Cash crunch forces Kansas to delay aid payments to public schools for third consecutive month

Kan. delays aid payments to schools for 3rd month

TOPEKA, Kan. — Kansas is delaying $200 million in aid payments to public schools this month so it can meet state government’s payroll and pay other bills on time, its top budget official confirmed Tuesday.

It will be the third consecutive month that an ongoing cash crunch has led the state to postpone payments to its 295 school districts. State officials expect nearly 100 districts will be forced to violate cash management laws to pay their own bills.

The payments to schools, representing part of general aid to school districts, were due Friday, the first day of the new year.

State Budget Director Duane Goossen said the state hopes to make half the payments by the end of the week. But he said it doesn’t expect to pay the rest until the end of January because it won’t collect enough tax revenues in its main bank account until then.

“It depends on how fast money comes in,” Goossen told The Associated Press. “These bills will be paid. It’s just that we don’t have the cash right now to do it.”

The state’s financial juggling comes as legislators, Gov. Mark Parkinson and other officials wrestle with the state’s ongoing budget problems. Legislators are scheduled to open their 90-day annual session Monday, and their biggest task will be heading off a projected budget shortfall.

The state delayed general aid payments to schools in November, with half the funds not arriving until early December. It also postponed general aid payments and special education funding in December.

Deputy Education Commissioner Dale Dennis said a third of school districts probably will be forced to violate state laws that govern how they’re supposed to manage various accounts.

“The state really needs to step up and honor its commitments,” said Mark Desetti, a lobbyist for the Kansas National Education Association, the state’s largest teachers union. “This is shameful.”

But Goossen said delaying payments to public schools will allow state government to cover $25 million in payroll expenses this week. Also, he said, the state will make $35 million in aid payments to community colleges on time and pay health care providers $24 million for services to needy Kansans in the Medicaid program.

Meanwhile, state Sens. Laura Kelly, a Topeka Democrat, and John Vratil, a Leawood Republican, proposed change in the Kansas Constitution to create a “rainy day” fund to help with future budget problems. It’s a variation on other, unsuccessful proposals made in the past.

Their measure, which quickly received Parkinson’s endorsement, would require the state to set aside funds if its tax revenues grew more than 3 percent from one fiscal year to the next. The money could be spent only if revenues decreased from year to year.

A constitutional change requires adoption by two-thirds majorities in both the Senate and House and approval by a majority of voters. Kelly and Vratil, members of the Senate budget committee, hope their proposal will go on the ballot in November.