First School Finance Bill Passes; Four Day Weekend

May 25, 2017 by

The House this morning passed Sub for HB 2410 on final action on a vote of 84 to 39, moving it on to the Senate.

The Senate meanwhile has crafted their own school finance bill which was originally in SB 251 but on moving it out of committee, it was put into HB 2186.

We now know what’s in HB 2410 and can report that we believe the policy in the bill makes for a good school finance plan and will likely be found to be constitutional. The bad news is that the funding in the bill remains low and we expect the Court to call it inadequate.

Sub for HB 2410 contains many important policy pieces including:

  • Full funding of All Day Kindergarten and funding for 4-year-old at-risk,
  • A higher level of at-risk funding and a floor of 10% for districts with fewer than 10% free lunch students,
  • High-density at-risk weighting, low enrollment, and high enrollment weightings,
  • Enrollment count provisions to protect districts impacted by military deployments/transfers, and
  • Funding for mentor teacher and professional development programs.

The bill contains many provisions that re-enact elements of the school finance formula that was in place before its repeal and replacement by the unconstitutional block grant system.

The bill also makes changes to the corporate tuition tax credit scholarship program. The bill would require that private schools receiving students under the program be accredited by the State Board of Education. Eligible students would have to be in one of the 100 lowest performing schools as determined by the Kansas State Department of Education and be free lunch eligible. 50% of those students would also have to be directly certified by the Department of Children and Families. While KNEA still opposes the payment of state monies either directly or indirectly to private schools, HB 2410 makes significant improvements to the program.

The Senate Bill, contained in Sub for HB 2186, is perhaps a different animal altogether.

While it started out similar to HB 2410, there are a number of significant differences including an even lower funding level.

In crafting the bill, while legislators had a copy of SB 251 as drawn up for Senator Denning, very few amendments were submitted in written form. They were offered and debated as “conceptual” amendments all of which were further amended by more conceptual amendments. With nothing in writing it was very difficult to determine the impact of most of the amendments ultimately adopted.

As of today, the amended bill was not available for review. So we apologize, but we will have to wait to report to you on the specifics of the bill until we have had the chance to read it. The word under the dome is that the Senate will caucus on HB 2186 on Tuesday with a vote to follow on Wednesday. If this bill passes, it is possible that the two chambers will go directly to conference with their two versions of school finance as the guides.

And just remember – we have a long way to go before this is done. The Senate must deal with a school finance bill and then a House/Senate Conference Committee will need to hammer out the differences before a final bill can be submitted to the Governor and ultimately the Supreme Court.

It Still Has to be Funded

Yes, funding is needed. Something the state does not have right now.

A tax plan that restores revenue to the state and allows for an increase in school funding has yet to be passed.

On Monday, the House defeated a tax conference committee report in SB 30 that would have restored three income tax brackets, repealed the glide path to zero, and ended the LLC tax loophole. The no votes came from conservatives who don’t believe there is a revenue problem or that schools need more money and from Democrats who pointed out that the bill was not big enough to fund the current budget and increase school funding.

Like HB 2410, KNEA believes that SB 30 (the Monday version) was the right policy but we agreed that more would need to be done to fund schools. We supported the bill because it would have put the income tax system back on firm ground but we agreed that a second bill would be necessary to cover school funding increases.

The House put SB 30 back in committee and the next version to come out was a smaller, more anemic bill. This time we opposed SB 30. And apparently, a lot of legislators did as well because it was pulled before it hit the floor.

Okay, so here’s the problem in following along – SB 30 is the tax bill. It is the tax bill over and over (Groundhog Day?) and each time it emerges out of its hole, it’s different. Sometimes it’s good; sometimes it’s bad. The next tax bill is likely to be SB 30 and we don’t know if it will be a good SB 30 or a bad SB 30. But look for it on Tuesday or Wednesday of next week.

Should We Be Mad That There is a Four-Day Weekend?

