The legislature will be returning next week (April 30) to complete this session. Major issues remain to be resolved, including health care, immigration, and the Omnibus bill with the final budget. During this legislative break, its been determined that the revenues available for the 2009 will be less than earlier projections, making spending decisions more difficult. Paul Johnson has provided a very good synopsis of the many programs and activities that will be affected by the budget decisions awaiting the legislators. Now is the time to let your legislators know where your priorities are in terms of what our state should be funding.

Budget update
The ripples from the national economy are starting to impact the State of Kansas budget. The consensus revenue estimators met on April 16 and lowered the revenue estimates by $130 million. The major items were lower business tax revenues of $79 million because of the new federal economic stimulus package, a loss of $44 million in assumed State General Fund (SGF) interest earnings because of lower interest rates and increased transfers to the Bioscience Authority of $36 million. The Kansas Legislative Research Department memo states that “One factor influencing the FY 2009 growth rate relates to several pieces of legislation enacted in 2005-07 that will reduce, relative to prior law, the amount of severance (oil and natural gas), income, estate, corporation franchise and motor carrier property tax receipts deposited into the SGF.” For example, the estate tax receipts dropped from $55 million in 2007 to a projected $32 million in 2009 and phases out entirely in 2011.

With these new projections - that must be used by all lawmakers - the ending balance for the SGF drops from $552 million (9% of SGF) in FY 2008 to $173 million estimated for FY 2009 (2.7% of SGF) and the ending balance goes negative in FY 2010. The FY 2009 estimate does include a pay plan for state employees but does not include the increase of $38 million for higher health care costs and social service caseloads (nursing care, regular medical, foster care, welfare caseloads, etc.). The final budget bill known as the Omnibus Bill will have to be developed in light of these changed economic circumstances. There will be very strong legislative pressure to limit any new budgetary enhancements and to shore up the ending balances of the SGF in preparation for further economic uncertainties.

Rural Housing Grants for the Disaster Areas
SB 417 creates a new, annual $4 million rural housing grant program. For the first two years, the grants will only be available for the disaster areas around Greensburg and the flooded areas in southeast Kansas. After two years, these grants will be available to all counties with a population under 60,000 – and can be used to provide housing and housing repairs for low income residents. The Kansas Housing Resources Corporation (www.kshousingcorp.org) will administer this grant program. Final grant rules and regulations should be adopted by mid-June and the first grant applications accepted by the first of July. Grants can be written for housing or housing infrastructure. The local match is 10% for housing infrastructure and 50% for housing programs. Over 3,000 homes were lost in the tornado and flooding damage.

Child Support Payment Update
The Kansas Payment Center (now operated by J.P. Morgan/Chase) is piloting a debit card – known as the NOW card – for custodial parents that receive their child support payments by check. The first pilot is in the judicial district that covers Coffey, Franklin, Linn and Anderson counties. 1,000 notices were sent to custodial parents in the area and so far 130 have adopted a direct deposit option and 78 have decided to adopt the NOW card. A second pilot project will be tried in Saline and Ottawa counties. By fall, the NOW card will go statewide if the pilots are at all workable. Statewide, the Kansas Payment Center is handling 158,061 transactions a month with 84,781 (54%) going out by check and 73,280 (46%) going out electronically. A total of $30.2 million is disbursed. SRS is hoping to move the number of electronic transactions from 46% to 80% over the next few years.
Kansas Corporation Commission – Potential Impact on Energy Policy
In the last few days of this legislative session, the Kansas Senate confirmed the Governor’s appointments of Thomas Wright and Joe Harkins to the Kansas Corporation Commission. This may well be the most important effort by the Governor to chart a new energy direction for Kansas. In the 1980’s, Joe Harkins was the Kansas Secretary of Health and Environment and in that capacity helped craft a water plan for the state of Kansas. Today Kansas has a statewide water plan and a Kansas Water Office to coordinate this effort. Kansas is at a similar fork in the road today in regards to an energy plan. Thomas Wright brings a legal knowledge and computer expertise to streamline the filings electronically at the KCC.

The KCC is on the verge of some very important decisions in regards to energy conservation and the role of utilities in providing such services. By late spring, the KCC will make some key decisions on how utilities will be compensated for energy efficiency investments. After this ratemaking decision is decided, the KCC will start analyzing the best energy programs for Kansas such as air conditioner replacement to smart electric metering to funding comprehensive weatherization services. One challenge is how to coordinate weatherization programs between the electric company (such as Westar that serves 570,000 residential customers) and the natural gas company (such as Kansas Gas Service that serves 660,000 residential customers – many the same as Westar). On a per capita basis, Kansas has been last of all 50 states in having utility-based or governmental energy conservation programs but that is changing before our very own eyes.

Holcomb Coal and Energy Legislation
The battle goes on over the construction of two new coal plants at Holcomb. The Senate did override the Governor’s veto of the original Holcomb Bill (SB 327) but the House did not have the 84 votes necessary for the override. A new bill was then developed – SB 148 – and passed by the Senate and House before the first adjournment. The Governor will veto this legislation as well and the House will have the full veto session to override this new veto. Key energy legislation is being held up till the Holcomb bill is approved. Kansas City Power & Light’s bill to put energy conservation programs into the companies’ rate base is on hold. (KCP&L has not been a strong vocal advocate for the Holcomb plant.) SB 586 that will force electric customers to pay for a nuclear plant as it is being built is also on hold. (Westar and KCP&L have both said that today nuclear power is too expensive.) SB 580 that would expand Kansas’ weatherization program by drawing more dollars from SRS’s energy assistance program (LIHEAP) to assist 3,000 homes has been put on hold. Time will tell if these bills will all die if the Holcomb bill is ultimately blocked.

Health Care Legislation
Conferees from the House and Senate came close to agreeing on a comprehensive health care bill but it stalled at the last minute. Agreement has been reached to expand the state children health insurance program (known in Kansas as HealthWave) from 200% to 250% of the federal poverty line but to accomplish the expansion through the use of purchasing private health insurance as is being done in 12 states. Agreement has been reached to expand Medicaid coverage for pregnant women from 150 to 200% of the federal poverty line. Medicaid now funds 33% of the 38,000 births in Kansas, and with this change, that percentage could increase to almost 50% of the births. Agreement has been reached to increase by $2.5 million the state’s funding for safety net medical clinics. The disagreement came over waiting a year to provide Medicaid to parents who make 50% of the federal poverty line. (For a family of three that is $8,800/year.) For the complete conference report, check out the Kansas Health Policy Authority 4.7.08 Legislative Pulse at www.khpa.ks.gov.

