Legislative Updates, 2010 Session:

Edited by Ernestine Krehbiel, LWVK President
Reports by Paul Johnson, LWVK Lobbyist

#19: July, 2010

POLITICAL REPORTS & COMMENTARY
Paul Johnson – June 29, 2010

July 1 marks the start of the 2011 Fiscal Year. Kansas’ lawmakers are holding their breath to see if revenues to the State have stabilized. June 28, Governor Mark Parkinson announced that the budget was in balance for 2011 and he doubted that he would need to make any further changes before the Kansas Legislature and the new Governor would convene in January. One very uncertain factor is the federal funding for Medicaid. Everyone assumed that the federal government would continue from December 31, 2010 to June 30, 2011 enhanced Medicaid payments to the states. For Kansas, this extra Medicaid funding totals $131 million. The United States Senate has rejected this extra funding unless offsets are found so there is no increase in the federal deficit.

Both Kansas’ Senators – Sam Brownback and Pat Roberts have voted to block the extra Medicaid funding without an offset. If Kansas does not receive the extra funding, it would take a 2% cut across all state agencies to equal $131 million. For SRS, this would mean less funding for the disability waiting lists, community mental health grants and tighter staffing. For the Kansas Health Policy Authority, it will mean longer waiting lists to determine eligibility for medical programs and a possible reduction in rates paid to medical providers. In his race for Governor, Sam Brownback has promised a roadmap in August that will define his governing and budgetary priorities. It is hard to believe that a compromise will not be found on this enhanced Medicaid funding. While Kansas is in trouble without the extra funding, many states would see drastic cuts!

This last legislative session had the most in depth discussion of taxes and budget reductions in 15 years. Unfortunately, tax exemptions and credits are still treated differently than budgetary decisions. The Kansas Legislative Post Audit along with the Kansas Legislative Research Department and the Kansas Revenue Department did a superb job in listing the cost of each tax credit and exemption in their various reports. Despite the pleas of Revenue Secretary Joan Wagnon, there was no moratorium placed on new tax breaks, no elimination of existing tax breaks and no sunset put on tax exemptions so they could be reviewed. Every option for raising more revenue was considered from small property tax mill levies for schools to reinstating part of the estate tax to a new income tax bracket but in the end the most regressive tax – the state sales tax – was the only one increased. Beware of efforts next year by the State Chamber of Commerce and conservative legislators to reduce personal and corporate income taxes further and substitute a more regressive sales tax.

Of the 125 races for the Kansas House of Representatives, 38 House members are running unopposed. (No Kansas Senate races this election) The August 3rd primary will decide 19 of the Kansas House races, as there are candidates from one party only, so by then, 57 of the 125 House seats for the 2011 Kansas Legislature will be decided. Of the 18 House Republicans that voted with the Democrats for the sales tax increase, 10 face opposition in their races.

SUPPLEMENT II – 2010 KANSAS LEGISLATION SUMMARY

The final supplement to Kansas Legislative Research Department ‘Preliminary Summary of Legislation – 2010 Kansas Legislature’ was completed on May 26. These three summaries (March 30, April 8, May 26) are available online at www.kslegislature.org/klrd. This latest summary also includes bills that vetoed by Governor Parkinson including an economic development bill – Promoting Employment Across Kansas – and an abortion bill – Revisions to Late-Term Abortion Law. Summaries of the FY 2010 and FY 2011 State Budget are covered. Other highlights include:

Senate Sub. for HB 2356 amends prior law concerning the supervision, licensing and inspection requirements for specified child care facilities under a single licensure category. The bill requires the creation of an online information dissemination system accessible to the public that will provide the names of licensees and applicants, and the history of citations and substantiated findings.

Senate Sub. for Senate Sub. for Sub. for HB 2320 establishes an assessment of up to $1,950 on each licensed bed within skilled nursing home care facilities. The Kansas Health Policy Authority will implement this provider assessment and the Kansas Department of Aging will manage the program. This bed tax will generate millions in new federal Medicaid funding with this extra funding intended to improve long-term care programs in Kansas.

Senate Sub. for HB 2360 enacts a state sales tax increase, expands the food sales tax rebate program, expands the state earned income tax credit program and amends the Kansas Taxpayer Transparency Act (that requires Secretary of Administration to include tax expenditure information on a searchable website).

HB 2130 amends state law to require every occupant of a passenger car manufactured with safety belts to wear a safety belt. The bill also allows law enforcement officers to stop a passenger car for a violation of safety belt requirements by anyone in the front seat or by anyone under the age of 18. The fine is $5 for an adult till July 1, 2011 and $10 thereafter with no court costs.

Senate Sub. for Senate Sub. for HB 2650 establishes a new comprehensive transportation program – Transportation Works for Kansas (T-Works). This plan will total $8.2 Billion over 10 years. Very slight increases – 2% of entire plan - to assist transit, rail and aviation starting in 2013. No funding for bike paths. New funding from sales tax increase. The last 10-year highway plan was $13.5 Billion.

FYI--ROCKY MOUNTAIN INSTITUTE

The Rocky Mountain Institute (RMI) – founded in 1975 by Amory and Hunter Lovins in Snowmass, Colorado – is the premier, market-based, private energy efficiency and energy policy think tank in the United States. RMI is funded primarily by their energy consulting work all over the world. RMI has worked closely with the Pentagon to improve the military’s energy efficiency and pilot renewable energy programs. RMI has consulted with Wal-Mart to improve greatly the distribution system as well as the energy efficiency systems in all Wal-Mart stores. (Wal-Mart has a master energy monitoring system in Arkansas that tracks the energy use of every cooler and freezer in its stores nationwide.)

Amory Lovins has written extensively on energy transformations beyond oil. RMI has worked on producing super efficient automobiles that are very light but very safe with state of the art polymers. Amory and Hunter wrote NATURAL CAPITALISM that describes how proper market signals should get us to a more efficient economy powered by renewable, sustainable energy sources. Amory has debunked the myth that nuclear power is a viable future energy source (without extensive governmental subsidies). RMI’s website: www.rmi.org.

FYI -- KANSAS HEALTH INSTITUTE

Just a reminder that the health news reporting by the Kansas Health Institute (KHI) is the best in-depth medical reporting we now have in Kansas. KHI will have reports on the health policies and priorities of the major candidates this election year. KHI will stay on top of the implementation of the new federal health insurance law. This website – www.khi.org -- should be visited regularly.

A LEGISLATIVE WRAP – PART II
Paul Johnson, legislative liaison to the LWVK – May 25, 2010

The budget picture for Kansas remains uncertain. Total receipts through April of FY 2010 were $62.2 million (1.5% percent) below the new April 15 consensus revenue estimate. ( Total State General Fund Receipts through April of FY 2010 were $425 million (9.1%) below FY 2009 for the same period.)

• 37,000 fewer individual income tax balance due checks were received this April as compared to April 2009.
• The average individual income balance due check in April 2010 was $836 as compared to $1,064 in April 2009.
• Individual income tax revenue was down 3.6% compared to the latest consensus revenue estimates and 11.5% down from FY 2009.
• Kansas unemployment rate stands at 6.3% today well above the normal rate of 4-5% but still below the national average of 9-10%.
• Until the employment picture improves and more employees are working full 40-hour weeks, the Kansas ’ budget picture will continue to be troubled.

A LEGISLATIVE WRAP – PART I
Paul Johnson, legislative liaison to the LWVK – May 14, 2010

KANSAS BUDGET IS ‘LESS DESTRUCTIVE’ THAN IT COULD HAVE BEEN.
THAT IS THE BEST THAT CAN BE SAID
The Kansas Legislature has finally finished its business with a ceremonial closing on May 28. The coalition of moderate Republicans and most Democrats held together to pass a less destructive state budget and an increase in the sales tax that begins July 1. Legislation impacting childcare and nursing homes passed in the final hours of the session as did a new 10-year highway plan. Now the political ramifications of this session will begin as Kansas House members announce their intention for re-election or retirement. The August primary may tell what the electorate thought of these governmental decisions.

THE ECONOMIC PICTURE IN KANSAS REMAINS UNCERTAIN AT BEST.

The state general fund is 80% dependent on individual income and sales tax. In 2009, personal income in Kansas was actually negative – the first time since WWII. The unemployment rate in Kansas has been around 7% - well above the normal rate of 4 to 5%. Many employees are working less than fulltime impacting the amount of revenue to the state. April revenue was down over $40 million primarily driven by a decline in payment of individual income taxes. The revenue flow to Kansas will have to stabilize for the rest of this year to avoid some tough budgetary choices this coming January as the new Governor develops a budget for 2012.

BUDGET WAS ALREADY CUT ENORMOUSLY BEFORE SO THE LAST MINUTE FIGHT TO “PROTECT EDUCATION, DISABLED ETC WAS TO PROTECT IT FROM MORE CUTS.

News coverage of the budget battles were framed in a context of protecting education, social service and public safety programs versus increasing taxes. This news coverage missed the fact that $1 Billion dollars had already been taken out of the $6.5 Billion State General Fund.
The budget that did pass just did not render further damage to critical, community-based, preventative programs.

• SRS will still suffer with a vacancy rate of 20% in field staff and 30% vacancy rate in central office staff.
• The state grant for mental health services for the uninsured is down 50% ($30 million to $15 million).
• Waiting lists for the physically and developmentally disabled will continue to increase.
• The state funded Senior Care Act that provides home care services for the elderly has been cut in half in the last two years.
• The Kansas Health Policy Authority will struggle with less staffing to provide timely services to the 318,000 Kansans now on Medicaid and processing new applications for health care.
• Social services have taken serious budget reductions while the reductions for K-12 education are far less clear.
  TAX on NURSING HOME BEDS

The nursing home bill will levy an annual fee of $1925 on private pay nursing home residents. This fee will generate $30 million in state funds that will draw down $56 million in new federal Medicaid funds that will be used for nursing homes solely in the first few years.
Kansas has 346 nursing facilities.

• 326 of these facilities will see an increase of $163,000
• 20 facilities will lose an average of $42,800.
• The more Medicaid clients a facility has the more funds received.

This law is a first step in developing a more comprehensive long-term care plan that involves both the disabled and the elderly.

CHILD CARE INSPECTIONS NOW REQUIRED

The childcare legislation phases out registered childcare homes These have not been required to be inspected in the past. Kansas now has 2,500 registered childcare homes and this category that will be phased out over two years. The state has 4,200 licensed childcare facilities (which are inspected currently) and only those licensed and inspected will be allowed. Kansas is nationally ranked 47th in childcare oversight and regulation.

IMMIGRATION LAW LIKE ARIZONA ’S IN KANSAS ?

The immigration issue continues to percolate in Kansas . An amendment was offered by Rep. Lance Kinzer to force undocumented students to pay out of state tuition rates at regent’s institutions. This amendment was defeated during the budget debate on the Kansas House floor. Rep. Anthony Brown offered an amendment similar to the new Arizona law restricting any public benefits to residents that cannot provide proof of legal residency. This amendment was ruled out of order given that this was a budget debate. Kris Kobach is credited with writing much of the Arizona law and Anthony Brown serves on the statewide steering committee for Kobach’s Secretary of State campaign.