We know, it seems somehow wrong that as soon as they hit 101 days, they decided to take a four-day weekend.

But this has been an extraordinary week under the dome. They have been building tax plans, debating them, arguing about them. The House has finally passed a school finance plan that was the result of a lot of hard work and long hours. This week they’ve been meeting late into the evening and it has been trying.

We know we are exhausted and we also know that they are exhausted. And knowing that good work is seldom done by the unrested, we hope that they will use the long weekend to relax and refresh. That’s what we will do.

But here’s the big thing – we are fully expecting them to come back on Tuesday rested and ready to roll up their sleeves. There’s still a lot to be done and we’re about out of time. There will be long days and night work ahead.

 

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K-12 Committee Finishes Finance Plan Bill

Apr 5, 2017 by

The House K-12 Education Budget Committee met this afternoon to finish their amendments to HB 2410. They began with opening comments by Chairman Larry Campbell (R-Olathe). Campbell said it was his intention to finish the amendment/debate work today but not to pass the bill out of committee. Instead, he hopes that the three-week legislative break in April will allow stakeholder groups, other legislators, legislative counsel, and the revisor’s office to thoroughly digest the bill. The Committee will then meet at the start of the veto session in May and “kick it out” of committee.

The first amendment to be taken up was Rep. Adam Smith’s (R-Weskan) amendment on transportation that was on hold since last week. Working with the Department of Education, Smith adjusted his amendment such that an algebra issue is fixed but he added a hold harmless provision so no districts lose money. About 25 districts will gain. The amendment was adopted. KNEA supports a hold harmless provision.

The next amendment adopted was from Rep. Jim Karleskint (R-Tonganoxie). It changed the corporate tuition tax credit program so that eligible students would have to be from one of the schools in the lowest quartile of student achievement as determined by the KSDE. This would triple the number of schools from which eligible students may be chosen. With other amendments adopted last week, the program would limit eligible students to those direct certified by DCF as in poverty and limit receiving private schools to accredited schools that outperform the state average on either post-secondary success or ACT composite scores. KNEA opposes expansion of eligible schools and supports limiting schools to SBOE accredited schools; KNEA supports repeal of the program in its entirety.

Next were a series of amendments offered by Clay Aurand (R-Belleville). The first would disallow virtual students from out of district to be counted for the calculation of assessed valuation per pupil. This would reduce capital outlay and LOB aid (more on that in a minute) because only resident students would count in the calculation and would save the state about $3.8 million. This amendment was adopted.

Next Aurand moved to distribute the $3.8 million in savings over to career and technical education programs. This amendment failed.

Aurand’s next amendment, which passed, changes the name of the LOB from “Local Option Budget” to “Local Foundation Budget.” He asserted that this more accurately represents the fact that the LOB morphed from extra money to de facto base aid. So the LOB (mentioned above) will now be called the LFB if the bill passes.

A subsequent amendment by Aurand to require an election for any LFB funding above 30% (the last 3%) failed on a vote of 7 to 9.

With all of these amendments now disposed of, they got on to the big issue – the setting of the base state aid per pupil.

Rep. Melissa Rooker (R-Fairway) moved to set the base at $4040/pupil in the first year at a cost of $172 million. The base would be increased by $200 per pupil in each of the succeeding 4 years at a cost of $150 million per year. This would be a total increase of $772 million over five years. There was an 8 to 8 tie vote which was broken by the Chairman who voted no. The motion failed.

Rooker then moved to set the base at $4006/pupil in the first year at a cost of $150 million. The base would be increased by $200/pupil in each of the succeeding 4 years at a cost of $150 million per year. This would be a total increase of $750 million over five years. This motion was adopted by a vote of 9 to 6.

With the bill finished, Campbell announced that the final written product would be available sometime over the next couple of days and posted on the KSDE website along with cost runs developed by the Department.


Governor Inserting Himself in Tax Debate

The news out today on the tax reform debate is that the Governor – who created the disastrous tax experiment that has left Kansas on the brink of bankruptcy – has decided to create a new tax plan.

