June 2009

June 25, 2009
(Syndicated to Kansas newspapers June 22, 2009)

No more use it or lose it

So far it’s just anecdotal, but it appears that Kansas may be ready to break with a time-honored tradition just under the surface of state government.

The tradition: Use it or lose it.

That was the concept that has brought for decades office furniture trucks to the back doors of a handful of state government office buildings in the days leading up to July 1.

If a state agency, through thrift or maybe just because its workload was a little below expectations, wound up with extra money in its budget, the last week of the state’s fiscal year leading up to July 1 was when many agencies spent their spare cash on office furniture or other essentially nonessential stuff.

That way, the agency could honestly tell the Legislature that it needed every dollar it got, and spent its budget down to zero and performed as expected.

This year, there just haven’t been the numbers of office furniture trucks backed up to state buildings where agencies are spending their spare money on fripperies.

That’s a sea change worth noting.

State government is getting more frugal.

Old timers around the Statehouse notice the change and Topekans who on their way to lunch probably are noticing they don’t have to dodge office furniture trucks and delivery people unloading desks that you could probably park a car on.

Budget times for state government are bad, there will be further cuts, and that probably means that even next year there’s going to be a dearth of spending by agencies that many of us didn’t really notice in good times.

It’s like even the obscure agencies that do things we don’t notice that in happier times had money left in their budgets and spent it on nice little things for their workers have stopped that.

We’re not sure what your idea of “shared pain” entails, and we’re not sure that state employees working at a nicked-up desks and sitting in chairs that are getting a little raggedy-looking qualifies, but there’s a change in the air that you’d probably be proud of.

It’s not a big deal, but it shows a change among those running the far-flung niches of state government.

 

June 18, 2009
(Syndicated to Kansas newspapersJune 15, 2009)

Balance of power shifts…

Remember back in February, about Valentine’s Day, when the state needed to borrow some money from idle accounts to put into the State General Fund or some 40,000 Kansas employees wouldn’t be paid?

Remember legislative leaders wailing that their constituents were being held hostage by the governor, used as a club to force them to allow that internal borrowing that the governor wanted to do but the Legislature wasn’t keen on?

It was a pretty interesting little showdown. And, by the way, the Legislature lost. There were some other things going on, but finally, the Legislature’s top leaders went along with the borrowing because they were basically not prepared to go home for the weekend and face constituents who didn’t get a paycheck on that mid-February Friday.
Well, legislators were mad; they realized that if there is one ultimate political lever that a governor can use to get what the governor wants, it is probably not paying lawmakers’ constituents.

And…that’s all over now.

It was quiet, nobody paid much attention to it, but in the last hours of the 2009 Legislature, a bill got passed and eventually signed into law that will never allow state employees—not just the “regular” folk who work for state agencies, but also members of the Kansas National Guard who are essentially the prom queens of the state payroll—to be used as hostages by an administration to force lawmakers to approve internal borrowing.

The administration can put a halt on payments to school districts, to universities, hold back payments to contractors or maybe delay payments to others, but state employees are off the table.

Is this a big deal? Yes.

Almost immediately after July 1 passes and the state begins a new fiscal year with virtually no money in the bank, legislative leaders are going to be asked to approve more of that internal borrowing—probably the same money that the state will repay on the last day of June to square up the books.

If the leaders OK the borrowing, well, that’s just the course of business. But if they want to dissect just what that newly borrowed money will be used for, they won’t have to worry that the paychecks of their state employee-constituents are on the line.

In a time of tight budgets, the balance of power shifts, just a little, toward the Legislature. We’ll see where that takes lawmakers…

 

June 11, 2009
Syndicated to Kansas newspapers on June 8, 2009

In the driver’s seat

In the sometimes hard-to-understand world of state government where there’s more happening under the covers than most Kansans will realize, Gov. Mark Parkinson says he’s going to make his own budget cuts while lawmakers are on summer vacation.

Now, that sounds reasonable because after all, the governor is the chief executive officer of this business called Kansas government. But it has some interesting political effects.

If you remember back to last year, then-Gov. Kathleen Sebelius told the state agencies that she controlled to cut spending by first 2 percent, and later, 3 percent.

They just did it. She was the boss, the money was still in their agency budgets, but she told them not to spend it and they found ways to cut their agencies down, to spend less, leaving more in the bank when the Legislature convened in January. The savings were essentially “booked” by the first appropriations bill of the session, the rescission bill.

Parkinson is suggesting something different. He’s saying that he will pull money back from agencies shortly after the new fiscal year begins on July 1, pulling it out of agency budgets and putting it back into the State General Fund.

He can do that, and the quiet little effect is that the governor has cut budgets; legislators don’t have to put any of their DNA or political assets on the line. It’s “the governor did it,” not “we did it, or we approved it,” and lawmakers can see money pulled out of agencies and react with the same surprise that most Kansans will.

In return for taking the political heat—and be assured that every agency losing money has its own fan base that will complain long and loud—Parkinson gets to decide what cuts are made where. He doesn’t have to cut everything, he doesn’t have to cut what he cuts by the same amount; he essentially gets to reshape government agencies and services by making allocations.

That is a very big deal in terms of operating state government. The governor really is in the driver’s seat.
Does Parkinson get some credit or some favors next session for taking on the role of the budget-cutter? Probably it depends on what he cuts and by how much. But there’s certainly political capital in the deal, saving lawmakers from having to affirm cuts next year to programs that they can still tout on campaign flyers.

It’s all pretty quiet, all pretty much insider stuff, but it shows up under the Dome here…

 

June 4, 2009
(Syndicated to Kansas newspapers on June 1, 2009)

Lower taxes = more state revenue?

Well, it’s not quite time to head to the window ledges yet over concerns that the state’s revenues are falling and its legislatively approved budget appears headed under water.

No, it wasn’t good news that May’s tax receipts to the state were about $103 million less than expected. And chances are good that the state is going to receive less money in June than predicted, leading to the state delaying payments to vendors and to state agencies. Anyone who has run out of money before the month is over knows how that works. You just wait a little while until you know that your check is going to clear.

It does sound a little, well, unworkmanlike for a state government to have to do that, but these things have happened before and they’ll probably happen again.

It does bring up what will be an election-year mantra next year: Whether you can increase revenues to the state by lowering taxes. What?

Yes, that’s the conservative line, that if you lower tax rates, people and businesses somehow make more money, so what you lose with a lower rate somehow you make back on volume. Maybe that works, maybe it doesn’t.
The theory is that once tax rates are lowered, corporations and people find a way to make more money and it all pencils out.

Look for that line to mesmerize much of the Kansas Legislature next session—an election-year session—when voters typically tend to like the candidates who promise to lower their tax rates.

In a broad view, and with enough time, it just might. The concept is if Kansas tax rates are lower, businesses will spring up, creating more jobs, and we have more businesses and more people paying less in tax, but it works out because…well, there are more of them paying those lower taxes.

And, it probably doesn’t hurt that Kansas is in the middle of the country, so stuff made here is closer to half of the nation than something made on the northern, southern, eastern or western borders of the country.

Maybe it works. Nobody knows how quickly it works, how long it takes to build a factory and hire the workers and move product out the doors and start making money and paying lower taxes.

Yes, look for lower taxes to be talked about next legislative session…but look also for next year to be another one in which revenues are down, and we’re waiting a few days or weeks to make sure that the state’s checks are good…