Committee Passes Budget Stabilization Fund Bill

Kansas is one of only three states that do not have a rainy day fund.

IMMEDIATE RELEASE

February 18, 2009

For more information, contact:
Rep. Mike Burgess
785/296-7653

HOUSE COMMITTEE PASSES OUT BUDGET STABILIZATION FUND BILL

Topeka – The Kansas House Government Efficiency and Fiscal Oversight Committee voted to recommend the House approve House Bill 2320, a bill establishing a state budget stabilization fund.

Committee Vice-Chairman Representative Mike Burgess (R-Topeka) pointed out this week's debate on how the state pays its bills is a perfect example of why the State must put its financial house in order.

"The state stopped issuing income tax returns last Friday because the cash flow problem the state is having.  A well-funded budget stabilization fund would give the state a savings account to lean on during the difficult times and prevent situations like this and the budget shortfall we are currently facing," Rep. Burgess said.

House Bill 2320 would move revenues received by the state that are above the April Consensus Revenue estimate as adjusted for legislation into the fund.

"Right now, excess revenue just gets spent the following year – growing our state budget.  If this proposal had been in place since just 2003, the state would have nearly $300 million in the budget stabilization fund and a smaller budget," Burgess said.

The bill also:

·         Limits transfers out of the fund to 50% at one time.

·         Prohibits the Governor from using the fund to prepare the Governor's Budget Report .

·         Limits the fund amount to no more than 20% of the general fund budget from the previous fiscal year.

"Kansas is one of only three states that do not have some form of a budget stabilization fund.  For example, in Alaska, they have $6.6 billion dollars in their fund – plenty of money to weather a financial downturn for two years without having to drastically cut funding to important programs," Burgess said.

The Committee also recommended the House also approve House Bill 2219, continuing and expanding the work of the Kansas Performance Measurement Commission established by the Kansas Legislature last year.

The House is expected to debate these bills in the coming days.

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Mike Burgess serves north and west Shawnee County and southern Wabaunsee County, including Alma, Eskridge, Harveyville, Rossville, Silver Lake, Willard and a little bit of Topeka.