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Kansas borrowing against the future PDF Print E-mail
Wednesday, 08 December 2010 12:25

State borrowing from feds to cover unemployment checks


• Daily Leader
Kansas has the seventh highest percentage nationally of people using unemployment benefits, and at this time, the state is borrowing from the federal government to make payments.
Kansas Representative Carl Holmes was at Liberal’s Rock Island Depot Friday, and he said since unemployment payments are paid by employers, this means the state is borrowing against the future to make those payments.
“This means employers are going to be paying more in unemployment insurance to make up what we’re borrowing from the feds with the current situation,” he said.
Holmes next pointed to a national unemployment rate, which many economists say will hit double digits within the next year.
“It’s 9.8 percent, I believe, currently at the national level,” he said. “Last year, during the last month, 40 percent of the new jobs in the state of Kansas were government jobs – local government, city, county, school district and state government. In China, for last year, 80 percent of new jobs were in private industry. Wrong track for us. Right track for China.”
Holmes said this is something that needs to change quickly if both Kansas and the U.S. are to see brighter economic times.
“This has become known as a great recession,” he said. “Results are fewer resources and slower growth in our economy. In Kansas, federal bailout dollars have patched together the Kansas budget for the last two years. Those dollars are gone when we start going to Topeka next month to start dealing with the 2012 budget. That’s a couple hundred million dollars that’s taken out of our budget that will not be there next year. Government spending at all levels is basically out of control.”
Holmes said Kroger, a national grocery store chain, is reporting lower grocery prices despite hikes in milk, meat and produce.
“Kroger’s business for food stamps was at an all-time high as a percentage of total revenues,” he said. “People on food stamps are usually people who are unemployed or are working low-income jobs.”
Holmes said solutions for the state and the country need to be considered from a different angle.
“Near term issues as well as long-term structural inbalances are in the fiscal health of the government,” he said. “We’re looking for short-term solutions to long-term problems. We’re not taking the long-term approach as to where this country is going, and government on all levels has failed to address the long-term fiscal issues structurally. How we get through this, I don’t know, but we’re going in the wrong direction.”
Holmes broke down how state dollars are allocated for the various sectors of the budget.
“Fifty-five to 57 percent of the state general fund dollars go to K-12 education,” he said. “That money is spent by local school boards and not the state. Ten percent of the money goes to regents’ institutions. That money is spent by the board of regents, not the state legislature.”
Holmes said 20 percent of state money goes to Medicaid and social programs. That is mandated by the federal government, but he said those costs are not picked up at the federal level. He next said that 6 to 7 percent of the state budget goes to the operation of prison and court systems, with the federal government mandating how prisoners are treated.
“Ninety percent of the state dollars are already spent before we go to Topeka – spent by other people – and the state legislature does not make a determination on how it’s spent,” Holmes said.

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