SRS Budget
There will be several SRS budgetary items to be considered in the final Omnibus Bill in the veto session. The good news is that $2.5 million was added in the regular budget bill to cover childcare caseloads expanding service to 22,500 children. SRS’s greatest concern is staffing for child protective services. Because federal policy does not allow federal foster care funding to be used for foster care intake and assessment activities, the demand for state dollars increases. SRS asked for $9 million but the compromise budget bill only allowed $6 million with the remainder being reviewed at Omnibus. (In 2006, SRS had 3,656 total positions authorized for the regional and central offices but 638 were kept vacant to make budget. In 2007, SRS lost 193 of these vacant positions because of budget shortfalls not because these positions were not needed.) SRS operates an intake system with 1970’s computer programs and asked for $4.2 million to develop an integrated enrollment system. This new system would be shared with the Kansas Health Policy Authority but must be reviewed at Omnibus.

The funding for the community mental health centers (CMHC’s) is in play. Last year, the Legislature gave the CMHC’s $10 million on top of the Governor’s $7 million increase to implement a new managed care mental health care system. The Governor did not recommend continuing the extra $10 million and now the Legislature has just approved the $7 million increase from last year but will review $8.8 million more at Omnibus. $1.7 million for adoption support caseloads, $18 million for a new early childhood block grant, $6 million for home and community based service waivers, $97,008 for a child protection toll-free line and several other items will all be reviewed and debated at Omnibus. The scramble to fund these priorities will be intense.

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LEGISLATIVE E-REPORT - Issue No. 7 - APR. 1, 2008

This week is the deadline for all bills to have been passed out of both the House and Senate, if the bill is to remain viable. Other than budget and tax bills, and a few others, bills must now be in a Conference committee where differences between the versions passed by each chamber are resolved. Then both chambers must pass the Conference committee version. First adjournment begins this weekend and legislators will return in late April for the “veto” session.

BUDGETARY CHALLENGES
Paul Johnson

The Kansas House and the Kansas Senate have now passed very basic, status quo budgets for Fiscal Year (FY) 2009 starting July 1, 2008. All new programs and budgetary enhancements will be debated in the veto session that starts April 30. The Kansas House and Senate will resolve any minor changes between their budgets and pass a final version by April 4 or 5. The State’s revenue estimators will meet on April 16 to establish new revenue projections for the next 18 months that will be used in the final budget bill known as the Omnibus Bill. The Senate Ways and Means committee and the House Appropriations committee will start working on their Omnibus Bills on April 23 and a final bill will be hammered out during the veto session that may last for several days into May.

The Kansas Senate and House each deleted $150-200 million in budget requests by the Governor. All expanded spending will be on the budget table competing with health care, social service, early childhood, education and university priorities. The Governor had included $87 million from the new casinos and slot machines in her budget but the final Supreme Court decision will not be made until summer. Kansas may lose some business revenues because of the federal stimulus package but the expanded consumer spending from the stimulus checks may compensate for some of the lost business taxes. The revenue estimators on April 16 may lower the revenue in the next 18 months to Kansas thus putting greater pressure on any new spending. Many lawmakers will demand that ending balances be increased so there is some cushion if Kansas slides into recession.

The Omnibus budget battle will be very intense. Any salary increase for state employees has been delayed. The budgetary choices will be almost endless – domestic violence outreach, disability waiting lists, mental health services, senior nutrition programs, early childhood development, greater public school funding, housing trust fund grants, an integrated medical enrollment system, frail & elderly waiting lists, etc., etc. etc. In essence, no real priorities were established in the basic budget bill so the heavy lifting is put off until the revenue picture clears. The ‘horse trading’ will go on until the last minute and just under the surface is the bartering to change votes on the Holcomb coal bill.

The Kansas Legislature and the Governor have decided to do all they can to land the $450 million National Bio Defense Laboratory. There are five states in the running. This lab will be built at Kansas State University. The airport at Manhattan must be improved for the transportation needs of the lab. A separate utility power plant (fired by natural gas) must be built for this lab. Kansas has now passed legislation to issue $105 million in bonds for the infrastructure improvements if Kansas is awarded this lab. If these 20-year bonds are issued, the yearly payments will be $8.3 million.

These budgetary battles may go on for several years if the economy softens. Medical costs continue to outstrip regular inflation thus putting pressure on all other budgetary needs. The run up in gasoline and diesel fuel costs is putting more pressure on school and highway construction budgets. Of the State’s $13.5 Billion dollar budget, almost 10% ($1.3 Billion) is spent on the highway plan. A new 10-year highway plan will be developed in the 2009 Legislative session. Highway advocates will request a new annual spending level of $1.6 Billion – a $300 million increase. Gasoline tax revenues are flattening out as newer cars get better mileage per gallon and as much higher gasoline cost restricts some traveling. $275 million of the regular sales tax now goes directly to fund the $1.3 Billion highway plan. If this amount of regular sales tax is increased for a new $1.6 Billion annual highway plan, this sales tax will be unavailable for other health, social service and educational needs. The funding increase for the next highway plan must be watched very closely.

ENERGY LEGISLATION UPDATE
Paul Johnson

The Holcomb Coal Bill – House Sub. for SB 327 – was vetoed by the Governor on March 21. The Kansas Legislature has 30 days to override the veto with 27 votes in the Senate and 84 votes in the House. The plan now is to override the veto in the Kansas Senate on April 4 and this resets the 30-day clock for the Kansas House that would run through the veto session in early May. The count in the House is 5 to 7 votes short of overriding the Governor’s veto. There are several parts to this legislation from setting energy efficiency standards for state buildings to carbon dioxide capture to creating a renewable resources standard for electric generation to tax incentives for energy efficient improvements in rental housing. The complete bill can be viewed at www.kslegislature.org/klrd in the March 28 Preliminary Summary of Legislation 2008 Kansas Legislature. The Governor has offered a compromise to limit the coal expansion to just one coal plant to serve the electric needs of Kansans, expand investments in wind energy and offer more energy efficiency programs

Senate Bill 586 is on the fast track. This law will fundamentally change how ratepayers would fund a new nuclear power plant. Under existing law, a utility would first borrow the money to build the plant and then recover those costs once the plant is completed and put into the rate base. With SB 586, ratepayers will pay for the construction of a new nuclear plant. (This change has already been made for new coal plants.) When Wolfcreek was first proposed, the cost was estimated at $1 Billion but the final cost ended up at $3.5 Billion. If a new nuclear plant was started but not finished, would the equity holders of the utility share any risk? Utility regulation has so changed in Kansas. Fuel costs, environmental costs, security costs and now “uncollectible” costs (unpaid bills by customers) flow through monthly to all ratepayers. If ratepayers will now pay for all construction costs, what risk is left for shareholders? The Kansas Corporation Commission still allows a 10-12% return for the shareholders. The Kansas Corporation Commission and the Citizens Utility Ratepayers Board both testified against SB 586 and the Governor should carefully consider the full costs of this legislation to the captive customers of the electric utility industry.

