July 21, 2020
The JCEP Question Series: Government Budget Outlook Questions
Welcome to the first article of the JCEP Question Series. This series is dedicated to addressing all of the questions you and or your colleagues submitted to JCEP, if they have not been addressed either at the JCEP Special Edition Friday Extension Update held June 26, in a previous Tuesday Letter Article, or that was divulged in some other way.
This week’s edition of the JCEP Question Series concerns Government and Budget Outlook Questions. Senior Executive Administrator to the Dean and Director Susan Metzger worked with Chief Government Relations Officer Sue Peterson to address three questions. The questions and Sue’s answers follow:
1. The State of KS's top three industries (Ag, Aviation, and Oil) are all suffering. Our governor wants to hold education harmless, but where does the state universities and KSU Regents stand?
The State budget deficit over Fiscal Years 2020 and 2021 as determined by the Consensus Revenue Estimating Group is $1.2 billion. As the State Constitution does not allow a deficit and the state has a balanced budget statute, the Governor, in concert with the State Finance Council, will need to take actions so the state does not deficit spend. Additionally, the balanced budget law requires the Governor to allot either selectively or across the board depending on the balance in the state general fund. The State Finance Council met June 25, 2020 to discuss issuing Certificate of Indebtedness for Fiscal Year 2020. The Finance Council did issue a $990 million Certificate of Indebtedness to help cash flow throughout the year.
The National Governor’s Association has requested $500 billion from the federal government in the Stimulus 4 package being discussed by the U. S. Congress. These monies if appropriated could be used to backfill lost revenue in states. The U.S. Senate leadership is scheduled to consider the Stimulus 4 funding on July 21, 2020.
2. Are the State's finances beating projections?
The Consensus Estimating Group met in April 2020 and revised revenues down for FY 2020 and FY 2021. To date, the state has been exceeding the (April 2020) revised estimates. Current projections still suggest the state will be short 1.488 billion dollars next year.
3. Is the $1.2 billion received by KS from the Federal Gov. for Covid response available for use in our budget?
The $1.2 billion dollars provided in the Cares Act is distributed by the Strengthening People and Revitalizing Kansas (SPARK) Taskforce Executive Committee with approval by the State Finance Council. To date, $400 million dollars has been distributed to counties at the average of $194.00 per person residing in the County. Also, $17.0 million dollars was distributed to state agencies. K-State received $637,672.00 for COVID operating expenses, i.e. software purchase and rental, scientific equipment, data processing supplies, consumable supplies.
The Kansas Board of Regents has requested $95.0 million for state universities and Washburn for primarily re-opening costs. The SPARK Executive Committee will review this request along with a recommendation for providing $55 million to the state universities and Washburn. The request is currently pending.