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Senate Bill 147 would have increased income tax rates, ended the income tax exemption for the poorest Kansans, and repealed retroactively the LLC loophole.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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Taxes, Cuts, and Revenue

Feb 8, 2017 by

Post Highlights

  • Senate unveils two-pronged strategy to restore a portion of state revenue.
  • Tax bill SB 147 does not solve shortfall and fails to address long-term problems.
  • SB 27 is a bill to cut funding to K-12 and Regents institutions to grab another chunk of revenue to fill the Governor’s revenue hole.
  • Full senate to convene on Thursday to debate both bills.
  • Rise Up Kansas plan gets committee hearing today.
  • KNEA joined 13 proponents from various organizations to support the bill.
  • 5 groups opposed the bill including Americans for Prosperity, Kansas Policy Institute and Kansas Chamber of Commerce among others.

 

The Senate has crafted a two-pronged plan, approved by Senate President Susan Wagle, that includes a tax bill which seeks to increase revenue (SB 147) and a bill which cuts funding to K-12 education and higher ed Regents institutions (SB 27).

The tax bill (SB 147) would raise approximately $280 million in new revenue. Unfortunately, the Brownback-created revenue hole is so deep, this plan is far short of what is needed to reverse the tax cuts of 2012 and 2013. Additionally, SB 147 is not a comprehensive, long-term solution.

The funding-cut bill would reduce spending in FY 2017 by $154 million. Most of the reduction would come after taking $128 million from K-12 education with another $23 million from Regents institutions. Overall, this plan cuts K-12 education by 5%, higher education by 3%, and the Schools for the Deaf and Blind by 1%.

The leadership of the Senate plans to convene the full Senate at 8:00 am on Thursday and work both bills.

We oppose the tax bill because it does not fully address the disaster brought on by the Brownback cuts. Passing this plan, even coupled with cuts, would require the legislature to address continuing shortfalls going forward with more tax increase votes likely. We support a comprehensive tax plan that restores funding such that vital state services can be adequately funded.

We also oppose the draconian cuts to K-12 education and higher education. When the Governor is challenging higher education institutions to provide a $15,000 undergraduate degree, it is counterproductive to cut state funding for our colleges and universities. As for the K-12 cuts, any cuts run counter to common sense as we await the decision on adequacy by the Kansas Supreme Court.

We are pleased to see that the House Taxation Committee appears to be on a more rational path, examining a proposal to raise enough money to restore fiscal stability to Kansas.

We urge the Senate to amend the tax bill to include a comprehensive solution or send SB147 back to Committee. While the tax bill is a move in the right direction, it falls far short of what is necessary to put Kansas back on sound financial footing. We urge the senate to vote no on SB 27, the “cuts bill.”

We believe that both chambers need to develop comprehensive tax policy bills that provide for the restoration of funding necessary for vital state services. We do not wish to be in a position to consider still more cuts and more tax increases indefinitely into the future.


Rise Up Plan Gets Hearing!

The Rise Up tax reform plan supported by KNEA, Kansas Action for Children (KAC), AFT/KOSE, the Kansas Contractors Association, the Kansas Center for Economic Growth (KCEG) and others got its day in Committee today.

The first proponent of the plan was Duane Goosen, the former budget director for Governors Graves, Sebelius, and Parkinson. Other proponents included KCEG Executive Director Heidi Holliday, Wesley McCain of Healthy Communities Wyandotte, KAC President Annie McKay, Christina Ostmeyer of Kansas Appleseed Center for Law & Justice, Scott Englemeyer of the Kansas Association of Community Action Programs, Rob Gilligan of KASB, Bob Totten of the Kansas Contractors Association, Reverend Sarah Oglesby-Dunegan of the Kansas Interfaith Alliance, KNEA’s Mark Desetti, AFT/KOSE Executive Director Rebecca Proctor, Ashley Jones-Wisner of Healthy Kids Kansas, and Scott Anderson of Hamm Companies (highway construction firm).

Opponents kicked off their arguments with Dave Trabert, anti-government zealot with the Kansas Policy Institute, Jeff Glendening with Americans for Prosperity, Tom Palace with Independent Petroleum Marketers, Tom Whitaker of Kansas Motorcarriers Association (opposing only motor fuel tax increase), Eric Stafford of Kansas Chamber of Commerce.

One neutral conferee from Kansas Association of Counties.

13 proponents to 5 opponents (where 1 opponent only opposes the motor fuel tax).

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To tax or not to tax…

May 15, 2015 by

To tax or not to tax…

Whether ’tis nobler in the mind to suffer

The slings and arrows of outrageous fortune

Or to take arms against a sea of troubles

And by opposing end them.

 

With apologies to Shakespeare, this seems to sum up where the Kansas Legislature finds itself.

Hamlet’s soliloquy is a statement by a depressed Prince Hamlet as he considers his own demise. He speaks about the unfairness of life and the pain associated with life but still acknowledges the alternative might (in the end) be worse.  The Kansas Legislature finds itself in a similar position as did Prince Hamlet as he struggled with life and death; to tax and face political demise or not to tax and leave the state and its citizens foundering.

Today on the floor of the House the latest effort to solve the state’s financial woes (SB 270) was defeated on a voice vote after a relatively short debate. The topics debated on the House floor relative to taxes were a reflection of those discussed in the House Appropriations Committee during the veto session. Not to be outdone by their colleagues across the rotunda, similar verbal skirmishes have been held in the Senate Tax Committee. The state is firmly in a fiscal crisis.

Some legislators approach solving the crisis by stating “we just need the cuts to have time to have an impact on the state.” Other legislators believe that they should only raise consumption taxes and leave small businesses and others alone. Some do not want to increase consumption taxes. Some legislators do not want to raise property taxes (local governments will need to do that to survive). Some want to increase property taxes especially in rural Kansas. Some do not want to slow down the income tax cuts while others want to slow those cuts down or eliminate them. Some would rather continue down the path of cutting more government services. What is clear is that there are myriad competing agendas and opinions.

Finally, there are many deep political divisions regarding how to raise state revenues (taxes). The depth of these divisions when paired with “to be or not to be” question has brought this legislative session to a very literal halt.

 

In other news under the dome:

The Senate Ways and Means Committee cancelled their meeting this morning.

The House and Senate go back into session Monday morning.

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Collective Bargaining Comparison

Mar 2, 2015 by

Click the “Read More” link below to view a comparison of the two collective bargaining bills working their way through the legislature right now.

 

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