Posts tagged with Economy

Kansas colleges request budget hike of nearly $19 million

The Kansas Board of Regents next week will consider a general 2.6 percent increase in higher education funding, plus a number of targeted increases including funds for Kansas University for a new medical school building and the hiring of “foundation professors.”

The board is scheduled to discuss the postsecondary budget proposal on Wednesday and take action on it Thursday.

The recommended budget for the fiscal year starting July 1, 2012, will then be forwarded to Gov. Sam Brownback’s budget office for consideration. Brownback and the Legislature will work on a state spending plan when the legislative session starts in January.

The proposal before the regents would increase general higher education spending by 2.6 percent or $18.9 million.

This would cover inflation that is specific to higher education, which includes such things as professional and non-professional salaries, contracted services, and utility costs, according to a regents memo.

In addition, the plan also calls for a $2.2 million increase in need-based student financial assistance programs, which would return that assistance to 2009 levels.

The proposal also includes a $38.4 million increase requested for specific institutions or programs; $20 million of that would be to increase funding for technical education.

Brownback has said he wants to see the state place a greater emphasis on technical education in high schools and colleges.

Speaking to the regents last month at a retreat, Brownback said, “Too many companies are saying that your workforce is not really trained for our needs.”

KU’s request totals $9.9 million and includes a $5 million annual appropriation help build a new medical education building at the School of Medicine in Kansas City, Kan.

Brownback has also spoken of the need to increase the ranking of the KU medical school.

The proposed building would cost approximately $78 million and allow KU to increase its medical school by 50 students. The current facility, which opened in 1976, is “severely outdated,” the regents memo states, because it was designed for lectures instead of the modern curriculum, which emphasizes small groups.

The $5 million annual appropriation would cover debt to retire bonds on the project.

KU also is asking for a $3 million annual appropriation to hire “foundation professors” who would have international status and play a major role in research efforts and maintaining KU’s membership in the prestigious Association of American Universities.

And KU is requesting $1.9 million for additional funding for its medical loan program, which provides tuition, fees and a monthly stipend for medical students. The loans can be repaid by practicing in an under-served county in Kansas.

By Scott Rothschild

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State official warns of problems if Congress fails to extend gas tax

Kansas Secretary of Transportation Deb Miller said Wednesday that if Congress fails to extend the federal motor fuels tax by Sept. 30, the state may have to shut down some highway construction projects.

"The disruption of funding would be absolutely immediate and of a concern," Miller told state legislators during a meeting of the Legislative Budget Committee.

The federal tax, which is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel, is set to expire Sept. 30 unless reauthorized by Congress.

Approximately 30 percent of the $1.5 billion the Kansas Department of Transportation expects to receive this fiscal year comes from the federal highway program. All of the federal monies go directly toward construction.

Miller did not say which projects would be affected if the tax wasn't extended, but she provided legislators with a map of Kansas showing numerous federally funded road projects under construction.

Miller said it appears most members of Congress want to keep construction projects going in their districts, but she said some have voiced opposition to extending the tax.

Miller also noted that under President Barack Obama's jobs plan, which includes funds for infrastructure improvements, Kansas could receive an additional $263 million in transportation funding.

By Scott Rothschild

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Brownback administration close to making proposal to restructure state tax code

Gov. Sam Brownback's administration is close to unveiling a proposal to reduce state income taxes, officials said Tuesday.

Working behind the scenes with a group of businessmen and economists, Kansas Department of Revenue Secretary Nick Jordan said the proposal is exciting and will cause other states to say "Wow."

Jordan didn't release any details but said it would help small businesses and individual taxpayers. He said the proposal would not be a copy of tax policy in Texas or Florida, but is designed to help the Kansas economy grow.

Brownback said he wants an aggressive and responsible restructuring of state tax policy. "Get the rates down, broaden the base," he said.

The comments came as Brownback presided over the first meeting of his appointed Council of Economic Advisors.

Jan Lyons of Manhattan, and with the National Cattleman's Beef Association, said she was concerned that a reduction in income taxes would result in an increase in property taxes. "I'm hoping we are looking at longterm impacts," she said.

Jordan said state budget requirements and any impact on property taxes were being considered when forming the proposed tax structure.

Brownback said the state has not been growing "like we need to."

But growing the state economy while most of the nation struggles will be a tall order.

Art Hall, director of the Center for Applied Economics at the Kansas University School of Business, said that even though the country is not in recession, "We're in for a long period of slow growth, if not negative growth."

Brownback's budget director Steve Anderson said although state revenues are currently outpacing estimates, there will be fiscal constraints because much of the state budget depends on federal funding. "As that shrinks, that puts us at tremendous risk," he said.

