by State Rep. Stan Frownfelter, D-37th Dist.
Recently the Legislature returned for what is called the veto session to wrap-up final business before we adjourn for the year. In the past, the majority of the work done during this time typically involved making changes to the budget, based upon updated revenue numbers. Most of the work has been done in small joint committees of the House and Senate called conference committees where they attempt to work on various bills and have them passed out before the Session ends.
Updated revenue numbers released
On April 20 a group of revenue forecasters called the Consensus Revenue Estimating Group, met and released their revenue projections for the state. The news isn’t good. Kansas is in the whole $140 million for the current fiscal year that ends June 30th and is down $150 million for the next fiscal year.
In response to the budget deficits, Gov. Brownback offered three options to balance the budget. All three options rely on more transfers and cuts instead of addressing the root causes of the shortfall, which is the governor’s failed tax experiment.
Option 1
-Transfers $185 million out of State Highway Fund – $17 million cut to universities -Securitize Tobacco Settlement Money
Option 2
-Transfers $185 million out of State Highway Fund -$17 million cut to universities – Delay $90 million KPERS payment
Option 3
-Transfers $185 million out of State Highway Fund -$17 million cut to universities -Across the board budget cut of 3 percent or 5 percent
As you can see, each option cuts our universities and colleges by more than $17 million, and yet again transfers more funds out of the State Highway Fund at the tune of $185 million over the next two years, crippling the state’s ability to provide safe roads and bridges.
In option 1, Brownback also proposes selling off part of the state’s interest in future tobacco settlement money to raise an estimated $158 million in the next fiscal year, a process known as “securitization.” This settlement money is statutorily required to be used for the funding of various children’s programs across the state including after school programs and health screenings. Essentially the governor is proposing taking out a “payday loan” on these funds and jeopardizing these children programs.
If the legislature doesn’t like the tobacco securitization option, the governor proposes to delay over $90 million of payments to KPERS.
And finally, in option 3, Gov. Brownback proposes across the board cuts of either 3 percent or 5 percent which would include a $57 million cut to K-12 public education. Any cut to education will result in larger class sizes, shorter school days, and rural schools closing.
All three options merely temporarily fix the problems we are having with our economy and I am strongly against them. With these options the governor made it clear that any discussion of having a fair tax system was not on the table for discussion and that is wrong for Kansas. It is high time for Gov. Brownback and his Republican allies in the legislature to admit their plan is not working and to repeal their failed tax experiment.
House votes on closing LLC tax loophole
During the week the House held a vote on a full repeal of the governor’s signature tax policy from 2012 and that is the LLC tax exemption. Under the bill, the full income of LLC’s would be taxed just as they were prior to the change in 2012. The bill did not pass with a vote of 45-74.
Cuts to State Highway Fund affecting road projects
While Gov. Brownback has proposed taking more money out of the State Highway Fund the Department of Transportation has admitted that the cuts already made to the fund will result in the delay or cancelation of several road projects throughout the state.
According to the secretary of the Department of Transportation at least 25 road projects that were scheduled for 2017 will be delayed until remaining State Highway Fund revenues allow or new money is made available.
The affected projects span the state. For months now the Brownback administration has been telling us the transfers made out the State Highway Fund was not going to affect road projects.
Now we finally have the truth. The governor’s mismanagement of the state economy is the cause of these project delays and the governor needs to admit it and propose a plan to replenish the Highway Fund. Poor road conditions are more than a nuisance; they are a public safety issue. Roads that are in disrepair can lead to more accidents and risk the health and safety of the people driving on them.
Governor delays $90 million payment to KPERS
In response to poor revenue numbers in April, Gov. Brownback delayed making a statutorily required payment of over $90 million to the state’s retirement program for public sector employees (KPERS). The Legislature gave the governor the authority to delay the KPERS payment as part of the budget bill it passed earlier in the session with the requirement that it be repaid next year with 8 percent interest.
The money represents the state’s contribution to the retirement accounts for public schools, community colleges and technical schools. This is in combination to the $90 million he has proposed withholding from KPERS in his budget options.
The governor has long argued that KPERS payments for teachers was also education payments, so this is in effect a cut to education funding. I am strongly against these payment delays. Our teachers, police officers, firefighters and public sector employees deserve better than using their retirement accounts to balance the budget.
Kansas credit rating in jeopardy
The credit rating service, Standard and Poor, stated this week that it was placing Kansas on a “credit watch” with “at least one-in-two possibility” of a lowering of the state’s AA credit rating. Standard and Poor citied the current budget shortfall and concerns about the governor’s proposals to filling the shortfall.
If the state’s credit rating is indeed lowered, this would not be the first time it has happened under Gov. Brownback’s watch. The lowering of the credit rating would end up costing Kansans more because the state will have to pay higher interest rates on loans and bonds.
This is yet another example of the failed economic policies of Gov. Brownback and his Republican allies in the Legislature.
House debates budget changes
Late Sunday night, the House debated and voted on a bill to make changes to the budget that was passed earlier in the session. The changes are needed to help balance the budget because of the budget shortfall of over $300 million for the next two years. The bill passed 63-59.
The changes included:
• Delaying $99 million payment to KPERS and using funds earmarked for children’s funds to KPERS back.
• Allowing the governor to make draconian cuts across the board of either 3% or 5% to state government.
• Denying the governor the ability to cut K-12 education funding.
• Allowing the governor to make a cut of over $17 million to universities and colleges with the larger ones being cut the most.
• The governor is expected to use his allotment authority to transfer most of the remaining sales tax going into the Highway Fund. This would transfer $70.0 million to SGF in FY 2016 and $115.0 million in FY 2017.
• It is crystal clear that the governor and the Republican controlled legislature have severely mismanaged the state’s budget and this bill does not change that. This is a budget crisis inflicted on Kansas by its Republican leaders and the governor. Democrats want to work to set a path for the future now and put Kansas back on the right track, and will work to create a budget that is not balanced on the backs of college students, teachers and children.
Bill update
Recently the House passed out the following bills:
A bill that increases the production limits of microbreweries passed 111-10 (SB 326).
Changes to the Student Online Protection Act increasing the protections passed 115-2 (HB 2008).ll that closes the open records loophole so personal emails that state officials use to conduct official business will be available as public records passed 119-0 (SB 22).
A bill Increasing the minimum liability for car insurance policies from $10,000 to $25,000 passed 115-2 (HB 2446).
A bill that includes the use of drones in the protection from stalking act, passed 119-0 (SB 319
A bill that would permit the possession of air guns in schools passed 93-27 (HB 2502).
For a more comprehensive list of the bills that passed the House the past week look here: http://li.kliss.loc/li/events/house/current/
Keep in touch
It is a special honor to serve as your state representative. I value and need your input on the various issues facing state government.
Please feel free to contact me with your comments and questions. You can reach me by calling the Legislative Hotline 1-800-432-3924 to leave a message for me. Additionally, you can email me at [email protected] or [email protected].