The recent announcement that Governor Mark Parkinson has ordered another $259 million in State cuts in order to balance the current fiscal year’s budget was more than a depressing news item to local individuals who work with state funding. It was an anticipated shot of reality that translates into hard choices as to how they can balance their own budget, be it for a school district or mental health center.
Parkinson ordered the cutback November 23 in the wake of continued revenue shortfalls coming into the State treasury.
Haviland USD 474 Superintendent Clint Corby told The Signal Friday he’d recently been informed by the State that the latest round of cuts means an estimated reduction of $61,000 in funds between now and the end of the fiscal year, June 30. He also said he’d anticipated the cut when preparing the current budget last summer.
“Of course I had no way of knowing how big the cut would be last summer but that’s ($61,000) in the ballpark of what I was expecting,” Corby said. He went on to say, “It’s just unbelievable what they’re (State of Kansas) doing to state agencies, from schools, to new highways, to cities and counties with these continued cuts.”
USD 422 Superintendent Darin Headrick, meanwhile, told The Signal Greensburg schools would take around a $90,000 hit due to the latest round of cuts. He added that the per-student funding by the State has dropped from a level of $4,433 two years ago to a level of “$4,012 a kid right now.”
Headrick, who’s also overseeing the construction of a new $50 million school expected to open its doors next August, said that while he can’t predict what further cuts might be coming once the Legislature meets in January, he does know “that if they (Legislature) don’t do some things that generate increased revenue kids will lose access to some programming, and not just here in Kiowa County.”
Recession to blame?
As for the root cause of the ongoing shortfall, Parkinson’s budget director, Duane Goossen tends to blame the now two-year-old recession, saying the drop-off in state tax revenues during the past two years constitutes the worst fiscal period in the state since the Great Depression.
“Our financial situation is still very challenging, “Goossen said late last month, going on to point out the state has yet to start recovering economically in addition to federal stimulus funding set to decline soon—a source of income used to prop up state’s budgets across the nation.
Short-sighted fiscal policy in Topeka…
Headrick, however, said the current shortfalls in State revenues have “nothing to do with the (overall, national) economy.” He points out that three years ago the State had a $900 million surplus in funds and has since been overspending by approximately $400 million a year, meaning the Legislature is “still operating on cash reserves rather than raising revenue.” To make matters worse, according to Headrick, the State is now “asking schools to spend cash reserves (to make up the difference from reduced State aid) like they’ve been doing, which is what’s gotten them (the State) in this situation.”
“It doesn’t take long to figure there’s going to be a (fiscal) train wreck if you keep overspending by dipping into cash reserves, and now the wreck is here,” Headrick continued. “They’re been using cash reserves to handle normal operations, and that means there’s going to be cutbacks in programming for everyone if a different direction isn’t taken soon. The (budgetary) hits won’t go away until they do something to increase revenue.”
More local cuts coming?
Ask Corby the end result for his district if revenues aren’t raised soon and he mentions cuts in programming and staff as the only alternative. “What else can we do?” he asked. “Right now we have enough in contingency funds because we anticipated this cut, but we can’t keep this up without this being detrimental to what we can offer.”
Acknowledging raising taxes is “not an immediate help” Corby said the State needs to focus on “getting business to Kansas. That needs to be a priority.” He also said that continuing to hand out stimulus money as the federal government has recently done via Obama’s $787 billion stimulus package of last winter is no long-term solution. “You need a ground-up approach,” he said.
Headrick sounded much the same note, saying cutbacks in staff and/or programming is “a very real possibility” if the Legislature follows the same course for another year. “We’ve taken a $200,000 hit between the cuts of last year and this year,” he said. “Something’s got to give if that keeps up.”
Statewide mill levy too low…
The main problem, as Headrick sees it, is the inequitable yield of the statewide property tax intended for public education, which has remained at 20 mills for well over a decade. As Headrick points out, a mill raises much more in tax revenue in an urban, upscale place like Johnson County, compared to a sparsely populated rural county in western Kansas.
“Within the past five years the average house valuation in Clark County was between $20,000 and $30,000 while it was around $325,000 in Johnson County,” Headrick said. “A single mill brings in over ten times as much there as here, so schools out here have to raise their local option.
“The flat rate the State assesses needs to go up so out here we have more flexibility in exercising our local option. Back there (Johnson County) they want to keep it at 20 mills so they can say they haven’t raised taxes because 20 mills goes a lot further there than in Kiowa County.”
Another option, according to Headrick, would be to raise the state sales tax, or simply eliminate “some tax breaks” rather than raise taxes. However it’s accomplished, “revenues need to go up,” according to Headrick.
More than schools affected…
Sheldon Carpenter, executive director of Iroquois Center for Human Development (ICHD) in Greensburg, a community mental health center serving Kiowa, Comanche, Edwards and Clark Counties, agrees.
“The State is going to have to increase taxes somehow and come up with more revenue somewhere,” he said. Carpenter said his facility has lost around half-a-million in state funding since the beginning of fiscal year 2008 and recently received word from the State of another $110,000 in cuts resulting from a 10 percent across-the-board reduction.
Of that, $59,000 will be cut from Medicaid reimbursement, which makes up 74 percent of ICHD’s revenue.
ICHD’s operation has already been affected, Carpenter saying, “We’ve not rehired staff (since the 2007 tornado) and some former (pre-tornado) programming isn’t yet back. I’m not sure what’s going to happen with us after this latest round of cuts, but we’re meeting soon to try to put a plan together.”
While school districts look at possible staff and/or programming cutbacks if state shortfalls continue, Carpenter said consequences for the area could be dire in terms of quality of life if funding for mental health also continues to ebb.
“People that get free services right now might not be able to if this continues,” he said. “What happens to those people then? Suicides, death and other negatives consequences could rise. This is a very serious situation for a lot of people in our communities.”