KANSAS NOW HAS A NEW 10-YEAR TRANSPORTATION PLAN

This new plan will cost $8.2 Billion over ten years compared to the last 10-year plan that cost $13.5 Billion. The first three years of this new highway plan will be funded primarily by issuing more bonds. In the fourth year, the 1-cent sales tax increase will decline to .4 and this will be dedicated to the highway plan. In total, the highway plan will be receiving 1.05% of the 5.7% state sales tax generating over $425 million a year. The name of this plan is called Transportation Works (T-Works) compared to the Comprehensive Transportation Plan passed in 1999. Unfortunately, the same pattern of seeming to fund only highway projects continues. In this new plan only 2% of the funding will go for mass transit or railways and nothing for bike paths. Instead of raising the fuel tax that would come from those using the roads, the increased funding stream falls on the general sales tax. This means that less general sales tax will be available for education or social services.

To track bills in the Kansas Legislature go to www.kslegislature.org or call 800-432-3924

#14: May 7, 2010

BUDGET DEBATE IN HOUSE RIGHT NOW

Already State Total Budget of $6 Billion Has Been Cut to $5 Billion and Legislators Must find another Half Billion Dollars More To Cut

HOUSE Debating Right Now-- listen in online at http://www.kslegislature.org/legsrv-legisportal/listen.do to debate of Sen. Bill 572
Earlier this week, the Kansas House of Representatives debated its leadership's budget bill (Yoder budget) for over 12 hours. Ordinarily, both parties offer amendments working towards a consensus budget that will garner enough votes to pass. That was not the case. The House bill was so lopsided (huge cuts to education, such cuts to SRS and the Kansas Health Policy Authority that these agencies might not be able to properly administer certain programs such as Medicaid—also, lots of funny money that is not likely to materialize) that the moderate Republicans and Democrats decided it was not reparable. Sometime today a totally different budget will likely be proposed that has the support of a majority of House members….
In the past 18 months, the Legislature and the Governor have cut spending by over $1 billion (out of a $6 billion budget). Many of [legislators] have scoured agency budgets looking for other savings. The Senate found some, not enough to fill the budget hole, but enough to limit a tax increase to a one cent sales tax hike with a three year sunset and a cap on a business tax credit. [From newsletter by Senator Laura Kelly]

Yesterday, [May 6] debate began on virtually a whole new budget. Rep. Bill Feuerborn joined by Democrats and moderate Republicans crafted and presented a "gut and go" amendment. That is when everything is stripped from a bill and the new contents inserted. This new amendment would replace the earlier Yoder/leadership budget. House leaders (O'Neal, Yoder, Merrick) divided the amendment into 13 questions. Why? One, it will take longer to debate. (Yes, those are your tax dollars keeping the statehouse lights on.) Two, there will be certain parts that some may choose to vote yes or no on for political reasons. [From Alert by Kansas Families for Education]

The House reconvened and is debating Senate Budget right now (Friday, May 7).

The Senate’s budget still contains more than $6.75 million in cuts to the Children’s Initiatives Fund (CIF). The CIF funds most of the early childhood programs in Kansas, including Early Head Start, Tiny-k, Parents As Teachers, Healthy Families, Four-Year-Old At-Risk and many more. These cuts would cause a heavy blow to our most effective early childhood programs, denying children access to programs in some cases and costing hard-working Kansans their jobs in other cases.
But, the Kansas House is debating its budget bill right now, and there’s an amendment on the table that would spare cuts to the CIF. This amendment – known as the Feuerborn – was developed by a bipartisan group of responsible lawmakers who have come together to craft a budget that protects our children and vulnerable Kansans, funds K-12 education and FULLY funds the CIF.
Your Representative needs to hear from you now! Please click here to contact your House member immediately and ask them to support the Feuerborn Amendment.

SENATE OKs $.01 Increase in Sales Tax – HOUSE DEBATING IT

Last night the Senate passed a tax plan of $330 million to fund the budget approved on Wednesday evening. This will help to protect students, the disabled, the elderly and other Kansans that rely on state services. This was the responsible resolution to a very difficult problem. The senators voting for both the budget and the tax plan deserve your thanks.

Many of [legislators] have scoured agency budgets looking for other savings. The Senate found some, not enough to fill the budget hole, but enough to limit a tax increase to a one cent sales tax hike with a three year sunset and a cap on a business tax credit. [From newsletter by Senator Laura Kelly]
This Senate budget has such tight limits on staffing at SRS and the Kansas Health Policy Authority that these agencies may not be able to properly administer certain programs such as Medicaid. This budget increases the co-payments for the Kansas Health Wave children’s program that may put Kansas out of compliance with the federal health law.

The budget for the courts is still having at least a one day a week furlough.

We urge you to keep calling and e-mailing your house members until they vote. Let them know you support a tax increase to prevent any further cuts to schools, courts and all of the social programs that are the state responsibilities!!

If you're interested, you can listen in online TO HOUSE DEBATE ON THIS BUDGET.

The new revenue numbers have now been developed by the consensus revenue estimators. In essence, the Kansas deficit FOR THIS YEAR –NOT THE ONE BEING DEBATED IN THE LEGISLATURE-- has increased by $70 million. There is a $70 million deficit in this 2010 Fiscal Year that ends June 30, 2010. In the past 18 months, the Legislature and the Governor have cut spending by over $1 billion (out of a $6 billion budget).

There are still some federal stimulus dollars that was reserved for the FY 2011 budget that will probably be pulled forward into the FY 2010 state budget to cover the $70 million hole. The State of Kansas will also probably delay some school and Medicaid payments from June to July to move the cost from 2010 to the 2011 budget. These budget maneuvers assist with cash flow needs of the State but they deepen the 2011 debt. There is ALREADY a $450 million deficit for the 2011 Fiscal Year that the Senate and House are debating as to how to fill.

Please thank the following senators for their courage. They ALL deserve thanks from our members!!

POLITICS ARE EVERYWHERE
By Paul Johnson for the LWVK

Politics are everywhere as these budget deliberations drag on. Kansas House Appropriations committee chair Kevin Yoder is running in the 3rd Congressional District Republican primary to replace retiring Dennis Moore. The tone of that primary is to fight any revenue increases. However, if Kansas pulls back on its support of public education but allows local communities to raise their local option budget, new revenues are just shifted from the state – that relies on sales and personal income taxes – to local taxes that are based on property taxes. While this scenario may work for the wealthier districts in Johnson County or around Wichita, it does not work in many rural areas that do not have high property values. There may be some constitutional issues involved as the inequities of per pupil funding among school districts continue to widen.

In the Senate, there are three Senators – Tim Huelskamp, Jim Barnett and Jean Schodorf - running for Congressional seats and trying to balance their political needs with the best interest of the State. Since the Senate has passed a balanced budget bill acceptable to the Governor, will House Democrats and Republican moderates step forward to agree to the Senate budget?

The key to this budget would be limiting further cuts to social services, public safety and education while finding a balanced revenue package - of sales, income and a limited property tax increase to fund schools - that does minimal damage to any one group.

Some good news is that the new estimates for human services caseloads – medical care, nursing homes, public assistance, foster care, etc. – show little increase for 2011.

Each department is now being analyzed to see what assets they may have such as land or buildings. Floor amendments will be offered to possibly sell some assets such as certain buildings and if needed lease back the space for a set period of time. This may solve the existing economic crisis for this budget but will the true costs be experienced several years in the future? There is confusion over how many dollars exist in public school district accounts that can be re-directed to ease this budgetary crisis? Kansas’ lawmakers are convinced that private auditing firms can find fraud - on a contingency basis - in medical programs or find third parties that should pay first before Medicaid is billed. The savings estimated by such efforts range from $10 to $60 million. [Remember, the state must find 8 TIMES that top amount or raise some taxes or makes cuts.]

If Congress passes further extensions of unemployment assistance, those clients receiving these unemployment funds would be ineligible for most state public assistance thus saving Kansas some welfare spending in 2011.

State budgets are never final. Whatever 2011 budget is passed will be reviewed in light of state revenue receipts for the remainder of 2010. While the Kansas Senate is not up for election this fall, Kansas will elect a new Governor and Kansas House members will be up for election. (Rep. Marti Crow has announced her retirement and odds are that 15-25 new House members will be seated in 2011.) If the Kansas House leadership loses their battle over new taxes this year that decision could well be re-debated with a new Governor and his budgetary recommendations next January.

PRELIMINARY SUMMARY OF LEGISLATION, 2010 KANSAS LEGISLATURE
By Paul Johnson for the LWVK

The Kansas Legislative Research Department has now completed two summaries of legislation – March 30 and April 8 - passed this legislative session. A final supplement will be developed once the veto session is over. These documents are available on the website www.kslegislature.org/klrd (under Summaries). I have chosen a few pieces of legislation for your consideration. These supplements have tables of contents in the front to assist in finding topic areas.

House Sub. for SB 316: permits those holding groundwater rights the option of nonuse without losing those water rights. The original bill was intended to be statewide but this bill was limited only to areas closed to new appropriations that comprise a small area of Kansas. Thus the existing water policy of ‘use it or lose it’ has not fundamentally changed and water shortages will be confronted in the future.

HCR 5013: a resolution between Kansas and the Assistant Secretary of the Army for Civil Works to develop a plan to extend the productive lives of the state’s reservoirs. These reservoirs were originally built with a projected lifespan of 100 years but many have passed the halfway point of the original design life.

SB 410: permits the acceptance of debit cards by state agencies. This law also prohibits retailers from imposing a surcharge on debit card transactions.

HB 2221: this is the Kansas Indoor Clean Air Act that bans smoking in certain public places, access points of buildings and places of employment.

SB 460: amends several statutes to clarify the priority of certain orders (custody, parenting time, residency, parentage, visitation, placement, etc.) concerning children.

HB 2649: designates the little bluestem as the official grass of Kansas.

SB 409: authorizes the Kansas Secretary of Transportation to establish and implement a passenger rail service program.

HB 2552: enacts the Midwest Interstate Passenger Rail Compact that promotes improvements to intercity passenger rail service in a 12-state region. This law facilitates long-range plans for high-speed rail passenger service.

HB 2445: this bill promotes and facilitates communication, cooperation and collaboration between military installations and any municipality adjacent to or surrounding the military base.

HB 2551: authorizes the Department of Commerce to distribute ‘recovery zone’ and ‘energy conservation’ bonds to counties and large municipalities. The energy conservation bonds can be used for capital expenditures for energy reduction purposes, research facilities for alternative energy sources and public education campaigns to promote energy efficiency.

HB 2652: this is the Kelsey Smith Act that requires wireless telecommunications carriers to submit emergency contact information annually to the Kansas Bureau of Investigation.

SB 382: The Kansas Housing Loan Deposit Program in the State Treasurers Office is amended to include multi-family dwellings, allow the rehabilitation of existing houses, increase the value of eligible housing and make this program statewide after January 1, 2011.

Sub. for HB 2517: creates a requirement after July 1, 2011, to establish a domestic violence designation in a criminal case by the court if the trier of fact determines that a defendant committed a domestic violence offense. This law allows, but does not require, a court to place a ‘DV’ designation on the criminal case number uniquely identifying the case.

Senate Sub. for HB 2585: creates a journalist’s privilege with regard to certain disclosures of information commonly referred to as ‘sh

#13: April 10, 2010

CAMPAIGN OPENNESS? A SLIVER OF HOPE.
Senate Substitute for HB2079

Heard from insiders—the hope of putting judicial retention votes under the Campaign Finance Act may not be dead yet! There is even a slim chance to include independent advocacy ad sponsors under it, too, thereby making it transparent as to who is funding the issue ads and the pro or con judicial retention ads.

