Thank you to everyone who took the time to participate in my recent survey on Kansas tax and spending issues. To see the results of the survey you can click here. The results reflect a strong preference for dealing with our current fiscal challenges thorough a combination of spending reductions and tax policy focused on fostering economic growth.
Recently I had the opportunity to receive a briefing from the Kansas Legislative Research Department on the current fiscal condition of the State. I’ve attached copies of two documents that are especially instructive which you can view here.
The Kansas Budget Overview document provides a quick summary of where Kansas gets its General Fund tax dollars (50% comes from individual income taxes); where that money is spent (55% goes to K-12 education); and the extent to which tax receipts have continued to come in lower than projections.
The Status of the State General Fund chart shows actual budget figures for FY 2008 and FY 2009 as well as projections for the current fiscal year (FY 2010) and two subsequent years. It is important to note that over the past two fiscal years State spending exceeded revenues by $860 million dollars. The affect of that spending, coupled with the FY 2010 budget has been to completely exhaust the $935 million in cash the State had on hand at the start of FY 2008. Back in 2008 when I voted against the FY 2009 budget I wrote the following, “I also voted against the FY 2009 state budget. The FY 2009 budget passed by the legislature provides for general fund expenditures of over $6.4 billion. This represents an increase of 5.2% over FY 2009 and is certainly an improvement over the 8% and 9 % increases that have become common in recent years. That having been said this budget still spends some $414.5 million more than projected state revenue. The result is a budget that reduces cash reserves to a dangerously low level and sets the stage for a fiscal crisis in FY 2010.” While I wish I had been wrong in this prediction the reality is that it took no great foresight to see that we were spending at a level that was unsustainable. Indeed, as early as 2007 I was leading the fight to reign in excessive spending and, as noted in this article from the Kansas City Star, I occasionally met with some limited success. But overall, the almost inexorable trend has been to grow the size of government in Kansas at a rate that was out of all proportion to our ability to pay the price tag. We are now facing the unpleasant realties that ultimately confront any person, family, business or government that year after year spends more money that is taken in. Again, the crucial fact to remember is that Kansas government was spending more than it was bringing in well before the economic downturn in 2009. That macroeconomic reality deepened and hastened our present budgetary woes, but it did not create them.
It is also important to remember the impact of the Kansas Supreme Court’s Montoy decision on our current fiscal crisis. In June of 2005 when the Montoy decision was handed down I wrote the following, “By now many of you already know the Kansas Supreme Court ruled Friday that the Kansas Legislature must spend an additional $142 million on K-12 education this year and potentially another $568 million the year after. The result would be to add $852 million dollars in state education spending over a two year period. To give some context it is important to understand that this spending would be on top of the roughly $2.4 billion in state dollars already spent on K–12 in fiscal 2005, for a total expenditure in the neighborhood of $3.25 billion by fiscal 2007. When one considers that the total fiscal 2006 general fund budget is a little less than $5 billion dollars this figure becomes particularly striking. I do not believe that compliance with the Court’s order is possible within the bounds of fiscal sanity."
The simple reality is that legislative acquiescence to judicial usurpation of the appropriations power carries with it natural consequences, not just to the seemingly abstract principle of ordered liberty, but to the very practical issue of political accountability within a republican form of government. We have ignored the proper separation of powers to our own peril and are now facing the inevitable ramifications of this distortion of our system of government. In Federalist # 78 Alexander Hamilton wrote that: “Whoever attentively considers the different departments of power must perceive that, in a government in which they are separated from each other, the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution; because it will be least in capacity to annoy or injure them. The executive not only dispenses the honors but holds the sword of the community. The Legislature not only commands the purse but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society, and can take no active resolution whatever.” That this wise division of powers no longer operates as a functional reality in Kansas has much to do with the challenges we now face.
