Less Health Care, More KPERS Delays, and Increased Student Debt

May 19, 2016 by

BrownbackLaughHow do you protect irresponsible tax cuts for the wealthiest Kansans?

You make the poor, children, public employees, and college students pay for them.

That’s what Governor Brownback has done with his latest move to balance a budget destroyed by his reckless tax cuts.

As state revenue continues to crater, the Legislature caved in to Brownback and refused to even talk about an “option 4” – restoring the income tax. Instead they punted to Brownback allowing him to decide what was important in Kansas. And what is important? Protecting his failed tax policy.

Most alarming to educators is Brownback’s $30 million cut to university funding. The bulk of the cut comes directly out of university budgets ($23 million) with another $7 million coming from the Board of Regents budget.

Making up for the cuts, universities will likely have to increase tuition rates. It’s not lost on those of us who have followed the budget debate this year that the legislature repealed a tuition increase cap they enacted just a year earlier specifically to allow bigger tuition hikes.

So, in order to protect a failed “march to zero” income tax policy, our students will either be priced out of a university education or saddled with additional debt.

Brownback also cut another $3 million from the Children’s Cabinet and delayed an additional $100 million in contributions to KPERS. $38 million was taken from KanCare – the state’s Medicaid program which serves the poor.

The Topeka Capitol-Journal reported that the Governor, in announcing the cuts, said, “The three main drivers of budget growth continue to be education, Medicaid and KPERS.” And so, this time around, he took money away from those three areas. He is also quick to assert that he has “protected” K-12 funding at a time when the Supreme Court is expected to rule soon on K-12 funding equity and then take up adequacy.

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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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What’s Going On?

Apr 30, 2016 by

We’ve been here in the statehouse since 8:30 this morning and we’re approaching dinner time now. And we have nearly nothing to report.

There had been hopes that this would be the last day of the session but that is looking less likely as the minutes roll by.

The budget committee has been meeting on and off all day and much of the debate in there has been over education.

First, they are adjusting the cuts to universities such that KU and KSU will get larger cuts; PSU and ESU get smaller cuts and WSU stays about the same. This issue was pressed by Senator LaTurner (R-Pittsburg), a strong supporter of the Governor’s tax plans that have moved the state to near-bankruptcy and caused several highway projects in his district to be delayed or cancelled. LaTurner has sent a letter to the Governor begging him to let the transportation projects in his district go forward. LaTurner is also the brains behind a bill capping the ability of local units of government to raise tax dollars that could be used to offset state losses. His avid support of Brownback is costing his district plenty and he faces a strong challenge in his re-election bid this fall. So far he has only managed to get PSU’s cut down to about $750,000 instead of $1 million.

The next debate on the bill is over K-12 education. House members want to “put a fence” around K-12 funding, prohibiting the Governor from cutting K-12 funding going forward. Senate negotiators don’t want to protect K-12. At this time it looks as if the report will go to the House floor with the K-12 protection.

Of course, the bill also contains the delay in KPERS payments as well as the delay in paying KPERS back. The state would be off the hook for the delayed KPERS payments until 2018. The bill contains a provision that calls for KPERS to be given any money that comes in above the revenue estimates. Since the estimates have not been hit 11 of the last 12 months, it is unlikely that KPERS will get any payments any time soon.

The Senate is now out until 8:00 pm at which time they will consider some conference committee reports but not the budget report. That has to go through the House first. The House is not expected to have the budget report ready until around 11:00 pm.

A budget debate could take them past midnight and going past midnight requires a special vote. Additionally, there is some thought that the budget might not have the votes to pass.

All of this means that ending the session tonight is looking more challenging. We anticipate being back tomorrow or maybe moving into next week.

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Conference Committee Actions

Apr 30, 2016 by

CCR SB 63: Repealing the business tax loophole

This bill would repeal the loophole in the tax code supported by Gov. Brownback that allowed more than 330,000 Kansans to pay no income tax at all.

