The Associated Press
TOPEKA, Kan. — It’s not hard to see signs at the Statehouse of a looming clash over the state’s budget deficit between Republican legislative leaders and Gov. Kathleen Sebelius and her fellow Democrats.
GOP leaders continue to argue that across-the-board spending cuts are the quickest and best way to deal with the state’s financial problems in the short-term. Meanwhile, Democrats argue that such cuts are thoughtless and likely to inflict damage on schools and social services when it can be avoided.
The argument seemed to sap the sense of urgency out of the Legislature during the first two weeks of its 2009 session. Sebelius and legislators must close a projected $186 million deficit by June 30, yet no bill has emerged from committee in either house.
But many legislators sense that the state’s finances haven’t hit bottom and the size of the projected deficit probably will grow. And that may force both Republicans and Democrats to accept ideas they now promise to fight, in a package that has to include just about everything to prevent a constitutionally prohibited shortfall.
“If you look at any of the big things that we’ve done the last 10 years, it’s taken Democrats and Republicans cooperating,” said Rep. Jim Ward, a Wichita Democrat and the assistant House minority leader.
Though the deficit is now projected at $186 million, Senate Republicans have said they want to pass a plan that would close a $300 million shortfall instead. Some Democrats are reluctant to accept the figure.
Legislators in both parties could have more information at the end of this week. The current deficit projection, from legislative researchers, is based on state revenue collections through December. If revenues continue to fall short of expectations in January — as Republicans generally expect — the gap between anticipated revenues and approved spending in the budget will grow.
Sebelius proposed a grab-bag of targeted spending cuts and accounting changes to close the deficit in the current budget, avoiding a cut in overall state aid to school districts and largely sparing social service programs. Higher education and local governments shoulder much of the burden.
Her proposals could close a gap of nearly $254 million, depending on how much aid the state withheld from cities and counties. They’d lose at least $10 million under her plan and up to $63 million, with the amount determined by how big the deficit gets.
Her worst-case, $254 million figure is not too far from Senate Republicans’ $300 million target, a number House GOP leaders also see as reasonable. Senate Majority Leader Derek Schmidt, an Independence Republican, acknowledges GOP senators are guessing about the deficit’s size but compares their efforts to duck hunting.
“The governor saw the duck in the sky. She aimed where it is and she pulled the trigger. Well, the problem is the duck’s gone by the time the shot gets there,” he said. “We see the duck in the sky, and we’re trying to lead it a little bit so we can actually hit the target.”
The philosophical divide seems much larger. Republicans like Schmidt argue that Sebelius is relying too much on accounting changes to make the budget work for the current fiscal year.
They argue that one-time fixes — shifting regulatory fees to general government programs, for example — don’t solve the basic problem, approved spending that outstrips available revenues. Part of her plan, they say, simply pushes the state’s problems into the future, perhaps even until after the term-limited Sebelius leaves office in January 2011.
Many Democrats believe such arguments are an attempt to avoid a discussion of reversing or stalling some of the tax cuts businesses and others have received over the past decade or so. State law phases out the estate and corporate franchise taxes by 2011, and Sebelius has proposed freezing the current tax rates in place.
Phasing out the two taxes are long-held Republican goals, pleasing core GOP constituencies. In avoiding deeper cuts, Democrats are preserving long-held goals of their own — and pleasing advocacy groups normally aligned with them.
Much of the rhetoric from both camps remained less than conciliatory at the end of last week.
Sen. John Vratil, a Leawood Republican, suggested Sebelius’ power to veto individual items in a budget bill or an entire bill — a potential weapon for bringing the GOP in line — is checked by the constitutional requirement to balance the budget in both fiscal 2009 and 2010.
“She has to use that veto pen very judiciously, or she can create huge problems,” he said.
Ward suggested that even with GOP majorities in both houses, Republican leaders still lack the support they need for across-the-board cuts.
“I think they’re just trying to get their arms around a pretty big budget deficit and trying different things,” Ward said.
Yet leaders in both parties already are contemplating having to compromise if the deficit keeps growing.
For example, Senate Minority Leader Anthony Hensley, a Topeka Democrat, said he doesn’t rule out across-the-board cuts on top of targeted spending cuts. Instead, he sees them as a last resort, to be tried as a gap-filler if it suddenly becomes necessary later this year.
Senate President Steve Morris, a Hugoton Republican, views some of Sebelius’ accounting changes in the same way. He said they might become necessary if, after making serious cuts in spending to close the shortfall, the deficit grows larger and there’s little time to respond.
Thus, for all the tough talk now, legislators of all philosophical stripes may be pushed together by a worsening financial picture.
The Associated Press