I was told that estimates show there are enough votes in BOTH the Senate and the House to pass both parts of Senate Sub for House Bill 2079 but that it is the Senate Majority Leader and maybe the Speaker of the House who are being too cautious and don’t want to bring it up because it might be controversial. Because it has very little if any impact on the budget stalemate, this should be one that all legislators would jump for—unless they like having the names of their contributors kept secret “for some reason”.

The Kansas Equality Coalition puts it this way:
Right now, anyone may contribute unlimited amounts to Kansas Supreme
Court Justice retention elections or to oppose the retention. Without the oversight and disclosure provided by the Kansas Campaign Finance Act, unlimited, anonymous funds from any source can, and will, pour into campaigns for and against judges and justices who stand for retention.

• There are no disclosure requirements for reporting of any campaign contributions made to candidate committees.
• Anyone may contribute unreportable money directly to a justice, judge, or magistrate standing for retention.
• There are no “paid for by” attribution requirements for any communications regarding a retention election.
• This complete lack of regulation and oversight applies not only to incumbent Supreme Court justices, but also any and all judges and magistrates who must stand for retention election.

I want to remind you of a West Virginia election for Chief Justice Elliott Maynard for the state Supreme Court The state Chamber of Commerce and the West Virginia Medical Association spent nearly $1 million promoting his candidacy. But perhaps worst of all, photos surfaced of him on a French Riviera vacations with the head of Massey Corp, coal mining giant that appealed at least 37 of the 50 citations for serious safety violations that it received last year, alone. Massey owns the coal mine that just had all those violations and the worst mine tragedy in decades --the explosion that caused the death of 29 miners in Montcoal, West Virginia Supreme Court Justice Brent D. Benjamin also refused to recuse himself, even though the Massey president had spent over $3 million on “independent” television advertisements supporting Justice Benjamin’s election campaign. Surprise! The W V court decided, 3 to 2, in favor of Massey Energy Corp. in a $50 million case. Last year the US Supreme Court ruled that judges must disqualify themselves from cases involving people who spent unusually large sums to elect them and it sent the case back – merely to be re-decided. See what money can do to the judicial system?

LWV ACTION ALERT — Contact your Ks. Senators and Representatives. Tell them openness in campaigns is basic to democracy. Tell them to demand a floor vote on Senate Sub for HB2079 to put the judicial retention votes under the Campaign Finance Act, including as well, the pro, con AND all independent issue ad groups (so called 527 groups like the Swift Boat group of six years ago.)

*BUDGET AND TAX DECISIONS
Paul Johnson – April 8, 2010

The Kansas Legislature will reconvene on April 28 for a veto session that has 13 days budgeted. The deficit picture has improved a bit. The estimated budget deficit for FY 2011 has declined from $477 million to $433 million. March tax receipts were $13 million higher than projected but overall the receipts are down $93 million from the consensus revenue estimates made last November. Kansas’ unemployment has come down from 8% to 6.8%. Filings for unemployment are trending downwards.

The Governor has stated he wants no further cuts in education, public safety and social services. How far will he compromise on these commitments in the final State budget? Will he use his veto pen to force the Kansas Legislature to find more revenues instead of deeper budget cuts? If the veto session ends in a budgetary impasse, will the Governor be forced to call the Kansas Legislature back to Topeka for a special session this summer? The consensus revenue estimates on April 16 will have a major impact on the veto session.

The Governor has stated that more lawmakers are supporting revenue increases but the problem is that there is little agreement on which taxes or fees to increase. The Governor wants Kansas to raised cigarette taxes to the national average that would generate $73 million in new revenues. Missouri has the second lowest cigarette tax in the nation so lawmakers in the northeast and the southeast are concerned about Kansans going to Missouri to buy their smokes and other items. Kansas’ income tax brackets top out $60,000. A new income tax bracket of $200,000 could generate tens of millions in new revenues. In the final analysis, a compromise position might be to raise revenues from a number of sources (income, sales, property, sales tax exemptions, property tax exemptions) and try and make this package of increases as low as possible for any one tax.

HEALTH CARE UPDATE

Just a reminder that the best reporting on health care can be found at the Kansas Health Institute www.khi.org. Kansas Insurance Commissioner Sandy Praeger has fully supported the federal health care legislation. One immediate result will be funding from the federal government to create a high-risk health care insurance fund for those unable to find health insurance now. Kansas has such a high-risk pool now but the federal mandates will necessitate a second high-risk pool that will be lower cost. There will be expanded federal funds for the 34 safety net clinics in Kansas. By 2014, the income eligibility for Medicaid for parents and single adults will increase from 40% of the federal poverty line in Kansas to 133%. This may add around 60,000 adults to Medicaid in Kansas. The federal government will fund the cost of this expansion.

The “Freedom from Health Care Amendment” to the Ks. Constitution died and AG Six has refused to sign onto the law suit by 14 other states. Governor Parkinson agrees with him saying at such a tight budget time let others take the case forward if they want as he thinks it will be found not constitutional. (US Constitution says all federal laws, treaties, etc are the supreme law of the land.)

WIND ENERGY UPDATE

Kansas is in the final stages of seeking approval for two major electric power lines. One line will run from Spearville in Western Kansas to Wichita so the wind energy can be sent back to the population centers around Wichita and the northeast. The second line will run north from Spearville to Nebraska. With seven wind farms and now over 1,000 megawatts (MW) of wind power, Kansas is approaching the limit on how much wind power can be used just by Kansans. (Kansas has a total of 10,000 MWs of electrical generation with 72% coal based.)

Kansas is now the 14th state in the country with over 1,000 MW’s of wind energy. Kansas has the second largest wind resource in the nation. The Federal Energy Regulatory Commission will have to approve these power line requests. The Southwest Power Pool - that regionally regulates the electric power grid - has adopted a new financing plan so the cost of constructing these lines are equitably shared by all involved electric utilities.

#12: April 6, 2010

As for issues that the League stands for we did not have many victories this Legislative session.

• The abolition of the death penalty lost by 1 vote.
• Putting the judiciary retention voting under the Campaign Finance Law lost by 3 votes along with putting independent campaign ads under it to make public who donates to either.
• The amendment to the state constitution to eliminate language barring voting to “mentally ill” did not pass.
• School budgets and programs for handicapped, elderly, poor and especially those on Medicaid were cut severely and the budget is not yet even balanced.
• The League tried to get a small surtax added to help balance the budget but even the $.01 sales tax did not get passed to help the crisis.
• Money for courts have been cut and one Ks. Court of Appeals judgeship stands empty either because of the budget or because some are playing politics with judicial appointments trying to leave it open for the next governor to appoint. But court employees are on four day weeks for the near future.
• None of the tax exemptions that Sec. of Revenue Joan Wagnon told us about was eliminated and even new ones were added further unbalancing the state budget.
  

One light at the end of the tunnel: The proposed state amendment to try to say Kansas could nullify the Federal Health Care Act did NOT pass.

BUDGETARY HEAVY LIFTING
Paul Johnson

The Kansas Legislature recessed on March 31 without passing a state budget. This has never happened in the past but Kansas has not had such a deep recession since the 1930s.

The primary reason given for not passing a budget is that the Legislature needs the latest revenue estimates to understand how deep the deficit is. The consensus revenue estimators will meet on April 16 to develop the revenue projections for the next 18 months. Kansas also has a process of developing projections for human service caseloads such as nursing homes, regular medical care, foster care, mental health services and public assistance roles. To this point Kansas lawmakers have automatically funded these increases. Most of these programs are federally mandated so Kansas would have to change these programs - such as lowering income eligibility – to reduce the program costs. These human service caseloads will be developed on April 14.

There is confusion on how to proceed to develop a state budget. The President of the Senate and the Minority leader have advocated for a combined state budget that has tax increases in one bill. The Attorney General issued an opinion that this process of a combined budget and tax increases would be legal. The chair of the Kansas Senate Ways & Means committee – Senator Jay Emler – disagrees with the Attorney General and for now will not develop such a combined budget in his committee. The veto session will formally begin on April 28 but the Senate Ways & Means committee and the House Appropriations committee will reconvene on April 19 to begin budget deliberations with the new revenue and human service caseload numbers. It seems that the Kansas Legislative leadership have saved enough funding for a 13-day veto session. The Governor has stated that he cannot support any further cuts to education, social services or public safety and will veto such reductions. It will take several attempts to find that right balance of budget reductions and revenue increases.

NURSING HOME BED TAX

Substitute for Substitute House Bill 2320 would levy a private pay nursing home bed tax of $1,325 per year. This tax would generate $30 million dollars that would than be matched with $56 million in federal Medicaid funding. These funds would be used to reverse the 10% Medicaid provider reduction that is now in place. 90% of the 345 nursing homes would receive more funds under this proposal. The Kansas Senate debated this proposal on the Senate floor and sent it back on a vote of 21 to 13 to the Senate Ways & Means committee for further deliberation. The future of this legislation is very unclear. If the nursing home industry wants a restoration of the 10% Medicaid cut this tax may be necessary.

#11: March 26, 2010

DEAD FOR NOVEMBER??? APPARENTLY KS. SENATE INTENDS TO GO HOME MARCH 31 WITHOUT PUTTING THE JUDGE RETENTION VOTES UNDER THE CAMPAIGN FINANCE LAW.

The recent US Supreme Court decision that corporations can give unlimited funds in election campaigns, coupled with this deliberate Ks. Senate decision NOT to cover the judicial retention vote under the openness of the Campaign Finance Law (with individual donation limits and reports of donor names) in COMING IN AN ELECTION NEAR YOU—THE BEST JUDICIAL SELECTION MONEY CAN BUY ???

CHILDREN'S ISSUE SCIF Funding. The Senate Ways and Means Committee and House Appropriations Committee have each passed their 2011 budgets, and both bills are awaiting debate by their respective chambers. The Senate budget bill is Senate Substitute for HB 2631 and the House budget bill is House Substitute for SB 73. The Senate bill includes a $12 million cut to the Children’s Initiatives Fund (CIF) in the form of a 24 percent across-the-board cut to all CIF programs administered by SRS and the Department of Education. The House bill calls for $7 million to be cut from existing CIF programs, including a $5 million cut from the Early Childhood Block Grant and a $2 million cut from Early Head Start. Debate on the budget bills is not anticipated until lawmakers return for the Veto Session at the end of April.

Infant Mortality. The infant mortality language, which would give KDHE the authority to collect more comprehensive data on infant deaths in Kansas, was amended into SB 488 Wed. on the Senate floor. The Senate passed the bill 40-0.

Healthwave. With no movement on either the House or Senate budgets this week, there is no new news regarding HealthWave. Both budget bills call for increases in Healthwave premiums, with the House budget proposing larger increases than the Senate version.

Child Care. SB 447, which earlier passed through the Senate, received a hearing last Friday in the House Health and Human Services committee. The committee did not work the bill and it has since been re-referred to the House Social Services Budget committee.

BUDGETARY TIMETABLE
Paul Johnson – March 25, 2010

In normal years, the Kansas Senate and Kansas House would pass their respective state budgets for the following fiscal year. These two budgets would be reconciled in a conference committee and passed before the Kansas Legislature took their first recess. They would reconvene during the veto session and develop an Omnibus bill to finish the state budget. This is not a normal year

It is very likely that the entire state budget for FY 2011 will be put off until the veto session starts on April 28. There are some very difficult decisions on budget cuts and revenue increases to be made. The final budgetary target will be set after the consensus revenue experts determine projections on April 15.

