The State of Kansas
Objectives: To
understand components of the State of
To identify revenue
(income) sources and makeup.
To identify agency
expenditures and amount of total state budget.
To discuss the impact of
state government on the lives of Kansans.
To discuss the tradeoff
between taxes and services.
Notes:
1. The budget data provided on Sheet 1 are from
the Governor’s FY 2003 (
2. The FY 2003 budget proposes to spend $9.8 billion
($9,845,900,000).
3. Students may work in teams of 4-5 students.
Materials Needed:
Income/Revenue Board
FY 2003 Income Sheet 2 & 3 (Projected revenues for
the State Budget)
Spending/Expenditure Board
FY 2003 Spending Answer Sheet 1 (Proposed Fiscal 2003
Budget)
Preparation:
Make copies of Income and Spending Board using cardstock
or colored paper.
Prepare 1 bag of pennies for each team. Each bag should contain 100 pennies.
State Revenue Exercise:
When using the Income Board,
each penny represents 1% of the proposed FY 2003
Give each team a Penny Bag
and Income Board. Ask them to distribute
the pennies onto the squares of the income Board according to what they think
are the State’s sources of the revenues/income.
When completed, give the
correct answers as shown on Sheet 3 - Projected Revenues for the FY 2003 State
Budget - all Sources. Ask students to
compare their distribution with the actual distribution. Ask them to move the correct amounts onto the
squares so they can visualize the actual makeup of the state’s total
revenue/income.
State Spending Exercise:
When using the Spending
Board, each penny represents 1% of the proposed FY 2003
Give each team a Penny Bag
and Spending Board. Using 100 pennies,
each representing 1% of the budget, have teams distribute pennies among the
spending categories according to where they think the
When completed, give the
correct answers as shown on Sheet 1 –
State Budget Deficit
Exercise:
When spending for the year
is greater than revenues for the year, the difference is known as a deficit.
Have students compare the State’s projected revenue/income ($9,489,146,000)
with the State’s FY 2003 Budget ($9,845,900,000) to identify the state’s budget
deficit of $356,754,000.
Explain that when the FY
2003 budget was approved, the state expected to have income to cover all
the spending they planned. Explain,
however, that a state’s actual revenues can rise or fall depending on the
condition of the state’s economy during that time and the effect that has on
the amount of taxes people and businesses have to pay to the state. Review
with the students that revenue from taxes provides 45% if the state’s
revenue/income (Sheets 3).
Sheet 2 provides the most
recent estimates of how much revenue/income the state will receive in the form
of taxes in FY 2003. Using Sheet
2, have students identify the two major sources of income for the state (individual
income tax and retail sales tax). Discuss what changes in the economy could
affect the amount of individual income tax and retail sales tax collected. Are there examples of these
taking place in your community?
Using the
Spending Board, review with the students that the projected deficit for FY 2003
is $356,754,000 (approximately 4% of the State’s FY 2003 Budget). Discuss with
the students the different options available to the Governor and the Kansas
Legislature in eliminating the deficit – cut spending or raise taxes. Be sure to discuss the consequences of both
of these options including how cutting spending could reduce the amount of
quality of services the citizens of
If the students decide to
cut spending to eliminate the deficit, have them use the Major Expenditure
Descriptions sheet to help them determine which 4 pennies (or portions of
pennies) they would remove from the Spending Board. Have the students share with the class how
they made their decisions and what impact removing pennies from the Spending
Board might have on the agency and the people that agency serves.
If the students decide to
raise taxes to eliminate the deficit, have them use the Sheet 2 to determine
which taxes they would raise. Have the
students share their thoughts behind how they arrived at their decision and the
likely consequences of raising taxes on people’s lives and the state’s economy.