Most of Kansas supports this repeal but this bill proved problematic. While the bill would have repealed the loophole, it was being sold as a solution to the state’s fiscal woes. Unfortunately, it was not. The bill would have provided an estimated $61 million in 2017 and something over $200 million in 2018. Passage of the bill would have given some legislators the opportunity to say they voted to reverse the damage done to the state, we would actually have faced the same disastrous issues we are facing now. This bill would not have funding our schools, fixed our highways, or protected our pensions, universities, and pre-school programs from the Governor’s cuts, sweeps, and delays.

The legislature needs to face up to the fact that “option four” is the only way out of this fiscal mess. Yes, the business income loophole needs to be reversed, but it needs to be done as part of a complete package that reverses the disastrous “march to zero” advocated by Gov. Brownback and his extreme allies in the legislature.

CCR SB 63 was an election year gimmick intended to some who support the Governor’s plan the cover necessary to survive their re-election campaigns. By voting for this bill, they could claim to have “broken with Brownback” to solve the problem while actually doing little to help.

We can guarantee that those who voted yes on this bill will be tagged as “tax raisers” by the radical right elements of the Kansas Chamber, Kansas Policy Institute, and Americans for Prosperity. And yes, they would have done a good deed in making the tax system more fair but they would have done almost nothing to solve the fundamental revenue problems caused by the Governor’s comprehensive and reckless tax cuts passed in 2012 and 2013.

Now that CCR SB 63 has been done away with, let’s hope that the legislature will actually stand up for Kansas and put together a bill supporting option four – reversing the reckless and irresponsible Brownback tax cuts.

No votes are a mixed bag of legislators containing many Democrats and moderate Republicans along with hard right anti-government ideologues. Democrats and Moderates who voted no want to fix the system so that schools, highways, public safety and other vital state services are funded. The hard right wants to continue the “march to zero” and the gutting of those same services.

The report failed on a vote of 45 to 74.

CCR SB 323: The education report

This conference committee was adopted easily. It contains three bills heard in committees and voted on by the legislature.

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.

KNEA supports all three bills. The report was adopted 118 to 0. It now goes to the Senate.

CCR SB 168, KPERS, Working after retirement

This bill does a number of things but those impacting teachers include the following three:

Prohibits pre-arranged working after retirement agreements,
Extends current provisions for three years, until 2020,
Makes certain changes in how to extend employment under the exceptions in current law.

The bill was adopted on a vote of 117 to 1. Only Rep. Jerry Lunn voted now. We imagine this is because he wanted the bill to include his study of retirement “spiking” via deferred compensation. But we’ll let him explain his rationale.

We’re back for the weekend!

Or at least Saturday. The House has now adjourned until 8:30 am tomorrow (yes, that’s Saturday). The Senate has not yet adjourned for the day.

Keep alert tomorrow! Follow us at underthedomeks.org or by using the KNEA app on your smart phone. We may need your help!

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Another Fine Mess

Apr 21, 2016 by

Brownback Offers Three Plans to Further Degrade Kansas

Laughing_brownbackIn response to yesterday’s reduction in estimated tax collections, Governor Brownback and his Budget Director Shawn Sullivan quickly released three proposals to balance the budget.

The first option would take nearly all of the remaining sales tax revenue dedicated to maintaining roads and highways further jeopardizing the safety of Kansas’ transportation infrastructure and extend a 3% reduction to Universities into FY 2017. Under this option he also asks the legislature to give him permission to bond the tobacco fund money (known as the Kansas Endowment for Youth and the Children’s Initiative Fund) and turn this continuing revenue source into a continuing debt. This money is currently used to provide services including pre-school for Kansas children. The Governor promises that most of these programs would be preserved in the state general fund. But of course, we know what happens to such promises as the state’s revenue stream continues to erode.

