Newspaper article The Topeka Capital-Journal

Editorial: Increasing Pressure on Our Pension System

Newspaper article The Topeka Capital-Journal

Editorial: Increasing Pressure on Our Pension System

Article excerpt

Although Kansas is in a much stronger fiscal position than it was at this time last year, there are still major challenges that lawmakers and the governor will have to address in 2018. From the Supreme Court's ruling that the Legislature's most recent school finance formula remains unconstitutional to the structural gap between recurring revenue and expenses that still exists in the state budget, lawmakers will have plenty of work to do next year. And one of their most important responsibilities will be the responsible stewardship of the state's pension system.

Two days after Gov. Sam Brownback's 2012 tax cuts were finally repealed, Moody's revised the state's financial outlook from negative to stable: "The tax increase enacted this week was a major step forward in the state's willingness to utilize its resources to balance its budget and service its long-term liabilities." However, Moody's also cautioned that Kansas "is likely to be a below-average performer for the next few years," citing its "pension funding challenges" as one of the main reasons.

It isn't difficult to see why. Kansas has $9 billion in unfunded pension liabilities, which means the system is only 67 percent funded. While this has improved from 52 percent in 2012, the Legislature still has to spend $623.5 million on KPERS in the next fiscal year just to maintain the current level of debt.

Sen. Laura Kelly, D-Topeka, says she doesn't think the Legislature will be able to cover that cost. It's possible that the state will have to spend hundreds of millions of dollars on school finance next session, and we're still in the process of clearing the debris from the Brownback tax cuts. Our reserves have been completely depleted, lawmakers continue to pay the bills with short-term cash from KDOT and other nonrecurring sources of revenue, and stressed state agencies like the Department for Children and Families are coping with personnel problems, high turnover rates, etc. …

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