Income Board: Projected Revenues for the
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Income from Taxes: Includes: Individual Corporate Taxes on Property & Wealth Property Tax on Motor Carriers Estate Tax Retail Sales Compensating Use Cigarette/tobacco/alcohol products Corporate Franchise Severance on Gas & Oil Insurance Premium Miscellaneous Taxes |
Motor Vehicle
Registration Fees; Non-federal Gifts, Donations, & Grants; Licenses,
Permits, and Registrations; |
Federal Funds |
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Lottery ticket Sales |
Agency Service Charges |
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Motor Fuels Taxes |
Dividends,
Royalties, Rents |
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Sales Tax to
Highways |
Other Revenues |
Spending Board: Projected Spending for the
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Education Department
(Elem & Secondary) |
Higher Education
System |
Human Resources,SRS & Hospitals |
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Transportation Dept |
Aging Dept |
Prison System |
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Department of Health
& Environment |
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Commerce Dept |
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All Other Agencies |
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Sheet
1 |
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(Dollars in Millions) |
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Agency |
Amount |
Percent |
Number of Pennies |
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Education
Department (Elem & Secondary) |
2,642.00 |
27% |
27 |
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Higher
Education System |
1,593.90 |
16% |
16 |
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Human Resources,SRS & Hospitals |
2,416.90 |
25% |
25 |
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Transportation
Dept |
1,229.10 |
12% |
12 |
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Aging
Dept |
410.5 |
4% |
4 |
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Prison
System |
245.5 |
2% |
2 |
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Department
of Health & Environment |
178.1 |
2% |
2 |
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145.2 |
1% |
1 |
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Commerce
Dept |
122 |
1% |
1 |
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All Other
Agencies |
862.7 |
9% |
9 |
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Total Planned Expenditures: |
9,845.90 |
100% |
99 |
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Source: The Governor's
Budget Report for FY 2003 |
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The
budget data provided for this lesson are from the Governor’s |
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FY 2003 ( |
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released in January 2002.
They do not include cuts to the budget |
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Governor
Graves has already made to help reduce the deficit. |
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Sheet
2 |
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Dollars in Thousands |
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Amount |
Percent |
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Taxes on Income |
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Individual |
$1,845,000 |
43% |
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Corporate |
154,500 |
4% |
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Total |
1,999,500 |
47% |
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Taxes on Property & Wealth |
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Property
Tax on Motor Carriers |
$16,500 |
0% |
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Estate
Tax |
$55,000 |
1% |
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Total |
$71,500 |
2% |
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Taxes on Consumption & Use |
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Retail
Sales |
1,600,000 |
37% |
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Compensating
Use |
230,000 |
5% |
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Cigarette/tobacco/alcohol
products |
200,700 |
5% |
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Corporate
Franchise |
28,000 |
1% |
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Severance
on Gas & Oil |
65,600 |
2% |
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Total |
$2,124,300 |
50% |
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Other Taxes |
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Insurance
Premium |
$85,000 |
2% |
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Miscellaneous |
3,500 |
0% |
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Total |
$88,500 |
2% |
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Total Taxes |
$4,283,800 |
100% |
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Source: Revised Consensus Estimates Report to
Governor Graves dtd |
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Sheet
3 |
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Projected
Revenues for the FY 2003 State Budget - all Sources |
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(Dollars in Millions) |
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Amount |
Percent |
Number of Pennies |
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Tax
Revenue to State General Fund (From
Sheet 2) |
4,283,800 |
45.1% |
45 |
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Special
Revenue Funds: |
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Federal
Grants |
2,645,856 |
27.9% |
28 |
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Motor
Fuels Taxes |
382,635 |
4.0% |
4 |
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Agency
Service Charges |
360,092 |
3.8% |
4 |
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Lottery
Ticket Sales |
194,496 |
2.0% |
2 |
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Sales Tax
Dedicated to Highway Fund |
96,869 |
1.0% |
1 |
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Interest,
Dividends, Rents, & Royalties |
106,312 |
1.1% |
1 |
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Property
Taxes Dedicated to Building Funds |
39,765 |
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Motor
Vehicle Registration Taxes |
133,000 |
1.4% |
5 |
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Non-federal
Gifts, Donations, & Grants |
94,387 |
1.0% |
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Licenses,
Permits, and Registrations |
86,927 |
0.9% |
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120,846 |
1.3% |
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Other
Revenue |
944,161 |
9.9% |
10 |
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Special Revenue Funds Total |
5,205,347 |
54.9% |
100 |
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9,489,146 |
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Source: The Governor's
Budget Report for FY 2003 & |
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Revised
Consensus Estimates Report to Governor Graves dtd |
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*Agency
service charges include tuition charged by state universities. |
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Major Expenditure
Descriptions
Education Department
The Kansas Department of Education is the agency is
responsible for Elementary & Secondary Education. Besides funding for the 304 unified school
districts in
Higher Education System
This budget item includes support for the state’s six
regents universities, a medical school, a veterinary
medical school, 19 community colleges, 16 technical colleges and schools, as
well as
Department of Human Resources
The Human Resources function of state government
contains the agencies that provide a variety of assistance programs to
Kansans. These include welfare
assistance; medical services; foster care for children, unemployment insurance
benefits; care and counseling for veterans, the elderly, developmentally
disabled, and mentally ill; and preventive health services through local health
departments. This budget item also
includes funding for hospitals and care facilities where people with
disabilities live and receive training.
Department of Transportation
The Department is res