A state government passing responsible, balanced budgets is necessary for a flourishing economy and thriving people. This form of responsible budgeting uses procedures of transparency and performance-based budgeting help legislators to craft state budgets that contend with revenue volatility by reining in government spending to avoid deficits. The “Brownback” tax cuts in Kansas in 2012 supported increased economic activity but were irresponsibly combined with excessive government spending that led to an expected large deficit. This subsequently led to the largest tax hike state history in 2017. Ensuring a balanced budget is a bipartisan issue as taxpayers fund excessive spending through high taxes, less economic growth, and fewer well-paid jobs.
In June 2023, Kansas ended FY 2023 with collected tax revenues at $10.2 billion – a 4.1% and $402 million increase over the collected tax revenues of FY 2022. Though this result was only 0.3% higher than what was estimated, Kansas has been accumulating a massive surplus since the COVID-19 pandemic. From July 2020 to October 2022, Kansas exceeded its estimated monthly tax revenues – a 27-month long streak. According to the Kansas Legislative Research Department, even if Kansas had enacted a flat tax bill during its 2023 legislative session, the state would end FY 2028 with $2.7 billion in its ending balance and $1.8 billion in the Budget Stabilization Fund, totaling $4.5 billion in reserves.
The growth in spending keeps increasing too. According to the FY 2024 Comparison Report, the approved FY 2024 General Fund budget of $9.47 billion is 2% more than 2023’s approved budget. It’s also 15.4% higher than the actual spending in FY 2022.
Over the last two years, Kansas Policy Institute has released the Responsible Kansas Budget (RKB). This model for accountable, sustainable budgeting proposed a limit on the initial appropriations of State Funds in 2024 at $18.2 billion, based on limiting the increase in spending to population growth plus inflation. Instead, the 2023 Legislature approved a State Funds budget of $17.7 billion – which was $500 million less than the RKB. While that may sound like good news it actually represents a series of factors highlighting the underlying bloat.
This is coming off FY 2023’s record year of $19 billion in appropriated state spending – a whopping $3.9 billion more than just the year before. The RKB overshot the budget – and not for good reasons. As mentioned, the growth rate is calculated from inflation and population growth. In 2021, the US chained-CPI inflation increased by 7.18% while Kansas’s population declined by 0.60%, this getting the increase of 6.58% in the RKB. These measures aren’t good: Kansas is losing population while the costs are increasing for residents.
To account for record-high inflation over recent years, the RKB is taking a slightly different approach by doing a three-year average of inflation. By preventing excessive spending to hold back the steady creep upward of taxes, a responsible budget helps reduce the growing burden of government on taxpayers and supports a more robust economy for Kansans to flourish.
The RKB is scheduled to be released at the end of January and functions as a response to the Governor’s Proposed Budget. However, the principles of the RKB ring true throughout the year: government can control spending while providing the same services to its citizens at a lower cost. As a result, there’s more room to give taxpayer cash back to families so they can spend it as they choose.