- Associated Press - Tuesday, February 16, 2016

TOPEKA, Kan. (AP) - A consulting firm hired by the Kansas Legislature to find efficiencies in the state budget recommends taking money from school districts’ cash reserves to help pay for future education funding.

The 292-page final report issued Tuesday by the firm Alvarez & Marsal - which has a $2.6 million contract with the state to conduct the study - also suggested lawmakers consolidate school districts’ health plans into one big statewide plan.

Overall, the report says Kansas could save $2 billion over five years if the Legislature adopted its more than 100 recommendations, The Wichita Eagle (http://bit.ly/1QjxuWX ) reported.

The firm said Kansas should require school districts to have a minimum cash balance of 10 percent of their operating budget and a maximum of 15 percent. Any money beyond the maximum would be deducted from future funding under the recommendation.

That policy would save the state $193 million over five years - and $40 million if it is implemented for the next fiscal year, which begins on July 1.

The idea of tapping districts’ reserves has been floated in the Legislature before, but has consistently faced backlash from school officials who say cash reserves are needed to make sure schools can operate during a crisis.

Mark Tallman, a lobbyist for the Kansas Association of School Boards, said districts are concerned about the state tapping reserves. If lawmakers want districts to lower balances, many districts would find ways to spend those funds before the state got its hands on them.

Senate Minority Leader Anthony Hensley, D-Topeka, a public school teacher, balked at the idea of digging into districts’ reserves.

“I’m not sure we should be getting into the business of telling school districts what they should do with their cash reserves inasmuch as we don’t have any reserves of our own,” he said.

If the state would consolidate all of the school districts’ health plans, it could save $360 million over five years, the Alvarez report said. But Tallman said that would mean some people who love their current plans would have to switch to something else.

The report recommends hiring 54 more collection officers at the Department of Revenue and filling 14 vacant auditor positions, which it estimates could bring in nearly $322 million over five years.

Ryckman said some of the recommendations can be in place by next fiscal year and that House members will begin working on crafting legislation.

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