Kansas Day Under the Dome

Jan 30, 2017 by

Post Highlights

  • Kansas Day celebrated in the statehouse.
  • Budget cuts- possibly to education- are being discussed as part of a strategy to deal with a $350 million shortfall.
  • Cuts to KPERS not included in House Appropriations committee report.
  • Consolidation of district purchases and health care plans will be heard in committee later in the week.
  • Hearing in House committee this week on bill allowing colleges to restrict guns on campus (identical to Senate bill from last week).
  • A comprehensive, sensible, long-term plan for dealing with Governor Brownback’s revenue disaster introduced as a bill in House Tax committee.  Plan known as “Rise Up Kansas!” has support from several organizations including KNEA.
  • New concerns have been raised regarding the new rules for Working After Retirement from both employers, employees and retirees.
  • To see a complete explanation of the rules and exceptions please see https://www.kpers.org/pdf/WARschools.pdf

Today is the day for legislators to celebrate Kansas Day. This includes showing a film about the writing of “Home on the Range” and a performance of the song by Michael Martin Murphey on the Senate floor.


Budget Talks Happening; Rumors Still Abound

There were few committee meetings today but that does not mean things are not moving. Committees are moving toward presenting a solution to the $350 million shortfall in the FY 2017 budget. There are still moving parts and some still believe there might be some level of across the board cuts which would include the possibility of cuts to education.

The education report before the House Appropriations committee does not include the Governor’s irresponsible cuts to KPERS funding. The full committee will take up the issue later this week.

Also up this week will be hearings on a bill to consolidate school district purchases on a state level and another to consolidate school district health care plans. Both were part of the Alvarez and Marsal efficiency study and both were included in the Governor’s budget plan. Some people believe the discussion of the health care consolidation will be canceled while the await an upcoming report on the issue by the Legislative Post Audit Division. While both of these bills were introduced as a courtesy to the Governor and to spur discussion, neither seems to have much popular support at this time.

Meanwhile, the tax committees continue to examine various tax solutions with an eye to reversing the damage that is being done to Kansas by the reckless 2012 tax cuts touted by Governor Brownback as just the thing to provide “a shot of adrenaline to the heart of the Kansas economy.” This week the House Taxation Committee will be looking at sales tax exemptions; income tax brackets and the glide path to zero income tax; taxes on cigarettes, liquor, and motor fuel; and how retirement benefits are taxed.

Also up this week will be a hearing on the House version of the bill to allow colleges to determine whether or not firearms may be carried on campus. The hearing in the Senate last week found lots of support for repealing the current law which requires colleges to allow guns after July 1, 2017 unless they provide security at all entrances to every building. The Senate hearing happened on the same day it was revealed that Rep. Willie Dove (R-Bonner Springs) left a loaded handgun in a committee room. Thankfully it was found and turned in to police by a responsible adult and not picked up by one of the hundreds of school children that tour the Capitol every day.


Rise Up Tax Plan Introduced

With an eye to fixing the damage done by the disastrous 2012 tax plans, a new comprehensive proposal was introduced today in the House Tax Committee.

The RISE UP plan as it is called was put together after lots of research and examination of what changes would provide for a restored Kansas. Among the components of the plan are the repeal of the LLC exemption, ending the glide path to zero income tax, adding a new higher income tax bracket, reducing the sales tax on food, and adding an increase in the motor fuels tax. KNEA is among the organizations supporting RISE UP along with Kansas Action for Children, AFT/KOSE, the Kansas Contractors Association, and the Kansas Center for Economic Growth.

Read more about the Rise Up plan at www.riseupkansas.org.

Also introduced today was a bill by the Kansas chapter of the American Cancer Society that would raise the cigarette tax by $1.50/pack and the tobacco products tax by an equivalent amount. This would be a greater tax increase on cigarettes and tobacco than the Govenor’s proposal. Brownback has sought a cigarette tax increase of $1.50 and was given a $0.50/pack increase in an earlier session. He has recommended an additional $1.00/pack this year.


Working After Retirement- WAR

The topic of Working After Retirement is again the subject of study for a subcommittee of the House Financial Institutions and Pension Committee. The subcommittee is Co-Chaired by Representatives Jim Kelly and Representative Dan Hawkins.  New concerns have been raised regarding the new rules for Working After Retirement from both employers, employees and retirees. The subcommittee met on Monday to hear and review the concerns from school districts, local governments, and KNEA.

At the center of the concerns are the number of exemptions to the rules for WAR. Currently, anyone who retirees from an employer with employees covered by the KPERS system has a $25,000 annual earnings cap. For example, if an employee retires and returns to work they have a $25,000 earnings cap in a calendar year. Once that cap is reached then the employee must stop working or basically “Unretire”. There are exceptions to the rule including those retirees who are “grandfathered” in under the previous rules that reached sunset on July 1, 2016.

To see a complete explanation of the rules and exceptions please see https://www.kpers.org/pdf/WARschools.pdf  Pages 2-3 offer an explanation to exceptions for K-12. For Community College and Tech College employees and retirees see https://www.kpers.org/pdf/WARcommtech.pdf which has the explanations of exceptions for Community College and Tech College employees.