Here is the status of some bills we’ve been following:

Campaign finance: Several bills were considered in House and Senate committees, but none of these bills made it out of committee this year.
Merit selection of judges/makeup of Supreme Court Nominating Commission: These bills died in committee.
Energy/environment: The above article sums up the situation with the Holcomb plant legislation. In addition, should the veto override fail, there is HSub SB 148, passed earlier this year by the Senate. It has many of the same emission concerns, some additional proposals for renewable and more “green” energy production, but still will release a significant amount of carbon into the environment. This is on General Orders in the House, but hasn’t yet been debated by the entire House.
Immigration: HB 329 is in Conference committee, and SB 458 is on General Orders in the House. The good news …. neither bill contains a provision to repeal the in-state tuition law for children of illegal immigrants! Provisions in both bills could adversely impact legal immigrants in new law that would significantly tighten restrictions on illegal immigrants being granted any public health or other public benefits. Many legal immigrants last year were denied benefits because they were unable to provide the proper documentation to prove their legal status. A provision in House budget bill would require a performance audit next year to determine: what Kansas pays for benefits/services to illegal immigrants, what is the tax revenue generated for the state by illegal immigrants, what is the real impact of illegal immigrants on labor costs and the job market, and the economic impact of any legislation regarding illegal immigration.
Photo ID when registering to vote and when voting: H Sub SB169 has passed the House and is in Conference Committee.

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LEGISLATIVE E-REPORT - Issue No. 6 - MAR. 10, 2008

Special Report
on Campaign Finance Reform Legislation

Carol Williams, Executive Director of the Kansas Ethics Commission, will be speaking at lunch during Day at the Capitol on Thursday of this week. Earlier E-reports provided information on several bills in the legislature dealing with campaign finance reform, and these may be discussed further during Carol Williams’ presentation.

SB 196 has passed both the House and Senate, but with amendments, and is now in Conference Committee. The essence of this bill is to shorten the “black-out” period of contributions made within the 11 day period prior to a primary or general election. Right now, contributions made within this time frame are not made public until a couple of months after an election. This bill would reduce that period such that any contribution of $300, or in aggregate of $300, made through the Wednesday preceding the date of election must be reported by close of business on Thursday preceding the date of the election.
HB 2308 has passed the House and will have a hearing this Thursday in the Senate Elections and Local Government Committee (1:30 pm in Room 423-S). It prohibits the use of campaign funds to pay dues to a non-profit or civic organization on behalf of the candidate, unless no goods or services are provided by the organization to the candidate.
HB 2408 also has passed the House and is in the Senate Elections and Local Govt. committee; a hearing has not been scheduled yet. This legislation is directed toward party committees and political action committees. It requires these committees to provide more detail (transparency) in their expenditures on behalf of, or in opposition to, a candidate, including in-kind contributions.
HB 2697 requires those persons contributing $150 or more to a candidate to identify their occupation and the industry in which they work. It the contributor is not employed, he or she must list the industry of their spouse’s employer. This bill has passed the House, and is not yet scheduled for a hearing in the Senate.

All of these bills provide increased transparency regarding who is contributing to candidates.

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LEGISLATIVE E-REPORT - Issue No. 5 - MAR. 9, 2008

Energy-related issues are dominating the Kansas legislative session this year. For that reason, I am enclosing the LWVUS position on energy, as found in “Impact on Issues 2006 - 2008”. These positions give us a basis for speaking out on issues found in the three bills presented here. Please use this information when talking to your legislators.

The League supports:

energy goals and policies that acknowledge the United States as a responsible member of the world community;
reduction of energy growth rates;
use of a variety of energy sources, with emphasis on conserving energy and using energy-efficient technologies;
the environmentally sound use of energy resources, with consideration of the entire cycle of energy production;
predominant reliance on renewable resources;
policies that limit reliance on nuclear fission;
action by appropriate levels of government to encourage the use of renewable resources and energy conservation
through funding for research and development, financial incentives, rate-setting policies and mandatory standards;
mandatory energy-conservation measures, including thermal standards for building efficiency, new appliance standards and standards for new automobiles with no relaxation of auto-emission control requirements;
policies to reduce energy demand and minimize the need for new generating capacity through techniques such as marginal cost or peak-load pricing or demand-management programs;
maintaining deregulation of oil and natural gas prices;
assistance for low-income individuals when energy policies bear unduly on the poor.

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LEGISLATIVE E-REPORT - Issue No. 4 - FEB. 24, 2008

First, a reminder that Day at the Capitol is scheduled for Thursday, March 13. We have scheduled two outstanding speakers. At 9 am, David Springe, director of the Citizen Utility Ratepayers Board (CURB), will speak on issues surrounding investments by utilities in energy efficiency and future energy policy. At lunch, Carol Williams, Executive Director of the Governmental Ethics Commission, will update us on ethics legislation and how Kansas ranks in its ethics laws.

Much of the legislation I have been following for the League falls primarily into four categories, as noted below.

Campaign Finance Reform

A number of such bills are pending in the legislature.
SB 196 and SB 504 would increase the reporting requirements of expenditures in excess of $300 (SB 196, SB 504) or $150 (SB 505) that occur within the 11 days before an election; SB 505 also requires the name of the individual and spouse making such contributions. SB 196 passed the Senate last year, and as passed by a House committee, with amendments. SB 504 has had a Committee hearing.
SB 505 and HB 2697would increase reporting requirements for a donor contributing $150 or more, and would require identifying the donor’s business and providing name of spouse. SB 505 has had a committee hearing; HB 2697 has passed out of Committee and is on the House Calendar for consideration by the entire House.
SB 506 and HB 2408 are similar bills that require party committees and political action committees to provide more detail on expenditures made expressly to advocate the election or defeat of an identified candidate. SB 2408 passed the House in 2007; SB 506 has had a Senate committee hearing.
SB 576 changes the definition of lobbying to include conversations with the Governor and Lt. Governor for the express purpose of seeking support, or no support. The bill also excludes testifying before a committee as lobbying. This bill has had a hearing a Senate committee hearing.

