Month: May 2015

UG Commission looking at small windfall for next budget

Unified Government commissioners learned about a small unexpected windfall during a budget discussion on Monday.

UG Administrator Doug Bach told the commission that the UG will receive a one-time payment this year of $6.5 million for land revenues from Cerner and Sporting Kansas City. Plus, the UG will receive a penalty payment from the Hollywood Casino hotel of $1.3 million for 2014, $1.4 million for 2015, and an unknown amount for 2016, Bach said.

Added together, that is about $9.2 million the UG will receive, before the anticipated 2017 revenues come in from the Village West sales tax revenue bonds that are paid off. The Unified Government Commission met Monday in a lengthy special strategic planning meeting.

Originally, Bach said, the Cerner-Sporting KC money was to be spread out over 10 years, but the UG staff worked with Cerner to get the money paid back now. The $6.5 million was additional land payments that had not been budgeted for this year, he said.

The hotel penalty had been negotiated into a contract with the Hollywood Casino, and was put into the contract in case the casino did not want to build a hotel because of the market conditions, according to Bach. He said it will probably be a couple of years before the casino goes forward to build a hotel, but he is not adding the penalty amount to future budgets because it is uncertain – at any time the casino could go ahead with the project.

Bach presented recommendations from the UG staff on how to spend this increased amount of money.

For the casino hotel penalty funds plus an estimated increase in assessed valuation revenues, he proposed $2.8 million for employee compensation; radio project debt, $500,000; acquisition, rehab and demolition of property, $500,000; Fire Department SAFER grant (which is expiring), $300,000. These are annual expenses, according to UG officials.

Bach’s recommendations for the land payment funds were one-time payments: restoring the fund balance, $2 million; employee health fund, $2 million; workers’ compensation fund, $500,000; water pollution control fund, $500,000; Police Department body cameras, $500,000; and other capital equipment, $1 million.

They were all big-ticket items, and instead of waiting until 2017 to address them, the UG can start looking at them now, Bach said.

The UG is discussing replacing some of the funds that were borrowed in past years from the fund balance and some of the funds, according to UG officials.

The UG had a brief discussion about body cameras, with some commissioners supporting waiting until they had matching funding from the federal government, or waiting until they had enough money to fund enough cameras and equipment before starting the program. Bach described $500,000 as a “down payment” for the body camera program. Several commissioners expressed doubt about jumping in too early for this program.

Mayor Mark Holland said a public safety task force will present recommendations on June 4 at a commission meeting, and final decisions to be made at a later commission meeting. Some of those big-ticket items June 4 will be restoring the cadet programs, according to UG officials.

Among the other items discussed by commissioners, but not necessarily approved, were a fund for $30,000 for each commissioner to spend on projects in the district; creation of a park for disabled children and residents; an additional staff member for animal control; and a rewriting of the UG’s sign codes.

No one suggested using the $9.2 million to lower property taxes, although property tax reductions are on the long-range goal list. However, Mayor Mark Holland said that reducing property taxes for the 2017 budget would be the top policy recommendation, and the commission needs to decide how much it wants to reduce property taxes then.

There will be about $12 million in new revenue, he said, and some has been committed for fund restoration and employee compensation.

“We’re going to need a significant property tax reduction to come out of some of that money,” he said.

In some ways, the UG would be shifting some of the tax burden from property taxes to sales taxes as part of the long-term plan for 2017, he said.

No final decisions were made on the budget today. The meeting was to discuss strategic planning, and some changes would be likely to the ideas that were presented.

During the meeting, Commissioner Brian McKiernan gave a presentation about rehabilitating homes that are abandoned and deteriorating, increasing the property tax base, and demolishing vacant homes that are unfit. Several options would be available to the UG. The UG’s goal would be to stop the erosion of the tax base. There were some opinions on the commission that demolition has to be reduced, while there were other opinions that demolition needs to continue.

The presentation may be viewed on the UG’s YouTube channel as part of the May 11 special session.

Key senator expects tobacco tax increase to be part of final revenue package

Brownback proposal to increase tax by $1.50 per pack won’t pass but smaller hike likely will, senator says

by Jim McLean, KHI News Service

The chairman of the Senate committee working on a plan to address the state’s projected budget deficit is confident that a tobacco tax increase will be a part of the final package.

However, public health advocates are concerned that the increase won’t end up being large enough to significantly lower smoking rates and reduce expenditures on smoking-related illnesses. They continue to favor the proposal that Gov. Sam Brownback announced at the beginning of the session to increase the cigarette tax by $1.50 per pack.

