We begin our final 14 days of the 2009 session with much the same news as when we left. Revenue numbers are down, projections appear weak, and yet we will still have to press forward to maintain state operations.
This is a serious issue we face and I am well aware of the impact our actions will have on the future of Kansas and its residents. We have to leave enough money in the budget to operate the critical services, but still balance the budget to not spend more than we take in.
Since 2002, SGF tax receipts have increased almost $2 billion; this is an increase of 38%. As recently as FY ‘05, revenues were $4.8 billion and now as revenues are projected to run $5.38 billion for FY 2010, despite those who seem to believe that the state is hemorrhaging tax revenue. If you add in Federal stimulus money for FY 2010, revenue is $5,777 billion.
Spending is at the heart of the fact that the state is now out of money. As tax revenues grew since 2002, state spending kept right along with it. However, as tax revenue began to flatten out (as it eventually does), the spending continued right on increasing.
State General Fund (SGF) spending increased 48% from 2004 to 2008 while inflation during the same time was only 13% and the population is increasing less than ½ of 1% a year (.45% annually). Now Kansas, one of only four states without a rainy day fund, is facing a situation where spending has outpaced receipts and we did not put any money “in the bank” to help us weather this type of financial storm.
Education has been the beneficiary of this massive spending increase Kansas has experienced. Education spending has increased over $1 billion since 2003, despite student enrollment that statewide is flat. The state’s largest school district, USD 259 (Wichita), student enrollment since 2003 has decreased by 201 students.
According to Legislative Research, Kansas ended FY 07 with $934 million in reserves. It is now projected that Kansas will end FY 09 with only $29 million in reserves. That means we spent over $900 million more than we took in during the last two fiscal years. We have a very large spending problem.
As we work to sort out this shortfall, we have to be diligent to come up with a long term fix and not just place a ban-aid on the hemorrhage. If we had just spent our tax receipts, we could enter this FY 2010 shortfall with over $900 million.
We are at a time in our history when we have to determine what is really important, everyone wants something, needs something, and just can not live with a budget decrease. We are here to work all this out in the short time we have left. I will update you more next week.
A national site selection magazine highlighted Kansas in its Top 10 list of states in the nation for biotechnology, ranking our state along powerhouses such as California, Massachusetts, and Illinois.
Since the federal government recognized Kansas’ enormous strength in the animal health sector, selecting us for a $650 million research laboratory that will protect the American food supply and agricultural economy, we have pushed to keep commercialization of products from this lab a top priority. This focus will further bolster the animal health corridor that is already home to 34% of the $16.8 billion global animal health industry
Tom Thornton from the Kansas Bioscience Authority (KBA), reports the Kansas Economic Growth Act, which created the KBA has allowed investments leading to 1,100 jobs; $94 million in capital expenditures; $38 million in additional research funding; nearly $12 million in equity investments; and the recruitment of the first three bioscience eminent scholars.
With our rich concentration of clinical research organizations and top ranked school of pharmacy, we have significantly increased our investment in drug discovery and delivery to accelerate the speed with which companies can get new drugs to market.
Indeed, as other states pull back from innovation investments, Kansas is vaulting ahead-just when businesses need it most- and yielding a return of more than $7.00 for every KBA dollar spent. Www.kansasbioauthority.org. 25501 West Valley Parkway, Suite 100, Olathe KS. 66061
HB 2130 is the state primary seatbelt law. This bill would allow an enforcement officer the ability to stop a car if the occupants in the front seat were not properly restrained. Passage of this law will result in saving several lives a year in Kansas. Currently in a conference committee, we should vote on this legislation before we leave on May 9th.
I consider it an honor and privilege to serve as your representative in Topeka and I want to know what you think. I want you to contact me if I can be of any assistance, you may reach me in a variety of ways. My home is 1115 Rim Rock Road, El Dorado 67042, 316-321-2087, email is johng@carlisleinc.net, john.grange@house.ks.gov, www.johngrange.net. Thanks, John.
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