Immigration related legislation

SB 458 is known as the Illegal Immigration Relief Act and is designed to provide significant penalties to businesses regarding hiring undocumented aliens and reporting procedures. Among other provisions of the bill are; public benefits must not be provided to anyone who cannot prove citizenship; it would repeal the immigrant tuition law passed several years ago (LWVK supported this bill); it would require law enforcement to verify citizenship of all persons detained for allegedly committing a felony; it also provides procedures for obtaining driver’s licenses and identification cards. Hearings on this bill are scheduled to begin on Feb. 27.
HB 2370 requires city and county law enforcement officers to inquire about citizenship of anyone they detain; it also prevents cities and county governments from passing ordinances or resolutions that would restrict law enforcement officers from inquiring about citizenship status. The bill is scheduled for hearings on Feb. 25 and 26.
HB 2680 is a second bill that addresses penalties for business who knowingly or intentionally hire undocumented aliens, but is not as severe as the provisions of SB 458. This bill is also scheduled for hearings on Feb. 25 and 26.

Since LWVUS is now in the process of developing a position on immigration policy, there is minimal opportunity to testify for or against any of this legislation at this time.

Judicial selection

HCR 5031 would change the make-up of the Supreme Court Nominating Commission and would require Senate confirmation of the Governor’s selection. Members of the Nominating Commission would be appointed by the Governor, the Senate President and the House Speaker (1 lawyer and 2 non-lawyers each). I provided testimony against this legislation for the Feb. 21 hearing, as it brings considerable political input into the process.
HB 2799 would also require Senate confirmation of Court of Appeals judges and an Appeals Court Nominating Commission would be made up as described in HCR 5031.

Reproductive Choice

HB 2615 requires additional detailed policies to be provided to KDHE; physicians performing abortions must provide written reports which must include gestational age of fetus, medical basis for the abortion, clinical diagnosis, viability status of fetus, etc. A hearing was held on Feb. 19 and 20.
HB 2736 would amend current law regarding late-term abortions to increase responsibilities for the Board of Healing Arts, the Kansas Department of Health and Environment (KDHE), the Department of Social and Rehabilitation Services (SRS), the Office of Judicial Administration, and of individual physicians licensed by the Board of Healing Arts. This bill also had a hearing on Feb. 19 and 20.

Thanks for your calls and e-mails to legislators asking them not to support HB 2299, the legislation that would prevent cities and counties from establishing domestic partner registries and would invalidate such registry established last year in Lawrence. It did not pass the House, and was sent to the Judiciary Committee for further consideration (if at all).

BUDGET UPDATES

Excerpted from a report by Paul Johnson
The $13.5 Billion Kansas Budget is wobbling. There are new concerns over a national recession and the economic stimulus package signed by the President will reduce revenues for the Kansas budget. Legislative leaders are now dismantling the Governor’s proposed budget and will leave key ‘increased spending’ decisions for the veto session in late April. The revenue consensus experts will meet in April to determine revenue projections for the next 18 months. These projections - that might reflect an impending recession - must be used to finalize the Kansas budget.

The Speaker of the Kansas House and the chair of the House Appropriations Committee have decided to delete any new enhancements in the Governor’s proposed budget. Any enhancements will wait till the final Omnibus bill is developed in the veto session.

The economic stimulus package signed by the President allows certain accelerated business depreciation and expenses that will lower revenues to Kansas by at least $87 million because Kansas business tax law is tied to federal business expensing laws. While the Governor’s proposed budget is $13.5 Billion and the State General Fund portion is $6.4 Billion, all but $240 million of this budget is already pledged for school finance, bond repayments, highway plan commitments and social service caseload increases. If you take away the $81 million of new casino money and now the $87 million loss of business tax revenue, there is only $70 million available for all other needs such as state employee pay raises or a cost of living increase for state retirees or child care needs or waiting lists for the disabled.

Now budget projections are just that – projections. Kansas has been economically growing itself out of these dire revenue projections for the last few years after recovering from the September 11, 2001 downturn. The question now is whether future economic growth will keep the Kansas budget above water? In this heated political world with so little new money available, if your lawmaker wants any special budgetary enhancement, they had better support the Holcomb coal expansion – period.

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LEGISLATIVE E-REPORT - Issue No. 3 - FEB. 5, 2008

This week in the legislature, there is a significant focus on energy, and specifically passage of legislation enabling construction of the Holcomb coal-fired plants and stripping the Secretary of the Kansas Department of Health and Environment from implementing policy on environmental issues. The Kansas League does not have a position on coal-fired plants. LWVUS does have a strong position on air quality, and has long been a supporter of the Clean Air Act (which was enacted by Congress in 1990) and has fought attempts to weaken the air quality standards. This gives us a basis for arguing against the coal fired plants, as presently configured, on the basis of the reported increase in carbon emissions. Talk to your legislators this weekend, and focus your comments and your questions on maintaining air quality and questioning the impact on clean air if/when these plants should be built, as presently described in the bills referenced below. Ask them to support a clean, healthy Kansas by voting against these two bills.
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ENERGY POLICY BATTLES —by Paul Johnson

The battle over energy policy has begun in the Kansas Legislature or should I say energy war? An identical House Bill (HB 2711) and Senate Bill (SB 515) were introduced on the respective floors of the Kansas Legislature. The rush is on to have committee hearings this week and have the full floor debates the week of February 11. These bills will mandate approval of the two new coal plants at Holcomb and open up Kansas to further coal expansion. This is a generational decision that our children and grandchildren will live with for decades.

Taking a page from the Dick Cheney playbook of writing secret energy policy, the chairmen of the Kansas Senate Utilities committee and the House Utilities committee wrote the bill in private with just the industry in attendance. Unfortunately the ranking Democrats – Rep. Annie Kuether and Sen. Janis Lee – played along endorsing this legislation and the denial of open government. There are now dueling websites. The Alliance for Sound Energy is promoting these bills and can be found at www.soundenergypolicy.net. The Great Plains Alliance for Clean Energy is opposing the legislation and can be found at www.gpace.org.

The Governor had several meetings with the owners of Holcomb - Sunflower electric cooperative that consists of six rural electric cooperatives. Initially, Sunflower had applied for just one smaller coal unit to add to their existing coal plant at Holcomb. Sunflower withdrew that application and applied for a permit to build three large coal units. In the process of applying, the request was reduced from three units to just two, at least for now. The majority of the electricity generated from the coal plants will not be used in Kansas but sent to Colorado. The Governor offered a compromise to allow the first smaller coal plant if Sunflower invested in more wind power and energy efficiency. Sunflower turned the Governor down and the battle ensued. The Governor signed Kansas on to climate change policies of the Western Governor’s and the Midwest Governor’s Associations so Kansas will move ahead on studying and mitigating greenhouse gasses.