IN THE SENATE -- DO NOTHING ….UNTIL YOU HAVE TO AT THE VETO SESSION

Rumor has it that the Kansas Senate will not debate the state budget until they return for the veto session. The Kansas Senate Ways & Means Committee has completed their work but the budget cuts were only $100 million from social and health services while assuming $350 million in new revenues.

NOTE > SALE OF KU MED CENTER? TURNPIKE? TO BALANCE BUDGET

Apparently Senators Masterson and Abrams will bring a budget bill to the Senate floor that has no tax increases and balances the budget with the sales and ‘lease back’ of certain state assets. (It is unclear what assets are being proposed – Kansas Turnpike, Kansas Med-Center, state office buildings?)

The Senate Taxation committee voted down every new tax on

• tobacco,
• alcohol,
• soda pop and
• raising the overall sales tax

Senate leadership has pulled that tax bill from the Taxation committee and may put it in the Ways & Means committee. The strategy may be to put revenue increases into the budget bill so there will be one vote on the entire package.

FOOD SALES TAX
Senator Les Donovan – chair of the Senate Taxation committee proposed:

• a 7/10ths increase in the sales tax and
• after 3 years the sales tax on food would be removed but not the .7 sales tax increase. Kansas has a food sales tax rebate for families under $25,000
• This rebate now costs $45 million so those savings would partially offset the entire elimination of the food sales tax.
• Kansas along with several states are part of a streamlined sales tax compact.
  • This compact assists with sales tax on certain interstate sales and nets Kansas $35 million a year.
  • This compact prohibits states from charging partial sales tax so Kansas could not take the existing 5.3% state sales tax off food but allow cities and counties the ability to levy their respective local sales tax.
    o Missouri is not part of the compact and has a lower sales tax on food. Nebraska has no food sales tax.

AND IN THE HOUSE

Right now it seems that the Kansas House leadership will bring their budget to the Kansas House floor on Monday March 29. This budget plan:

• has no tax increases,
• cuts education by refusing to replace federal stimulus funds and
• assumes that the federal government will continue the enhanced funding of Medicaid

POLITICAL POSTURING?

• In earlier Kansas House floor action on a tax bill to delete certain sales tax exemptions, 67 members voted to delay final action on the tax bill till May 3 in the midst of the veto session.
• Conservatives can posture for the House leadership bill knowing full well that the moderates and the Democrats will prevail with a balanced budget of budget reductions and tax increases.
• The Governor has stated he will veto any further cuts of education, public safety or social services.

There will be numerous budgets proposed, debated and defeated before a final agreement is found between 21 Senators, 63 Representatives and the Governor. —BUT NOT UNTIL FORCED TO AT THE APRIL 28 RETURN TO DEAL WITH ANY OF GOVERNOR PARKINSON’S VETOS.

#9 & 10: March 23, 2010

The regular session will end no later than April 6 and the veto session will start April 28.

PROPOSED LIMIT TO CONTRIBUTIONS FOR RETENTION CAMPAIGNS OF HIGH JUDGES

The bill to apply campaign finance law to retention elections was substituted into a House bill and passed to the full Senate. The contribution limit was set at $2,000. S.B. 563 was sent to the Senate for a vote. How interesting that it was Sen. Wagle, the conservative anti-abortion advocate, who made the motion to send to the Senate. It will be wonderful to have retention elections spending limits covered by the KS Campaign Finance Act but without spending and disclosure requirements on issue ads, money will still flow in from the anti-Beier groups (and other justices up for retention vote) The names of contributors will be available five days before the election and each day until the election.

At League Day at the Capital on March 4, 2010, our speaker from the Ks. Bar Assoc., Joseph Molina, said that the Fire Beier Campaign by right-to-life groups had just been the first of a campaign for not retaining any of the Supreme Court justices (4) or judges on the Court of Appeals (looking toward the expected governorship of Brownback, they want to get rid of Sebelius appointees and give him lots of openings to fill.). They had just hit Beier first because of the convenience of her name rhyming with Fire.

NO STATE’S RIGHTS AMENDMENT TO BLOCK FED. HEALTH CARE PLAN?

Dead is the proposed rewrite of the state constitution stop Kansans from being required to get health insurance from the federal health reform/ insurance bill.

KANSAS TAX REVENUES, PART III: REVIEWING PROPERTY TAX EXEMPTIONS

This final report by the Legislative Division of Post Audit dealt with this audit question: Does Kansas have property tax exemptions that potentially should be considered for elimination? The Kansas Constitution requires certain property tax exemptions and allows the Legislature and local government to exempt additional property. The number of property tax exemptions has increased from 42 in 1985 to 100 today. Tax revenues based on residential real estate have grown faster than any of the other major property category. This audit is a wonderful, historical overview of property tax in Kansas. Unfortunately, a lack of data makes it almost impossible for the State to determine the loss in tax revenues from certain key categories such as education, government and business machinery. There are thoughtful recommendations on tax policy going forward.

However, the House at this point only sees cuts and more cuts as a way to balance the budget. They have refused to look at either raising taxes by a small income tax surtax or by the governor’s suggested $.01 sales tax increase for 3 years. There is a need to make up $400 million for next year’s budget and their plan thus far is to do it by more cuts to services. Of really great concern is how to come up with $71 million that the state is short for the remaining 3 months in THIS fiscal year (tax revenue coming in has been down further than expected)

It says this at the site for the audit www.kslegislature.org/postaudit:
“The Legislative Division of Post Audit is the audit agency of Kansas government. The programs and activities of State government now cost more than $13 billion a year. As legislators and administrators try increasingly to allocate tax dollars effectively and make government work more efficiently, they need information to evaluate the work of governmental agencies. The audit work performed by Legislative Post Audit helps provide that information”

BUDGETARY BATTLES SHARPEN
By Paul Johnson and Kansas Action for Children – March 19, 2010

The budgetary battles are now sharpening. The Kansas Senate decided to cut the Governor’s FY 2011 budget by $100 million and find new revenues of $360 million to fill the projected budgetary deficit of $460 million.

The Kansas House leadership has decided the budgetary deficit can be solved through budgetary cuts that reduce K-12 education funding by over $200 million.
As well as cuts to other programs for children—cuts that would significantly impact the following programs:
Early Childhood Block Grants
Parents As Teachers
Smart Start Kansas
Early Head Start
Pre-K
Children’s Mental Health Initiative
Family Centered System of Care
Child Care Services and Child Care Quality Initiative
Family Preservation

Numerous tax proposals have been proposed to cover a portion of the deficit.
Some in the legislature hope that Congress will fund additional Medicaid spending, thus, saving Kansas $130 million in state general funds. It is possible that a second stimulus package or jobs bill will provide more federal spending for highways thus freeing up some additional state dollars.

It is doubtful the Kansas Legislature will pass the 2011 budget until they reconvene on April 28 and the new April 15 consensus revenue estimates have been factored into this budgetary merry-go-round.

As reported last week, the Kansas Senate Ways & Means committee voted out a 2011 budget that cut social services by $100 million and assumed $350 million in new revenues. Chairman of Ways & Means, Senator Jay Emler made the decision that further cuts to education would be vetoed by the Governor and there were not 27 votes in the Senate to override such a veto. Sen. Emler also decided that further public safety cuts to corrections could mean the closing of a prison thus threatening public safety. That left social services and medical programs to bear the brunt of these $100 million in cuts. For the Kansas Department of Aging, they were ordered to cut 5% - $8.5 million – from their budget. This will mean a 20% reduction – 873 clients - in the state funded Senior Care Act that provides homecare services. It will also mean a 25% reduction – 549,674 fewer meals – in senior nutrition programs. The Senate Ways & Means subcommittees - that made these draconian cuts to SRS, KHPA and Aging – hope that these cuts will propel the effort to find new revenues and reverse these reductions.

The Kansas House has taken a different approach. While the Senate cut the SRS budget by $42 million in state funds, the Kansas House Social Services Budget committee reduced SRS by only $12.5 million. The Kansas House leadership has decided that education should share in balancing the 2011 budget. The House plan does not replace the federal stimulus funds for K-12 education and holds the funding level from 2010 to 2011 thus saving $172 million. $50 million in state funds will not be transferred to the Highway fund. A 5% pay suspension for most state workers will be enacted by closing state offices at 3pm on Fridays and a hiring freeze will be put in place for most state agencies. Most state agencies will face another 1% across the board cut and overtime banned unless approved by the Governor or Chief Justice. A new nursing home provider tax for private pay residents will draw down an additional $27 million in federal funds for Kansas. The House plan assumes that Congress will increase Medicaid funding to Kansas by $130 million. All in all these changes will give Kansas an ending balance of $302 million on June 30, 2011.

The battle is now on. It is anyone’s guess whether this new Kansas House plan has enough support to pass the House or the Senate and certainly not a Governor’s veto. The discussions on new revenues will continue. The soda pop tax – one penny for each teaspoon of sugar – would raise $90 million. The Governor’s tobacco tax would raise $73 million. A one-cent sales tax increase brings in $370 million. A doubling of the liquor tax nets a $22 million increase. Repealing the sales tax exemption on residential utilities raises $130 million. Some lawmakers want to discuss an increase in the income tax. The statewide mill levy for public schools is now 20 mills down from 35 mills in 1992. A 5-mill increase has been proposed. Different combinations of these revenue proposals will be tested to see what plan has the best chance to pass.

CHILD CARE LEGISALTION

Substitute for Senate Bill 447 would create new law and amend current law concerning the supervision, licensing and inspection of child care facilities. This law would eliminate the category of registered ‘family day care home’ and replace it with licensed ‘family child care home’. This new category would be required to be inspected at least once every 15 months and would begin on January 1, 2011. Existing ‘family day care homes’ would file a self-evaluation report annually to the Kansas Department of Health and Environment. This annual self-evaluation report would expire on July 1, 2013 and KDH&E inspections would be required. This legislation was a substitute bill for House Bill 2221 so both chambers have debated and passed this idea.

WATER POLICY UPDATE

Senate Bill 510 was proposed by the Kansas Department of Agriculture to list conservation as a beneficial use of water. This law would move Kansas away from existing water law that is ‘use it or lose it’ in regards to water rights. This bill was heard before the Senate Natural Resources committee. The Kansas Livestock Association along with the groundwater districts supported this bill. The sole opposition came from the Kansas Farm Bureau. Without complete agreement from all parties, Senator Carolyn McGinn – chair of this committee – refused to move this legislation.

#8: March 3, 2010

PROPOSED LIMIT TO CONTRIBUTIONS FOR RETENTION CAMPAIGNS OF HIGH JUDGES

Kansas senators have drafted proposals to regulate campaigns to oust or retain members of the state’s appellate courts. Alternative proposals were introduced Wednesday in two Senate committees. Interest in such legislation comes as abortion opponents are waging a “Fire Beier” campaign against Supreme Court Justice Carol Beier. Appellate court members are appointed by the governor but must stand for retention. But the state ethics commission said last week that those elections aren’t covered by Kansas campaign finance laws.
Both proposals would limit contributions to Supreme Court justices and Court of Appeal judges’ retention campaigns to $2,000. Both their campaign committees and groups seeking to oust them would have to file reports on their activities (but the opponent groups would not be limited to $2000 contributions).

AMEND KS CONSTITUTION TO CUT KS OUT OF FED HEALTH CARE PLAN?

