So Close, Yet So Far Away

Jun 3, 2015 by

Once again, the Senate took up HB 2109, their tax bill. They’ve been at it for several days now, each night abandoning the debate as it became apparent things were not going well.

Yesterday, Senator King (R-Independence) offered an amendment that would include:

  • The tax amnesty plan,
  • The Christmas tree farm amendment previously offered by Senator Holmes,
  • The Social Security amendment previously offered by Senator Tyson fixed to address the military problem brought up by Senator Kelly,
  • The Department of Revenue tax letter amendment previously offered by Senator Baumgardner,
  • The repeal of the alumni association tax exemption previously offered by Senator Pilcher-Cook,
  • The “double dipping” on charitable contributions amendment previously offered by Senator Smith.

The effect of the King amendment is to bring the bill back to a much earlier form but include some amendments that had been adopted previously and send it off to conference.

King argued that the big floor debate has been held and now it’s time to let the conference committee cobble together an agreement to bring forth for a vote by both chambers.

Senator Hensley who had argued strongly that such a debate was needed and necessary indicated that he would support this amendment provided that the Senate conferees would also carry other Senate positions that had been approved on the floor, particularly the sales tax positions.

The King amendment would keep the sales tax at 6.15% for all purchases.

Far right conservatives continued their opposition to sending such a bill to conference. They want assurance that there will be no report coming forward that would reinstate income taxes on the 330,000 businesses now exempt. Senator Melcher likened this bill to the Trabant – the notoriously unreliable East German automobile.

It became clear the no promises were being made at this time on any of those points which caused Hensley to rethink his support of the amendment.

The amendment was ultimately adopted on a roll call vote of 21-17, the bare majority.

Senator Francisco (D-Lawrence) then offered an amendment to lower the food sales tax rate to 5.7% beginning on January 1. This would be consistent with amendments adopted by the Senate in earlier debates. Hensley pointed out that the last Senate position on sales taxes was 5.7% on food and 5.95% on everything else.

The Francisco amendment was adopted on a vote of 24 to 11.

At this point, King noted that adoption of the Francisco amendment set up a technical conflict elsewhere in the bill that would require an additional amendment. Since it would take several hours to have the technical fix drawn up as an amendment, the Senate chose to rise and report progress, adjourning until today at 10:00.

If adopted today, this tax bill would produce about $30 million in additional revenue – only $370 million more until the budget is balanced!

An earlier amendment by Senator LaTurner (R-Pittsburg) that was adopted on a vote of 30 to 8 would prohibit increases in property tax collections to exceed inflation without a vote of the people is also in the bill as it stands now. Coupled with state cuts, this could have a devastating effect on local units of government.

Budget bills down to two

Yesterday we reported that the budget conference committee was planning to put out three bills – one, the budget as it has already been proposed (needing $400 million), another just like it but with a 2% cut to a few agencies (not education), and a third with a 6% cut across the board (including education).

The committee got back together in the afternoon and Senator Masterson (R-Andover) withdrew the proposal with the 2% cut meaning that there are now two budget bills up for consideration.

SB 112, which goes to the House, is the budget as it was originally proposed that needs $400 million in additional revenue to balance, and

HB 2135, which goes to the Senate, which has a 5.7% across the board cut that will balance the budget but provide for no ending balance.

A 5.7% cut to education would be about $181 million. KASB calculates this to be an average cut of $369/pupil.

PNA bill to the Governor

The conference committee report on HB 2353 was adopted by the House yesterday. This action sends it to the Governor for his signature.

The bill makes some technical clean-ups to SB 7, the block grant bill, and enacts changes to the Professional Negotiations Act that are in line with the KNEA, KASB, KSSA, USA/KS consensus agreement.

The changes move the notice and impasse dates to later in the year, maintain the current list of negotiable items, mandate that salaries and hours are negotiated every year and that each side may choose up to three items from the list that must be negotiated. All other items may be negotiated by mutual agreement.

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Brinksmanship?

Jun 2, 2015 by

The House and Senate Budget Conference Committee met at noon to consider assembling three variations of the budget bill currently in HB 2135.
First a copy was made of HB 2135 and put into SB 112. HB 2135 would then be amended to cut 2% from all budgets except K-12, public safety, state hospitals, and debt service. This would save about $30 million.

A third budget would then be put into HB 2010, but this one would include a 6% across the board cut to all budgets except debt service. These deep cuts would provide for the needed $400 million to close the budget hole and leave a small ending balance.

So, in summary, if the House members agree, there would be three budget bills:

  • SB 112; the budget as agreed to earlier,
  • HB 2135; as agreed to earlier but including a 2% cut to all but K-12, public safety, state hospitals, and debt service, and
  • HB 2010; as agreed to earlier but including a 6% cut across the board except debt service.

What’s the strategy here?

Conference committee reports in Senate bills are voted on first in the House. Those in House bills go first to the Senate.

This action would let the House vote on the base budget bill (SB 112). The Senate would have to vote on a bill balancing the budget with cuts only (HB 2010) or one with limited cuts (HB 2135).

This is a test of the resolve of Senators who have not agreed to tax bills brought forth by Senate leadership. They are saying, “Here’s what it looks like with no tax bill.”

Remember that there are at least four camps in the Legislature.

  • Hard conservatives want only cuts and no taxes.
  • Brownback conservatives want no taxes on business, no income tax, and higher “consumption” taxes (sales, cigarettes, liquor, gasoline).
  • Moderates might accept some sales tax but want business back on the tax rolls.
  • Democrats want the three-legged stool of income, sales, and property taxes and want businesses paying their fair share.

Throw into the mix the fact that Brownback has vowed to veto anything that reverses the tax exemptions for business.

The conference committee meets again at 3:00 to see if the House agrees.

We will send out an ACTION ALERT via our messaging system if needed to contact representatives letting them know that additional cuts to public education are unacceptable! Click the JoinUs. banner below to register for the messaging system if you have not done so.

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