Gov. Mark Parkinson said $258.9 million in spending cuts he made to balance the state’s 2010 budget will touch every agency and department.

“This is the most challenging time in Kansas state budget history,” Parkinson said Monday during the announcement. He said the state is dealing with an unprecedented fourth year of revenue decline, 2008 through 2011.

“There are no longer any easy answers,” Parkinson said, noting that this is the fifth round of budget cuts for 2010. Early trimming included cutting waste, he conceded, but he said the latest round includes cuts to basic services that will likely include closing schools and staff furloughs.

The adjustments include reducing K-12 base state aid per pupil and Regents funding for higher education to FY 2006 levels. The state will also not fund the $155.8 million increase requested by K-12 educators to compensate for the decline in property tax collections and a slight increase in enrollment. The K-12 funding cut is in base state aid per pupil only.

Additional major adjustments include:

• Transferring $50 million from the State Highway Fund to the state General Fund. This will need legislature approval when the 2010 session starts in January.
• Moving $2.2 million in unspent prior year funds from individual agencies to the State General Fund.
• Reducing Medicaid reimbursement rates by 10 percent.

During the 2009 Legislative session $560 million in Federal Recovery Act (stimulus) funds were evenly divided between 2010 and 2011. Parkinson is moving $85.9 million from 2011 to 2010 to offset an additional $85.9 million cut to supplemental General State Aid to K-12 schools. Parkinson said a large majority of states are spending more of the two-year stimulus in 2010.

Parkinson said using the $85.9 million in 2010 allowed him to avoid “unacceptable” cuts this year. A larger transfer would have risked more cuts in 2011, he said.

“I am hopeful that when the Legislature returns in January we’ll avoid partisan politics,” Parkinson said.

Parkinson said he is not sure if there will be additional cuts in the 2010 budget. “State revenues are trending better in the last few months, but it’s hard to say for sure.”

When asked if unencumbered cash could help schools, Parkinson noted that some districts didn’t have cash left over to help them through the budget cutting. “It will be particularly challenging for small districts that don’t have any carryover funds.”

Parkinson said of threats of a lawsuit from members of Schools for Fair Funding, “We are in a budget situation where we don’t have any money.

“I would hope that rather than sue us our recipients of funds will try to work with us. We’re in the middle of the worst funding crisis the state has ever faced. It doesn’t seem like the time to sue us.”

Parkinson said he hopes doctors will continue to treat people covered by Medicaid in spite of across-the-board cuts in the program.