

Pittsburg State currently offers more than 200 degree programs, which means it would annually have produce 200+ financial prospectus publications. This would be a challenging task especially given the current economic environment.

Senate Ways and Means Committee Recommends Higher Ed Budget

Last week, the Senate Ways and Means Committee made the surprising decision to change the governor’s FY16 and FY17 funding recommendation for higher-ed and, instead, reallocated resources among the state’s universities and the Kansas Board of Regents.

In broad terms, the subcommittee cut $4.7 from the University of Kansas main campus and $3.1 million from Kansas State University. It then reallocated $4.7 million of those monies to the University of Kansas Medical Center for the expansion of the KUMC-Wichita and Medical Scholarships; $1 million to Pittsburg State University’s School of Transportation and $2 million to the Kansas Comprehensive Grant Program.

Interestingly, the committee changed Comprehensive Grant Program language to reserve at least 75 percent of the total available dollars (about $17.7 million with the new $2 million addition) for independent, private colleges. Those colleges currently get about 50 percent of the grant money. The end result, according to the Kansas Board of Regents, is that more than 1,500 fewer Kansas students would receive need-based financial aid if the proposed changes were to pass.

The targeted enhancement for Pittsburg State’s School of Transportation is an unexpected but appreciated addition. It reflects Pittsburg State’s growing stature within the state and confidence in our direction and impact.

However, it is important to look at the larger picture when it comes to higher-ed funding within the State of Kansas. The Kansas Board of Regents is concerned with cuts (to KSU and KU) and funding shifts included in the proposal. Of greatest concern to the Board, and Pittsburg State President Scott, are the broader policy implications, specifically any shift away from a block grant funding approach and erosion of decision making authority currently granted the KBOR.

Sexual Assault Bill – HB2266

The week began in the House with the Committee on Education taking up HB 2266, which focused on the serious issue of sexual assault and dating violence on college campuses. HB2266 would mandate the adoption of a sexual assault policy that includes an affirmative consent standard in determining whether consent was given in any case involving sexual assault, domestic violence, dating violence and stalking involving a student, both on and off campus.

Pittsburg State University, along with the Kansas State University, was asked to provide information about campus educational initiatives, policies, and preventive measures, related to sexual assault, that are currently in place.

Comments from Pittsburg State centered around its proactive health educational programming and safety services as well as the federal regulations currently in place (which already address the concerns of the bill). These programs include mandatory sexual assault prevention training for all first-year students, an award-winning Peer Health Educational program entitled “Gorillas In Your Midst,” and SafeRide and Gus Bus transportation services.

After a brief discussion, HB2266 was tabled. 

Legislative Turnaround Update: February Revenues, Budget, and City of Pittsburg Land Exchange

Friday, February 27th marked the halfway point of the 2015 Legislative Session. With the turnaround looming the legislators quickened their work and defied all predictions by finishing onThursday night and banking the Friday for the end of the session. All nonexempt bills that were not passed from their chamber of origin are now dead for all practical concerns and, following a long weekend, the members returned to Topeka on Wednesday to deal with the rest. Below is a brief recap of some of the more interesting developments from the session thus far.

February Revenues
On Friday revenue estimates for February arrived and they brought some much needed good news. Revenue for the month was $22.1 million above estimates. While the state is still $37 million below estimates for the fiscal year with four months yet remaining this was a welcome change. What remains to be seen is if this was a one-month uptick or the beginning of a trend.
Both House Appropriations and Senate Ways and Means continue to slog through the process of putting together a budget that meets the state requirements for core services and matches the revenue numbers the Tax Committees have to work with. It has been a tumultuous first half of the session with money being taken and added to programs at a frenzied pace. One of the most telling examples was the House Social Services Budget Committee removing the $7.2 million in funding from Parents as Teachers only to have it returned at the rail the following day and the proposal sent back to committee for further review. The mosaic that is the FY 2016 and 2017 budget will be an ongoing issue for the remainder of the session.

Budget Testimony
On February 10th and 11th, President Scott presented testimony on behalf of PSU to House and Senate budget subcommittees. Our testimony focused on the strong growth, momentum, and impact at PSU and the threat posed by any reductions in our base funding. President Scott urged support of Governor Brownback’s budget proposal of stable funding for PSU.

The House Education Budget Subcommittee issued their recommendations on February 19th endorsing, in large part, the Governor’s recommendation for stable funding.  The full House Appropriations Committee adopted the subcommittee report into the full budget bill, which will be debated later in the session.
The Senate Education Budget Subcommittee issued their recommendations on March 4, 2015. The Senate Subcommittee proposed maintaining funding for PSU and an additional $1 million in new funding for both FY16 and FY17 to support development of a School of Transportation in the College of Technology. On March 5th, the Senate Ways and Means Committee adopted the subcommittee recommendations but left open the possibility ofreopening a number of higher education related issues during the future omnibus budget discussion.

