KEPC UPDATE: Legislature returns, income tax, school finance, budget in works, Medicaid expansion, TRIP study, legislative post audits, bill tracking

In this issue …

  • Legislature returns
  • Income tax fast track could come in a conference committee today
  • Action expected on House school finance bill
  • Budget is still in the works
  • Another push expected on Medicaid expansion
  • TRIP study: Kansas roads need help
  • Legislative Post Audits firmed up


Legislature returns

The 2017 Kansas Legislature returns to Topeka Monday for what’s expected to be a difficult veto session.  The Senate goes in at 10 a.m. while the House returns at 2 p.m.

There’s not much officially scheduled for this first day.  The annual Shrimp Peel social event will be held to benefit Special Olympics.  It’s a first day tradition of the veto session and has lately been billed as a reunion, where several past legislators return.

Senate Majority Leader Jim Denning (R-Overland Park) told the Senate Ways & Means Committee last week that, “Things are pretty unpredictable.”  He said Senators will caucus Monday afternoon to talk about budget and taxes.  Denning said leadership hopes to have a tax plan passed by both houses by Friday, or Sunday at the latest.


Income tax fast track could come in a conference committee today

The direction forward on an income tax increase bill is not certain, but one possibility being discussed could fast track the issue through a parliamentary maneuver.

Some lawmakers familiar with the process believe a conference committee of House and Senate members will meet Monday to review tax bills that have passed one or both houses.  A new income tax proposal could be inserted into an existing tax bill through the process known as “gut and go.”

The proposal would then go to the House and Senate for an up or down vote and would not be subject to amendments.  Otherwise, any new proposal would have to start in a tax committee where hearings might be held, amendments made, and a vote taken before going to the full House or Senate.  That would take longer.

A new economic study we reported last week could have an impact on support for an income tax bill, particularly repeal of the business pass through exemption.  It hasn’t received much attention except on Twitter, but makes a powerful statement because it’s based on examination of over 255-thousand actual federal income tax returns of Kansans that contain business income.

The study by researchers at the University of South Carolina, the University of Indiana, and the U.S. Treasury Department concludes that the main result of exempting pass through income has been tax avoidance.  The study strongly refutes the claims of Governor Brownback and others that the exemption has helped grow the economy.

Here’s a link that will take you to the complete study.


Action expected on House school finance bill

As we reported in our newsletter at the conclusion of the regular session April 7, work on a new school finance formula in the House K-12 Education Budget Committee appears to be complete.  We expect House Bill 2410 will be voted out for debate in the full House of Representatives this week..

It’s expected to increase funding for school district general state aid and special education by about $150 million next year; then add $150 million more each of the next four years for a total of a $750 million increase.

Here’s a link to the Kansas State Department of Education web page with the estimated runs

The information is in the five links under House Bill 2410.


Budget is still in the works

The House and Senate budget committees met last week to talk about the Omnibus Appropriations Bill.  That’s the annual bill that cleans up the budget as it pertains to new legislation that has passed.

The committees look at new legislation to determine how the budget needs to be adjusted to implement the new laws.  Then they add or subtract from the budget so the legislation can work.

The Senate Ways & Means Committee work is nearly complete.  The committee will finalize its version of Omnibus on Tuesday.

The House Appropriations Committee just reviewed and discussed the list of legislative items that will cause budget adjustments.  It will also meet Tuesday to work the bill.

The regular budget bills (called the Mega Budget) for Fiscal Years 2018 and 2019 are still in the works.   Before adjourning in early April, the House Appropriations Committee passed a mega budget bill.  It’s House Bill 2364.   It may be debated by the full House of Representatives this week.

The Senate budget bill passed on March 30.  It’s Substitute for Senate Bill 189.

Both bills create deficit spending without passage of an income tax increase.  Both versions use PMIB (Pooled Money Investment Board) loans and delayed KPERS payments to balance the budget.  Neither budget cuts K-12 education or higher education.


Another push expected on Medicaid expansion

It looked like Medicaid expansion was nearly dead after the House could not muster enough votes to override Governor Sam Brownback’s veto.  Now the issue has new life.

The publicity surrounding the possible closure of Topeka’s St. Francis Hospital and the loss of about 1,600 jobs has given the issue new life.  St. Francis officials have said the lack of Medicaid expansion in Kansas has been one of the roadblocks to remaining open.

We’re not sure how or when the issue will resurface.


TRIP study: Kansas roads need help

A report released Thursday by a Washington, DC based national transportation organization warns that a third of Kansas’ major urban roads are in poor or mediocre condition.

The report comes from TRIP (The Road Information Program).

The study also says nine percent of the state’s locally and state-maintained bridges are structurally deficient; and that rural roads in the state have a traffic fatality rate four-and-a-half times higher than all other roads.

The study says, “Roads and bridges that are deteriorated, congested or lack some desirable safety features cost Kansas motorists a total of $2.7 billion statewide annually – as much as $1,600 in some urban areas – due to higher vehicle operating costs, traffic crashes and congestion-related delays.”

TRIP blames the problems on the state’s transfers of $2.4 billion in state highway funds to other purposes between FY 2011 and FY 2017.

Here’s the link to the Kansas TRIP Study.

The report comes as state legislators return for the veto session and ponder what to do about a dwindling amount of funding for even basic road preservation.


Legislative Post Audits firmed up

The Legislative Post Audit Committee of the Kansas Legislature approved audit topics for the next year during a meeting last week.

The Legislative Division of Post Audit is the non-partisan audit arm of the Kansas Legislature.  Its mission is to inform policy makers by providing accurate, unbiased information through audit reports.  They focus on three areas: oversight, insight, and foresight.

Here’s the list of approved audits:

  • K-12 Education: Reviewing the accuracy of free-lunch student counts
  • Department of Corrections: Comparing the merits of lease and bond options for improving or replacing the Lansing correctional facility
  • Medicaid: Evaluating issues related to KanCare and other important components of the state’s Medicaid system
  • Follow-up Audit: Reviewing agencies’ implementation of selected performance audit recommendations
  • K-12 Education: Evaluating the use of assessed valuation per pupil as the basis for state equalization aid
  • Kansas Tax Revenues: Reviewing how other states inventory and evaluate tax credits and exemptions
  • Community Mental Health: Evaluating mental health services in local jails (this is an extra audit that the Division may not have time to do)


Bill tracking

Here’s our latest bill tracking on measures we think are of interest to our readers.

You should be able to click on the bill number and be taken to the Kansas Legislature’s web site page for that particular bill.  You will be able to see all actions taken, read the bill, and read any supplemental notes (layman’s descriptions) and fiscal notes (how much does the bill cost the state) that have been prepared.