Sponsors said a proposed rewrite of the state constitution was needed to let the federal government know Kansans don't want to be told they must buy health insurance. But opponents say it was a plan created by the health insurance industry to preserve a failed status quo. On a 12-9, party-line vote, the House Health and Human Services Committee voted to recommend House Concurrent Resolution 5032 favorable for passage. The measure could now go to the full House. It would need two-thirds approval there and in the Senate before being added to a statewide ballot to be decided by voters. An identical measure was passed without recommendation earlier this session by the Senate Public Health and Welfare Committee but remains lodged in the Senate Judiciary Committee.

CAMPAIGN FINANCE TRANSPARENCY DEAD

Senate Bill No. 418 would have facilitated greater transparency in campaign electioneering. We encouraged Senators to support this legislation, (Kay Hale testified for the League) but it was juggled between committees and never went to the floor.

TAX TRANSPARENCY

SB 559 was introduced Feb23 in the Senate Federal and State Affairs committee. The bill would add information about the state’s indirect expenditures to KanView, the state’s transparency Web site. This bill will provide Kansas taxpayers with a more complete picture of Kansas expenditures

BUDGETARY CHALLENGES By Paul Johnson and others

The heavy lifting is now starting to develop a FY 2011 budget. The Kansas House Social Services Budget committee is now considering the Kansas Department of Social and Rehabilitation Services (SRS) budget. The SRS budget will be followed by the Kansas Health Policy Authority’s (KHPA) budget and the Kansas Department of Aging’s budget. The Kansas Senate Ways and Means subcommittee on the Kansas Department of Aging starts on March 3 while the Ways and Means subcommittee on SRS will start the week of March 8. These budget deliberations are happening under a budgetary deficit shadow of $440 million dollars. The Governor developed these budgets assuming a $410 million increase in revenues via increases in the sales tax and the tobacco tax.

The Kansas House leadership has ruled out any new revenue increases. The Kansas House Taxation committee is now ready to work the sales tax exemption bill. This bill would change the sales tax exemptions for many non-profits and the sales tax exemption on residential utility service. It is unlikely this Taxation committee will eliminate many sales tax exemptions especially the one on residential utilities. The Kansas Senate President has stated that there is not $400 million in budget cuts possible and that a blend of revenue increases (certainly the tobacco tax) and targeted budget cuts will have to be found. The passage of the no smoking bill by the Kansas House may show the power of the moderates and Democrats to pass a tobacco tax. The key budget item in SRS and KHPA will be the 10% cut in rates to Medicaid providers. The Governor reinstated this cut in his 2011 budget. The 10% cut results in saving $70 million in state funds while relinquishing $150 million in federal matching funds.

CHILD WELFARE HEARINGS

These hearings have been rescheduled for March 2, 3, 4 and 8. The featured speakers for March 2 will be Sheri Steisel – federal affairs counsel at the National Conference of State Legislatures (NCSL) and Nina Mbenge – director of children and families programs at NCSL. Judges, attorneys and volunteers will testify on March 2 while parents, grandparents and foster care contractors will testify on March 3. March 8 will be reserved for committee discussion on three bills: House Bill 2461 would prohibit the state from renewing its foster care, adoption and family preservation contracts; House Bill 2511 would allow SRS to fund grandparents to care for grandchildren who have been removed from their parents’ custody; House Bill 2512 would mandate the courts review of SRS’s placement decisions of foster care children. The courts would have to approve SRS’s placement for a foster care child to be moved.

Kansas completely privatized its child-welfare programs in 1996. Kansas is the only state that has a complete statewide privatized child welfare system. SRS still investigates reports of child abuse and neglect (over 56,000 such reports last year) and monitors the progress of the 5,000 children in this privatized foster care system. Several lawmakers are very critical of this system and the authority of the private contractors and SRS over the rights of parents and grandparents. For complete coverage of these hearings, read the reporting of Dave Ranney at the Kansas Health Institute’s website www.khi.org.

Child Care. The Senate Public Health and Welfare committee Tuesday met on SB 447, a bill that would call for all child care facilities in Kansas to be inspected and would strengthen supervision requirements in child care facilities. For a second time, they failed to act. In the meantime, opponents of this legislation have been busy spreading misinformation about the intent of SB 447 and the clock is ticking on this year’s legislative calendar.

Infant Mortality. The language originally contained in SB 448, which would allow for more comprehensive data to be collected regarding infant mortalities in Kansas, was amended Wednesday into SB 488.

HealthWave. The Social Services Budget committee next week will discuss the Kansas Health Policy Authority’s budget. This budget includes funding for HealthWave, the state children’s health insurance program that provides more than 170,000 Kansas kids with affordable health coverage. KAC will be monitoring these deliberations to ensure adequate funding for children’s health coverage.

Afterschool Funding. The Senate Ways and Means committee voted this week to cut state funding for afterschool programs. If this action is not reversed in future deliberations, it will result in the elimination of afterschool grants to school districts across the state. The full Senate will consider this cut next month as part of the education budget.

SB 499, which is aimed at improving school food offerings, scheduled for hearing Mar 3.

A MONOPOLY IN MEAT? HOUSE RESOLUTION No. 6018
by Committee on Agriculture and Natural Resources

Supporting a review, investigation and enforcement of the antitrust laws in relation to the marketing opportunities available to independent livestock producers. This resolution states that the companies controlling beef, pork and poultry have a protein monopoly.

The concern here is that these companies can control beef and pork prices by manipulating poultry prices. Within this resolution are the facts that 1) 88% of beef is controlled by four major companies: Tyson Foods, Cargill, JBS and National Beef, 2) 66% of pork is controlled by four major packers: Tyson Foods, Cargill, JBS and Smithfield Foods 3) 52% of poultry broilers controlled by two companies: Tyson Foods and JBS 4) 55% of turkey is controlled by four companies: Butterball LLC, Hormel Foods, Cargill and Sara Lee.

#7: February 23, 2010

Last Saturday was “Turn around Day”. It marked the half-way point of the 2010 legislative session – a deadline for almost all bills to pass out of the first chamber - and both the Senate and House are working long hours.

The Death Penalty was not abolished this year.
The Senate floor debate on SB 375 abolishing the death penalty in the State senate was very good and amazingly bi-partisan. But a tie vote fails; it was 20 to 20.

The Ks League and the Ks. Coalition Against the Death Penalty launched what we hoped was a really effective lobbying effort. The League testimony focused on the extreme cost difference in death penalty trials vs. non-death trials and how this is not an effective use of tax funds when citizens can be kept safe by sentences of life without parole. The Senate committee did vote it out 7 to 4 to be debated on the Senate floor. The floor debate was very good. . Senator McGinn reminded lawmakers that they’ve voted to slash funds for social service programs, from agencies that help poor woman have healthy babies. The Senators spoke of morals, meaning of justice and were down right civil with the exchange. AND there were Dems and Repub. on both sides!

There were Senators we thought would vote to abolish who did not. With a tie vote this year and state funds that will still be tight next year maybe we can win next year.

About School Dollars
HB2222 is the rescission (budget) bill for the current fiscal year. However, current revenues are still short to fund this budget. So if revenues don't pick up there could be additional cuts to schools THIS year. (PASSED BOTH HOUSES)

HB2280 dealing with capital outlay. This bill has many components, some good and some very, very bad. It would reduce state aid assistance to those districts that receive it for capital outlay and improvements. The good is it would give some districts the flexibility to transfer back any general funds they put in capital outlay in school year 08/09 back to their contingency reserve in 10/11.(PASSED IN HOUSE)

HB2410 reduces at-risk dollars to schools. This bill would require a second count date for at-risk students, and any schools where parents have not provided the proper paperwork would have their at-risk funding reduced. Now of course the schools would continue to provide at-risk programs for students, just without the money! The department of education estimated that this would result in a savings to the state of about $3.2million dollars. This legislation was based on a Legislative Post Audit Study from 2006. It is important to note that the same study indicated that there are approximately 6900 students eligible for free and reduced lunch in Kansas that never apply because of the stigma or worries about confidentiality. (PASSED IN HOUSE)

SB355 was the bill that would have stripped retired teachers who have returned to the classroom (many because of shortages in their specialty) of the continuing contract right. Which meant that districts could non-renew their contracts as late as the day before school started. (It was defeated in the Senate on final action.)

SB359 is the catastrophic aid bill that has been controversial. It was introduced because Shawnee Mission school district went from 0 claims to over 300 in one school year. What SM did was certainly legal, but other districts and legislators claim it was not the intent of the law and would reduce the special education funds available to all districts. SM claimed this was necessary for them because of the disparity in the funding of excess costs which should be 92%. Shawnee Mission is only receiving 65% of excess costs and about one-third of districts receive over 100% of excess costs. The bill was recommended, then reconsidered and re-referred back to committee. At issue is whether or not it will take effect this school year. This is a prime example of why funding schools based on the LPA cost study of 2006 would have been appropriate. That study was done because of the Supreme Court Case and then instead of enacting it, it was set on a shelf for legislators to pick and choose portions to enact and fund. Might be exactly why another court case is on the horizon!

TAX POLICY -- LEGISLATIVE POST AUDITS
February 19, 2010
by Paul Johnson

The Kansas Legislative Division of Post Audit has just issued two timely performance audit reports on: Reviewing Sales Tax Exemptions and Reviewing Tax Credits. These reports are at <http://kslegislature.org/postaudit>. These reports come after several days of sales tax exemption discussions before the Kansas House Taxation Committee. Tax expenditures may finally be coming under the same scrutiny and detail that is given to budgetary expenditures.

The level of detail in these audits is impressive. One can see in detail how tax credits, sales tax exemptions and property tax exemptions have increased especially in the last 12 years. From 1985 to 2009, tax credits increased from 10 to 51 while sales tax exemptions increased from 30 to almost 100 and property tax exemptions increased from 43 to more than 100. (Property tax exemptions were not detailed in these two reports nor is Kansas auditing the total tax exemptions of income, property and sales given to particular organizations.) The tax considerations divide the preferences into: 1) requirements of the State Constitution, 2) requirements of federal law, 3) necessary exemptions from taxation and 4) public policy tax exemptions. Detailed charts show each tax credit, specific purpose, how often used and whether other states offer it.

Sales tax exemptions have grown even faster than tax credits. The audit states: Sales tax exemptions in several areas provide unequal treatment for similar types of services, including $2.2 million in exemptions granted to 44 specifically named organizations. Kansas also exempts some non-profit organizations from paying sales tax, but not for their for-profit counterparts…The Legislature hasn’t formally adopted a public policy goal regarding the types of organizations, services, or activities it wants to exempt from sales tax. This audit lists each sales tax exemption, the cost to the state, number of beneficiaries and a comparison of these exemptions to other states. The state sales tax is now 5.3% and 716 local jurisdictions in Kansas levy local sales tax averaging about 1.5%. 74 of 168 potentially taxable services have a sales tax now. (Certain services not taxed in Kansas include investment counseling services, limousine services and professional services by accountants, attorneys or architects.)

The legislative hearings on sales tax exemptions along with these audits will be part of the final discussions to finish the Fiscal Year 2011 budget. The Governor has stated that the significant budgetary discussions will come late April after the Consensus Revenue estimators have developed their latest 18 month revenue projections. The Kansas House Taxation committee has already voted down a resolution that would have placed a 3-year moratorium on new tax exemptions.