Word was that this plan would include keeping two brackets and mixing in a little cigarette and liquor taxes. No word on his intentions on the LLC loophole or the glide path to zero but we assume he would not dare to reverse his signature tax policies. His plan was to skirt the full Senate and House and send his plan straight to a tax conference committee, letting only six legislators have any real say in the plan.

That did not go over well with any members of the Republican caucus. Senators on the conservative and moderate sides of the caucus both blasted the idea of cutting them out of the discussion.

Now the Governor has announced that he would sign a flat tax bill should the legislature send him one. Of course, a flat tax punishes middle and low-income Kansans for the benefit of the wealthy (MORE HERE) and would do nothing to solve the disaster brought on by the Governor’s last tax plan.

Kansas needs tax reform that will reverse the Governor’s failed experiment. End the glide path to zero, repeal the LLC loophole, re-establish the third tax bracket for upper-income Kansans. Kansas desperately needs revenue to put highway maintenance back on track, to hire correctional officers and highway patrol officers, to fund the social service safety net, and to respond appropriately to the Supreme Court decision on school finance. No plan proposed yet this session would do this.

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House Crafts Its Tax Plan

Feb 10, 2017 by

House Tax Bill Comes Out of Committee

The Senate on Thursday abandoned debate on their tax bill when it was clear that it would not get the votes necessary to pass. That bill, SB 147, would have raised about $280 million by raising income taxes on all Kansans. While it repealed the LLC tax loophole, it did not end the Brownback glide path to zero. The money raised in the bill would have resulted in the need to once again raise taxes later this year or immediately in 2018 and the continuation of the glide path would have put Kansas in the same budget crisis in the future.

Also on Thursday, moderate Republican and Democratic Senators handed leadership yet another defeat when they announced that they would not vote for SB 27, the cuts bill that would have reduced education funding by $154 million dollars in the current year.

Senate president Susan Wagle has been insisting that cuts were needed and that support for increased taxes must be concurrent with budget cuts the largest of which would be applied to K-12 public schools.

Over in the House, they are taking a radically different approach. Late yesterday the House Taxation Committee assembled and passed a comprehensive tax restructuring bill that goes a long way to restoring stability to the state’s revenue system.

Under the House plan, House Substitute for HB 2178, the glide path to zero income tax would be repealed as would the LLC loophole. The loophole would be repealed retroactively to all of 2017.

The House would restore the third income tax bracket set at 5.45% for those with an adjusted gross income of $50,000 or more filing as an individual and $100,000 for married couples filing jointly.

Income rates under the House plan for those married filing jointly would change as follows:

Taxable income (AGI) 1992-2012 Current law (2017) Sub for HB 2178 (2018)
$0-$30,000 3.5% 2.7% 2.7%
$30,001-$60,000 6.25% 4.6% 5.25%
$60,001-$100,000 6.25% 4.6% 5.25%
$100,0001 + 6.45% 4.6% 5.45%

 

The full deduction for medical expenses which was repealed in 2013 would be restored effective 2017.

This tax bill is estimated to raise an additional $590.2 million in fiscal year 2018.

The bill is a major step forward in the debate over tax policy under the dome.

Next week, the House Appropriations Committee will hold a hearing on HB 2161, a bill that would liquidate the pooled money investment portfolio putting about $317 million in the treasury. The portfolio would then be paid back at about $45 million per year for seven years. This action would likely create enough one-time money to plug the hole in the current year budget. It would, however create a seven year obligation. KNEA believes that this is the best way to get out of 2017 without cutting state services but must be done in conjunction with a comprehensive tax fix that provides for state services and allows the new obligation to be paid.

