An almost off-the-cuff comment by Gov. Sam Brownback ó that he plans to present the Legislature with a two-year budget at his State of the State address next month ó instantly sparked intense discussion by us Statehouse watchers.
Two years? Sounds simple. Just what you hope to spend in the coming fiscal year that starts July 1, and what you hope to spend the next year.
Well, maybe. Maybe not.
First off, at this point, there just isnít any reasonable information about revenues for the fiscal year after next ó that second year of that two-year budget. The governor has the official ó which means it has to be the basis of his budget for the upcoming fiscal year ó estimate of revenues from the Consensus Revenue Estimating Group for the state fiscal year that starts in July. The year after? No estimate.
And, remember, the year-after-next is likely to be the one that will reflect most practically the effects of the coming yearís major tax cuts. It will be a year before we know whether everyone in Kansas becomes a Limited Liability Company and therefore exempt from most state income taxes ó or not.
That immediately makes the second year of a budget more of a wish list than a budget. Nobody will expect that second year to be right on the nose, but itís going to be the governorís best guess of revenues and expenses of the second year.
That second year? Well, thatís also a gubernatorial election year, and weíre presuming that yearís budget will set the stage for a re-election campaign. So, the rosier that the governor predicts the out-year budget to be, the better chance for re-election.
The stateís tradition of year-at-a-time budgeting probably isnít the best way to plight the troth of a state. Thereís a value to certainty of revenues for agencies, of course. And, thereís the chance, in a two-year budget, to buy support. Would school districts, which for years have sought two-year budgets for their planning purposes, pay 1 or 2 percent for that certainty?
The ways this can go are amazing. Say revenues increase in that out-year? Thereís more spending available. Say revenues drop further than expected this year, and youíve immediately resigned agencies and others who depend on the state for even more bleak budgets in the outyear.
Sound interesting? Thatís what has folks who deal with the state hyped up for what happens next. Does a two-year budget force lawmakers to extend the penny sales tax so that out-year isnít all doom and gloom? You can make the case for that.
Or you might be able to make the case that with a two-year budget the 2014 Legislature might get by with a shorter session, just tending to loose ends every-other-year and whatever social legislation is still in the wind, and tout the efficiency that youíve created for the people of Kansas.
Of course, thereís always the possibility that this yearís budget crunch will be so severe ó and weíre looking at a roughly $300 million shortfall ó that lawmakers will tell the governor thanks, but no thanks.
Yes, a two-year budget sounds simple, but ...
Martin Hawver is publisher of Hawverís Capitol Report. Visit his website at www.hawvernews.com