“I’m afraid it’s going to get ugly,” Dahl said last week.
Why? In a nutshell, the challenge of creating a fiscally responsible state budget during this election year may be overwhelming.
In any election year, Dahl said, elected officials want to present the image of financially supporting programs and projects that are important to their respective constituencies, while also holding the line on taxes.
This year, Dahl said, it will be all but impossible to do both.
“The past two years, state spending has seen something like an 8.5 to 9.2 percent increase from the year before, and the state simply cannot continue on that route,” he said. “Consequently, we’re just going to have to vote no against a lot of proposed increases.”
Or raise taxes to pay for them.
“This coming year is an election year for all senators and house members,” Dahl said. “Who wants to go out and campaign, ‘I voted for a tax increase to pay for the increased spending’?”
Dahl said even before the budgeting process begins this month, the Legislature is already committed to a budget increase of 5 percent: a $450 million increase for education mandated by the Kansas Supreme Court, and increases in Medicaid mandated by the federal government.
If legislators could agree to keep the increase at 5 percent, that would be one thing, Dahl said. But the political pressure to add projects and support favorite programs will be enormous in an election year.
“We have 40 senators and 125 representatives,” Dahl said. “If each one has just a ‘small’ project they bring—like only $2 million—but you multiply that by 165, what do you do?”
The minority party always blames the majority party if the Legislature can’t settle on a budget. This year, Dahl said even some Republicans may not have the backbone to make the hard choices.
“The same people who don’t have enough guts to vote against a spending increase in some program are also the ones who are going to sit on their hands and not vote for a budget—on both sides of the aisle,” Dahl said.
“That’s politics, but that’s reality,” he added. “I know that ahead of time.”
Dahl said one of his first tasks when he arrives in Topeka for the start of the session will be to work with House Speaker Melvin Neufeld to plot a way through the budget morass.
“We need to sit down right now and develop a plan on how we’re going to get out of session (with a budget),” he said.
Dahl said he and other Republican House leaders have been talking with their counterparts in the Senate about altering the way the state budget is formed.
Currently, the governor and her staff meet with representatives of the various agencies and programs ahead of time, and develops a budget to present to the Legislature that incorporates the increases the administration favors.
Dahl said that only makes fiscal decisions more difficult for legislators.
“The governor’s budget already includes the increases that are requested,” he said. “So, if the governor proposes a $10 million increase in a particular program, and the House approves an increase of only $5 million, we get blamed in the media for cutting a program by $5 million when actually we approved an increase of $5 million from the previous year.
“What we’d like to do is use last year’s approved budget as our starting budget for the next session and work from that,” he said.
On the revenue side, Dahl said Kansas has enjoyed six or seven relatively strong economic years.
The additional tax revenue generated in private sector has helped offset state spending increases during that time.
If the economy slips, as some are projecting, the budget situation in Kansas will worsen dramatically—much like it did in 2001 and 2002, Dahl said.
The state’s debt currently stands at $4 billion—compared to only $450 million in 1992.
“The interest and principal we pay on our current debt is even more than (the entire debt in 1992),” Dahl said, citing a current line item of $490 million in the state budget.
Dahl said Kansas ranks 44th in private-sector economic growth, the source that generates tax revenue for the state, while ranking seventh in public-sector growth, the source that spends tax revenue in the state.
“We need to make Kansas more business friendly,” he said. “If you raise taxes, Kansas already has a bad reputation of being a high-tax state. Basically, it boils down to our appetite is bigger than our pocket book. People want Utopia in a lot of different areas, and it’s not going to happen.”
Dahl said he hopes constituents will be understanding if legislators make tough calls in an attempt to balance program needs—many of them legitimate—and hold the line on taxes.
“That’s why I say it’s going to be an ugly year,” he said. “There’s going to be a lot of things where representatives agree that a lot of the programs need more money, but we’re going to have to say we just can’t do it.”