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Your advocacy works! Support Evaporates for Senate Tax Plan and Ed Cuts

Feb 9, 2017 by

Post Highlights

  • The Senate convened at 8:00 this morning and almost immediately shut down when it became clear that there was no possibility of getting 21 votes to cut schools or pass an inadequate tax plan.
  • In pulling the bills (SB 27 and SB 147) and ending the discussion for the day, Senate President Susan Wagle announced that they would not consider anything else until budget and tax plans were resolved.
  • As the revenue crisis continues in Kansas, the state has earned yet another credit downgrade from Standard and Poor’s.
  • On Monday, the House K-12 Education Budget Committee will hear HB 2142 which would establish a consolidated health benefit program for schools.
  • On Tuesday, the House Education Committee will hear HB 2179, a bill restoring due process or fair dismissal protections to Kansas teachers.

Senate Tax and Cuts Plans Derailed

You and many other public education advocates answered the call last night, you contacted your Senators and enough of them listened.

The Senate convened at 8:00 this morning and almost immediately shut down when it became clear that there was no possibility of getting 21 votes to cut schools or pass an inadequate tax plan.

Senate Bill 27 would have cut K-12 and higher education by $154 million (a 5% cut to K-12 and 3% to the Regents) while Senate Bill 147 would have increased income tax rates, ended the income tax exemption for the poorest Kansans, and repealed retroactively the LLC loophole.

While the bills were supported by Senate leadership and did have enough committee votes to make it to the full Senate, the blowback from voters forced many to rethink whether or not they represented the best way out of Kansas’ current revenue crisis. Voters in August and November ousted most of Brownback’s most ardent legislative allies replacing them with moderate Republicans and Democrats who campaigned on no more cuts to our schools and reversing the Brownback tax disaster. Overnight Kansans from border to border blasted the bills on social media and in messages directly to Senators.

The bills before the Senate would have done nothing to stop the ongoing fiscal crisis. While the cuts to education and other state services might have helped patch the hole in FY 2017, the tax increase would have raised only about $280 million in FY 2018. Most analysts believe Kansas needs at least $580 million to get through next year. Additionally, while SB 147 did raise income tax rates and repeal the LLC loophole, it continued the Brownback glide path to zero income tax so that even if it did put some money in, it all would be for naught when the glide path kicked back in reducing revenue further.

In pulling the bills and ending the discussion for the day, Senate President Susan Wagle announced that they would not consider anything else until budget and tax plans were resolved.

Democrats have now reached across the aisle to try to work a bipartisan solution that would garner enough votes to override a potential gubernatorial veto. That would take 27 votes instead of the 21 votes needed for simple passage.


Yet Another State Credit Downgrade

As the revenue crisis continues in Kansas, the state has earned yet another credit downgrade from Standard and Poor’s. We believe this is the fourth credit downgrade under Brownback’s leadership.

S&P Global Ratings has now dropped the states AA minus stable rating to AA-minus negative. They specifically cited the move to securitize the tobacco settlement monies, liquidate capital reserves, and pension underfunding as problems.

Lower bond ratings negatively impact investment in Kansas as potential bond investors look to more secure places in which to invest.

S&P said that Kansas has a one in three chance of getting yet another downgrade in the next two years.

There is a solution, however. That is to stop relying on gimmicks and one-time transfers or shifts to balance budgets. Get off of Governor Brownback’s runaway train wreck by reworking the Kansas tax system. End the glide path to zero, repeal the LLC loophole, add another income tax bracket for higher income levels and stop selling off the state’s assets to fill holes.


Two Important Hearings Next Week

On Monday, the House K-12 Education Budget Committee will hear HB 2142 which would establish a consolidated health benefit program for schools.

The bill explicitly requires a high deductible insurance plan, prohibiting any that are not high deductible. This essentially guarantees that the savings will come out of employee’s pockets.

If all savings generated by the move to a consolidated plan were left in the school districts to be passed on to employees in higher salaries, it is conceivable that in some of those districts the higher salary might offset the higher costs to employees. Since the Governor’s budget proposal assumes any savings would be diverted into the state’s general fund, we can only assume that all savings would be clawed back by the state or result in reduced funding to school districts.