The Alliance for Sound Energy has suited up the former Chairman of the Kansas Corporation Commission – Brian Moline. It is the appropriate role for Brian since he offered no leadership at the KCC for energy conservation or renewable energy sources. Kansas has been last of all 50 states in having energy conservation programs and even though Kansas has the third best wind resources in the nation, Kansas is only 11th on the list of states with wind energy. The best article on climate change and the reaction by key Kansas Legislative leadership was written in December by Duane Schrag for the Salina Journal. This can viewed on www.gpace.org under the title ‘Legislators ignore research about climate’.

The shadow of Holcomb will hang over this legislative session in many ways. The chair of the House Utilities committee, Rep. Carl Holmes, told the House Republican caucus that no legislation will move out of his committee until the Holcomb matter is resolved. The Governor’s budget will be held hostage and reduced if the Holcomb matter is not settled satisfactorily to the wishes of the Republican leadership.

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LEGISLATIVE E-REPORT - Issue No. 2 - JAN. 17, 2008

As you are reading news reports on the legislative session’s first week, you are no doubt aware of the play that Kansas energy policy is getting. The single focus in this E-report is Kansas energy – history, policy, alternative fuels, costs and conservation. The report was written by Paul Johnson, who has followed this topic for many years, from the perspectives of a conservationist, environmentalist, and small farmer, as well as from someone who works to help low income individuals and families deal with rising energy costs. Paul has arranged to have David Springe, director of the Citizen Utility Ratepayers Board (CURB), speak to us at Day at the Capitol on March 13 on the issues surrounding investments by utilities in energy efficiency and future energy policy.

KANSAS ENERGY POLICY AT THE CROSSROADS

You may witness for the first time in Kansas history a serious discussion on the future of energy policy in the 2008 Kansas Legislative session. It will not be pretty and it may not be very civil. All major economic interests in Kansas will be involved. In 1997, Kansas transitioned from being a major energy exporting state to an energy importing state, but a new mindset has not followed. The newly appointed Kansas Corporation Commission (KCC), which regulates 75% of all electric and natural gas sales in Kansas, may finally balance ratemaking between allowing more power plants or investing in energy efficiency. The Kansas Energy Council (KEC) is struggling to define its purpose and create an energy plan for Kansas. Major wind farm development is expanding rapidly but the policymakers have not supported smaller, “community-based wind” systems. Grain based ethanol plants have sprung up in many communities and several more are in the planning stage. The largest energy decision may well come in 2009 or 2010 as Kansas develops a new ten year transportation (highway) plan.

KANSAS ENERGY HISTORY

Historically, Kansas was a major exporter of natural gas that started right after WWII when major pipelines to the east coast were completed. The Hugoton gas field in southwest Kansas was the third largest natural gas field in the world in the 1950’s. With natural gas so cheap in Kansas, energy efficient housing was not a priority. Of the one million housing units in Kansas today, half were built prior to 1960. Kansas had a couple of large oil fields, such as El Dorado, but those were pumped fairly quickly and most oil production in the last 30 years has come from smaller wells that only pump 10 barrels or less a day.

Through 1970, Kansas’ utilities produced most of our electricity from burning natural gas. The utility only captures at best 50% of the heat value making electricity, with the rest vented to the atmosphere, whereas a modern home gas furnace today can capture 90% of the heat value. Kansas has very few co-generation systems where natural gas is burned on site to make electricity and the waste heat is captured for space or water heating. This is all to say that we wasted a fair percentage of this 100 million year old treasure in our life times. In 1975, Congress passed a law restricting the use of natural gas as a utility boiler fuel for electricity. The scramble was on in Kansas to replace natural gas with coal and nuclear, thus the Jeffrey Energy Center was built along with the Wolfcreek Nuclear Plant. The La Cygne coal plant was also expanded and the Kansas City, KS Board of Public Utilities Nierman Creek coal plant was built. There was no interest by the utilities to invest in energy efficiency so fewer plants would be needed and no direction provided by the KCC.

In the 1980’s, the mantra in the utility business was to get big or get out. First, Kansas Power & Light, that served Topeka and northeast Kansas, bought out Kansas Gas & Electric that served Wichita and southeast Kansas. Westar, the new company name, also acquired the largest natural gas company in Kansas – Kansas Gas Service. Of the 1 million homes in Kansas, Westar served 570,000 homes with electricity and 670,000 homes with natural gas service. There was some discussion of Kansas City Power & Light - that serves 220,000 homes in Johnson County and more in Missouri – merging with Westar but that deal fell through. David Wittig, the Wall Street whiz kid, was recruited to be CEO at Westar. Wittig saw Westar as a cash cow that could generate revenues from the utility side to speculate on non-utility investments such as home security companies. Wittig drove Westar into the ditch and almost bankrupted the company before the KCC, finally in the early 1990’s, stepped in to force Westar to keep their utility business separate from the other investments. To dig out of this financial hole, Westar had to sell Kansas Gas Service to Oneok, an Oklahoma company, and Westar’s stock value is now 50% of its 1980 value.

Kansas has a summer electrical peaking load driven almost exclusively by air conditioning. Kansas overbuilt the large coal and nuclear units in the 1980’s, so we have plenty of base load capacity. For example, Westar has 6,000 megawatts of capacity, with 66% base load (coal and nuclear), 22% intermediate (fuel oil and natural gas) and 12% peaking (natural gas). Nine months of the year, Westar’s electric load is 3,000 megawatts or less. It is late June through September that the load will peak towards 5,000. If this air conditioning driven peak load could be lowered, there would be no need for any new power plants for several years. It is only now that Westar is creating an energy efficiency division and developing the numbers on the most cost effective investments.

KANSAS CORPORATION COMMISSION

The KCC regulates 75% of the electric and natural gas sales in Kansas. The KCC does not now regulate the small rural electric co-operatives or the municipal systems such as Kansas City, KS or small cities such as McPherson. Electric and natural gas utilities are regulated monopolies that are given certain service areas where they face no competition. In essence, the KCC then has to emulate the free market by giving certain economic incentives to these regulated energy utilities. For decades, the KCC has not performed this role. The utilities have set their policy of only selling more power and the KCC has not balanced that policy with investigating opportunities to invest in energy efficiency. The KCC did open a special investigation into conservation investments in the early 1990’s but closed that investigation without any decision.

Today, this debate over investing in energy efficiency is back before the KCC with a new investigation. For historical reference, on a per capita basis, Kansas has been dead last of all 50 states in having utility sponsored or governmental conservation programs. As stated earlier, with a housing stock built without adequate insulation because of very cheap natural gas prices and a summer peaking electrical load driven by air conditioning, there are many opportunities to improve our use of energy at far lower costs other than buying high priced natural gas or constructing more power plants. (From a climate change perspective, it takes 3 units of coal to provide one unit of electricity at your electric outlet. Coal plants can only capture 40% of the heat value of the fuel with the remaining 60% vented into the atmosphere. So a saved kilowatt of electricity actually saves the burning of three units of coal.) The KCC has finally commissioned a study by Summit Blue Consulting to ‘”Assist the State of Kansas in Conducting an Energy Efficiency Potential Study”.

