Legislators Unveil Republican Balanced Budget Solution
Topeka, KS – A broad coalition of Republican legislators unveiled the “Republican Balanced Budget Solution” on Monday afternoon, providing a pathway for legislators to meet their constitutional obligation without increasing the tax burden on Kansas families.
The Republican Balanced Budget Solution, which balances the budget in 2018 and fully funds KPERS without a tax increase, stands in stark contrast to the array of proposals that have emerged during the legislative session, which is fast approaching 100 days. After several votes and many false starts, leaders of the coalition supporting the Republican Balanced Budget Solution said it was time for a new approach. “As we approach Memorial Day, those controlling this legislature are no closer to a solution than they were in January,” said Senator Ty Masterson, who added, “As they work behind the scenes to reach the magic number of votes necessary to ram through a plan that includes new and unnecessary spending and pays for that new spending with higher taxes on the middle class, we have a simple, straightforward plan that balances our budget without increasing the burden on hard-working Kansans.” The benchmark of the Kansas Republican Balanced Budget Solution is that it slows the growth of government by not including new spending, thereby unnecessarily inflating the state’s need for added revenue. In addition, it brings KPERS up-to-date and fulfills promises made by taking advantage of the opportunity to leverage the state master settlement agreement (MSA), which 18 other states have done previously. Partial securitization allows the state to utilize a cash payout to address a past due, one-time balance.
“This Balanced Budget Proposal is our way of saying – there is another way. If we really want to, there is a responsible path that does not require any new taxes. It’s not easy – but it’s simple: no new spending, keep promises, deliver the essentials,” said Rep. Chuck Weber.
Another feature of the Republican Balanced Budget Solution is that it returns to the practice of passing one-year budgets. It is not prudent to pass two-year budgets when the revenue picture can dramatically change year-to-year, particularly as our economy grows. Furthermore, imposing a premature tax increase can undermine that very growth. By this simple process change, the Republican Balanced Budget Solution eliminates the need for a tax increase to fund a deficit that may not exist.
KEY POINTS OF REPUBLICAN BALANCED BUDGET
Protects Kansas families struggling to make ends meet from massive, unnecessary tax increases
Safeguards all Kansas taxpayers from an unexpected retroactive tax increase
Controls government spending that leads to budget shortfalls
Keeps legislative promises to fund delayed KPERS payments.
Protects Children’s Initiative Fund (CIF) programs
The Kansas Republican Balanced Budget Solution is a proposal that balances the state budget and fulfills promises to fund KPERS without increasing taxes on hard-working Kansas families and seniors on fixed incomes.
The benchmark of the Kansas Republican Balanced Budget solution is controlling the growth of government by eliminating new and unnecessary spending. Unfortunately for Kansas taxpayers, budget proposals currently under consideration in the Legislature add new spending and unnecessarily inflate the state’s need for added revenue.
According to the recently released Docking Institute Kansas Speaks poll, a whopping 75% of Kansans want the budget deficit solved with either spending cuts alone (41%) or a combination of cuts and taxes (34%). Only 25% of Kansans approved of new taxes to fill the deficit. The proposals currently being debated in the Kansas Legislature will INCREASE spending AND raise taxes.
Kansas taxpayers expect the Legislature to find solutions without imposing a massive tax hike on families already struggling to make ends meet. This proposal applies the same live-within-your-means solution that Kansas families utilize when balancing their own budgets.
In order to balance the budget, we must first stop new and unnecessary spending. Kansas government spending has increased by 145% since 1992 - $1.9 billion above the rate of inflation during that same period. This year, for example, the Senate Ways and Means Committee has added $298 million in new spending above the Governor’s recommendation to date, despite a challenging budget situation.
In addition, it is prudent to bring KPERS up-to-date and fulfill the promises made to state employees. The state has delayed KPERS payments for three years running. Those promises can be kept by taking advantage of the opportunity to partially securitize the state master settlement agreement (MSA)—a prudent option already exercised by 18 other states.
This partial securitization is fiscally sound while funding and protecting important Children’s Initiative Fund programs.
Perhaps most importantly, this proposal responsibly addresses the current budget situation without suppressing future growth. After several years of recession level growth, the national economy is finally rebounding under the new administration. As clearly evidenced in the nearly 626,000 new jobs since January, unemployment is at a near 10-year low at 4.4 percent, Consumer Confidence is the highest it has been in 17 years, and the average hourly private-sector earnings are up 2.5 percent over last year.
With these positive economic indicators in mind, imposing a massive, unnecessary tax increase on Kansas families and businesses just as they are beginning to recover would be irresponsible and will ultimately impede growth. A simple process change of reverting back to annual budgets will allow the Kansas Legislature more flexibility moving forward as we monitor and assess economic indicators rather than rushing to burden Kansans with harmful and unnecessary tax increases.