By Scott Rothschild

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Jobs picture in Kansas remains largely unchanged; new data raise concerns about pace of economic recovery

The state unemployment situation continued to hover around the same level, raising concerns about a sluggish recovery on the job front.

The July jobless rate was 6.8 percent, up from 6.7 percent in June and down from 7.3 percent in July 2010, according to the Kansas Department of Labor. The seasonably adjusted rate was 6.5 percent for July, down from 6.6 percent in June and down from 7 percent in July 2010.

State officials said they detected slow growth, especially the pickup of 2,400 private sector jobs since June.

"Private sector jobs continued to grow last month -- albeit at a snail's pace," said Kansas Labor Secretary Karin Brownlee. She said there were some encouraging job gains in education and health services.

Tyler Tenbrink, a Labor Department economist, said, "Kansas experienced its second month of very slow growth in private non-farm jobs, increasing the risk of a stagnant recovery in the labor market."

Statewide, there were 19,706 initial claims for unemployment benefits in July, up from 18,884 initial claims in June and down from 23,907 in July 2010. There were 192,155 continued claims in July, down from 195,006 in June and down from 249,950 in July 2010.

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Regents want to get on Brownback’s side in budget talks

Last year, the Kansas Board of Regents approved a plan called the Kansas Commitment that would have required $50 million in additional funding for public higher education.

But Gov. Sam Brownback rejected that proposal, saying that the increase wasn't possible given what at the time was a projected $500 million state budget shortfall.

This time, regents say, they want to get on Brownback's side in upcoming budget talks.

Fred Logan Jr. of Leawood, who was recently appointed to the regents by Brownback, said Tuesday it would serve the board well to be on the same page as the governor.

"I prefer a very realistic approach that gets us aligned with the executive. I would say regardless of who the governor is, that is always the smart move," Logan said. "I don't care if it's on the left or the right," he said.

He got general agreement from most of the other regents, who noted that the governor's budget proposal is frequently given a lot of consideration in the Legislature.

During a retreat at Pittsburg State University, the board discussed its approach in upcoming budget talks with Brownback's office and the Legislature, which starts the 2012 session in January.

Regents frequently face the dilemma of requesting funds for what they believe is needed to advance higher education in Kansas and what they hope they can get from political leaders.

Leading up to the last legislative session, higher education had been cut $100 million because of the state's revenue problems during the recession. The regents had sought to make up some of those cuts through the Kansas Commitment.

But Brownback rejected the idea. He did, however, steer clear of deep cuts to higher education and signed into law an initiative to produce more engineering graduates.

The regents will meet with Brownback on Wednesday.

Several board members and university leaders said they hoped to be able to make the case with Brownback that the schools need some additional funding for pay raises for faculty who have not seen a general increase in several years.

"We have lost ground with faculty (pay) in the last three years," said Kansas University Chancellor Bernadette Gray-Little.

She said faculty salaries at KU are below that of peer universities, and KU is starting to lose some of its best professors to other schools that provide better offers. She said when KU fails to retain a star researcher it also loses research grants that person brings in, plus the investments that KU made.

Gray-Little said even when KU is able to increase a salary to retain a top-notch instructor that creates tension down the line to increase other salaries.

Regent Chairman Ed McKechnie of Arcadia said he hoped to be able to put together a budget proposal that would provide for a merit increase for faculty.

Pittsburg State President Steve Scott said classified employees also need a raise. "The classified are not doing well. We've got some real morale issues growing," he said.

By Scott Rothschild

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City's proposes five percent reduction in 2012 budget

De Soto City Administrator Pat Guilfoyle is a cautious man when it comes to the city's finances. When he speaks of making five-year forecasts of city funds and maintaining the city's cash balance, he often uses the phrase "in the worst-case scenario" to describe how he comes about his numbers. This cautious nature is paying off for De Soto.

The proposed 2012 city budget of $7,517,316, which will likely be approved after a public hearing at the Aug. 18 meeting, shows a five percent reduction from the $7,848,699 2011 budget and does not include a mill levy increase.

Guilfoyle attributs the majority of the budget reduction to the city's efforts to reduce capital improvement projects.

"We're trying to be very cautious with our improvement projects and really only do the very basic ones, sort of the meat and potatoes of needed improvements," Guilfoyle said.

Necessary improvements boil down to street maintenance and a few water projects, according to Guilfoyle.

"We don't want to do anything that we can't pay for in cash," he said.

It is Guilfoyle's tendency to plan for the worst that has made him comfortable enough to present the option to keep the mill levy flat at 20.1 mills for 2012 based on higher than usual cash balances at the end of recent years.

"A budget is basically saying how much money [the city] expects to bring in and how much we expect to spend," Guilfoyle said. "We always allow for the worst-case spending possible and hope that doesn't happen, the last few years it hasn't and we're in a good spot."