The governor’s proposal would raise the tax on a pack of cigarettes from 79 cents to $2.29, which would generate about $80 million of the approximately $420 million still needed to balance the budget in the fiscal year that starts July 1.

But Sen. Les Donovan, a Wichita Republican and chairman of the Senate Committee on Assessment and Taxation, said the governor’s proposal is too steep for most lawmakers.

“I don’t think the $1.50 will fly — I really don’t — and I’ve told the governor that,” he said.
Even so, Donovan expects the final revenue package will include some kind of a per-pack cigarette tax increase, either $1 or 50 cents.

“I think that’s pretty much going to happen and also maybe a small increase on liquor taxes, I think that will happen too,” he said.

A $1 per-pack increase would generate $63.5 million, according to the Kansas Department of Revenue. An increase of 50 cents per pack would raise $40.4 million.

Donovan also said lawmakers are likely to consider expanding the tobacco tax to include e-cigarettes, which are electronic devices that deliver a nicotine kick to users in a vapor.

“If we get around to putting a tax on e-cigarettes, it’s going to be substantially lower than the tax on a pack of cigarettes,” he said. “We want people (who smoke) to move to the e-cigarettes because they seem to be healthier.”

Researchers studying the potential health hazards of e-cigarettes haven’t reached definitive conclusions on that point. One recent study found little evidence for the commonly held belief that e-cigarettes can help tobacco smokers to quit.

Taxing e-cigarettes likely would generate only $5 million to $10 million in additional revenue, according to the Kansas Legislative Research Department. The relatively small return, coupled with questions about whether the federal government intends to regulate the industry, may cause legislators to wait until next year to take up the issue of taxing e-cigarettes.

Most of the additional revenue needed to close the budget gap would be generated by an increase in the statewide sales tax, according to legislators and lobbyists familiar with what Brownback and legislative leaders are negotiating. However, a significant number of legislators continue to favor slowing, revising or reversing some of the income tax cuts approved in 2012.

A coalition of public health advocates is backing Brownback’s tobacco tax proposal because they say it would keep about 50,000 Kansans from starting or continuing to smoke and over time reduce the $1.12 billion annually that it costs to treat tobacco-related illnesses in the state, including $237.4 million in KanCare payments.

KanCare is the name of the state’s privatized Medicaid program.

Reagan Cussimanio, a lobbyist for the American Cancer Society’s Cancer Action Network, said coalition members would support Donovan’s compromise of a per-pack increase of $1 but not anything less.

Cussimanio said increasing the tax from the current 79 cents to $1.79 per pack still would produce “discernable health benefits.” But, she said, the tobacco companies’ ability to manipulate the price of cigarettes through coupons and other marketing techniques would virtually offset a 50-cent increase per pack.

“The health benefits at that level are very small,” she said.

Like Donovan, Cussimanio said coalition members remain optimistic that a substantial increase in the tobacco tax will be a part of whatever revenue plan the Legislature approves to deal with the budget situation.

“We’re hopeful that this will be a part of the final package,” she said. “It is the only tax proposal that would produce a savings for the state because of the health savings through the KanCare program and through employers seeing savings through their insurance.”

The tobacco industry is opposed to any increase, contending that it will affect mainly middle- and low-income Kansans.

Many legislators also worry that any increase will hurt Kansas convenience stores and other tobacco marketers that operate in areas bordering Missouri, which at 17 cents per pack has the nation’s lowest cigarette tax.

The nonprofit KHI News Service is an editorially independent initiative of the Kansas Health Institute and a partner in the Heartland Health Monitor reporting collaboration. All stories and photos may be republished at no cost with proper attribution and a link back to KHI.org when a story is reposted online.

– See more at http://www.khi.org/news/article/key-senator-expects-tobacco-tax-increase-to-be-part-of-final-revenue-packag#sthash.4TsaFPzr.dpuf

Legislative update from State Rep. Pam Curtis, D-32nd Dist.

Rep. Pam Curtis
Rep. Pam Curtis

The 2015 legislative session should come to a close this week as we approach the 90th Day. However, there are issues that were not resolved during the regular session that still must be addressed before final adjournment.

The most important considerations remaining are the budgets for the next two fiscal years and whether there are sufficient revenues to fund these budgets. It is still unclear how the state will fund the cost of whatever budget emerges. The Legislature will have to address the revenue shortfall because, the state cannot deficit spend. With no clear solution in sight this could cause the veto session to go longer than the 90 days.

