Ad Astra Rural Jobs Act
On Monday, February 6, the House Commerce and Economic Development Committee held a hearing on the Ad Astra Rural Jobs Act.
Since I was the bill’s author, I testified to the committee describing the elements of the bill and why this rural jobs act would be beneficial to the state of Kansas. I described that the jobs act would offer a 20% tax credit beginning in tax year 2018 for certain investments from approved investment companies that will create job opportunities in rural areas of our state. The maximum amount of tax credits allowed is $20 million each year and the tax credit could be claimed for up to five years. The rural areas would be defined as a city with a population less than 60,000, not including urbanized areas that are adjacent to that city.
Businesses that receive investment funding would be required to relocate at least 60% of its principal business operation to a rural area, have fewer than 500 employees or have a federally adjusted gross income of less than $15 million. As the bill is written, these businesses would engage in industries related to manufacturing, plant sciences, technology, or agricultural technology. However, the Secretary of Commerce could determine if other industries qualify or if a location qualifies as rural area. I explained to the committee that with the Rural Opportunity Zones that were incorporated in 2012, this jobs act partners well with that program for job creation. I have been told by Representative Les Mason, chairman of the House Commerce and Economic Development Committee, that the Ad Astra Rural Jobs act will be worked in committee this week.
The Kansas Budget
In the weeks since the November Consensus Revenue Estimate (CRE), there has been much discussion about the revenue situation in Kansas. The economic challenges that the state faces are tied to a growth rate in tax receipts of 0.3% since FY 2014. While there have been some adjustments on the revenue side since passage of the 2012 tax plan, it is important to note the progress that has been made on reducing the size of government or reducing the cost of rising expenditures that the state has little to no control over.
Last week, we focused on some of the big picture numbers. Total State General Fund expenditures have increased by 0.3 percent ($17 million) from FY 2012 to FY 2016. During the same time period, entitlement expenditures (Human Services Caseloads) increased nearly $144 million. All other expenditures actually decreased by almost $127 million. When you break the expenditures down by function of Government, a good portion of state government has seen declines in spending, including a 6% reduction in General Government.
Human Services saw an increase of 7.1% during the FY 2012 to FY 2016 timeframe. Services are provided to the most vulnerable Kansans, including the frail, elderly, and disabled. Going forward, entitlement programs (KanCare, Medicaid Non-KanCare, Temporary Assistance to Families, and Reintegration/Foster Care) will continue to increase, although KanCare has kept the rate of growth at a more manageable growth.
In addition, there are other expenditures that continue to require funding. There are obligations to debt service and statutory obligations to the KPERS system. The solutions going forward will contain an effort to provide structural balance, while continuing to look for efficiencies in government.
Appropriations
This week in the Appropriations committee we focused on many of the budget committees reporting to the full committee the fiscal recommendations for fiscal years 2018 and 2019. The budget committees from General Government Budget, Agriculture and Natural Resources, and Social Services reported their committee’s suggestions for various budgets for the state of Kansas.
In addition to the budget committee reports, the committee also held two bill hearings. The first was House Bill 2133, which would change the reporting date for the Consensus Revenue Estimates from April 20 to May 1. The second bill was House Bill 2068, which specifies enforcement of child support orders against those required to pay child support but are currently in arrears.
Taxes
Last week, the House Tax Committee held hearings on many tax proposals. On Monday, the Committee further explored sales tax exemptions, by hearing testimony on eight exemptions which were previously identified by the committee for further study. On Tuesday, they heard public testimony from several conferees on pieces of the Governor’s tax proposal, namely cigarette and alcohol taxes. Also on Tuesday and into Wednesday, the Committee heard additional testimony regarding an increase on the motor fuel tax and were briefed on taxing retirement benefits. Then Thursday, the committee held a bill hearing which contains an increase to the upper tax bracket from 4.6 to 5.25%, repeals the automatic tax rate reduction, and provides a deduction for medical expenses on the Kansas income tax form.
Busy Week In Topeka
Many committee hearings this week covered a wide range of issues that affect the citizens of Kansas. On Monday, Wednesday, and Thursday, the House Health and Human Services committee held hearings regarding KanCare 2.0, or more commonly referred to as Medicaid Expansion. The Federal and State Affairs committee held hearings on altering the tax on slot machines for racinos, or gaming facilities that also offer gambling for horse and greyhound racing. That same committee also held a hearing on concealed carry licensure, as well. On Wednesday, Legislative Post Audit released their findings and savings if the school districts consolidated health insurance. Post Audit found that of the 101 districts they evaluated, the potential savings could be $63 million annually.
K-12 Education Budget
The K-12 Education Budget Committee is a newly created Committee to look at the budgets of K-12 Education including the Department of Education, the School for the Blind, and the School for the Deaf. The Committee is also charged with reviewing and making recommendations on school finance. So far this Session, the Committee has heard several briefings on topics and available resources related to School Finance including: Legislative Post Audits, Special Education, and Virtual Education. Members on a subcommittee on Virtual Education have been announced: Rep. Aurand, Chair; Rep. Patton, and Rep. Lusk. Last week, the Committee heard one bill and discussed two recommendations from the 2016 Alvarez and Marsal Efficiency Study: HB 2143 (procurement) and K-12 Benefits Program Consolidation. The K-12 Benefits Program Consolidation is found in HB 2142.
On Monday, the Committee will begin to examine individual school finance proposals, hearing from Mike O’Neal. On Tuesday, the Committee will hear HB 2242, enacting the Classroom-Based Funding Act. On Wednesday, the Committee will receive a briefing on the Legislative Post Audit on K-12 Benefit Consolidation, which will be released earlier that day. The Committee will also make recommendations on the FY ’18 and FY ’19 K-12 operating budget (not the school finance portion) for the Department of Education and for the School for the Blind and the School for the Deaf.
Contact Information
As always, if you have any concerns, feel free to contact me (785) 296-7672, visit www.troywaymaster.com or email me at [email protected]. Also, if you happen to visit the statehouse, please let my office know.
It is a distinct honor to serve as your representative for the 109th Kansas House District and the state of Kansas. Please do not hesitate to contact me with your thoughts, concerns, and questions. I always appreciate hearing from the residents of the 109th House District and others from the state of Kansas, as well.
Troy L. Waymaster, (R-Bunker Hill) is the 109th Dist. State Representative and chairman of the House Appropriations Committee.