2009 left De Soto with the highest year-end cash balance in the city's history with $709K left over. That increased in 2010 and Guilfoyle expects to be in that neighborhood at the end of 2011.

"Having a good cash balance helps the city in two ways," he said. "The obvious one is it provides the city with a safety net should any unexpected emergencies occur and it helps us prevent the rollar coaster effect on our property tax rate."

Guilfoyle also warns that while the 2012 budget proposal doesn't call for a property tax increase he expects one to be needed for the next couple years.

"Our cash balance now is great but we don't want to rely on it too much because then we would be in trouble and taxes would go up by a lot all at once instead of a little over time."

One place Guilfoyle doesn't see an increase coming is in the water rate. The water fund has been stabilizing in recent years, even turing a profit for the first time in 2010.

The city is also seeing a reduction in the law enforcement budget. According to Guilfoyle, the contract between the city and the Johnson County Sheriff's Department for police coverage is $30,300 or 7.3 percent less than last year. This is due to a decrease in criminal activity and the amount of time deputies have needed to spend in De Soto in the past year he said.

The public is invited to speak regarding the budget at a public hearing before the regular city council meeting at 7 p.m. on Thursday, Aug. 18.

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Casino sets career fair for dealers this weekend

Hollywood Casino at Kansas Speedway will have an informational career fair this weekend for individuals interested in learning about upcoming dealer training and dealer positions available at the casino when it opens in February 2012.

The informational fair is set from 10 a.m. to 3 p.m. Saturday, Aug. 13, at the Hilton Garden Inn, Reardon Convention Center in Kansas City, Kan., 520 Minnesota Ave. Members of Hollywood’s management team will provide information about the voluntary dealer school that begins Oct. 10, including dealer training, the timeline and commitment involved, and the licensing process. Information pertaining to the application process for dealer school will be provided to job fair attendees, but no interviewing will take place and resumes will not be accepted.

Casino officials reported they expected to fill about 50 percent of the table game positions at the casino with dealer school graduates. Hollywood will offer 52 table games when it opens, including blackjack, craps, poker and roulette.

After applications are submitted, Hollywood will contact and interview select dealer school candidates and administer a series of tests for math skills, dexterity and color vision. Applicants cannot have a criminal record, and criminal background checks will be conducted.

Those in training are not considered Hollywood employees and will not be paid for their time, casino officials said.

Dealer school will be held for eight to 12 weeks depending on the complexity of the games learned. Multiple session options — afternoon or evening — will be conducted Monday through Friday, and all attendees will be trained on at least two types of games. There is no guarantee of a job after dealer school, and applicants must pass a drug test and be licensed by the State of Kansas before they can be hired.

Hollywood Casino at Kansas Speedway plans to play host to a separate career fair for those interested in all other positions in September. Details for the event will be announced at a later date.

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Brownback says state is returning to feds $31.5 million health care reform grant

Gov. Sam Brownback on Tuesday rejected a $31.5 million grant from the federal government to implement a part of health care reform designed to allow Kansans to get the best insurance coverage possible.

In announcing the decision, Brownback, a Republican, said in a prepared statement, “There is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations. Every state should be preparing for fewer federal resources, not more. To deal with that reality, Kansas needs to maintain maximum flexibility. That requires freeing Kansas from the strings attached to the Early Innovator Grant.”

Asked to elaborate on what federal requirements were attached to the grant, Brownback’s office did not respond.

Kansas Insurance Commissioner Sandy Praeger, also a Republican, who was administering the grant from the U.S. Department of Health and Human Services, said there were few strings attached.

“There are conditions with the grant that we were going to have to meet, but HHS has been incredibly flexible,” Praeger said.

“It’s a missed opportunity,” Praeger said of Brownback’s decision, “but I understand the politics.”

Republicans in Kansas and nationally are calling for repeal of President Barack Obama’s signature piece of legislation, the Patient Protection and Affordable Care Act.

At the American Legislative Exchange Council meeting last week in New Orleans, which key Kansas legislators attended, a topic of discussion was on ways legislators could return to their home states and take action to try to stop implementation of the law.

In ALEC’s “State Legislators Guide to Repealing ObamaCare” one of the strategies is for states to decline federal grant money that comes with “federal strings.”

Brownback, when he was in the U.S. Senate, voted against the legislation, and as governor has supported efforts to challenge it in court. However, he had earlier given his blessing to getting the grant.

On Tuesday, Praeger was brought into a conference call led by Lt. Gov. Jeff Colyer, who said the state was opting out of the grant.

In February, HHS announced the award of seven agreements to states to help design and implement the information technology infrastructure needed to operate health insurance exchanges.

