Social Services Budget Escapes Traumatic Cuts

May 12, 2010

The Kansas Legislature has finished its work for 2010, adjourning Tuesday after having sent Governor Parkinson a budget and tax legislation that was the source of lengthy debate.

In the end, the Legislature was able to avoid making the deep cuts to social services that many had feared.  An earlier 10% reduction in Medicaid provider rates was restored for FY2011 (which begins July 1), and the budget for the Department of Social and Rehabilitation Services (SRS) went from $616 million in FY2010 to $643 million for FY2011.  Additionally, the Kansas Earned Income Credit received a slight increase.  Nonetheless, the effects of previous rounds of cuts are still felt and advocates remain concerned about the state’s capacity to serve the most vulnerable.

The Legislature restored $199,000 in funding for the Stan Clark Pregnancy Maintenance Initiative.  This valuable program helps low-income pregnant women with a wide variety of support services, including counseling on alternatives to abortion.  The governor eliminated all funding for the program last year.

After much fierce debate, the Legislature chose not to cut public education, which represents almost 2/3 of the state budget.  In fact, K-12 received a 4.7% increase in funding.  Because of the dramatic decline in revenues coming into the state treasury, the state had to either make budget cuts or raise taxes, and the Legislature opted for the latter.  The governor was particularly opposed to further cuts for fear that they might do damage to social services programs and education.

The Legislature approved a $314 million sales tax increase.  Beginning on July 1, the state’s sales tax will go from 5.3 cents per dollar to 6.3 cents for three years.  In 2013, the tax will decrease to 5.7%, with the revenue from the remaining 0.4 cents allotted for highway construction.

As the Kansas Catholic Conference noted in a letter to legislators on April 16, the sales tax is a regressive tax that falls heavily on the poor.  In recognition of that fact, the Legislature expanded the food sales tax credit, which is designed to help offset the sales tax on food for people with low (or no) incomes.  Whether the credit will sufficiently mitigate the effects of a sales tax increase on low-income Kansans remains to be seen.  Those with an income over $35,000 remain ineligible for the credit.

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