The spending coated by the state’s common tax revenues would rise by 1.2%, to almost $8 billion, reflecting Kelly’s dedication to increased funding for public colleges in step with a regulation enacted in 2019 to settle a lawsuit over schooling spending. Complete spending from all sources, together with federal funds, would stay simply shy of $21 billion.
Kelly’s plan would go away $601 million in money reserves, plus one other $82 million in an emergency finances stabilization fund.
However Kansas might have such a monetary cushion and finance Kelly’s spending proposals as a result of her plan would give the state one other 10 years — till 2046 — to shut a long-term, $9 billion hole in funding for the state pension system. Kelly’s transfer would unencumber $159 million through the subsequent finances yr by dropping the following annual pension contribution by 24%.
The state in 2012 dedicated itself to an aggressive plan of rising annual contributions to the pension system to shut its long-term funding hole, one thing squeezing annual state budgets.
However Kelly’s plan comes with a long-term price of $4.6 billion in additional curiosity funds over 25 years. The state pension system is 70% funded, and a few Republican lawmakers need to wait no less than a couple of extra years earlier than contemplating a brand new, much less aggressive schedule of pension contributions.
In the meantime, Kelly and her aides pitched the proposed “Netflix tax” as a matter of equity, arguing that Kansas companies with bodily shops are at a aggressive drawback as a result of they’ve to gather the state’s 6.5% gross sales tax.