It remains an incredible honor to represent our community in the Kansas House of Representatives. While the Legislature is in session, I do my best to stay in touch and keep you informed by email, and I spend countless hours every week helping my constituents solve problems. If I can be of service to you or anyone you know please call my office at 785-296-7371 or email me at [email protected]

Budget and taxes
Despite the House Appropriations Committee meeting several times this week, the legislature still does not have a comprehensive budget proposal to fund the 2016 and 2017 fiscal years, or to address the looming $800 million deficit. The session is nearly over and it is still unclear how the state will be able to fund the cost of whatever budget emerges.

Several lawmakers in both chambers have proposed a number of tax increases to help the state make ends meet including increasing sales taxes, raising property taxes, taxing certain kinds of income, and taxing gas, tobacco, and alcohol at higher rates.

Kansas is the ninth most regressive tax state, and using any of these proposals to fill the deficit would disproportionally affect lower income Kansans. As proposals continue to be introduced, I will consider any plan that is fair, equitable, and sustainable and puts the needs of Kansas’ families first.

RPS
The House voted this week to approve a bill amending Kansas’ Renewable Portfolio Standards (RPS). Based on an agreement reached by wind and business industry leaders, the bill:
• Transitions the state’s mandate of twenty percent renewably sourced energy by 2020 to a voluntary goal.
• Replaces the indefinite property tax exemption with a ten year property tax exemption for future renewable energy projects.
• Clarifies that renewable energy is not a public utility, and is therefore not subject to a higher tax rate.
• Avoids a 4.3 percent excise tax on wind energy production.

Civil service
The Senate approved a bill, which amends the Kansas Civil Service Act and changes protections for state employees. The House passed the same bill earlier in the legislative so the bill will now be sent to the governor, who is expected to sign it into law.

I voted no when it appeared before the House. The bill removes state employees’ classified status, changing them to ‘at-will’ employees who can be fired without cause.

This bill risks replacing the state’s current merit based system with a corrupt system of political patronage. Kansans deserves the best possible employees delivering services, regardless of their political affiliation or beliefs.

Kobach’s prosecutorial powers
A proposal to grant the Kansas Secretary of State the authority to criminally prosecute voter fraud was approved by the House Judiciary Committee. The bill will greatly redefine the role of the Secretary of State from Chief Elections Officer to a public prosecutor. Kansas has already vested the authority to prosecute voter fraud in county and district attorneys elected at the local level. Allowing the Secretary of State to overstep a locally elected leader’s power impedes on local control.

Another provision in the bill that is concerning would allow candidates to give gifts of no more than $3 to a voter. Under current state statute, it is illegal and considered election bribery to distribute items of tangible monetary value. Changing the law sets a dangerous precedent, and potentially exposes the democratic process to corruption. To voters $3 might seem not seem like much, but it is a matter of principle – there is not a price on democracy and votes should never be bought.

Uber
While legislators were on break in April, Gov. Brownback vetoed consumer protection legislation that regulates ride-sharing services (like Uber) by requiring drivers to complete a background check and carry comprehensive and collision insurance on their vehicles. Both the House and Senate voted this week to override the veto.

I voted to override the veto because the bill provides essential consumer protection for individuals using the ride sharing service. While the legislature’s action in no way prevents the company from operating, in a dramatic response, ride-sharing service Uber immediately shut down all operations in the state. I remain willing to continue negotiations with Uber in the future, so the state can reach a compromise that protects consumers and allows ride sharing companies to operate safely.

Changes to marijuana possession penalties
This week the House approved HB 2049, in response to projections from the Kansas Sentencing Commission that state prison populations will soon exceed current bed capacity. The legislation would lessen the current penalties of marijuana possession for repeat offenders, lowering the first violation to a less severe misdemeanor and changing the second violation from a felony to a misdemeanor. A third, and subsequent, violation would still result in a felony offense. If signed into law the state may save over $1.2 million over the next year alone.

The bill also legalized the pharmaceutical use of non-intoxicating hemp oil, which has less than 3 percent THC, to address the needs of Kansans suffering from debilitating seizure disorders who have exhausted treatment options. The regulatory framework established by the bill includes strict licensing requirements and oversight for the production, prescription, distribution, and use of hemp oil. In doing so, the bill balances the need for positive health outcomes with the need to protect public and patient safety.