Brownback’s Fiscal Disaster Continues

Sep 6, 2016 by

Financial cliff or fiscal risk and dangerous challenges regarding the risk in investing and finance management pit falls with a highway in the shape of a dollar symbol on the edge of a hazardous cliff.

Kansans are unhappy with Brownback AND his legislative allies

Under the leadership of Governor Sam Brownback and the willing participation of conservative Republicans in the legislature, the state budget continues its long collapse.

Just the other day, it was revealed that tax receipts for August were off yet again; this time by $10.5 million. Nearly every month since the Brownback tax policy passed by his conservative legislative allies in 2012 took effect, collections have missed the mark. Even after Brownback and his allies passed the largest tax increase in state history, dramatically increasing sales taxes and slashing your income tax deductions, revenue continues to decline.

Last month state agencies were directed to prepare budgets showing what a 5% cut would look like. And with the August revenue collections being off once again, it’s looking more and more likely that those cuts could be a reality for agencies already reeling from the loss of funding.

And while you might think that $10.5 million is not really a lot of money in a state budget, remember that the revenue collection estimates have been repeatedly ratcheted down as collections come in below expectations.

All of this is having an impact on the Brownback allies. After being ignored by their representatives in the House and Senate, Kansas voters have decided to take matters into their own hands and in the August primary election, many of Brownback’s allies were ousted in favor of more moderate, responsible Republicans. And let’s not forget that there is another chance for voters to be heard in the November election.

Those Brownback allies still in office but facing a challenge in the November election are Senators Dennis Pyle, Steve Fitzgerald, Jim Denning, Julie Lynn, Mary Pilcher Cook, Ty Masterson, Rob Olson, Mike Petersen, and Susan Wagle and Representatives Kevin Jones, Jene Vickrey, Keith Esau, Amanda Grosserode, James Todd, Willie Dove, John Bradford, Tony Barton, Marvin Kleeb, Scott Schwab, Ron Highland, Ken Corbet, Lane Hemsley, JR Claeys, Marc Rhoades, Will Carpenter, Pete DeGraaf, Joe Scapa, John Whitmer, and Kyle Hoffman.

Voters have choices in all of those races this November and it’s beginning to look like living a life of fealty to Sam Brownback instead of to your constituents might not be good for your electoral health.

A new poll commissioned by Republican Senate Leadership is bad news for those on the above list. When asked if they would vote for a Senator who supports the Brownback agenda, 57% of voters say they would cast their ballot for the Democrat. Only 21% of voters have a favorable view of Brownback and only 19% look favorably upon the legislature – the legislature that has blindly followed Brownback down the path to fiscal collapse. A full 75% of voters called the Brownback tax plan unfair.

Voters were asked which issues were of greatest importance to them. Leading the pack was K-12 education, the number one issue for 35% of voters. Tied for second place at 15% were state government spending and job creation.

You can read all about the poll in a Topeka Capital-Journal article. Click here.

 

 

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We’ve Grown Accustomed to this Pace…

May 2, 2016 by

Pothole

In Now Typical Fashion, Session Ends in the Wee Hours with Minimum of Votes Needed

In these days of a legislature and Governor who seem to be determined to run Kansas into the ground – or simply shrink it to a size that can be drown in a bathtub – the 2016 legislative session came to an end in the wee hours of this morning with the Senate on a vote of 22 to18 passed a budget conference committee report that the House had earlier passed on a vote of 63 to 59.

In both chambers it took a call of the body to persuade the last few people to move to the YES column in order to pass the bill. In the House it takes 63 votes to pass, 21 in the Senate.

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Governor Sam Brownback

The budget bill contained in the conference committee report on SB 249, marks the second year running that the legislature failed to balance the budget, instead punting to the Governor to make cuts of his choosing.

Here’s what the bill does:

Gives the Governor permission to take most of the sales tax dedicated to the highway program and move it into the state general fund (aka “robbing the bank of KDOT”).

Gives the Governor permission to delay KPERS contributions and then indefinitely delay paying KPERS back. In an earlier version, the legislature had directed that delayed KPERS payments would have to be paid back in the first quarter of the next fiscal year with 8% interest. Under this bill, KPERS gets paid back with any revenue that comes in above estimates and any tobacco settlement money that comes in above what has already been allocated for children’s programs. Bear in mind that revenue has exceeded estimates only one time in the last 12 months. There is also a proviso that says the revenue from the sale of state properties will go to the agency that owns the property and not to KPERS as was under current law.

