Analysis: Buzz for restraint grows in Kansas

(AP) — A new proposal for a "rainy day" fund in Kansas' budget suggests that fiscal restraint is becoming more fashionable among Kansas legislators, perhaps enough to change the state constitution.

They're not new ideas: Limiting what legislators can spend, making it harder for them to increase taxes or forcing them to set aside tax dollars for bad times. Legislators have sponsored at least 13 other proposals over the past decade.

The latest proposal is notable for who's pushing it, state Sens. John Vratil, a Leawood Republican, and Laura Kelly, a Topeka Democrat. Vratil, a moderate, is a vice chairman of the budget-writing Ways and Means Committee. Kelly, its ranking Democrat, voted against a proposal last year for a budget reserve fund.

Democratic Gov. Mark Parkinson quickly endorsed their proposed constitutional amendment, a possible sign that support for new fiscal restraints has grown beyond its core conservative constituency.

Legislators still have to hash out plenty of sticky details before any proposal gets to the ballot. But the chances of a constitutional change appear better now than in the past.

"I think we certainly may see a constitutional amendment on the ballot," said House Appropriations Committee Chairman Kevin Yoder, an Overland Park Republican. "The issue continues to gain significant momentum, and this is probably something that will emerge from the legislative session."

The Legislature's annual, 90-day session begins with members — and Parkinson — facing a projected shortfall of nearly $400 million for the fiscal year that begins July 1. It also starts with a debate well under way over how the state got into the mess.

Many Republicans, particularly conservatives, blame big increases in spending. In fiscal 2004, after the state had emerged from the 2001-03 economic slump, it spent $4.3 billion in general revenues. In fiscal 2008, just before the current downturn began, the figure was $6.1 billion — up nearly $1.8 billion, or 41 percent.

Democrats and advocates for schools and the needy blame what they consider overly generous tax cuts, particularly for businesses. The Department of Revenue estimates that the tax cuts enacted since 1995 will cost the state $920 million in revenues during the next fiscal year.

But both trends — operating at the same time — contributed to the current mess, of course.

Bob Beatty, a Washburn University political scientist, said Vratil, Kelly and others really want a "a guard against the politics of the moment."

Those politics push legislators to budget down to the last penny each year, spending and cutting taxes to provide instant gratification.

And state officials have been doing it for at least the past two decades, so Kansas is stuck in regular boom-and-bust cycles lasting perhaps five to seven years.

Many legislators — and groups lobbying them — are well aware of the cycle. That's inspired numerous proposals to limit spending authority, make tax increases more difficult or create budget reserve funds.

"These are the types of measures that need to be implemented to prevent them from hurting themselves," said Derrick Sontag, state director of Americans for Prosperity, which advocates lower taxes and smaller government.

The proposal from Kelly and Vratil would require the state to put money into its rainy day funds if its general revenues grew by 3 percent or more from one fiscal year to the next. The amount would depend on how much revenues increase but would be capped at 1 percent.

The money couldn't be spent unless revenues dropped from one fiscal year to the next, and only to keep revenues at the same level.

As a constitutional change, their plan must be adopted by two-thirds majorities in both houses, then approved by a majority of voters. Vratil and Kelly hope it will be on the November ballot.

"It's really not rocket science," Vratil said during the news conference in which he and Kelly outlined their plan. "It's smart business practice — it's smart personal practice — to set aside money for the times when revenue is short."

Naturally, the politics of such issues aren't quite so simple.

Sontag's first reaction to Kelly and Vratil's proposal was that it "sounds a little complicated." He and other conservatives also worry that establishing a rainy day fund would be a way to block future tax cuts.

GOP moderates and Democrats resist conservatives' ideas for capping the annual growth in spending or requiring two-thirds majorities to pass tax increases. They fear setting up a system that encourages big tax cuts while schools, roads and services deteriorate.

But the state's current budget problems have given enough of them a headache that financial restraint is in fashion for legislators. Beatty suspects voters already have embraced setting aside money for a rainy day.

"If you ask how it plays out politically, I think it actually plays out pretty well among the voting public, and I think it would probably have a very good chance if it got on the ballot," he said.