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May 15, 2002 - SRS Stakeholder Letter
Dear SRS Stakeholders:
As you know, the budget passed by the Legislature (S.B. 517) required about $300 million in new revenue from the State General Fund. Revenue collections in March and April are significantly below the consensus revenue estimates made in March. Without new revenue, the state faces a negative ending balance in the State General Fund next fiscal year. By law, the state cannot have a negative ending balance. In accordance with Kansas law, the Governor is instituting an allotment system to prevent a negative ending balance in the State General Fund next year. He is doing this now because the law requires that he provide state agencies with 30 days notice before the allotment system begins.
Under the allotment system, the Governor will remove $300 million from the approved State General fund budget for FY 2003. For SRS, this initially means a reduction of $21 million in state funds, which will result in a corresponding loss of $16.3 million in federal funds. Selected SRS caseload services were excluded from the calculation. This afternoon, the Governor held a news conference with Secretary Schalansky and Secretary Hubbell outlining the impact of the allotment process on vulnerable Kansans served by SRS and Aging. Without new revenue to fund the budget already passed, these are the actions that must take place.
At this hour, the Senate has passed a tax bill; the House has not yet successfully passed a tax package. We are uncertain at this time whether or not a tax package will be passed prior to the end of the regular session. There is speculation that the Legislature may adjourn its regular Session tonight, regardless of whether a revenue package is passed. Even if a tax package is not enacted during this regular session, there would be an additional opportunity at the sine die Session at the end of May, or the Governor could call a special session to address the revenue shortfall.
If a revenue package is passed, this allotment may not be necessary, or the amount of the allotment might be reduced. However, we wanted you to be aware of the magnitude of the potential allotment reductions. We would also note, that as agencies appeal specific reductions to the Governor, SRS may face further reductions since our consensus caseloads were excluded from the initial calculation. Be aware that these reductions, due to the allotment, are in addition to the $68.2 million reduction in State General Fund dollars already passed by the Legislature in S.B. 517. These further allotment reductions will result in loss of services to vulnerable individuals and families, increase uncompensated care, and increase the burden on communities of providing needed services.
Key reductions include:
• Waiting lists will grow for the most vulnerable Kansans. The developmental disability and physical disability waiting lists will nearly triple.
• Services for General Assistance and MediKan will cease July 1, 2002 for individuals who have received services for 24 months.
• MediKan mental health rates will be reduced.
• Acute care hospital rates will be reduced.
• HealthWave premiums will double.
• Eligibility to receive child care subsidy will be reduced.
• Family Preservation services will be cut again.
• Mental health and developmental disability services will be significantly reduced.
• Discontinue payments for emergency shelter stays for children not in SRS custody.
• SRS will be forced into further downsizing, consolidation, closures, and reducing hours of service.
The Governor's allotment letter to the Secretary along with further details regarding these reductions is available on the SRS web site at www.srskansas.org. We appreciate your continued advocacy on behalf of Kansans.
Sincerely,
Janet Schalansky
Secretary