Overland Park moved $17.2 million from its General Fund into a capital fund that requires no formal budget hearing, according to a Kansas Policy Institute analysis published Wednesday, Sept. 23. KPI is a free-market advocacy group based in Kansas.

Prairie Village made a similar move, transferring $8.9 million to its non-budgeted Capital Projects Fund. Of that, $6.7 million came from the General Fund.

The transfers are part of a statewide pattern the report describes. Kansas counties and the 25 largest cities held $6 billion in cash reserves at the start of 2024, with about $1.8 billion sitting in non-budgeted funds. Those funds do not require a published budget hearing or specific spending limits in the annual budget document submitted to the county clerk.

Kansas law also allows cities and counties to delay reporting activity in non-budgeted funds by two years. That lag is why the KPI analysis relies on 2024 data; fund balances for 2025 and 2026 have not been reported.

KPI CEO Dave Trabert wrote a summary of the findings published Monday, Sept. 28 by The Sentinel, which is owned by Kansas Policy Institute. The report said most of Overland Park's $17.2 million transfer to its Capital Improvement Fund increased the fund's cash balance rather than paying for projects. The exact portion was not specified.

As of Jan. 1, 2024, Overland Park's non-budgeted Capital Improvements Fund held $42.2 million in unencumbered cash, according to the KansasOpenGov data portal. The city also carried non-budgeted balances in several other funds, including $32.7 million in Capital Projects and $12.5 million in Street Improvement Escrows.

Prairie Village's non-budgeted Capital Projects Fund held about $4 million in unencumbered cash on the same date.

Collectively, the cities and counties in the KPI study spent $8.2 billion in 2024. On average, they had 73% of the coming year's expenses already in the bank. KPI noted that figure is roughly double the 36% average held by Kansas school districts.

The institute argued in its report that the practice drives up property taxes. When cities transfer money from tax-supported funds into non-budgeted accounts, KPI wrote, operating expenses in those budgeted funds appear higher, requiring more property tax revenue.

KPI recommended the Kansas Legislature ban non-budgeted funds, require cities and counties to publish a summary of cash reserves in every fund during the annual budget process and mandate more detailed expenditure reporting. No bill number or hearing date has been announced.

All but two of the state's 25 largest cities use non-budgeted funds. Manhattan and Olathe are the exceptions.

The report does not detail what either city's capital fund spending covered. Residents can contact Overland Park at 913-895-6000 or Prairie Village City Hall with questions about their city's use of non-budgeted funds.