Gives the Governor permission to cut most state agencies by 3 to 5%. It specifically directs that he may not cut K-12 education.

Gives the Governor permission to cut universities by another $17 million but kindly repeals the cap on tuition increases passed last year so that students and their families can make up the difference in higher tuition and increased student debt.

Gives the Governor permission to issue an RFP for the privatization of Osawatomie and Larned State Hospitals. Reverses permission to actually privatize with the legislature.

Contains provisos to protect Juvenile Justice Reform funding and Domestic Violence program funding.

Contains a proviso that the Docking State Office Building cannot be demolished without legislative permission.

There are a number of other provisos as well covering everything from Parks and Wildlife to K-State land sales.

NO votes for the bill, based on the statements made during discussion, include the belief by some extreme conservatives that K-12 education should not be spared from further cuts. Others argued that they could not support the bill because it could have a potentially devastating impact on KPERS. Still others argued that it was the equivalent of “dereliction of duty” in that the one task given to the legislature each year is to pass a balanced budget – it’s not balanced if it is dependent on the Governor making cuts to budgets at his discretion.

House Speaker Ray Merrick

House Speaker Ray Merrick

And the YES votes? We’re not sure about those. Maybe it was the late hour and the belief that things would only get worse if they stuck around town. Whatever the reason, the bill in the House was initially at 61 to 60. Rep. Suellentrop (R-Wichita), who was out of the chamber when the vote was initially taken, came in and voted YES, making it 62 to 60. That’s when Rep. Todd (R-Overland Park) changed his vote from NO to YES, securing the 63rd vote for leadership and passing the bill.  The final vote follows.

 

Final Vote Roster

 

In the House:

YES: Alford, Anthimides, Barker, Barton, Boldra, Bradford, Campbell, B. Carpenter, W. Carpenter, Claeys, Corbet, Davis, Dove, Esau, Estes, Goico, Gonzalez, Grosserode, Hawkins, Hedke, Hemsley, Highland, Hildabrand, Hoffman, Houser, Huebert, Hutchins, Jennings, D. Jones, K. Jones, Kahrs, Helley, Kelly KIegerl, Kleeb, Lunn, Macheers, Mason, Mast, McPherson, Merrick, O’Brien, Osterman, Pauls, Powell, Proehl, Rahnes, Read, Rhoades, Ryckman, Ryckman Sr, Scapa, Schwab, Schwartz, Seiwert, Smith, Suellentrop, Sutton, Todd, Vickrey, Waymaster, Weber, and Whitmer

NO: Alcala, Ballard, Becker, Billinger, Bollier, Bruchman, Burroughs, Carlin, Carmichael, Clark, Clayton, Concannon, Curtis, DeGraaf, Dierks, Doll, Finch, Finney, Francis, Frownfelter, Gallagher, Garber, Helgerson, Henderson, Henry, Hibbard, Highberger, Hill, Hineman, Houston, Hutton, Johnson, Kuether, Lewis, Lusk, Lusker, Moxley, Ousley, Patton, Peck, Phillips, Rooker, Rubin, Ruiz, Sawyer, Scott, Sloan, Swanson, Thimesch, Thompson, Tietze, Trimmer, Victors, Ward, Whipple, Williams, Wilson, Winn, Wolfe Moore

Absent and not voting: Edmonds, Ewy, Schroeder

In the Senate:

YES: Abrams, Arpke, Bruce, Denning, Donovan, Fitzgerald, Holmes, Kerschen, LaTurner, Longbine, Love, Lynn, Masterson, Melcher, O’Donnell, Olson, Ostmeyer, Petersen, Pilcher-Cook, Powell, Wagle, Wilborn

NO: Baumgardner, Bowers, Faust-Goudeau, Francisco, Haley, Hawk, Hensley, Holland, Kelly, King, Knox, McGinn, Pettey, Pyle, Schmidt, Smith, Tyson, Wolf


Please Explain the Business Income Tax Exemption Mess

Everybody knows (well, everybody except the Kansas Chamber, the Kansas Policy Institute, and Americans for Prosperity) that the income tax exemption for LLCs which has resulted in more than 330,000 Kansas business owners paying no income tax whatsoever in both unfair and bad fiscal policy. KNEA has been one of the many voices calling for the repeal of this exemption.

