It was the House that rejected the governor’s plan to essentially refinance the debt — or more precisely, actuarial shortfall — of the Kanas Public Employees Retirement System, or KPERS.
Her bill would have taken that shortfall and reamortized it over 30 years, cutting the state’s payment toward making the fund for more than 300,000 Kansans actuarially sound…which means it has the money in hand to make the pension payments that those state and school district employees expect.
The Republican victory? It was refusing to refinance that debt to free up maybe $200 million a year for other purposes. Which means, essentially, that there will be less of that money from lower annual payments which can be spent on nearly everything else the state spends your taxpayer money on.
It comes down practically to “pay now or pay more later” and Republicans figure that the refinancing would cost the state billions of dollars in additional interest payments over the next three decades.
It’s a principle thing. The Republicans say they believe–but haven’t always voted for–the state paying its bills on time and saving that interest penalty which will undoubtedly present the next generation of House and Senate members money they would probably like to spend on something sexier for most voters than actuarially determined pension obligations.
But for the House Republicans, nixing the governor’s plan is a major victory, which also has the effect of reducing the state’s bank balance. But it is something they can campaign on. Don’t look back several years when GOP lawmakers and their GOP governor repeatedly didn’t make the pension appropriations they should have under state law, just look with them at saving money for Kansas income taxpayers who haven’t been born yet.
Now, there’s always the view that Kelly took the reins of a state in which that Gov. Sam Brownback-era income tax cut experiment is still being shaken off with recent increases in income and sales taxes. But there’s also the view that spreading out the state’s debt to its pensioners and pension program participants frees up money for other uses. And…the pensioners still get paid.
There’s also the chance that the refinancing of pension debt makes possible expanded funding for education, roads and care for the state’s children. Oh, and though she’s not a fan right now, it also means there’s a chance for some income and maybe sales tax on food cuts.
The refinancing would hand Kelly and the Legislature more money to spend on politically attractive items, or at least more money to fight over how to spend or give back to taxpayers.
So, is the fight over? Has this first major defeat for the governor handed control of the state back to the Republican-dominated Legislature? Or does it ring the bell for the start of the fight between conservative Republicans who control the Legislature and its moderate Republican/Democratic faction?
That’s the key to that one House vote. What does it end and what does it start?
That start? It might just be the fight for who gets to sit in the governor’s chair…four years from now. Which means the battle this year could determine whether Kelly gets to see enough of her platform enacted to make reelection look likely, or whether she gets so little of her platform enacted that it will appear she’s doing nothing for the state.
It’s a long fight ahead. The first-round bell has just rung.
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com