KEPC UPDATE: House & senate advance school finance, income tax bill delayed

In this issue …
  • House advances school finance bill 81 to 40
  • Senate Committee passes its version of school finance
  • Income tax bill delayed; maybe Thursday debate
 
House advances school finance bill 81 to 40
 
The Kansas House of Representatives advanced a long-awaited school finance bill Wednesday after several hours of debate. 
 
By a vote of 81 to 40, House Bill 2410 was sent to a final vote, expected shortly after 10 a.m. Thursday morning.
 
The bill increases K-12 spending by $180 million next year and $100 million the year after.  The bill also puts more money into at-risk students in an attempt to satisfy the Kansas Supreme Court, which said that area needed more attention.
 
Several amendments were offered.  The most important was by Representative Ed Trimmer (D-Winfield) to add $200 million in extra money each year for three years.  Trimmer said he worried the bill did not contain enough funding to satisfy the Court.  The Trimmer Amendment failed 47 to 75.  Opponents said they feared they could not pass a big enough tax increase to pay for it.
 
 
Another amendment proposed by Representative William Sutton (R-Gardner) was one likely to be strongly opposed by economic developers across the state.  It would have allowed any taxing entity to have veto power over property tax abatements.  Democrats and Republicans opposed it, saying it would have a negative impact on economic development.  It failed on a voice vote.
 
 
Senate Committee passes its version of school finance
 
Meanwhile, most of the activity in the Kansas Senate also centered on school finance, but at the committee level.  The Senate Select Committee on Education Finance passed out its version of school finance.  It’s called the School Equity & Enhancement Act.
 
That measure was previously in Senate Bill 251, but it has been placed in House Bill 2187 for parliamentary procedure purposes.
 
The bill will NOT be debated Thursday.  It is not listed on the agenda for General Orders that has been published.
 
 
Income tax bill delayed; maybe Thursday debate
 
The income tax bill that was to be debated in the Kansas House of Representatives Wednesday was delayed and changed slightly.  It might be debated on Thursday.
 
The Tax Conference Committee met Wednesday morning and made some changes to what had been agreed to on Tuesday:
  • The one-year moratorium on STAR Bonds begins September 1.  There is no reference to bond issuance
  • A one percent drop in the sales tax on food has been added, to begin in 2020
  • When the sales tax starts being collected on the new services, there is no change on how the money is allocated to the highway fund.  The current formula continues
  • Instead of July 1, the sales tax on certain services begins October 1 to give businesses time to ramp up.  If services are provided through a pre-existing contract, the sales tax does not take effect until the contract expires (for example landscaping/lawn services)
  • The previous version of the bill included a sales tax on veterinary services for companion animals (pet dogs, cats, etc., as opposed to animals in agriculture).  There were no hearings on this concept, so it is no longer in the bill
  • The sales tax is added to custom computer software
  • The alcohol enforcement tax would start July 1, 2017
  • Tax credits for the Ad Astra economic development program added to the bill Tuesday have been cut in half
Most observers expect this conference committee report (Senate Bill 30) to be debated in the House sometime Thursday.  It is not given a high expectation of passage.  The bill still raises about $488 million in FY 2018 and $460 million in FY 2019.