The Budget Bill: The Good, The Bad, The Ugly
On Wednesday, April 27, the House and Senate reconvened after a five week break to address the final legislative items before the conclusion of the 2016 Legislative session. The committee leaders from the House and Senate have met in what is referred to as Conference Committees, where they discussed legislation that has passed either one or both legislative chambers and placed that legislation into what is referred to as Conference Committee Reports. Last week we have voted on several conference committee reports for final action.
A week before we returned to Topeka, the Consensus Revenue Estimate Group released its revenue estimates for the state of Kansas for fiscal year 2016 and 2017. The revenue estimates were downgraded, prompting Governor Brownback to release three different plans in order to balance the state budget for each of the respective fiscal years. The new revenue projections have the state budget for fiscal year 2016 with a current budget hole of $140.1 million and a deficit for 2017 of $151.3 million.
Early on Monday, May 2, the House debated and voted on the conference committee report for Senate Bill 249, otherwise referred to as the omnibus budget bill that makes adjustments to the Governor’s request from April 21 for fiscal years 2016, 2017, and 2018. Although there has been much coverage regarding this bill, listed below are some of the highlights of the bill and the impacts that it will have for each year:
• $40,000 for the Interstate Compact for recognition of Emergency Medical Personnel Licensure;
• Stipulated that no state agency, or the Governor, can spend any money with the intention of demolishing the Docking State Office Building, nor reconstruct, relocate, or renovate the power plant in Docking for fiscal years 2016 and 2017;
• Prevents the Governor from making any allotments for monies appropriated for K-12 education for fiscal years 2016 and 2017. The Governor had proposed a $57 million cut to K-12 education on April 21;
• Included language regarding Larned and Osawatomie State Hospitals stating that they cannot be outsourced or privatized without legislative approval. This will be in place through 2018;
• Removed the tuition increase restrictions for fiscal year 2017 that were placed on the Regents schools in 2015;
• If an allotment is made to the Regents schools, the Budget Director will calculate the State General Fund allotment using a calculation based as a percentage that is proportionate from the institutions overall funds ;
• Regarding the delayed payment to the Kansas Public Employee Retirement System (KPERS) that the Governor announced, in order to restore the delayed payment to KPERS, revenues in excess of the April 2017 consensus revenue estimate are to be deposited into the KPERS Trust Fund;
• Includes language that any amount of state general fund monies equaling the amount received in Tobacco Settlement Funds in excess of expenditures and transfers made from the Kansas Endowment for Youth Fund be deposited in KPERS Trust Fund for the sole purpose of repaying the lapsed amount, plus 8% interest;
• If on June 30, 2018, and if the KPERS Trust Fund has not been totally repaid for the delayed contribution plus the interest, a transfer from the State General Fund will be made to the KPERS Trust Fund in the remaining amount unpaid.
These provisions of the budget are in addition to the allotments that the Governor announced on April 21 when his office addressed a joint committee meeting with the Senate Ways and Means and House Appropriations Committees.
In my opinion, there was no easy vote on this budget.
I voted “yes” for the primary reasons of protecting funding to K-12 Education and having a repayment mechanism for the delayed transfer to KPERS.
Since the Governor did not present to the Legislature a balanced budget, he is now responsible for making approximately $82 million in allotments in 2017 to state agencies in order to balance the books for the state of Kansas. I still contend that we need to have a more stable revenue stream and we cannot continue this practice of balancing the state’s erratic budget. We must revisit the tax plan of 2012 to administer financial stability and solvency.
Business Loophole Tax Bill
As many of you know, I have advocated for the past four years that there needs to be a reconsideration of the tax reduction plan that was passed during the 2012 legislative session. Even though I was not in the Legislature in 2012, I vowed during the campaign and when I was sworn in to rectify some of the inequities and imbalances of this tax plan.
I have generally focused on the portion of the tax plan that has been of most angst to many of the constituents of the 109th Kansas House District; the business tax exemption for certain business types, which now excludes approximately 330,000 businesses from paying income taxes. We had a bill last year that included an elimination of this exemption, and other tax provisions. That bill only garnered 27 votes, far from the 63 needed for passage.
This year we were able to have another bill debated and voted on the House floor. Unlike last year’s bill, this one was simply a repeal of the 2012 Tax Plan that eliminated the business tax exemption and would have placed those businesses back on the tax rolls. Even though this bill did receive many more votes than last year, it still did not receive enough for passage. The “Aye” vote count was 45, 18 short for passage out of the House and on to the Senate.
Due to the fact that this would be addressing the income taxes of businesses that were made exempt because of the 2012 tax plan, if it had passed, those provisions would not have gone into effect until January 1, 2017, and would not see a total impact to the state of Kansas until the income tax filings for that year, which would be due on April 15, 2018.
Each year that this exemption is not repealed, we delay the impact it would have by each passing year and we will continue to see an unbalanced state budget. Some contend that other provisions of the 2012 tax plan need to be addressed. However, I feel that we need to begin the conversation in order to establish financial stability for the state. This is needed due to a poorly crafted tax plan passed in 2012.
Sine Die and Contact Information
The Kansas House of Representatives adjourned the 2016 Legislative Session around 1:30 AM on Monday morning, May 2, 2016.
We will return to the statehouse on June 1, 2016 at 10 AM for what is commonly referred to as Sine Die, the absolute final day of the 2016 Legislative Session.
The term Sine Die, which means “without day,” is used to indicate the final adjournment of our annual session. Until then, and then after June 1, I will be spending my time traveling the 109th Kansas House and visiting with constituents.
As always, if you have any concerns, feel free to contact me at my home number while we are out of session. My home number is (785) 483-2822, visit www.troywaymaster.com, or email me at [email protected].
The honor to serve you in the 109th Kansas House District and the state of Kansas is one I do not take lightly. Do not hesitate to contact me with your thoughts, concerns, and questions. I appreciate hearing from the residents of the 109th House District and others from the state of Kansas, as well.
Troy L. Waymaster,
State Representative
109th Kansas House
300 SW 10th
Topeka, KS 66612