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SPOTLIGHT
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Two-year budget raises serious questions

Published on -12/18/2012, 10:41 AM

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An almost off-the-cuff comment by Gov. Sam Brownback -- that he plans to present the Legislature with a two-year budget at his State of the State address next month -- instantly sparked intense discussion by us Statehouse watchers.

Two years? Sounds simple. Just what you hope to spend in the coming fiscal year that starts July 1, and what you hope to spend the next year.

Well, maybe. Maybe not.

First off, at this point, there just isn't any reasonable information about revenues for the fiscal year after next -- that second year of that two-year budget. The governor has the official -- which means it has to be the basis of his budget for the upcoming fiscal year -- estimate of revenues from the Consensus Revenue Estimating Group for the state fiscal year that starts in July.

The year after? No estimate.

And, remember, the year-after-next is likely to be the one that will reflect most practically the effects of the coming year's major tax cuts. It will be a year before we know whether everyone in Kansas becomes a limited liability corporation and therefore exempt from most state income taxes -- or not.

That immediately makes the second year of a budget more of a wish list than a budget. Nobody will expect that second year to be right on the nose, but it's going to be the governor's best guess of revenues and expenses of the second year.

That second year? Well, that's also a gubernatorial election year, and we're presuming that year's budget will set the stage for a reelection campaign. So, the rosier that the governor predicts the out-year budget to be, the better chance for reelection.

The state's tradition of year-at-a-time budgeting probably isn't the best way to plight the troth of a state. There's a value to certainty of revenues for agencies, of course. And, there's the chance, in a two-year budget, to buy support. Would school districts, which for years have sought two-year budgets for their planning purposes, pay 1 percent or 2 percent for that certainty?

The ways this can go are amazing. Say revenues increase in that out-year? There's more spending available. Say revenues drop further than expected this year, and you've immediately resigned agencies and others who depend on the state for even more bleak budgets in the out year.

Sound interesting? That's what has folks who deal with the state hyped up for what happens next. Does a two-year budget force lawmakers to extend the penny sales tax so that out-year isn't all doom and gloom? You can make the case for that.

Or, you may be able to make the case that with a two-year budget the 2014 Legislature might get by with a shorter session, just tending to loose ends every-other-year and whatever social legislation is still in the wind, and tout the efficiency that you've created for the people of Kansas.

Of course, there's always the possibility that this year's budget crunch will be so severe -- and we're looking at a roughly $300 million shortfall -- that lawmakers will tell the governor thanks, but no thanks.

Yes, a two-year budget sounds simple, but ...

Syndicated by Hawver News Co. of Topeka, Martin Hawver is publisher of Hawver's Capitol Report. To learn more about this nonpartisan statewide political news service, visit twww.hawvernews.com.

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