Yet, the repeal bill failed. And frankly we think that’s a not a bad outcome. Here’s why.

The LLC exemption is just one small part of the state’s revenue collapse. If the exemption is the only part of the 2012-13 tax plan to be repealed, it will not bring nearly enough revenue to solve the revenue crisis. In fact, this bill (SB 63) would have brought in no new money now, a very small amount next year and would only fully kick in in 2018.

The repeal of the LLC exemption is important but needs to be part of a complete repeal or comprehensive reform of the tax system such that revenue stability and adequacy is returned. We know that the Chamber, AFP and KPI would call a yes vote on this bill a tax increase and use the vote in the next election to attack moderate Republicans and Democrats.

What moderates and Democrats all want is to fix our tax system so that we can once again fund our highways, schools, public safety, and other vital state services. They know that if this bill passed, it would solve almost nothing and reduce the willingness of all legislators to consider more tax reform in the future. Think of it like pulling a bandaid off your arm – especially if you’ve got a hairy arm! Most of us would rather rip it off and get the pain over with rather than take incremental equally painful little tugs.

What the state needs – and what moderate Republican and Democrats understand – is fiscal responsibility. We are all better served if we bite the bullet, admit the “experiment” is a failure, and take real action to reverse course.


Last Few Days Were Conference Committee Reports

What we were watching over the last few days were not amendable bills being debated but conference committee reports.

There is a big difference between bills and conference committee reports. Conference committee reports are agreements worked out by small teams to get deals on the various versions of bills passed. This is important in the process because if a bill has not passed either chamber, it cannot be taken up in conference. While bills that have only passed one chamber can be added to a conference committee report, it is not often done because legislators like to have had their own hearing on the bill and a chance to amend it.

In the education realm, several bills were rolled together in conference committee reports.

In CCR SB 323, three K-12 bills were rolled together. The first bill, the Jason Flatt Act, requires 1 hour of annual suicide prevention training for school employees. The second bill establishes a program to track the language development of deaf and hearing impaired students. The third bill changes the rules for capital improvement state aid, establishing a 6 year rolling average cap on expenditures and allowing the State Board of Education to prioritize projects based on certain criteria. This CCR was adopted unanimously in both chambers.

A post-secondary CCR, HB 2622, holds four items:

  • The degree prospectus program under which institutions would provide prospective students with data on graduation rates and performance,
  • The CLEP provision that standardizes the use of CLEP examines for earning college credit,
  • The performance based funding incentives for career and technical education, and
  • Adjustments to some fees charged by the Board of Regents.

This CCR was adopted in the Senate on a vote of 34 to 6 and in the House 109 to 8.

Some other bills we were following this session did not move forward during the veto session. They were not put into conference committee reports and, since conference committee reports cannot be amended, they were not added in as floor amendments.

These include, SB 56, the repeal of the affirmative defense for K-12 teachers; HB 2199, the opt-in human sexuality education bill; HB 2531/SB 136, the repeal of due process for post-secondary instructors; and SB 469, the recertification of representative organizations for teachers.


The Waiting Game

Now everyone who lives under the dome goes into a waiting game. At issue is the Supreme Court ruling on whether or not the school funding equity bill passed by the legislature will meet constitutional muster. Arguments are scheduled for May 10.

The Court has suggested that if the legislature does not meet its constitutional obligation by June 30, schools will not open in August. People on the plaintiff’s side think the bill will not satisfy the court while those who wrote the bill believe just as strongly that it will.

With Sine Die (the largely ceremonial last day of the legislative session) scheduled for June 1, it would be a stretch for the court to rule prior to then. If the court rules early in June and rules against the state, we would expect a special session to be called in order to resolve the issue before the scheduled opening of schools in August.

Whatever we find out, we will report right here!

With the session over, Under the Dome will go into sporadic hibernation. Rather than daily updates, you will receive occasional updates as the need arises.

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Option 4: On the Table! (at least it should be)

Apr 27, 2016 by

Legislature Returns

The so-called “Veto Session” of the Kansas Legislature got underway this morning with both chambers gaveling in about 10:00 a.m.

Today was a very slow day. The Senate announced early that they would not be taking any votes today and the House dispensed with a couple of conference committee reports before calling it a day.

