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

Think of farmers and ranchers and this old, often forgotten tribute comes to mind. It fits farmers like seed in the soil or ranchers like a new-born calf takes to its mother’s udder.

A man’s greatest possession is his dignity and no calling bestows this more abundantly than farming. Hard work and honest sweat are the building blocks of a person’s character.

I’ve often heard friends, neighbors and family – my dad for one – quote bits and pieces of it. I’ve heard others refer to it at meetings, in church, at a sale barn, funerals and many other places where rural people live, work and congregate. It exemplifies the farm and ranch vocation.

Farming and ranching, despite its hardships and disappointments, is the most honest and honorable way a man or woman can spend days on this earth. The vocation of agriculture nurtures the close family ties that make life rich in ways money can’t buy.

Children who are raised on a farm or ranch earn values that last a lifetime. Farming and ranching provides education for life and no other occupation teaches so much about birth, growth and maturity in such a variety of ways.

Without question, many of the best things in life are free – the splendor of a sunrise, the rapture of wide open spaces, the exhilarating sight of the landscape greening each spring – true happiness comes from watching crops ripen in the field, watching children grow tall in the sun, seeing your whole family feel the pride that springs from their shared experience living, working and harvesting from the land.

Farmers and ranchers believe that through their shared vocation they are giving more to the world than they are taking from it – an honor and privilege that does not come to all men or women. Agricultural producers believe their lives will be measured ultimately by what they have done for their fellow men and women and by this standard, fear no judgment.

They believe when they grow old and sum up their days, they will stand tall and feel pride in the life they’ve lived. Farmers and ranchers believe in their vocation because it makes all of this possible.

John Schlageck, a Hoxie native, is a leading commentator on agriculture and rural Kansas.

Well, this is the week, probably, that we find out whether the most dramatic, important bills of the 2016 legislative session are signed into law by Gov. Sam Brownback.

These are the bills that will impact how Kansans live and deal with each other, and, by the way, assemble a cash-short budget for a year in which the state is cash-short. Reasons for that shortage are, of course, the 2012 tax cuts the Legislature had little interest in reversing, even for those widely criticized LLCs, owner-operated businesses and, of course, farmers.

It is that shortage that is one reason, for example, lawmakers passed to the governor a bill that will shorten from 36 months to 24 months a key welfare measure, the Temporary Assistance for Needy Families program, which is a federally funded program that the state doesn’t spend a dime on. It’s essentially a few hundred dollars a month so that the poorest of Kansans can eat and live indoors and feed their children.

And, there’s the step therapy program, estimated to save the state and its Medicaid (we call it KanCare here) contractors about $10 million a year. Basically, it’s a stutter step, prescribing cheaper medications for the poor and those with largely psychological or behavioral illnesses, and not moving them to expensive prescriptions for at least 30 days (in case the less expensive work), saving the contractors hundreds of dollars per patient.

Don’t forget the sale of the assets of the Kansas Bioscience Authority, probably $25 million worth, which will shut down one of the state’s premiere and apparently successful efforts to assist high-tech and bioscience expansion in Kansas, a source of high-paying jobs and medical research that has focused development in Kansas, of all places, not somewhere you can see an ocean.

Oh, and the delay of at least a year repaying about $97 million in employer (that’s the state) payments to the Kansas Public Employees Retirement System, on behalf of mostly educational system employees. The delay in repaying that borrowed money is supposed to bridge a revenue gap for which there is no apparent fix.

Sales tax revenues for the Kansas Department of Transportation? That’s all over, and while the governor can single-handedly just not make $185 million in sales tax transfers to KDOT in the remainder of this fiscal year and next, that $185 million results in more than $553 million of projects (including federal and other funds) not being put out for bid.

It’s a big week ahead, some ugly choices being made on behalf of Kansans, and the real problem—from just operating state government, but also politically for legislators who stand for re-election this fall—is that it doesn’t appear that it will get better next year, and maybe the year after with a governor who opposes raising taxes on business.

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Maybe the bills that the governor will consider signing this week would seem a little less dramatic if they fixed anything but the budget shortage.

If there were a plan—which probably should have been started last year or the year before—that was designed to “downsize” government, or make it more economical or streamlined, this week’s bill signings would seem a little less discouraging.

But that didn’t happen, and now legislators are going to stand for re-election with not much to show their potential voters. Oh, a few bills are worth touting. You don’t have to brand sheep and goats anymore. You can finally get a way to sue a neighbor who flies drones over your backyard when you are sunbathing. A little something, but it’s like prom night dinner when your date tells you to look at the chicken dishes and stay away from the steaks.

Just a little disappointing, or a lot disappointing…

We’re wondering how legislators campaign on a session with those results.

Syndicated by Hawver News Co. of Topeka, Martin Hawver is publisher of Hawver’s Capitol Report. To learn more about this nonpartisan statewide political news service, visit www.hawvernews.com.