By John Celock
A Kansas legislative committee has advanced legislation to cut from the current state budget, following debate over state prison construction and borrowing policies.
The House Appropriations Committee voted Monday to advance legislation to plug the state’s current $348 million budget hole with cuts and borrowing from the unclaimed property investments to make up for the state’s current revenue shortfall. The legislation comes after the state Senate on Thursday did not take up a similar measure following collapse of 21 votes to pass the bill amid concerns over cuts to K-12 education. The House panel’s vote came following debates over repayment of the state’s borrowing from the pension fund and over the legislative process used to construct new facilities at the Lansing Correctional Facility.
“While I hate borrowing money to pay our monthly bills that is the such incredible situation we’re in,” Rep. Kathy Wolfe Moore (D-Kansas City), the top Democrat on the Appropriations Committee, said of the borrowing plan. “The only other is cutting K-12 and we made a solemn commitment to them when we did block grants, not to cut.”
The Pooled Money Investment Board legislation would allow for the state to borrow $327 million from the state’s idle fund that comes from the investment of unclaimed property for use in the current budget. The committee approved an amendment from House Appropriations Committee Chairman Troy Waymaster (R-Russell) to change the repayment plan from Gov. Sam Brownback’s (R) seven year $45 million plan to a six-year $52.8 million plan starting in July 2019. Waymaster said the one-year delay is needed to address uncertainty in the budget for Fiscal Year 2018, which starts on July 1 of this year.
Rep. Henry Helgerson (D-Eastborough) argued against the borrowing plan, noting that the proposal was putting the state in a position of borrowing to repay operating expenses. He called the proposal a “dangerous precedent” and said he does not believe the money will be paid back.
He said he would have preferred to see the state addressing the long-term revenue issues with the current budget, a move that has been mentioned by state senators.
Rep. Barbara Ballard (D-Lawrence) said that the state was put into a tough position with the revenue downturn, in part due to the state’s 2012 high tax cuts, and that the borrowing would save the state from having to make across-the-board budget cuts to the current budget.
“I don’t think we really have a choice when we consider how many people would be affected,” Ballard said.
The committee voted against a proposal from the state Department of Corrections to allow a private company to demolish and rebuild the Lansing Correctional Facility under a 20-year agreement, which would see the state lease back the facility from the private company. The facility would remain under state control and with state staffing during the lease term. The language of the amendment would have the state assuming ownership after 20 years.
House Transportation and Public Safety Budget Committee Chairman J.R. Claeys (R-Salina), who proposed the Lansing amendment, said the reconstruction was needed to end “inhospitable” working conditions at Lansing, which was constructed in the 19th Century and lacks air conditioning. He noted that the facility currently has a 37 percent annual staff turnover rate, the highest in the system, and that a new facility would increase bed space and create new efficiencies for the system, along with increasing safety for guards.
Claeys said bed space at Lansing would increase by 206 under the plan and that the change would reduce staffing in the Department of Corrections by 294 full time employees through attrition for a savings of $14.1 million annually. He said that the modern facility would allow for fewer guards. He said that employees would also be transferred to other Corrections Department facilities in the area.
“Our constituents send us here to solve problems. Today we can solve a problem with employee turnover and capacity at our correctional facility in Lansing,” Claeys said. “We have seen vacant positions put our correctional officers at risk.”
Opposition rose on the committee from the process used to put the amendment before the panel. The Transportation and Public Safety Budget Committee held a hearing on the plan from the Department of Corrections last week and is scheduled to discuss the measure, along with the agency’s budget proposals for FY 2018 and FY 2019 on Monday afternoon. The decision by House leadership to schedule the FY 2017 budget bill for discussion in the Appropriations Committee on Monday morning – and a desire by the Corrections Department – to put the amendment in the 2017 budget to allow the process to start sooner required the amendment to be put forward without budget committee discussion, according to Claeys.
Claeys told the appropriations panel that the amendment was devised based on the discussion in his committee last week. He noted that the final lease agreement would require the “advice and consent” of a legislative budget committee and that the Legislature’s Joint Committee on State Building Construction and the budget conference committee would have review of the plan going forward.
Helgerson, the top Democrat on the Transportation and Public Safety Budget Committee, called the Lansing proposal “a monumental change” and said that he wanted to see more discussion on the issue before it was passed. He noted that the budget committee had only heard from the Department of Corrections and he wanted to hear from the public. He also said that the change needed more legislative discussion, including by the budget committee.
“We have not had full vetting,” Helgerson said. “It may save money but it needs to have legislative approval in the process.”
Rep. Sydney Carlin (D-Manhattan) said that she was part of a discussion on the construction of a new prison in Riley County and she said that the discussion and review took 12 years to complete. She said that there are many issues that need to be reviewed in the construction of a new prison facility and that time needs to be put into the process to allow for those issues to be thought out.
Carlin also said that a lengthy review process would allow for other communities in the state to possibly bid on having the prison in their district and not just placing the new facility in Lansing. Claeys said that the department wanted to address the issues at Lansing, including adding bed space to the system, and not build a new facility in the state. He noted that the new facility would meet federal standards.
Wolf Moore expressed concerns over the process, saying that more time was needed.
“It is irresponsible to give us this piece of information, I know nothing about this issue,” she said. “It has not been heard by the Joint Building Committee.”
Ballard also called for more time, saying that the employees needed time to know about the potential changes including staff reductions. Claeys said the cuts would be via attrition.
“This is a very inefficient Lincoln Administration building. It wasn’t built with plumbing. It doesn’t have HVAC,” he said. “It is a very inhospitable work environment.”
Helgerson said that he was concerned about new money being spent on the prison and that he wanted more time to be given to the discussion in the Legislature. Claeys said that no new money would be spent with the project saying that it would save money by making Lansing more efficient.
“If you are going to spend hundreds of millions of dollars you should have plenty of discussion,” Helgerson said.
The committee voted nine to twelve to defeat the Lansing amendment.
The committee also passed an amendment from Joint Pensions, Benefits and Investments Committee Chairman Steven Johnson (R-Assaria) to require that 50 percent of the FY 2017 budget ending balance to be used to repay money that has been borrowed by the state pension fund to plug budget holes. Helgerson tried to require a full repayment of the pension fund borrowing in the current budget, a move that was defeated by the committee.
Helgerson said that the budget committees had been recommending the full repayment of the pension funds and that the Appropriations Committee should be setting the repayment policy. He also said that the repayment has support outside of the State Capitol.
“The majority of citizens said they want to stop borrowing money from KPERS,” he said.
The committee also passed a Waymaster amendment to have 10 percent of the ending balance for the FY 2017 budget set aside for the state’s rainy day fund. The amendment’s funding would come after the money is repaid for the pension fund. The state passed the rainy day fund a year ago but no money has been placed into the fund.
“I hope that we can build this fund,” he said. “Kansas was one of the few states without a rainy day fund and now we do but it has no money in it.”
Update 5:40 P.M.
The House Transportation and Public Safety Budget Committee unanimously voted to recommend the inclusion of the Lansing Correctional Facility project in the budget plan for Fiscal Years 2018 and 2019.