FOOD ISSUES

The Kansas Women, Infants and Children supplemental feeding program (WIC) has changed the basic food package to include fruits and vegetables for the 77,000 recipients. These fruits and vegetables can be purchased at grocery stores but not at farmers markets…Kansas has 84 farmers markets and 10 of these farmers markets are wired to receive the Vision Card (electronic food stamps). A complete list of these farmers markets can be viewed at the website www.ksfarmersmarkets.org. Unless new revenues are found, it is unlikely any additional farmers markets will be wired for the Vision Card…The First Lady Michelle Obama has initiated a ‘Let’s Move’ campaign to combat childhood obesity. It is estimated that one-third of this nation’s children are either overweight or obese. As part of this campaign, a Food Environment Atlas has been developed. This atlas lists by county the number of grocery stores and restaurants, food assistance, food insecurity, food prices, health, local foods, physical activity levels and socioeconomic characteristics. This atlas can be viewed at http://maps.ers.usda.gov/FoodAtlas/

ELECTION BILLS

League and the mental health coalition to which we belong has strongly supported this: Senate Concurrent Resolution 1622 is a constitutional amendment to delete mental illness as a disqualification to vote. SCR 1622 passed the Senate 38 to 1 and is now in the Kansas House Federal and States Affairs committee. If this concurrent resolution passes the Kansas House by a two-thirds vote, it will be voted on this coming November.

Senate Bill 421 would change the penalty for voting without being qualified from a class A misdemeanor to a level 9 non-person felony. This bill passed the Senate 39 to 0 and is now in the Kansas House Elections committee. This bill was requested by the Kansas Secretary of State and would bring the penalty for illegal voting in line with penalties for other election-related offenses. [Is this just political grandstanding? Has there been a rash of fake voters that we don’t know about]

Senate Bill 426 ‘would expand voting opportunities for certain absentee federal services voters and military personnel or their family members. Overseas voters would be allowed to vote a full ballot at all elections; apply for, receive and return their ballots by electronic means; and vote a write-in ballot, if needed.’ (Supplemental Note On Senate Bill NO. 426). The Secretary of State requested this bill to comply with two federal laws. SB 426 passed the Kansas Senate 39 to 0 on February 2 and is now in the Kansas House Elections committee...[ The LWVUS opposes any voting system that does not have a paper trial so if this electronic voting means would be fax LWV agrees with it but online voting is NOT secure.]

#6: TAX POLICY DEBATE
February 12, 2010
by Paul Johnson

The Kansas tax policy debate has now moved to a full debate over sales tax exemptions. House Bill 2549 will have four days of hearings. The core of this bill is to repeal sales tax exemptions for non-profit, charitable, religious and benevolent organizations as well as the exemption for residential utility bills. The silver lining to this discussion is that tax policy may finally be held to a similar fiscal standard as that for budgetary decisions. Kansas tax policy has been ad hoc at best but tough economic times are forcing a different perspective.

Kansas has granted sales tax exemptions in different ways. The number of sales tax exemptions has increased from 30 in 1986 to 96 today. Exempt sales have grown from $3 billion to $4.2 billion. 20 years ago the tax policy was to exempt purchases so when a non-profit bought office supplies there would be no sales tax. Over the years, sales by non-profits were granted sales tax relief so there is no sales tax paid on Girl Scout cookies. Various legislators would champion the cause of a non-profit in their district and request a sales tax exemption for a particular organization like a foster care provider. There are several such organizations listed in the statue books. Sales tax exemptions were also extended to certain listed services such as recreational activities.

Testimony was given on the unfairness of certain non-profits being sales tax exempt but competing against private firms that must pay sales tax. One obvious example is the non-profit status of the YMCA and YWCA’s that are sales tax exempt but not the private health/fitness clubs. There are approximately 25,000 non-profits in Kansas and 8,000 of them have sales tax exemptions. In assessing the total tax picture, many of these non-profits pay no property tax as well as being exempt from sales tax. This gives these non-profits even more advantage over their private competitors. Legislation has been introduced to place a three-year moratorium on any new sales tax exemptions while a formal policy can be designed and existing exemptions examined.

Several groups testified that tax exemptions for sales or income or property should be considered tax expenditures and treated the same way as budgetary expenditures. State revenues have declined for four years (first time ever in Kansas history) and budgets have been reduced repeatedly but no tax exemptions have been reduced. In the same manner that a state budget is developed and passed so should an annual report on tax expenditures be developed and passed. Most tax exemptions have no sunset provision so once enacted these exemptions are not reviewed. As the sales tax base shrinks and less revenue is gained from the sales tax, local units of government (cities, counties and schools) must rely more on property taxes. (Kansas does not allow local units of government to enact local income or earnings taxes.)

In the midst of this budgetary struggle, Kansas may finally have a full and complete debate on the proper balance between budgets and tax policy. The Kansas Advisory Council on Intergovernmental Relations (KACIR) was created by the Kansas Legislature to develop tax policy recommendations. KACIR was worried about the erosion of the sales tax base, higher property taxes caused by less sales tax and the consequences of even deeper budget cuts. They made the policy choice to leave business, agriculture, government and major health care (hospitals, doctors, nursing homes) sales tax exemptions alone. They wanted to raise $200 million with their tax recommendations. $60 million will come from the non-profit sales tax changes and $140 million from the sales tax exemption elimination on residential utilities. Even though the Kansas economy is moving towards a service economy, no recommendation was made to extend sales tax to services like accounting or law. This tax debate has begun in earnest!

KANSAS MILITARY INDUSTRIAL COMPLEX

The Governor’s Military Council (GMC) was created in January of 2006. GMC is chartered to 1) protect the gains in military installation expansion such as Fort Riley, 2) recruit/acquire new missions & forces plus implement initiatives and 3) enhance the quality of life for all military personnel. GMC commissioned Wichita State University to develop a complete economic analysis on the direct and indirect fiscal impact of military/civilian employment, wages and contracts.

The numbers are both impressive and sobering. The summary of these statewide annual impacts are as follows: Output is $7.7 Billion (7% of gross state product), Employment – 169,560 jobs (9.4% of total Kansas employment), Earnings - $5.7 Billion – (5.8% of state earnings), Tax Revenue - $393.6 million. The five military installations included in these numbers are Forbes Field, Fort Leavenworth, Fort Riley, McConnell Air Force Base and Smoky Hills Weapons Range. GMC estimates a $2 million public benefit for every additional 1,000 military personnel. The average annual wage in 2007 for military service personnel was $77,087 compared to the average Kansas’ salary of $44,500. GMC wants to grow the military anyway it can. The Kansas Legislature is passing a law – HB 2445 – to settle land disputes between military bases and adjoining landowners.

With GMC, Kansas is positioning itself to fight off any base closings in the next round. How long can a ‘deficit-funded’ United States military empire continue? How can we afford to spend more on the military than the rest of the world combined? What are the foreign policy and domestic infrastructure costs of being the largest military arms exporter by a factor of 10 (U.S. - $33 Billion – Italy $3B)? The Pentagon budget is so large and unmanageable that auditors cannot find tens of billion of dollars when they report to the Congress. If Congress ever gets serious about deficit reduction, can the military budget be left off the table? President Dwight Eisenhower warned us of the ‘military-industrial complex’ and that an unnecessary dollar spent on the military is a dollar unavailable for schools, health care or infrastructure investment. www.nationalpriorities.org

LEGISLATIVE TIMETABLE

The Kansas Legislature moved up the turnaround date to February 20. This is the mid-point of the legislative session. The regular session is now scheduled to end Tuesday April 6 but may get pushed ahead to end before Easter Sunday on April 4. The Kansas Legislature will have the revenue numbers from February and March to assess their progress with the budget. Today, the 2010 Fiscal Year budget is out of balance by $39 million and in mid-April the consensus revenue estimators will produce new 18-month revenue projections. The veto session starting late April may well last two weeks to find agreement on further budget reductions and revenue increases.

THE GOVERNOR SAYS STATE NEEDS TO FIND AT LEAST $400, MILLION MORE
Governor proposes a $.01 sales tax increase.
LWVK says sales taxes are regressive; Proposes instead to raise income tax. Governor says no one will vote for any raise in income tax, that the sales tax is seen by public as "no big deal."

#5: BUDGETARY SCRAMBLE
February 5, 2010
by Paul Johnson

The Kansas Legislature is scrambling to develop a ‘rescission’ budget to finish out this fiscal year on June 30, 2010. The Kansas Senate passed such a budget that was fashioned on recommendations by the Governor. The Kansas House of Representatives could have passed the same Senate bill and send it immediately to the Governor for his signature. The Speaker of the Kansas House decided to send it to the Kansas House Appropriations committee for more review. In the meantime, revenues have declined and Kansas Legislative Research have stated that even with the Senate bill the State’s budget is out of balance by $39 million.

CUT K-12 SCHOOL FUNDING TO GIVE TO COURTS SO THEY DON’T HAVE TO HAVE FULOUGHS?

The House Appropriations committee is now in a box to find even more budgetary cuts. At the same time, the courts have a budgetary shortfall of $5 to $8 million. The Senate bill restored $5 million of that shortfall. In order to assist the courts and grapple with the growing deficit, Rep. Joe McLeland proposed taking $5 million from K-12 supplemental aid and use that for the courts. This proposal was soundly defeated by the full committee.

CUT LEGISLATOR’S PAY?
HOW ABOUT CUTTIN' PLANNED PARENTHOOD? ---
Eerrrr-- HOW MUCH DOES PLANNED PARENTHOOD GET ANYWAY

Rep. Ray Merrick proposed an 11.1% reduction in legislator’s pay to save $297,000. This proposal was accepted.

Rep. Peter DeGraaf proposed eliminating all funding for Planned Parenthood and use those savings for the deficit. Rep. DeGraaf had no idea what those savings would be. Planned Parenthood services are a Medicaid service and arbitrarily ending those services could threaten all Federal Medicaid funding to Kansas.

EVEN WITH $200 MILLION CUTS WHERE DOES THE OTHER $200 MILLION COME FROM?

The budget clock is ticking. With every week passing, this fiscal year gets closer to the end on June 30 and budgetary reductions get more challenging. If across the board cuts are made, the state agencies have only a few months to find the savings so a 1% cut is magnified to 3 or 4%. There are some budgetary tricks available such as delaying school or Medicaid payments from June to July thus saving the costs in FY 2010 and deepening the $416 million deficit in FY 2011. In regards to 2011, Senate Ways and Means Chair Jay Emler has given directions to cut all state agencies by 2.5% and continue the 10% cut to Medicaid providers. This combination of reductions would raise around $200 million thus necessitating revenue increases of $200 million. As the weeks go by, every conceivable budget solution of all cuts to all revenues will be proposed. Latest news is that House Appropriations passed a budget bill without solving the $39 million deficit for now. That debate may come on the floor of the House next week or more likely in April.

WATER LEGISLATION

Senate Bill 510 is a change in water rights law that recognizes conservation as a distinct beneficial use of water, statewide, with no time limit. Presently if a water right is not used it can be decreased or lost. Kansas has a ‘use it or lose it’ policy. This water right change is voluntary and the owner can choose how long to keep his water right in conservation use. This bill was proposed by the Kansas Department of Agriculture <www.ksda.gov>. You can read their talking points on this website. When visiting this website homepage, click on Division of Water Resources and on the left side of this page click on maps and you will see color maps depicting the draw down of groundwater in Western Kansas.

CHILDREN’S ISSUES

Inspecting all child care facilities. There are two bills on the table regarding child care inspections, one in a Senate committee and one in a House committee. On the Senate side, SB 447 was heard Monday in Public Health and Welfare. Kansas Action for Children, parents and other advocates gave compelling testimony about the need to inspect all child care facilities in Kansas and to implement adequate supervision requirements

Infant mortality. The Blue Ribbon panel that has been working over the past several months on infant mortality released its recommendations Wednesday during a Statehouse press conference. One of the panel’s recommendations - increasing data collection around infant deaths in Kansas - would be accomplished by SB 448, which was introduced last week in Public Health and Welfare. Sen. Jim Barnett (R-Emporia), chair of Public Health and Welfare, spoke during the press conference about the importance of having solid data around infant mortality so that lawmakers could more effectively craft solutions to the problem.

