Kansas Budget Outlook Washington Days Issue Forum March 8, 2014 Duane Goossen Kansas Health Institute

Opening Summary: A dramatic tax reduction bill was enacted in the 2012 legislative session. As a result, lawmakers faced a very large gap between revenue and spending. In response, the tax bill was modified and spending cut in the 2013 legislative session. Even with the tax modifications and spending cuts, the state is spending more than it receives.

Fiscal Year 2014 July 1, 2013 to June 30, 2014 Fiscal Year 2015 July 1, 2014 to June 30, 2015 Lawmakers have already approved budgets for: The governor has proposed budget revisions which are being considered by the 2014 Legislature.

Future Revenue Stream Restricted

The state will collect $3.7 billion less as a result of the 2012 and 2013 tax bills.

School Finance Lawsuit All Day K Medicaid Caseload Medicaid Expansion Restore Cuts State Employee Salary Increase KPERS Judicial Budget Dept. of Corrections Public Health Spending Issues

Governor’s Recommendation

Closing Summary: The governor’s spending proposals for FY 2014 and FY 2015 can be financed by drawing down the state’s bank account, but are not sustainable in the future. The state’s revenue stream does not support current spending patterns or allow for new investments. Lawmakers will be required to make hard decisions to balance revenue and spending.