Budget and Tax Policy
The issue of taxes are lurking in the background and shadowing all budget debates. A host of proposals have come forward ranging from limiting how long property tax exemptions can be used for renewable energy sources to taxes on aviation fuel. Tax rates on businesses, STAR Bonds, and ROZ exemptions have also been discussed. These are in addition to the proposed increases in alcohol, tobacco, and agricultural land property tax. Each of these has faced harsh criticism and opposition from interested parties.
The current plan appears to be that the Budget committees will put together the budget and then the Tax committees will figure out how to pay for it. It is not the usual way it is done but it should prove interesting moving forward.

PSU/City of Pittsburg Land Exchange
For more than a year PSU and City of Pittsburg officials have been exploring a land exchange in the southeastern corner of the city to facilitate planned residential growth of the city as well as future planned development for PSU. On February 24th, the Pittsburg City Commission unanimously approved the proposed exchange.
The agreement provides 72.7 acres to the city in exchange for 30.3 acres to PSU. This will provide the city with approximately 50 acres of prime residential development land, significantly supporting the residential (as suggested by the recent housing study) and economic development needs of the city.
The exchange would clean up the map and rearrange ownership providing PSU a single undivided parcel of just over 100 acres with frontage road access to a major road (Centennial). This will support future planned development and expansion for the area and maintain the site used for international Baja competitions.
Overall the proposal substantially cleans up the map and supports growth and development for both the University and the City. We’vereceived positive feedback and support from the Pittsburg community and are excited to work with the city on another partnership that promotes the common good of our community. We are fortunate to have such a strong partnership relationship with the City of Pittsburg. Now our work turns to securing legislative approval of the proposed exchange, which we expect during this session.

Legislative Update: Revenue Challenges, Current Year Cut to PSU, and Push for Stable Funding

At the end of the first month of the 2015 Legislative Session we saw a serious increase in the volume of work and bill introductions as the last day to introduce bills fast approaches. Friday the 13th of February could have had an even more ominous feel as it would have marked the day the state could not meet its bill paying obligations. Fortunately, for those expecting payment, the House and Senate worked and sent a Recision bill to the Governor. With that hard lifting done the Legislature’s attention will now move to the two-year budget bill and dealing with the revenue shortfall.

Revenue Estimates and Actual Receipts
January Revenue collections were $47 million below estimates. The Department of Revenue pointed to less than expected sales tax collections as the primary cause of the shortfall.

Recision Bill
The big work done last week was on the Rescission Bill. On February 4th the House of Representatives passed the Recision Bill on a vote of 88-34. The bill transfers $158.5 million from the State Highway Fund, delays nearly $8 million in KPERS investments, sweeps $12 million from the Kansas Endowment for Youth Fund, and just over $7.1 from the Job Creation Program Fund. Rep. Grossrode offered an amendment to maintain about half the school district equalization payments originally slated to be delayed until June. As it was placed in a Senate Bill as a Substitute Bill the Senate had the option to concur on February 5th. Following a brief debate it passed the Senate on a 24-13 vote. Governor Brownback signed the Recision Bill into law on Friday, Feburary 6th. A massive appropriations bill will likely be used as a final adjustment once the April Revenue numbers are released. An interesting side note to the recision bill is a bill that has been introduced in Senate Ways and Means to move the Revenue Report from April to May 4 to allow for a more accurate estimate.

Allotments
The decision with greatest impact to higher education (and PIttsburg State specifically), came on Thursday with Governor Brownback’s announcement of additional allotments. While higher education and K-12 had been held harmless in the first round of allotments, declining state revenues forced additional allotments, this time including cuts to education funding. These one time cuts for the current fiscal year total $44.5 million: $28.3 million in cuts to K-12 and $16.2 million for higher education. This effective 2% reduction in state university budgets means a cut of $709,717 for PSU. It is hoped this additional allotment will provide the state with sufficient funds to meet its obligations through the remainder of the current fiscal year, which ends June 30th.

In response to the Governor’s allotments, PSU President Steve Scott issued the following statement:

“While we are disappointed to receive this news, we are not surprised,” said President Steve Scott. “The state’s fiscal difficulties have been apparent for some time, and we have been preparing ourselves for a funding reduction. Pittsburg State’s portion of the allotment will be $709,717 for the current fiscal year. While this is not an insignificant amount, we are prepared to address the cut with contingency funds.”

“Our concerns are now focused on the upcoming fiscal year and the impact additional cuts would have on our students and our campus. Through the efforts of our faculty, staff, students, donors, and community, the university has generated considerable momentum over the past few years. These cuts and the possibility of more cuts threaten that momentum and could ultimately serve to undermine the university’s future.”

Shifting Focus … Insuring Stable Funding in the The Two-Year Budget Bill
With the passage of the Recision Bill and additional allotments issued, focus will now shift in earnest form the current fiscal year to work on the next two year budget. Budget committees are now beginning serious work on the FY16 & FY17 budget. Starting with the Governors Budget Proposal, which you will recall was issued on January 6th. As part of the budget process, President Scott testifies this week before House and Senate budget committees.

As we have urged from the beginning of this session, for our great momentum to continue, it is essential that alumni and friends of Pittsburg State University (and higher education generally) get involved in the legislative process. Our work is essential in supporting the economic health and vitality of Kansas. If you have not yet done so, please show your support for PSU and higher education by joining the Gorilla Legislative Network.