Kansas was one of the seven set to receive $31.5 million. At the time, HHS Secretary Kathleen Sebelius, and former Kansas governor, said, “Early innovator states will play a critical role in developing a consumer-friendly marketplace where insurers must compete to deliver the best deal. These grants ensure that consumers in every state will be able to easily navigate their way through health insurance options.”

In April, Oklahoma opted out of its grant. Now Kansas has followed.

Kansas Democrats criticized Brownback’s decision.

Democratic Party Chairwoman Joan Wagnon said, “Brownback showed he cared more about kowtowing to the extremists of his own political party than the people of Kansas.”

Senate Democratic Leader Anthony Hensley of Topeka said, “Over the years, I’ve heard conservative legislators consistently complain about unfunded mandates.

“Now, with a funded mandate available, Gov. Brownback has decided to opt out, forcing future funding to come from the state general fund. Kansas taxpayers can’t afford to pay for Gov. Brownback’s political grandstanding.”

House Republicans rallied to Brownback’s side.

House Speaker Mike O’Neal, R-Hutchinson, said, “With strings attached, an unknown ultimate price tag and an unworkable timeline, the ‘early innovator’ grant involves unreasonable risk. The governor made the right decision. We must continue to focus on health solutions that meet the needs of Kansans.”

Praeger lamented the loss of the grant. “We really had an opportunity to create a process that really worked well for us,” she said. Now, she continued, if the health reform law is upheld, the federal government will probably develop Kansas’ exchange. The loss of the grant funds could also impact efforts to improve the state’s Medicaid system, she said.

Praeger, a former state senator from Lawrence, said making affordable health care available shouldn’t be consumed in partisan politics. “It’s about doing the right thing,” she said.

By Scott Rothschild

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5 Questions: Creditworthy? Advice for parents as students hit the road

As the fall semester draws near at area colleges and universities, the Kansas Credit Union Association offers advice, below, to parents about students and credit cards.

Q: Should we allow our college-aged children to get a credit card?

A: Using a credit card wisely is a good way to build a credit history but stress that all credit cards are not the same. Encourage them to carefully scrutinize any credit card offers they receive.

Q: What’s the best route to take?

A: Have them enroll for only one card, use it sparingly for key expenses and commit to paying the monthly bill in full. Consider applying for a joint credit card with your student – that way, you can monitor the spending activity and step in if things start to get out of hand.

Q: What lessons should we stress?

A: Make sure they stay on top of due dates for their bills. Have them keep receipts and balance their accounts regularly. Help them understand that late or missed payments, along with bounced checks or overdrawn balances, can damage their credit history and make it difficult to get a loan for their first car or home.

Q: What if they get into a bind?

A: Establish ground rules about how much financial assistance you will provide before they leave home – and stick to it. If they need extra help once in a while, that’s fine, but don’t make it a habit. They need to learn on their own. Statistics show having a good understanding of financial skills is critical for college-bound students

Q: What else do parents and their credit card-holding kids need to know?

A: Stress the importance of protecting personal information. Identity theft is on the rise, so teach them common-sense monitoring: review statements each month and report suspicious charges; protect all passwords and PINs, and never share them with others; shred receipts or papers containing personal or financial information, including pre-approved credit card offers. If you pay bills online, only send payments over secured networks.

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Kansas University business professor offers thoughts on US credit rating downgrade

Christopher Anderson, a Kansas University business professor, offered a few thoughts on Monday on the credit downgrade and market situation.

• A primary factor in the decision to downgrade the country’s credit rating is the ratio of the country’s debt to its gross domestic product, Anderson said. He said that people can forget about the denominator in the equation, the GDP. If the nation slips and enters another recession, it will have a direct effect on the rating, even if the country takes debt reduction measures.

“That will be that much harder to catch up,” he said.

• Occasionally in the past, a downgrade can be neutral or even good news for a government, he said, as it will free up a government to take actions it had been avoiding to maintain its good credit rating.

Japan, for example, weathered a similar downgrade it received in 2002, he said. The U.S., however, has a number of factors that make it unique, he said, making comparisons to other countries difficult.

• The markets are falling, but Anderson said it likely wasn’t the downgrade by itself that had investors concerned as much as political gridlock in the United States, other debt issues in Europe and a heightened concern about the growth potential of the economy.

“For the short term, just hold on tight,” he said. The slumping market will allow some investors an opportunity to go bargain shopping on stocks, but people are still flocking to treasury bonds, which are still seen as the safest bet, he said.

• As more people invest in treasury bonds, interest rates are falling, too, he said. For people who have good credit, this shift offers another opportunity to refinance mortgages at historically low rates, Anderson said.

• Uncertainty is definitely ruling the day, he said. The VIX, an index that is a measure of how volatile the market is, has doubled since last Wednesday.

“There’s a hell of a lot of uncertainty right now, because people don’t know what this means,” he said.

By Andy Hyland

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