Governor Laura Kelly today announced her third budget recommendation. The fiscally responsible budget protects and invests in core services – like education, infrastructure, and economic development – while keeping Kansas on a path for economic growth.
“All Kansans benefit from good schools, a strong infrastructure, and access to affordable healthcare,” Governor Laura Kelly said. “This fiscally responsible budget protects the critical resources, services, and programs Kansas communities and businesses need to recover and emerge from this pandemic stronger than ever.”
Governor Kelly’s budget protects Kansas public schools, includes funding to expand Medicaid and behavioral health services, allocates $37.5 million to modernize the state’s unemployment system, and maintains fiscal responsibility though a $600.9 million ending balance.
The Kelly budget accomplishes the following critical policy goals necessary to recover and rebuild from COVID-19 without any increases in individual or business income taxes:
- Maintaining Fiscal Responsibility: The Governor’s proposed budget for FY 2022 protects critical public services while also stabilizing the state budget during a year of significant economic uncertainty. It leverages federal stimulus dollars and avoids any increases to income taxes for Kansas families and businesses. Due to the Governor’s fiscal leadership during her first term, this year’s recommendation maintains a healthy State General Fund ending balance of $600.9 million.
- Continuing Record-Breaking Economic Growth: Despite the economic pressures of COVID-19, Kansas recorded more than $2.5 billion in new investment from businesses like Urban Outfitters, Amazon, and Great Plains Manufacturing. These deals, which will bring thousands of quality jobs to Kansas communities, were spurred by the Governor’s investments in rebuilding the Kansas Department of Commerce and its economic development tools. This budget protects these tools by supporting community development programs like the Kansas Main Street Program, protecting funding in the Economic Development Initiatives Fund, and allocating state dollars to hire experienced economic development staff to make Kansas an attractive place to grow a business.
- Protecting Kansas K-12 Public Schools: In 2019, the Kansas Supreme Court unanimously ruled that Kansas had enacted a plan fulfilling the state’s constitutional obligation to adequately and fairly fund public schools. The Governor fully funds this plan in the FY 2022 budget, putting Kansas on track to increase school funding by $388.1 million through FY 2023. This year, despite significant state fiscal challenges brought forth by the pandemic, the Governor has continued her commitment to public education in Kansas by protecting K-12 education funding for the FY 2022 and FY 2023.
- Expanding Access to Affordable Healthcare and Behavioral Health Services: The COVID-19 pandemic has further highlighted the importance of access to affordable, quality healthcare in protecting the health of Kansans and keeping the state on the path of economic growth. The Governor’s recommendation includes $19 million to expand KanCare, the state’s Medicaid program. The budget also allocates $5 million in additional funding to the Mobile Response and Stabilization Services Program and $3 million for Family Crisis Response and Support services. These programs will expand behavioral health crisis response and triage services to Kansans across the state, including for justice-involved youth and children in foster care.
- Closing the “Bank of KDOT”: When Governor Kelly entered office, she promised to close the “Bank of KDOT” by the end of her first term. This budget keeps that promise, reducing transfers from the State Highway Fund to $133.7 million in FY 2021 and $66.9 million in FY 2022. In a difficult budget year, Governor Kelly’s budget recommendation to phase out the reliance on the State Highway Fund for general fund purposes will provide the resources necessary to continue critical investments in the comprehensive Eisenhower Legacy Transportation Plan approved during the 2020 Legislative Session.
- Investing in the State’s Digital Infrastructure: Updating our digital infrastructure is critical to both economic growth and increasing the transparency and accessibility of Kansas’ public services. The Governor’s budget makes substantial investments to improve the state’s IT systems, including leveraging $37.5 million in federal funds to begin to modernize and improve the state’s unemployment insurance systems. It also makes a number of other critical IT investments, including $2 million for Electronic Health Records support to the Kansas Department for Aging and Disability Services, $3.1 million for replacing the state’s Juvenile and Offender Management Information Systems, and $4.1 million in funding for the Office of Informational Technology Services to make capital improvements in IT security and underlying systems.
- Protecting State Retirees by Stabilizing KPERS: The Governor’s Budget Recommendation also proposes the reamortization of the legacy unfunded actuarial liability of KPERS for 25 years. This in an inevitable, fiscally responsible step that will both stabilize the state’s KPERS system and create $158.7 million in savings to the State General Fund. Reamortization is a frequently used tool to manage pension systems in other states and better positions Kansas to make full, timely KPERS payments now and into the future. Stabilizing the KPERS system through reamoritzation is especially critical in FY 2022 to continue the important investments in economic development, infrastructure, and healthcare that will help the state recover.