KANSAS ENERGY COUNCIL

The Kansas Energy Council (KEC) was first established in 2002 by Governor Bill Graves to develop a comprehensive energy plan for Kansas. KEC was continued and expanded to 35 members in 2004 by Governor Sebelius. Unfortunately, this council is heavily tilted towards the same energy interest groups that have fought any progressive, balanced energy planning at the Kansas Legislature or before the KCC. There are only a few representatives of consumer, environmental or academic interests on the KEC. The energy interests on the KEC have challenged whether there should be any debate on greenhouse gases emitted in Kansas or the issue of climate change. KEC has avoided taking any position on the Holcomb coal plant. To view the KEC’s 2008 Energy Plan and their reports, go to www.kec.kansas.gov

The co-chair of the KEC is Lt. Governor Mark Parkinson. The Governor’s office is moving ahead on tackling climate change and promoting wind energy without waiting on the KEC. The Governor has signed Kansas on to the Midwestern Governor’s plan to help states reduce greenhouse gases. A new wind energy-working group has been established by Lt. Governor Parkinson to promote major wind development and the necessary power line infrastructure.

In regards to the proposed new Holcomb coal plants, there are many misconceptions. There is now one 300-megawatt coal plant at Holcomb that was constructed in 1979. This plant doubled the electric rates for the Western Kansas cooperatives. They were paying twice the cost of electricity that eastern Kansas was paying. The track record is not good for controlling costs. In light of a pending recession and the much higher costs for steel, any new coal plant will escalate rapidly in construction costs. These two new plants are being built to send power to Colorado and New Mexico. The Southwest Power Pool is the regional organization that controls the movement of electricity in Oklahoma, Kansas, Nebraska and the Dakotas. Plans are in the work to vastly expand wind energy, and the necessary power lines will be built regardless what happens with the Holcomb plants.

WIND ENERGY

Kansas now has major wind farms in Grant County, near Dodge City at Spearville and near Beaumont in the southern Flint Hills. The Smoky Hills Wind Farm is now operating 22 miles west of Salina and can be seen off I-70. Meridian Wind Farm, 8 miles south of Concordia off Hwy 81, is next to be built. Westar has announced investments in wind farms in Barber and Wichita counties. The Spearville wind farm will be expanded. There are probably a half dozen more wind farms in the planning stage. To this point, foreign corporations from Portugal or Italy have financed all of these major wind farms. Westar has received permission from the KCC to lease half of their wind projects and own the other half. To encourage wind development, Kansas passed legislation making industrial size wind farms exempt from property taxation. Wind developers are signing secret agreements with local county governments that provide some payments in lieu of the property taxes. It is questionable how adequate these payments are.

States such as Minnesota, Iowa and Nebraska have passed “community wind” legislation that promotes smaller wind projects. These smaller projects can be funded by local investors and provide a better return to the landowner and to local units of government. In certain southern Minnesota counties, one-third of the county budget comes from the wind revenues. A 300-employee wind turbine manufacturer has now moved to southern Minnesota paying very decent wages. “Community wind” legislation will be debated in Kansas this year.

ETHANOL AND BIO-FUELS

As of September 2007, Kansas had ten grain-ethanol plants producing 370 million gallons with six more plants under construction. There are preparations underway for one proposed cellulosic ethanol plant in Hugoton. The grain processed is either corn or sorghum (milo). The cost of corn has doubled to $4.50/bushel in the last year, threatening the economics of the ethanol business. Ethanol cannot be sent through pipelines, so it must be hauled to a local fueling terminal. This cost is four times the cost of transporting petroleum. Most of Kansas’ ethanol is shipped for use in western and southwestern U.S.

Ten years ago, Archer Daniels Midlands (ADM) owned 70% of all the ethanol facilities in this country. Since that time, the new ethanol plants have been financed by many farmers and outside investors. With higher corn prices and much lower profit margins, farmers and the outside investors do not have the deep pockets to weather serious financial conditions. ADM is so large it can use its other divisions to offset temporary losses in its ethanol business. A few ethanol plants have already gone into bankruptcy. ADM will be in position to buy these facilities for pennies on the dollar.

With the passage of the new energy bill by Congress, the national target is to produce 35 Billion (B) gallons of ethanol by 2022. Of the 35B gallons, 15B will come from grain while 20B will come from cellulose such as grasses, wood chips or other non-food sources. Grain ethanol production is now up to 7.9B gallons annually. The scramble is on to find enough acres to grow enough grain for ethanol and still supply all of the normal feed and export needs. The large confined chicken, hog and dairy operations were predicated on very cheap corn prices that have now disappeared. The corn reserves can carry this country through one more year but the new ethanol plants will continue to drive up the cost of corn. If the Midwest does not have a normal growing year in 2008 and a drought occurs, the cost of grain could climb exponentially.

Cellulosic ethanol is still a ways down the road. There is only one small commercial plant (1 million gallons a year) in Canada. The break down of grasses to process profitably into ethanol is still in the research stage. The energy balance for corn ethanol is that it takes 1 unit of energy to grow/process corn into 1.3 units of ethanol. Using a perennial grass such as switch grass might get 5 units of ethanol for every 1 unit of energy to process the grass. In the case of bio-diesel, 1 unit of energy can process soybeans into 4 units of bio-diesel. Right now Kansas does not have any bio-diesel plants but a new one is being proposed just across the line in Missouri. The country’s largest bio-diesel plant in New Jersey just went into bankruptcy. Now that soybeans have jumped from $7 to $11.50 a bushel, these plants are having a very hard time maintaining cash flow. This is all to say that trying to develop all kinds of bio-fuels is very tricky and will depend significantly on the price of a barrel of oil. If oil goes back under $60/barrel, the bio-fuels will struggle even with their extensive tax credits.

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LEGISLATIVE E-REPORT - Issue No. 1 - JAN. 2, 2008

2008 KANSAS LEGISLATURE PREVIEW

By Paul Johnson

The 2008 session of the Kansas Legislature may well be very contentious. Legislative leaders have vowed that the rejection of the Holcomb Coal Plant will not stand and other legislative matters will depend on reversing this decision. In 2008, all 40 seats in the Kansas Senate and the 125 seats in the Kansas House will be up for election. As retirements are announced a scramble will be on for new leadership in the 2009 session. The state budget is in fair shape but sales tax revenues are soft and could present greater economic challenges in 2009. With the natural disasters of tornadoes and floods, the issue of rebuilding affordable housing is of great concern to key legislative leaders. Immigration issues will be very troubling as surrounding states such as Oklahoma and Colorado adopt very draconian laws. Health legislation will be very prominent as lawmakers search for ways to cover the uninsured, reduce health care costs and debate public versus private health insurance programs. There will be several social service issues that merit more debate while the fairness of the tax system in Kansas will be discussed.