The conference committee report on SB 387 (making the Pooled Money Investment Board a separate state agency) was adopted on a vote of 119 to 0 and the conference committee report on SB 373 (dealing with toll evasion) was adopted on a vote of 82 to 39.

And that was about it for today.

Having just returned following the dismal revenue estimates and the release of Governor Brownback’s three devastating budget options, folks need a little time to meet quietly with their colleagues and figure out what they want to do and who is going to propose what. We would expect that things will begin to get pretty quickly since they seem to be anxious to finish everything up as quickly as possible.

Rumor has it that the House would like a three or four day veto session; the Senate may be thinking a little longer.

With no clear and immediate consensus that one of Brownback’s plans might be good, there would seem to be little chance of moving as fast as they might like.


Screen Shot 2016-04-27 at 3.23.34 PMOption Four Proposed

The Governor gave three options for solving the budget gap, all of which would be quite harmful to Kansas and Kansans. His proposals are various combinations of quick fixes and one-time savings but all of them include robbing still more money from the transportation plan and changing road maintenance from once every 12 years for a road to once every 50 years.

Another option is to sell off the tobacco settlement money for a quick influx of cash. This option jeopardizes early childhood programs for infants and toddlers. Brownback also proposed delaying nearly $100 million in payments to KPERS and delaying the payback due date by a year.

His option three includes cutting $57 million from K-12 education (so much for those stabilizing block grants).

Five groups came together in a press conference this morning to call upon the legislature to consider an Option Four – repealing the Brownback income tax cuts. The Kansas Center for Economic Growth organized the event during which Kansas Action for Children, the Kansas Contractors Association, the Kansas Organization of State Employees, and Kansas NEA all said that the three options from the Governor were unacceptable and that it was time to restore common sense to Kansas tax policy.

Remarks from KNEA were given by KNEA Lobbyist Mark Desetti:

In repealing the school finance formula and replacing it with the block grant system, Governor Brownback and legislative leaders promised that our K-12 schools would have – if not better funding – at least stable funding. It was to be funding schools could count on.

Now we are on the edge of another broken promise to our children and teachers.

The loss of funding that was provided in response to the Montoy decision was the result not of legislative action but was a legislative response to the great recession. We were sorry to see it happen, but we expected it to be temporary; fixed when the economy recovered.

Instead of restoring recession era cuts, Governor Brownback and his legislative allies implemented a plan that has turned out, in effect, to be a self-inflicted recession when it comes to generating necessary revenue for state services.

While every indicator tells us the experiment is a failure, the legislature continues on the same dangerous path, even doubling down.

Now they propose to sell off a program that has been providing quality early childhood programs for Kansas children, they continue to drain funds from important highway projects jeopardizing our safety, they turn their backs on hardworking Kansans putting their retirement security in jeopardy, they propose driving up the cost of higher education with extended cuts. And now they threaten to slash funding to our K-12 schools.

As our schools drop days from their calendars, reduce to a four day week, and eliminate valuable programs and staff positions, we cannot be more certain that there must be an option four – an option our governor continues to sidestep. It’s time to return to a stable, dependable, and fair tax system. It’s time to put option four on the table.

The definition of insanity, it is said, is to continue doing the same thing and expecting different results. It’s time to step away from the Kansas tax insanity.

The press conference was not long and you can listen to all of it by clicking here.

You can read coverage from today’s press conference on CJOnline by clicking here.


Topeka Capital-Journal Reporters Tour the State to Ask Everyday Kansans What They Think of the Governor and Kansas Legislature

In an extensive report published today in the Topeka Capital-Journal, Reporter Tim Carpenter writes about what he and other reporters heard while traveling the state during the five week legislative break. The reporters visited more than 40 Kansas communities from border to border to talk to homemakers, business owners, teachers, retirees, and employees (but no politicians) about the direction Governor Brownback and the legislature have moved our state.

And what was clear in everything people said? They are worried. They are frustrated with the inability of politicians to admit their mistakes and change course. They are worried about the partisan sniping and politicking while their hospitals are closing, schools are being challenged, and roads are degrading.

Carpenter highlights two prominent issues: “They’ve lost touch” and “Dysfunctionality.”

We urge our readers to take a look at the article and the accompanying videos online by clicking here.

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