KNEA’s position is that the new rules are complicated and need to be simplified for all those involved with Working After Retirement. There are times that intelligent and well-meaning people sometimes over complicate a problem while working to solve that very problem. If there is an unfilled teaching position, no matter what the cause of the opening, it is important to find a qualified and willing person to fill that position. The new rules seem to be a hindrance to the hiring of a willing and qualified applicant based solely on the fact that they had previously worked for a KPERS employer. Working towards simplifying the rules for both employers and employees is a goal that KNEA would recommend.

The subcommittee will most likely meet again on Wednesday after the regular meeting of the House Financial Institutions and Pensions Committee.

 

 

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Court Arguments and Tax Discussions

Nov 6, 2015 by

School Finance Equity Hearing in Supreme Court

The Kansas Supreme Court heard from the state and from the plaintiffs in the equity portion of the Gannon School Finance lawsuit today. The hearing took about 2 ½ hours.

Attorneys for the state were questioned first. They defended the block grant funding scheme passed by the legislature (SB 7) and asserted that the money the legislature had appropriated for the equity resolution last year was appropriate to meet the requirement.

The money that had been appropriated was about $138 million but the final cost was closer to $200 million. The state argued that the money appropriated was based on what they were told by the State Department of Education. KSDE had provided an estimate of the amount that would be needed based on the prior year’s data – the only data available at that time.

Attorneys for the plaintiffs maintained that it was long past time to resolve the issue and that the repeal of a constitutionally sound but underfunded school finance formula was an inappropriate action by the legislature.

Questioning of both sides by the justices was pointed but it was difficult to tell with any certainty what position they might be forming.

We don’t know when they will make their ruling but most expect it to come early in the session.

The issue of adequacy is still to be resolved.

Special Tax Committee considers sales tax exemptions, tax credits

A special Joint Committee on Taxation spent the last two days learning about the challenges of sales tax policy and tax credits.

The committee studied the history of the sales tax in Kansas and reviewed Legislative Post Audit studies that have been conducted on sales tax exemptions, tax credits, and economic development incentives.

They took public testimony today. Shawnee Mission Superintendent Jim Hinson gave them much food for thought regarding Tax Increment Financing Districts (TIFs) which have the potential to stress the budgets of school districts – particularly growing districts like Shawnee Mission.

KNEA lobbyist Mark Desetti testified, urging the committee to reign in the granting of sales tax exemptions by developing guidelines under which an organization would be eligible for such an exemption. Today these exemptions are generally granted every time an organization comes before the committee with a pitch leading to an enormous laundry list of individually named organizations with exemptions.

A coalition of non-profit organizations urged the committee to proceed cautiously while the Sisters of Charity made a plea for the preservation of the Earned Income Tax Credit which applies to the lowest income Kansans.

The Kansas Livestock Association and Farm Bureau both spoke on behalf of rural and agricultural interests in the state.

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Slow Going on Solutions to Budget Problems

May 11, 2015 by

No solution in sight yet

It’s another quiet day under the dome. We are in a holding pattern while legislators grapple with the every-increasing budget hole they have to fill.

While there have been some proposals to raise revenue, there hasn’t yet been enough done to overcome the drops experienced thanks to Governor Brownback’s reckless income tax cuts of 2012 and 2013.

Talk continues about changing the income tax cuts given to LLC’s under which 330,000 Kansas businesses have been allowed to pay no income tax at all. There is a proposal to limit this provision to those businesses that hire people. This has the potential to close about half of the hole in this year’s budget.

Other proposals focus on “consumption taxes” including one proposal to raise the state sales tax from the current 6.15% to 6.5%. The governor has suggested raising taxes on tobacco and liquor and instituting a tax amnesty program for those who owe back taxes, letting them pay without penalty.

So far though, the biggest push-back to these proposals has come from those who backed the anti-tax conservatives in their elections. Americans for Prosperity, the Kansas Chamber of Commerce, the Kansas Policy Institute, and the National Federation of Independent Businesses have been vocal opponents to any tax increases.

The situation in Kansas continues to make national headlines. Most recently a Washington Post editorial has been appearing in newspapers around the nation. Calling Kansas an “instructive educational mess,” the editorial focuses on the damage being done to public education citing it as a reason to be wary of proposals to go down the same path as our state. We’ve found it so far in North Carolina and Illinois newspapers. Read it by clicking here.

KPERS “spiking” bill has hearing

HB 2426, a bill that would limit accumulated leave for KPERS covered employees, had a hearing today in the House Commerce Committee.

At issue is what some legislators refer to as “spiking” for the purposes of increasing the retirement benefit. They allege it happens when employees accumulate large amounts of leave time which is paid to them upon retirement thus raising the final average salary for the calculation of benefits. By limiting the amount of accumulated leave, legislators would limit the chances that this could happen.

Limiting leave accumulation however creates other unintended consequences such as leaving employees without sufficient sick leave should they experience a significant health issue.

Testifying in favor of the bill were Rep. Jerry Lunn (R-Overland Park), Dave Trabert of the Kansas Policy Institute, and the Kansas Chamber of Commerce. There were numerous opponents.

Perhaps realizing the potential negative impacts of the bill – unintended or not – Chairman Mark Hutton (R-Wichita) announced at the end of meeting that he would not be working the bill this session and instead would ask for an interim study of the issue.

 

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