Kansas delaying contributions to public employee pensions

TOPEKA, Kan. (AP) — Kansas is delaying roughly $90 million in contributions to pensions for public school and college employees as it wrestles with budget problems and disappointing tax collections.

Republican Gov. Sam Brownback's office announced the move Friday after his budget director, Shawn Sullivan, notified the Kansas Public Employees Retirement System that contributions due April 15 would not be made on time. Brownback spokeswoman Eileen Hawley said it's not yet clear how long the contributions will be delayed.

The delay won't affect current retirees' benefits, nor should it affect the pension system's long-term financial health, assuming the state catches back up. The contributions go toward pensions for school teachers and employees at the state's community and technical colleges.

Hawley added that the state also might not delay the contributions for more than a few weeks. She said the administration is waiting for state officials to issue new revenue projections later this month before making a final decision.

"It just maintains flexibility," she said.

The state has struggled to balance its budget since the Republican-dominated Legislature slashed income taxes in 2012 and 2013 at Brownback's urging in an effort to boost the economy. Critics contend the tax cuts simply didn't provide enough of a stimulus, while Brownback said the effects have been offset by slumps in agriculture, energy production and aircraft manufacturing.

Since the fiscal year began, the state's month-to-month tax collections have fallen a total $81 million short of expectations, a shortfall of 1.9 percent. The state has missed its projections 11 of the past 12 months.

Brownback last month ordered $17 million in immediate cuts in state university budgets, but Kansas is still projected to end its fiscal year on June 30 with a $31 million deficit in its $15.4 billion budget. Delaying the contributions to KPERS until July would prevent a deficit but push the problem into the following fiscal year.

"It kicks the can down the road 90 days and gives the governor the chance to see what the revenue estimators come up with," said Sen. Jim Denning, a conservative Overland Park Republican and a member of the chamber's budget-writing Ways and Means Committee.

Senate Minority Leader Anthony Hensley, a Topeka Democrat, said he's not surprised by the move. Because Brownback won't backtrack on the tax cuts he championed, his administration has few options for a short-term budget patch.

"For people who claim to be conservatives and wanting to balance the budget, they've done a very poor job of it," Hensley said.

Sullivan, members of his staff, Department of Revenue officials, legislative researchers and university economists meet April 20 to draft the new revenue projections to be used in budgeting. The new forecast is likely to be more pessimistic.

Hawley said after the new forecast is released, Sullivan will immediately and publicly discuss the options for keeping the budget balanced.

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By John Hanna, AP. Copyright 2016 The Associated Press. All rights reserved.
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The Gayly - 4/9/2016 @ 8:45 a.m. CDT