SESSION OF 2002

SUPPLEMENTAL NOTE ON SENATE BILL NO. 387

As Amended by Senate Committee on

Ways and Means

Brief

       SB 387, as amended, lowers the required State General Fund ending balance from 7.5 percent to 5.0 percent of total State General Fund expenditures for FY 2003. The required ending balance would be increased to 5.5 percent for FY 2004, 6.0 percent for FY 2005, and to 7.5 percent for FY 2006 and subsequent fiscal years. The bill as amended also requires that if the required ending balance is not met when the Legislature adjourns sine die, members of the Legislature would be notified in writing by the Director of the Legislative Research Department.

Background

       The Director of the Budget and a representative of the Kansas Association of School Boards testified in opposition to the bill.

       The current ending balance law was enacted by the 1990 Legislature, and provided for a required projected ending balance in the State General Fund beginning in FY 1992. The minimum State General Fund ending balances as a percent of expenditures were statutorily targeted at the following amounts:

• 5.0 percent in FY 1992;
• 6.0 percent in FY 1993;
• 7.0 percent in FY 1994; and
• 7.5 percent in FY 1995 and subsequent years.

       The required projected State General Fund ending balance only applies at two points in the state budget process. The Governor must present a budget for the out-year that leaves a minimum ending balance of no less than 7.5 percent of State General Fund expenditures. In addition, the projected ending balance on passage of the last appropriations bill each session cannot be less than 7.5 percent of expenditures.

       The fiscal note submitted by the Division of Budget indicates that, based on expenditures included in the FY 2003 Governor’s Budget Report, passage of the bill would allow additional expenditures of $102.5 million and reduce the required ending balance from $322.2 million to $219.9 million in FY 2003.