ENERGY

The denial of the two new coal plants at Holcomb has fired up the President of the Kansas Senate and the Speaker of the Kansas House. Many people in Western Kansas support this $3.6 Billion dollar project that will generate 2,000 construction jobs and 140 full time employees when completed. 85% of this power will be sent west to Colorado and New Mexico . 100% of the pollution will stay in Kansas . Major natural gas interests from Oklahoma have entered the debate to derail the coal units and substitute the use of natural gas. Wind farm development is surging ahead with the next major project – Smoky Hills Wind Farm – 22 miles west of Salina with I-70 running through the middle of this wind farm. In the fall of 2008, the Meridan Way wind farm will be developed 10 miles south of Concordia just off Hwy 81. Kansas has the third largest wind resource of all 50 states. New power lines will have to be developed to carry this power. Since wind energy is subject to the vagaries of when the wind is blowing, natural gas is the best energy source to power up and down to firm up wind energy. As more wind farms are developed in different areas of the state, wind energy can be better balanced. Holcomb will be a hotly debated issue with moneyed interests on both sides and the environmental community raising the concerns over global warming. States such as Minnesota , Iowa and now Nebraska have passed ‘community wind' legislation that encourages local investors and provides better economic returns to landowners and county governments.

STATE BUDGET

Right now, the state budget in Kansas is in pretty good shape. With revenues increasing from higher personal and corporate income tax, there is enough ending balance to develop a 2009 Kansas ' budget without cutting programs or raising revenues. Individual income tax payments and sales tax revenue comprise 85% of the revenue to the State General Fund (SGF). Sales tax revenue has been increasing slowly and is of concern to state officials. The higher cost of gasoline will have an impact on regular sales tax collections. No one is quite sure what a depressed housing market nationally may have on Kansas . Farm income is at an all time high in this country but so are the related expenses to farming. The aircraft industry in Wichita continues to expand.

The 2010 budget will be much more troublesome. The three-year educational plan will be over and what will be the next plan? The universities will continue to press their case for more assistance for salaries, operations and building repairs. A new Comprehensive Transportation Plan (Highway Bill) will be developed that will vie for more revenues from the SGF. Unless health care costs trends change, higher medical costs will be necessary to provide services to an older and sicker population. On the revenue side, the Kansas tax system is pretty regressive with property taxes falling disproportionately on lower income households and a sales tax on all food. Kansas ' lawmakers have handed out a number of tax breaks and credits for various development projects but the total impact of these tax breaks lowering governmental revenues has not been fully illuminated.

AFFORDABLE HOUSING

The tornado in Greensburg and the flooding in Southeast Kansas have shown a light on the lack of state funding for affordable housing. Thousands of housing units have been destroyed but Kansas does not have any state funded housing programs to respond. All of the housing programs for rural Kansas are now found in the Kansas Housing Resources Corporation ( www.kshousingcorp.org ) but the funding is primarily federal. Kansas does have a State Housing Trust Fund but no dedicated funding source. The Low Income Housing Tax Credit (LIHTC) program is the largest rental housing development program in Kansas and last year was responsible for developing 1900 units statewide. Without subsidies from the State Housing Trust Fund, LIHTC rental units cannot offer affordable rents for the working poor. Legislation will be offered to find a revenue source for the Trust Fund. One option would be to dedicate a portion of the expanding gaming (lottery, casinos, slot machines) revenues.

IMMIGRATION

The debate over undocumented immigrants could turn very brutal in Kansas . This divisive issue is taking center stage in presidential politics. Oklahoma has adopted a very strict law that will even punish humanitarian service providers. Colorado is set to adopt similar strict laws. This harsh debate started last year in Missouri and may be the basis for proposed legislation in Kansas . The Kansas law - providing in-state tuition to the children of undocumented parents - will be openly challenged again. Legislation that would fine employers for knowingly hiring undocumented immigrants or immigrants with false documentation would cause severe problems for industrial agriculture. The five mega-meatpacking plants in Kansas could not operate without continual access to new and desperate immigrants. These employers want their employees left in the shadows so these employees cannot assert their rights or protect their health. With surrounding states restricting undocumented immigrants, many lawmakers in Kansas will support similar restrictions so that Kansas does not become a magnet for immigrant refugees.

HEALTH CARE

The Kansas Health Policy Authority (KHPA) was instructed to deliver a health care legislative package to the 2008 session. Health care expenses now comprise over 25% of the $11 Billion Kansas budget. KHPA settled on a $160 million 21-point proposal that reformats health insurance, expands Medicaid coverage for adults and addresses public health with a statewide ban on smoking in public places. These proposals and related articles can be viewed at the website of the Kansas Health Institute – (KHI) - ( www.khi.org ). This whole health care debate will be fully covered by the four reporters at KHI. The most contentious proposal will be to raise the cigarette tax by 50 cents to support the expansion of Medicaid services for some adults and cover more children with the state children's health insurance program known in Kansas as HealthWave.

SOCIAL SERVICES

The General Assistance (GA) and MediKan program serves 4,000 disabled adults in Kansas with limited cash assistance ($170/month) and very basic medical assistance. These programs are now being restricted to cover those disabled adults who will qualify for federal disability programs. Unfortunately, disabled adults with mental illness often never qualify for the federal disability programs since these programs are only for clients who are long-term unemployable. Only 1/3 of the 4,000 clients are expected to meet the federal disability requirements. Advocates have been meeting with KHPA who administers the MediKan program and SRS who administers the GA program to see if another safety net program can be devised to cover the mentally ill disabled. Dave Ranney at KHI recently reported on the challenges of the changing mental health care system in Kansas .

The Kansas Payment Center (KPC) processes 95% of all the child support paid in Kansas . Close to 300,000 Kansas children are involved with child support payments. With a 55% monthly child support collection rate, Kansas ranks 37 th out of the 50 states. The KPC handles 175,000 transactions a month. Only 45% of these transactions are sent out electronically with the rest being checks. In 2008, the KPC will work to increase the electronic transactions from 45% to 80%. Custodial parents will be encouraged to start a checking account or they will be issued a debit card known as the NOW card.