Employees then are left with fewer health benefits and no opportunity to offset the loss of benefits with an increase in salary. This plan truly represents a $25 million reduction in compensation for school employees across the state.

The LPA auditors examined the impact this consolidation would have on 101 of the state’s school districts. In 98 of those, employee benefits would be reduced by an average of 6% with some districts see a 14% drop in benefits. Only three districts in the study currently have lower benefits that the consolidation plan would have. But since the bill allows school districts not to join the plan, those district would more than likely stay with their less expensive low-benefit plans.

On Tuesday, the House Education Committee will hear HB 2179, a bill restoring due process or fair dismissal protections to Kansas teachers.

Due process was repealed in 2014 in a backdoor manner with no bill introduction and no public hearing. Many of our readers were with us in the statehouse at 4:00 am when the repeal happened after House members were locked in the chamber for hours until the 63rd vote could be secured.

This time the bill has 45 bipartisan co-sponsors. We look forward to the hearing and expect Chairman Aurand to work the bill and allow a committee vote.

 

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Guns and good beef

Jan 25, 2017 by

First Gun Bill in Senate Scheduled for Hearing

Senate Bill 53 which would create a permanent exemption for public buildings to the current gun carry law. Under current law college campuses will have until July 1, 2017 to provide security solutions that will stop guns from coming into buildings. If a college cannot provide such security – a metal detector and security at every building entrance – then they cannot prohibit the carrying of firearms in their buildings. Senate Bill 53 strikes the date. While the bill does not outright ban weapons from campuses, it allows each college to put a policy in place based on their situation.

Student, faculty, and administrative groups have all opposed the current law, wishing to keep their campuses safe. College campuses are stressful places for students. Many of these students are away from home for the first time, adjusting to new kinds of schedules, and trying to get along with roommates. They are worried about grades. They might be in new romantic relationships that can go wrong.

While colleges might prohibit firearms on campus, there is of course no guarantee that someone won’t violate the policy. That will always be a problem. But to have multiple persons pull out firearms in defense simply increases the likelihood that there will be victims. Beyond that, it creates a serious problem for law enforcement when responding to an incident. A police officer has no way, in the split seconds it takes to respond, to determine who are the “good guys” and who is the perpetrator.

The bill just came out today and a hearing has been scheduled for Thursday.


Who Among Us Prefers a Select Grade Steak Over Prime?

That is the question that came to us last night during the continued hearing on HB 2023, the repeal of the LLC income tax exemption.

The Kansas Chamber of Commerce, the National Federation of Independent Businesses, and Americans for Prosperity all claimed in their testimony against the repeal that the state of Kansas has plenty of money and before business owners should have to pay income tax like the rest of us, the legislature should cut and cut and cut spending. It’s apparently not enough that we have essentially depleted our highway fund, robbed over $100 million from employee pensions, and cut services for Kansans with disabilities in order to give the income tax exemption to business owners, we must continue on the path of service destruction.

One of their lobbyists, in response to a question about where to cut, told the committee that it was easy to “cut the fat cap off a piece of beef, but much harder to cut the marbling.” We could not think of a better analogy!

The legislature has indeed “cut the fat cap off.” And they’ve begun digging out the marbling. What they fail to remember is that the marbling is what moves a steak from “select” to “choice” to “prime.” Any lover of a good steak knows that marbling – more of it – is what makes steak taste so good. One can look at a steak and know what grade it is by the marbling.

Kansas for years provided prime grade services from education to public safety, from highways to a social service safety net. The fat cap was cut off years ago – Kansans by their nature are fiscally conservative – but there was always enough marbling to let schools go from okay to excellent, enough marbling to make our neighboring states envious of our roads and highways, enough marbling to make life better for our seniors and those with disabilities.

The last few years, legislators have been digging out the marbling. Kansans are experiencing for the first time what no marbling tastes like. It tastes sour. Kansans want better and they started demanding better last August and again in November.

 

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