Children’s Initiatives Fund. Senate Ways and Means heard testimony Monday on SB 327. Kansas Action for Children testified in opposition to this bill, which would divert almost a million dollars of tobacco money from the Children’s Initiatives Fund (CIF) each year. The CIF funds most of the early childhood programs in the state. The committee has taken no further action on the bill.

Tax Loopholes. Kansas Action for Children testified Thursday in opposition to HB 2538 before the House Taxation Committee. This bill would expand the circumstances under which businesses could keep their employee’s income tax payments for the business’ use. This type of tax loophole is relatively new in Kansas and there is little, if any, evidence to show that it is effective in attracting or keeping business in the state.

Mid-Year Budget Cuts. The Rescission bill (Senate Substitute for HB 2222), which would enact mid-year budget cuts the Governor could not accomplish through the allotment process, was passed out of the House Appropriations Committee yesterday. This action brings the bill one step closer to becoming law.

Financial Literacy. The Senate Education Committee introduced a bill to provide funding for teacher professional development in the area of personal financial literacy. Under the bill, SB 503, this funding would come from a $1 surcharge on every payday loan and car title loan made in Kansas.

SENATE TO VOTE IN COMING WEEK ON DEATH PENALTY ABOLITION

The bill was voted out of committee by a vote of 7 to 4 and now goes to floor for debate and vote. Contact your Senators!!!

#4: TAX AND BUDGET ISSUES
January 29, 2010
by Paul Johnson

The Governor’s effort to raise the sales tax has hit a brick wall so far. The option to raise the cigarette tax has more promise. Conservative business leaders and their supported anti-tax crowd are rallying to fight any tax or fee increase. The conservative think tank – Kansas Policy Institute – is out with the promise that idle funds in state agencies and school districts can be tapped this year without any reduction in service. The January tax receipts to the state were down more than $18.6 million. The Kansas Legislature may well put off the toughest budgetary decisions until the veto session late April after the consensus revenue estimators have come up with new 18 month revenue projections in early April.

The Kansas House Taxation committee voted 12 to 7 to report the sales tax increase proposal unfavorable to the full Kansas House. The chairman of the committee did say that certain sales tax exemptions would be debated. So far the sales tax exemptions for business and agriculture would be off the table. The sales tax exemptions for non-profits would be considered along with the exemption that protects residential customers from paying sales tax on your electric or natural gas bills. This one exemption is by far the largest and would raise $130 million. The Kansas Senate President Steve Morris has stated there is little support in the Senate for an overall sales tax increase but sales tax exemptions could be considered and it is impossible to find over $400 million in budget reductions. The citizens of Oregon voted to keep a tax increase on higher income residents and certain corporations. Here in Kansas, some Democrats will push for increased income taxes on higher income residents.

The Kansas Chamber of Commerce (KCCI) has come out with the proposal to do away with all corporate and personal income taxes by increasing the sales tax. The Koch, Inc. endowed business professorship at Kansas University – Dr. Art Hall – made the proposal to replace the income taxes with an increase in the state sales tax from 5.3% to 8.3%. The sales tax may be applied to certain services such as law or accounting that are now exempt. The logic is that the states without income taxes are the most business friendly and prosperous. The sales tax is subject to economic downturns thus undermining stable revenues.

The Kansas Policy Institute (KPI) has been publicly debating the school lobby over the funding of public education. KPI has demonstrated that the funding per student varies greatly among different school districts and that the higher per student districts should be brought in line with the average per student districts. Funding for public schools has increased every year in the last decade except for 2009. The Kansas Supreme Court mandated the increases for the previous three years. Public school advocates respond by saying the funding decisions are in the hands of locally elected school boards and that the educational expectations mandated by the Kansas Legislature have increased over the years. While public school funding in Kansas is under the national average, performance by public school students in Kansas have been well above the national average. This debate on proper and necessary funding for K-12 education will never be completely settled. As the number of poor children and ‘english as second language’ students increase, school districts are under greater pressure to perform. The paraprofessionals hired for these students are the first ones cuts.

The Kansas Senate has now passed the budget reductions proposed by the Governor to make it through FY 2010 that ends June 30, 2010. These reductions included a 10% cut to hospitals, nursing homes, home care services, doctors, pharmacies and other Medicaid providers. There was no funding option offered to replace this $22 million Medicaid reduction if this cut was withdrawn. Time will tell if this cut will put any providers such as the smaller nursing homes out of business. Unless new revenues are found for the FY 2011 budget, this 10% Medicaid cut may be permanent. While this reduction results in $70 million in savings for the state general fund, it means the loss of $150 million in federal Medicaid funds. The hope is that the experience of the 10% Medicaid cut in 2010 will bring the necessary political resolve to find new revenues for 2011.

WATER POLICY

The Kansas Department of Agriculture has drawn up legislation to change the use of water rights towards more conservation. Presently, if a landowner does not use their existing water rights they are subject to having that water right reduced. This ‘use it or lose it’ policy would be changed so a landowner would not be penalized if they did not use their full water rights in one year. There will be much discussion on this issue as it proceeds through the legislative process. I will cover this issue in more detail as the testimony is presented.

#3: ENERGY EFFICIENCY UPDATE
January 15, 2010
by Paul Johnson

Kansas is slowly developing a range of energy conservation programs. Certain major electric and natural gas utilities have programs or are developing ones. The major impetus for Kansas has come through federal stimulus dollars. There will be spirited discussions on how to pay for these utility sponsored energy conservation programs and will the rate design for residential customers change?

The Kansas Corporation Commission (KCC) received $48.7 million of federal stimulus dollars. The bulk of the funding has been used to create new energy efficiency and renewable energy programs at the Kansas Energy Office. The new Efficiency Kansas Loan Program www.efficiencykansas.com will channel $34 million in energy efficiency loans to existing houses and small businesses. Average loans will be $5,000 to $6,000 and must pay back in less than 15 years. A comprehensive energy audit is required. Loan repayments will be made to a lender or to your utility if your utility is participating in this program. 15 lenders have signed on so far. The website has the list of participating lenders and utilities. $350 rebates are being offered for the first 1,000 participants who elect to implement projects through Efficiency Kansas. Kansas now has 44 certified energy auditors and funds are being used to offer scholarships to train more auditors at the three institutions qualified to provide effective training.

Grants of $3.5 million in renewable energy incentives will be available for local units of government, school districts, community colleges, cities and counties to invest in wind, solar, biomass, hydropower or geothermal projects. Grants will cover up to 25% of the approved project cost, not to exceed $250,000. The first awards of four rounds will be announced in mid-February. $2.5 million will be available for coalitions of local units of governments to hire energy managers for up to two years. This is targeted to rural areas and these energy managers will be expected to develop strategic plans to determine energy usage and energy savings strategies. The Kansas Energy Office has developed the Energy Efficiency Building Codes Working Group to assist cities and counties develop energy codes for residential and commercial buildings. These codes would apply to both new construction and retrofits. Data compiled in 2008 indicate that 90% of the state’s building permits were issued in just 8 counties.

Kansas City Power & Light - that serves over 200,000 residential customers - was the first major electric utility to offer energy conservation programs. KCP&L has audit and rebate programs for residential and commercial customers. These programs can be accessed by visiting their website. KCP&L has installed over 20,000 programmable thermostats that can be accessed via the internet. The customer can access their thermostat remotely and KCP&L can impact their air conditioning load by increasing the temperature setting during peak load times. The thermostat is installed free for the customer and financed by all customers since the peak savings will avert the need for more power plant construction.

Westar serves over 565,000 residential customers in Kansas and is the largest electric utility in Kansas. Westar has had an energy efficiency division for a few years that offer energy conservation advice to all customers. Westar is following the lead of KCP&L in starting to offer the same type of programmable thermostats in an effort to dampen peak load electrical usage. Westar is taking the next step with federal stimulus dollars in an energy efficiency grant to install smart meters in the 45,000 households in the Lawrence area. These thermostats give customers a complete picture on the electrical use in a customer’s home and how that usage compares to other similar customers in Westar’s service area. If the pricing of electricity ever tracks the time it is used - as peak time pricing does with phone service -, these smart meters would offer that option. Westar is investing in another large wind farm near Spearville in Western Kansas.

Kansas Gas Service (KGS) is by far the largest natural gas company in Kansas providing natural gas service to 650,000 residential customers of the 1 million homes in Kansas. KGS is now requesting Kansas Corporation Commission approval to offer 5 different energy conservation programs. These programs would vary from rebates for energy efficient furnaces and water heaters to yearly appliance check-ups to programmable thermostats to community outreach education. KGS estimates that these programs will impact only 1-3% of their customers over three years. These programs will be funded by the participating customers or by all customers through an energy conservation rider. In exchange for offering these programs, KGS wants the authority to change existing natural gas bills. Right now, one-half of KGS’s fixed costs (gas meters, piping system, billing) are covered by the customer charge and the remaining costs are added to the price of natural gas. KGS wants all fixed costs to come through an increased customer charge. This change is called ‘revenue decoupling’ and will be challenged before the KCC by consumer groups.

CONGRESSIONAL REDISTRICTING

The process has started to redraw the 4 Congressional districts, the 125 Kansas House districts and the 40 Kansas Senate districts. The final vote on the new districts will be taken in the 2012 Kansas Legislative session. Kansas Speaker of the House Mike O’Neal is chairing the committee to draw the new maps. Senate Bill 291 would change the process by adopting the method used in Iowa. Iowa is the only state that has developed a non-partisan mechanism to redraw maps that do not track party affiliations. Iowa tries to draw compact districts that keep communities in tact. SB 291 had a hearing last March in the Senate Federal & State Affairs committee but needed to pass last year to impact the new district maps. Conservative Republicans and Democrats opposed this non-partisan bill.

LEAGUE URGES PUTTING ISSUE ADS UNDER CAMPAIGN FINANCE LAWS

S.B. 418 was scheduled for hearing by the Senate Ethics and Elections Committee.
Kay Hale gave testimony for LWVK after Lawrence League member Carolyn Jacobson did excellent research on good campaign finance bills. The testimony urged establishing laws that would require any organization that sponsors a political campaign “issue ad” to report the sources of their funding and their expenditures to an appropriate governmental agency and such reports should be made public prior to election voting.

ONE CENT SALES TAX TO SAVE SCHOOLS?

HB2475 which would have increased the sales tax by 1% and sunset in three years had a hearing in House Taxation Committee. Fourteen proponents testified in favor of the sales tax increase including: Kansas Action for Children, Kansas Association for School Boards, Kansas National Education Association, Interhab, SILCK, and a couple of individuals.

When the Legislative Post Audit Division (LPA)was ask to find efficiencies, these are what they found for ways to save money which are sure to impact student achievement: increase class size, eliminate block scheduling, close schools, replace librarians with aides, cut coaching positions, fire teachers and principals.

