Category: FY16/17 Budegt

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.