The second option also takes the highway fund money and continues the reductions to Universities as in option one but instead of selling off the tobacco receipts delays more payments to KPERS and delay paying KPERS back until 2018. Don’t forget that the Governor has already delayed $93 million in KPERS payments. Option three is expected to delay another $99 million in KPERS payments.

Option three takes the highway fund money as in options one and two but instead of delaying more KPERS payments or bonding the children’s initiative fund asks the legislature to give the governor the ability to cut most state agency budgets between 3 and 5%. Under this plan K-12 education would be cut by more than $57 million.


Promises, Promises

Brownback and his allies are full of promises to Kansans. They promise that they will fund pre-school programs even if they sell off the tobacco settlement money. They promise that they will repay the KPERS funds with 8% interest. They promise that their radical reckless tax cuts will be a shot of adrenaline into the heart of the Kansas economy. They promised that their education block grant program would provide certainty in school funding.

But after four years of continuing economic collapse and broken promises, what faith do any of us have that they will keep any of their promises in the future?

If revenues continue to decline, what promise will they break first? Dump pre-school programs? Renege on the 8% interest on KPERS fund delays? Don’t pay back KPERS at all? Make ever deeper cuts to K-12 and higher education?

We wonder how much faith the people of Kansas have that promises made will be kept.


Who is Responsible for this Mess?

Back in 2012, when Brownback launched his “glide path to zero income taxes” plan, based upon advice from the architect of trickle-down economics Art Laffer the plan eventually ended up in Senate Substitute for House Bill 2117. It was initially voted down in the Senate but after moderate Republican senators were persuaded by Brownback that the bill as it was would never become law – it was only a vehicle to get a tax conference committee to write a better plan – there was a vote to reconsider and the bill was passed and sent to the House. There, the much more conservative House moved to concur in the changes to HB 2117. At first the bill was not passing but after a long call of the House and much arm-twisting and wood-shedding from House leadership and the Governor, 64 votes were cobbled together and the bill became law.

Since its passage the revenue situation for Kansas has been grim. Month after month, revenues have declined resulting in massive spending cuts and sweeps of millions of dollars in fee funds and highway fund to shore up the budget. In desperation, the Governor called for the largest tax increase in Kansas history – a sales tax increase that, like Laffer’s trickle-down plan for income taxes, falls heaviest on the lowest income Kansans and has driven residents of border counties across state lines to shop for food.

Despite the sales tax increase, revenues have continued to fall until we came to yesterday. Now we are faced with even more draconian cuts to already badly damaged state services.

So who among today’s incumbent legislators were among those in 2012 who enthusiastically embraced the Brownback agenda?

Here’s the list!

Representatives in 2012 who voted in favor of the reckless Brownback tax bill:

Alford, Arpke, Bruchman, DeGraaf, Denning (now a Senator), Garber, Goico, Grosserode, Hedke, Hildabrand, Hoffman, Huebert, Kelley, Kerschen (now a Senator), Kiegerl, Kleeb, Knox (now a Senator), Mast, O’Brien, Osterman, Peck, Powell (now a Senator), Rhoades, Rubin, Ryckman, Sr., Scapa, Schwab, Schwartz, Seiwert, Smith (now a Senator), Suellentrop, Tyson (now a Senator), and Vickrey.

Senators in 2012 who voted in favor of the reckless Brownback tax bill:

Abrams, Bruce, Donovan, King, Love, Lynn, Masterson, Merrick (now in the House), Olson, Ostmeyer, Petersen, Pilcher-Cook, Pyle, and Wagle.

So far most of the above legislators have shown little appetite to revisit their tax cuts and put Kansas back on the road to recovery.

And the original group of moderate Republican Senators who reversed course when the Governor assured them this bill would not be the final product? The Governor joined the campaign against them and managed to oust all but McGinn, Longbine, and Schmidt from the Senate, replacing them with more obedient conservative Republicans.

Look at the list carefully. We expect that many of them will soon be campaigning for re-election. Feel free to ask them about their votes on tax policy when they come knocking on your door.

 

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