LOCAL FOOD

There is a nationwide local foods website called Local Harvest that lists farmers markets, food stores and restaurants sourcing local food ( www.localharvest.org ). This is one good place to source local food for the holidays or to find those special restaurants when traveling. A Kansas River Valley Foods website ( www.kansasrivervalley.com ) has begun for all consumers but with special emphasis to connect local growers with institutional buyers like schools.

A s we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

President Eisenhower in his farewell address (Fall 2007 The Land Report –p. 24 – www.landinstitute.org )

OBSERVATIONS OF A BUDGET SUMMIT

by Paul Johnson – December 26, 2007

There was a unique if not unprecedented joint meeting of the Kansas House Appropriations and Senate Ways and Means Committees on December 17 – one month before the start of the 2008 Kansas Legislative Session. This meeting was a preview of the challenges and opportunities with the 2009 Kansas budget that begins July 1, 2008. It was a platform for the major departments of Kansas ' government to detail their wish list for the next year. The realistic budgets -dictated by the Governor's office - will be presented in the State of the State speech shortly after the legislative session begins on January 14.

The simple truth is that economic growth in Kansas over the last five years has covered increasing spending. The out year budgetary projections always look very grim, but somehow the extra growth in the economy has come to the rescue. Such is the projection for the 2010 and 2011 budgets. If these numbers do play out, the ending balance in the State General Fund on July 1, 2007 was just over $800 million while the projected ending balance for July 1, 2011 will be $99.1 million. These numbers are built on a 4% growth in state revenues and the spending obligations that are built into existing law. There are no new dollars for schools, state employee salaries or medical inflation included. If the national economy does enter a recession and this softens sales tax revenues or the employment picture in Kansas , the budgetary picture could darken quickly.

This hearing allowed the full committees to hear the major Departments list their top needs and accomplishments. The budget committees are divided into subcommittees that review a few select budgets, thus not having the opportunity to see the bigger budgetary picture. Time is always too short. Once the Governor's budget is released mid January, it takes Legislative Research a few weeks to analyze the numbers and for the subcommittees to start their review. It is then early February and the budget must be worked by the subcommittees, presented to the full committee and then passed by the full House or the Senate. Each chamber passes their version of the entire State budget and then these two versions must be reconciled by early April. During April the State's revenue experts come to town to assess the revenue projections for the next 18 months that must be used as the basis for the new State budget. The late April veto session is the time to reconcile any budgetary discrepancies.

The Kansas Health Policy Authority (KHPA) was the first agency to report. KHPA's requested budget for 2009 is $1.4 Billion of the entire state budget of $13.3 Billion. KHPA has 207 employees. KHPA has two major requests. The first is a premium assistance program to provide private health insurance with Medicaid funds for very low-income parents earning around $5000 annually. This income test will double in three years to 100% of the federal poverty level. The second item is an integrated eligibility and enrollment system for Medicaid, HealthWave and the State Employee Health Benefits Plan. This system also involves the Department of Social and Rehabilitation Services and will eventually cover 388,000 Kansans. The total system cost over 5 years will be $100 million. KHPA has a complete 21-part health plan recommendation that depends largely on a 50 cent a pack tobacco tax increase to fund the Medicaid expansions. For complete details on the health plan go to www.khpa.ks.gov.

The second presentation came from the Kansas Secretary of Aging – Kathy Greenlee. What is so stark about the Kansas Department of Aging's $475 million budget is that 75% of the budget is for nursing home care for 10,500 patients. Secretary Greenlee requested more funds for home and community based services so that attendants could provide in some instances 12-hour care instead of the present 8-hour care. Wichita has had for 5 years a full service managed care program where a private provider is paid an annual fixed fee per client to provide the full range of services from in-home care to adult daycare to skilled nursing care. Topeka has such a program with 75 clients and the budget request is to fund 75 more slots for Topeka and 50 new slots for such a service in the Wyandotte County . This service is called PACE that stands for Program of All-Inclusive Care for the Elderly. To view all of the 2009 Budget Enhancement Proposals go to KDOA's website at www.agingkansas.org .

The third presentation came from the Secretary of SRS – Don Jordan. Even with the loss of Medicaid to KHPA, SRS's 2008 Budget is still $1.647 Billion. Mental health services and services to the developmental and physically disabled comprise over $700 million while the five state hospitals have a budget of $145 million. SRS is still struggling with changing federal rules that now deny Medicaid coverage to many foster care children in group homes and deny federal funds for SRS staff that are investigating abuse and neglect complaints for children who may not be candidates for foster care. Additional funds will be required to eliminate or lower the waiting lists for various community disability programs. SRS still has 300 to 400 vacancies out of 3,600 staff positions statewide because of inadequate budgets. The budgetary request is to lower that by 105 in 2009.

The Kansas State Department of Education (KSDoE) presentation was made by Deputy Secretary Dale Dennis. Teacher shortages are a major concern. In 2004-05 school year, Kansas ranked 38 th nationally in average teacher salaries. Kansas has around 3,500 teacher vacancies statewide with special shortages in special education and math/science teachers. Kansas ' colleges are now producing less than 2,000 new teachers a year. Over one-fourth of all teachers are now over 55 and headed for retirement. The third year of the school funding package in 2009 will increase the base state aid per pupil by $59, from $4,374 to $4,433. The new budget request is now to increase that by $41 more dollars to $4,474 with 75% of that new money going for teacher salaries. Just as with SRS, the Medicaid program has changed the rules so schools have to bill Medicaid for individual students as opposed to bundling billing for all special education students. This will cost the State $31 million if the services are to continue.

One bright spot came with the Kansas Department of Corrections and the presentation by Secretary Roger Werholtz. The community correction programs and the parole programs are far more effective today than five years ago. If the present trends hold, Secretary Werholtz is convinced that Kansas can go 10 years without constructing a new prison. Today Kansas has a total of 9,413 beds with a total operating cost of $148 million that averages $21,972 per inmate per year or $60.20 per day.

Remember again that these presentations were the wish list for these various agencies. The departments are asked by the Governor's office to develop such budgets to detail what the needs are and what are the agencies listed priorities. The Governor also gives the agencies specific budget allocations to develop realistic budgets given actual revenues and demands on the state. By now the final choices have been made and the Governor's budget is now at the printer. By law, the Governor has to present a budget with a 7.5% ending balance that is called a limited resource budget. Right now it looks like the Governor's budget will come in with a 5% ending balance that would be roughly $150 million short of the 7.5% ending balance. The Kansas Legislature will start working the Governor's budget in January and historically 98% of Governor's budgets are passed. This year though the new revenue projections in April may upset the apple cart if a national recession is in sight. The entire $13.3 Billion dollar Kansas budget for 2009 will divide out to $4,852 per Kansan.

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