#2: ENERGY CHOICES AND QUANDRIES
January 5, 2010
by Paul Johnson

Kansas Governor Mark Parkinson has stepped to the plate to raise two taxes to fend off more major cuts to the 2011 State Budget. The Governor has had to cut almost $1 billion in the 2010 budget from the original adopted 2009 State General Fund (SGF) budget ($6.404 Billion in 2009 to $5.451 Billion in 2010). The increase in the sales and tobacco taxes will raise $378 million for 2011 and without these increases very severe budget reductions have been identified. The battle of revenue increases versus further budgetary reductions has been joined. If history is the guide, this painful process will take the full 90 days to settle. A court suit on school finance before the Kansas Supreme Court may play a role in this legislative session or possibly force a special session this summer. In early April, the consensus revenue estimators will meet to determine new 18-month revenue estimates and recovery of the Kansas economy will be closely examined.

The tax increase and revenue debate will under go much iteration. The Governor's proposal is to increase the state sales tax from 5.3 to 6.3% for 36 months and the annual increase is $308 million. (The majority of cities and counties have local sales taxes in addition to the state tax so for example the Lawrence sales tax is 7.8% today before any increase in the state rate.) Kansas does have a sales tax on food. Of the 45 states in the country with a sales tax, 25 have taken the sales tax off food like Nebraska. Some states have a lower sales tax on food like Missouri. A 15 member Kansas Inter-Governmental Task Force (of state lawmakers and local officials) supervised by Kansas Secretary of Revenue Joan Wagnon has proposed legislation to raise $200 million by imposing the sales tax on residential utility bills (natural gas & electricity) and eliminating sales tax exemptions for non-profits. A second bill would put a three-year moratorium on any new sales, income or property tax exemptions. A task force to develop a new 10-year comprehensive transportation has floated a proposal to put the sales tax on the purchase of gasoline in addition to the existing per gallon fuel tax. Revenue options discussed might include the sale of the Kansas University Medical Hospital for an estimated $1 Billion (only 5 states now have their own state hospitals) or sell off the Kansas Turnpike as Indiana did.

You can view the Governor's Budget Report - Fiscal Year 2011 at http://budget.ks.gov (click on the icon in the current events red box and than click on the Budget Director's Overview Presentation. Kansas is not publishing a hard copy of the budget so the 800-page budget has to be read on line). The budget pie charts are very helpful in detailing how the state budget is financed and the major area of spending. There is a list of specific budgetary reductions if no new revenues are enacted such as further reductions to: the mental health grants, primary health care clinics, nutrition grants for seniors, general state aid to schools, court operations, community correction programs, etc., etc.

FOOD STAMPS UPDATE

The food stamp program (distributed electronically through the Vision Card) has increased 61% in the last 12 months. In November 2009, 255,887 Kansans received food stamps with 120,332 being children and 135,555 being adults. The dollar amount has gone from $19.6 million in November 2008 to $31.7 million in November 2009. SRS has been adding close to 1,800 new households a month in the fall of 2009 compared to less than 1,000 in the fall of 2008. The food stamp program is the largest child nutrition program in Kansas and served over 330,000 Kansans in 2009. The federal stimulus program increased the individual benefit from $105 a month in FY 2009 to $123 in FY 2010. The household benefit increased from $232 to $272 per month. SRS has been working with the Kansas Rural Center to increase from 2 to 9 the number of farmers markets that can accept the Vision Card. The Kansas Rural Center now manages the website, training and development of farmers markets in Kansas. The website is www.ksfarmersmarkets.org .

LONG TERM CARE PLAN

Representative Bob Bethell chairs the Aging and Long-Term Care Committee in the Kansas House. Rep. Bethell is working on a plan to bring all long-term care programs into one agency to coordinate a better care of plan for all clients. The home and community based waivers for the disabled are now found in SRS while the home and community based waiver for the frail elderly is in the Kansas Department of Aging along with the nursing home program. The future of the state hospitals for the disabled and mental health would also be part of this broader plan to balance community options versus institutional settings. Rep. Bethell is chairing a health advisory committee for Sam Brownback and may well play an important role in health care options for Governor Sam Brownback. The Kansas Health Institute reporters will be writing in-depth on the evolving issues of health care changes and reductions in Kansas at www.khi.org .

KANSAS DEATH PENALTY DEBATE

The Kansas Senate Judiciary Committee will hold hearings on Senate Bill 208 – Abolishing the Death Penalty - January 19 thru January 21. Kansas would be the third state to abolish the death penalty. SB 208 will probably be voted out of committee for a full debate on the Senate floor. The cost of the death penalty is forcing a few lawmakers to reconsider their previous support now that Kansas has a ‘life without parole' option. When Governor Mark Parkinson was a state senator he helped re-establish the death penalty in Kansas and it is unclear what his position would be on this bill if it ever reaches his desk. Governor Joan Finney allowed the death penalty be re-established without her signature.

You may be familiar with SB 291 - legislation patterned on the Iowa method of redistricting Congressional and state legislative seats that tries to avoid heavy partisan influence. The maps are drawn by Kansas Legislative Research with a plan to draw districts that are compact with no regard to party registration. There is a five member review committee of members who are not elected officials or lobbyists. This committee helps with decisions in the gray area. This commission holds 3 public hearings. The maps are presented to the Kansas House and Kansas Senate - I think - without the ability to amend. If the maps are voted down, reasons have to be stated. Senator Derek Schmidt was involved in requesting the legislation but he only presented written testimony. Conservative Republicans opposed the bill.. The hearing was March 16 in Senate Federal and State and I doubt there will be any movement. You should read this bill on-line.

PREVIEW OF LEGISLATIVE SESSION
December 17, 2009
By Paul Johnson

The 2010 Kansas Legislature will meet in January to debate what constitutes essential governmental services? After several rounds on budgetary cuts in 2008 & 2009, Governor Mark Parkinson has now implemented $259 million in budgetary reductions to balance the 2010 budget that ends June 30, 2010. The budgetary picture for 2011 is further complicated by the reduction in federal stimulus funds that provided several hundred million dollars for the 2009 and 2010 State budgets. The federal stimulus dollars are completely exhausted by 2012 unless Congress appropriates new dollars. Will the Kansas Legislature have a substantive debate on adequate revenues and the proper mix of tax sources at the same time that further ‘program eliminating’ budget cuts are debated?

KANSAS DEPARTMENT OF SOCIAL & REHABILITAION SERVICES (SRS)

As part of the Governor’s budget reductions for 2010, several SRS programs were severely impacted. SRS now has a 17% (1 in 6 positions) vacancy rate at the area offices. SRS central office has a vacancy rate of over 30%. The Mental Health consolidated grant funds mental health services for the uninsured statewide and was reduced by $3.9 million. Since 2007 this grant has declined from $31 million to $10 million. The support grants for the Developmentally Disabled were decreased by $1.3 million and the waiting list is now 2,848. The General Assistance (GA) program for disabled single adults was shortened to just 12 months reducing the clients served by 480 on January 1, 2010. The GA program count has fallen from 4,461 clients in November 2008 to 2,323 today. The food stamp program has been increasing from 200 new households a month in 2007 to 2,087 new households a month today. The food stamp program now serves over 250,000 Kansans providing over $30 million in benefits monthly. Projections are that the Temporary Assistance for Families households will increase 37% from 2009 to 2011 (12,571 cases to 17,724 cases). What pressure on limited SRS staffing!

KANSAS DEPARTMENT OF AGING

The Kansas Department of Aging (KDOA) has very limited options to reduce budgets. 75% of KDOA’s budget - $365 million – funds nursing homecare for 10,149 clients statewide. The Governor has ordered a 10% reduction in all Medicaid provider rates that will impact a range of medical care from nursing home care to primary care to mental health services. The Home and Community Based Services for the Frail Elderly (HCBS-FE) now assists 5,609 clients statewide with a budget of $75 million. Unlike nursing home care that is a federally mandated under the Medicaid program, HCBS-FE is provided through a waiver granted by the federal Department of Health and Human Services. HCBS-FE has not had a waiting list in the past but that may change as budget cuts increase. KDOA’s nutrition programs were preserved by $1 million in federal stimulus dollars. If not restored by the Kansas Legislature for 2011, providing 3.5 million meals to seniors will have to be reduced. The Senior Care Act - that provides homecare services with only state dollars to the elderly that have incomes just above Medicaid eligibility - now has a waiting list of 269. With these homecare service options reduced, more senior citizens will end up in nursing homes at a much higher cost to Kansas’ government.

KANSAS HEALTH POLICY AUTHORITY

Like KDOA, the Kansas Health Policy Authority (KHPA) has few options to reduce their budget. KHPA funds a private clearinghouse where applications for medical programs are processed. As KHPA reduces the contract to operate this clearinghouse, the backlog of 20,000 applications will increase significantly. KHPA is ending its customer service contract that handles 250,000 calls a year from providers and clients. The 10% reduction in Medicaid provider rates will impact the availability of medical care especially for the underserved in urban and rural areas. KHPA estimates that 41% of the 41,000 births in Kansas last year were funded by Medicaid. Approximately half of all nursing home clients are funded by Medicaid. KHPA now provides medical services to 318,000 Kansans. KHPA is mandated by federal law to process a medical application in 45 days. With this latest round of staff reductions and cuts to contracts, the 45-day rule may not be met and the accuracy of processing claims will suffer!
(Check out the new, reformatted Kansas Health Institute website for the most comprehensive coverage of medical/social service issues. www.khi.org)

KANSAS REVENUE

The best estimate is that the Kansas Legislature will start developing the 2011 budget (July 1, 2009 – June 30, 2010) with a deficit well over $200 million. Kansas has experienced three years of declining revenues and this has not happened since the Great Depression. Since state budgeting was fully formalized in 1966, the State General Fund had experienced just 3 years of decline (1986, 1999 and 2002) and all were single years of decline. Kansas has not had a complete review of our tax system since the Bill Graves administration in 1995.

Combined state and local tax revenue in Kansas is now 31% property tax, 28% income tax, 26% sales tax and 15% from several minor sources. Property tax is the most politically unpopular tax but also the primary source of income for counties and cities. The income tax is the most progressive tax and Kansas needs one more bracket for higher income households. The sales tax is the most regressive tax especially in Kansas since we tax groceries. There are dozens of services that are exempt from the sales tax. Kansas needs to stop providing more sales tax exemptions and review all existing exemptions every 5 years.

OTHER ISSUES

The process is now starting to redraw the 4 Kansas Congressional districts, the 125 Kansas House districts and the 40 Kansas Senate districts. The final bill to redraw these districts will happen in the 2012 Kansas Legislative session. Projections are that Kansas will not lose a Congressional district as we did in 1990. Iowa is the only state in the country that has established a non-partisan committee to develop their Congressional map with an eye towards community balance. Most redistricting in this country is a partisan war among the Democrats and Republicans. The net effect is to design safe Congressional districts for one party thus subverting a necessary civic dialogue to compromise and solve our country’s most troubling problems. For the Kansas House and Senate districts, rural representation will decline further as the population continues to shift to northeast Kansas and areas around Wichita.

The debate to develop a new 10-year Comprehensive Transportation Plan will increase in the coming Legislative session. The first 10-year plan was 1989 to 1999 and the second plan started in 2000 and now ends in 2010. The Kansas Legislature will wait to see whether Congress can pass a new transportation plan? The Federal Highway Trust Fund is under-funded and must be made solvent. With the push for more jobs, highway funding along with some high -speed rail development is considered most promising for employment. The last 10-year Comprehensive Transportation plan in Kansas was $13 billion – 9% of total state spending. The new request will be closer to $16 Billion. There should be an extended discussion on how this plan should be funded so as not to compromise funding sources for other vital educational and social service needs.