Every government entity needs cash reserves to some degree, but holding $6 billion among Kansas counties and Class A cities is arguably far too much, and that’s one cause of excessive property taxation.
We examined the 2026 budgets for the state’s 105 counties and the 25 cities with populations of 15,000 or more, identified the beginning unencumbered cash reserves in each fund as of January 1, 2024, and compared each entity’s total to its 2024 expenditures. Collectively, those entities began 2024 with about $4.2 billion in budgeted cash reserves and about $1.8 billion in non-budgeted cash reserves, and they spent $8.2 billion. On average, they had 73% of the coming year’s expenses already in the bank.
To put that in perspective, that is a little more than twice the 36% average held by school districts, and even that is unnecessarily high.
The analysis is limited to 2024 because Kansas law allows cities and counties to utilize non-budgeted funds and only report activity in those funds two years in arrears, so fund balances and activity were not reported in non-budgeted funds for 2025 and 2026. Further, unlike the General Fund and other budgeted funds, non-budgeted city and county funds do not require a formal published budget hearing or specific appropriation limits in the routine annual budget document submitted to the county clerk.
All but seven counties (Doniphan, Greeley, Jackson, Jefferson, Lyon, Nemeha, and Woodson) and two Class A cities (Manhattan and Olathe) use this opportunity to delay reporting spending and cash balances in non-budgeted funds.
Just as with carryover cash in local school districts, the amounts held in these funds vary widely. Still, taxpayers should ask local governments that use this off-budget process to explain why they don’t want to approve a budget for all money spent and report it on time.
Significant spending and cash reserves withheld from public scrutiny
The rationale for the Legislature allowing cities and counties to accumulate cash and spend money without formal budget approval and to delay reporting for two years is unknown, but there is no valid accounting reason to allow this practice.
Non-budgeted funds contain significant spending in many cases. The adjacent table of just ten cities and counties accounts for more than $665 million.
Activity in the non-budgeted funds is also related to property tax increases.
Cities and counties routinely transfer money from their General and other property-tax supported funds to non-budgeted funds. Operating expenses would be lower without the transfers, and the funds would require less property tax support. Examples of such transfers include:
- Prairie Village transferred $8.9 million to its non-budgeted Capital Projects Fund, including $6.7 million from its General Fund.
- Overland Park transferred $17.2 million from its General Fund to the non-budgeted Capital Improvement Fund, and most of that transfer merely increased the cash reserve balance.
- Douglas County diverted $22.6 million from its General Fund.
Local government budget reforms needed
Beyond banning the use of non-budgeted funds, the Kansas Legislature could take additional steps to improve transparency.
- A summary of cash reserves in each fund should be included in the published budget, along with a certification that the total represents all cash holdings.
- Require accurate reporting of projected ending cash balances for each fund. Currently, the budget does not show proposed property tax revenue in each fund, so the ending cash balance cannot be calculated.
- Require more detailed reporting of expenditures, rather than the broad categories used by many cities and counties (e.g., Personal Services, Commodities, and Contractual).
