'My favorite time of the year': Laura Kelly does what she loves during Kansas budget season

It's December, when the Kansas Statehouse is filled with holiday cheer as Gov. Laura Kelly hosts a Christmas tree lighting, Hanukkah menorah lighting and Kwanzaa celebration.

It's also when the governor puts together her budget proposal.

That, Kelly said, is "my favorite time of the year."

Before Kansans elected her governor, Kelly was a state senator from Topeka. She spent 14 years on the Senate Ways and Means Committee, with 12 of those years as the top Democrat.

"So the budget is something that I know inside and out," Kelly said. "I was a math major when I went to college. I love numbers, and I love problem solving. You can do a lot of both of those things in the budget."

Budget week is Laura Kelly's favorite time of the year

Budget week, as it's called, is more like two weeks of half-day sessions with the division of the budget, "going line by line, decision by decision," said Adam Proffitt, the governor's budget director and secretary of the Department of Administration.

After sending the governor briefing memos ahead of time, those two weeks involved "sitting in our conference room with my budget team, with my analyst, presenting to her."

Kelly has previously described it as being "locked in a government office poring over spreadsheets."

"When we sit down with her, first of all, she's very happy," Proffitt said. "On day one, she comes walking in the door with a big old smile on her face and she says, 'All right, let's build a budget.' She truly loves budget building, so it's always fun when you start with a smile on her face walking in the door and she's ready to go and it's genuine."

She may even crack a joke — if you catch it.

"The personality that you see publicly is very much the personality you see behind closed doors, with the exception of she's very quick witted," Proffitt said. "She is very quick witted. She will make jokes and you have to be paying attention because she's also soft spoken. So she injects a little humor into the process as well just to kind of keep things light."

A 'policy wonk' governor

During the summer and fall, state agencies and the division of the budget work through the base budget and any enhancement requests.

Work during budget week includes going through enhancement requests from state agencies that the division of the budget said no to, but were appealed to the governor.

"That's when we put everything together and put all the decision points together for the governor when she comes in December, we work our magic for the next couple of weeks," Proffitt said.

"It's not just here is a request, here is a dollar amount, do you want to say yes or no," he said. "It's here is a request, here is their dollar amount, here is a policy paper on that and the details around it, and here's the long-term implications of that. ... What would you like to do?"

Sometimes, the governor — who is a self-described "policy wonk" — may ask for more information, such as reading up on what other states are doing or if state dollars will someday have to replace federal funds.

"Without fail, every time, she will ask a question that we simply don't know the answer to and hadn't thought of, because she's just going that next level deeper into the policy and into the weeds of what this really means," Proffitt said.

Proffitt described Kelly as the CEO of a $23 billion organization operating on various revenue streams.

"It's a puzzle in putting it together," he said. "So there's a challenge in making sure it works."

Budgeting during times of surplus has its challenges

There are typically hundreds of enhancement requests, Proffitt said. This year, state agencies collectively requested roughly $750 million in new spending, though a substantial portion was for one time capital projects, meaning not all of it would be ongoing expenditures.

"That'd be very difficult to say yes to every single one of those," Proffitt said. "It's almost more difficult when you're in times like this where you have a lot of cash in the bank. Because every request comes with a very justifiable reason for why we should say yes and why we should fund the program, but we have to say no to a lot."

The discussion with the governor starts with a five-year outlook of the state general fund profile. That shows projected revenues, expenditures and ending balances before making decisions on spending changes.

"She wants to make sure that every decision she makes, we can afford this and we're not going to go bankrupt in five years," Proffitt said.

For the current fiscal year 2024, which ends June 30, the state has a projected ending balance of $2.8 billion with an additional $1.7 billion in a rainy day fund. The current approved budget for fiscal year 2025 has a projected $3.5 billion ending balance and $1.7 billion in the rainy day fund.

As everything currently stands, before any potential spending increases or tax cuts next session, projections by the Kansas Legislative Research Department have the surplus growing to $4.5 billion in ending balance with $1.9 billion in the rainy day fund by the end of fiscal year 2028.

"Folks look at the ending balance and feel like that's everything that we could spend," Proffitt said. "Again, with her personality, she knows that's not the case. Your ending balances, it's like looking at your bank account on a payday and seeing what your balance is but not recognizing that you have a rent or mortgage or car payment due next week."

The focus for Kelly is instead on structural balance and making sure long-term revenues exceed long-term expenditures.

"We have obligations that we need to meet the needs of Kansans, and she's hyper-focused on doing that for years to come and not just while she's in office," Proffitt said.

Some of the motivation may come from Kelly's years as a legislator and seeing the state's fiscal progress since then, Proffitt said.

"She went through some times where there was some very, very bad budget woes," he said. "And I think that kind of fortifies her feeling on making sure that we're being fiscally responsible."

He called it "weighty stuff."

"Literally every single decision that we make and every action that we take, big or small, is going to have an impact on Kansans' lives for years to come," Proffitt said. "So we have a choice to make, are we going to make good decisions and have it be a good impact for Kansans, or are we going to make a tough impact?"

What have been Laura Kelly's budget priorities?

The governor's budget proposal is typically unveiled in January during the first week of the legislative session, after which House and Senate committees do their own reviews of the numbers. She spoke last week to some of her top priorities.

"When I'm putting a budget together, I'm trying to figure out what is it we need to do to make Kansas better," Kelly said.

She said funding schools has always been a top priority.

"I've been able to get that done the last six years," she said.

Another priority was to stop transfers out of the highway fund.

"I wanted to shut the Bank of KDOT, when we were just robbing transportation funds to fill in budget holes elsewhere," she said. "Our economy came to a near standstill. Roads, bridges, broadband are extraordinarily important to be able to provide the foundation for economic growth. We've been able to do that."

Funding institutions of higher education is also a priority.

"Those are probably the biggest economic driver in the state," Kelly said. "That's where our workforce gets done. That's where research and development gets done, all the kinds of things that are absolutely essential to grow an economy."

She also wants to eliminating debt while the state has a budget surplus.

"We do have a rather large surplus," she said. "I recognize that a lot of that is one-time money that came in during the pandemic, and so we have been targeting those funds to eliminate debt in the state, to avoid debt. For instance, the Docking Building, we're paying cash on the barrelhead for that rather than bonding it and incurring more debt."

Proffitt said Medicaid expansion is also a top priority in the budget. The governor has already unveiled plans for her sixth attempt to enact it.

"As it turns out, this one won't cost the state any (state general fund) for quite some time based on how it's structured, making sure it's fiscally responsible," he said.

Jason Alatidd is a statehouse reporter for the Topeka Capital-Journal. He can be reached by email at jalatidd@gannett.com. Follow him on X @Jason_Alatidd.

This article originally appeared on Topeka Capital-Journal: Laura Kelly loves Kansas budget season, her favorite time of the year