KEPC UPDATE: Feb. 22 – Week 6

In this issue…

  • TAX: Food Sales, Federal Windfall, Internet Sales
  • SPEND: KPERS, Ways & Means and Appropriations Budget Hearings
  • TRANSPORTATION: KDOT Budget, Revenue Bills
  • HEALTHCARE: SB 32 Farm Bureau “Not Insurance”
  • MARKLEY MUSINGS: Wise Words from Retiring Rep. Greg Lewis

TAX: Food Sales, Federal Windfall, Internet Sales
On Monday, the House Tax Committee held hearing on HB 2261, lowering the state sales tax on food from 6.5% to 5.5%. There were many conferees in favor, including KNEA, KC Healthy Kids, grocery store owners, and food dealers. Opposition included the Kansas Farm Bureau, whose primary concern is that any reduction in sales tax could lead to the creation of Value Added Taxes (VAT). The Kansas Chamber supports the overall goal of reducing food tax, but requested specific changes to the bill dealing with the definition of candy. The Kansas Restaurant and Hospitality Association spoke in opposition to bill. Their position is “food is food,” regardless of where it is prepared, therefore the bill as written is unfair to restaurants. Similar legislation, SB 76, was heard in Senate Tax committee on Thursday. Both bills carry a fiscal note of approximately $60 million.

On Tuesday, Wednesday, and Thursday, the House Committee on Taxation heard testimony on SB 22 related to the tax windfall from the federal tax bill. Testimony was similar to what was heard in the Select Senate Committee two weeks ago – decoupling from federal government allowing individuals to itemize deductions and tax breaks for multi-national corporations doing business in Kansas. As of this newsletter’s deadline, the committee did not take final action on SB 22.

Legislation dealing with sales and compensation use tax (aka taxing internet sales), HB 2352, was heard on Thursday. Several cities, counties, chambers of commerce and the League of Municipalities spoke in favor. The fiscal note indicates that HB 2352 would increase state revenues by $41 million in FY2020.

SPEND: KPERS, Ways & Means and Appropriations Budget Hearings
On Tuesday, House Appropriations approved SB 9, the $115 million KPERS repayment. The full house debated the bill on Thursday, and on Friday approved SB 9 on final action by a vote of 117-0. It now goes to the Governor for her signature, is allowed to become law without her signature, or she can veto.

Senate Ways and Means and House Appropriations began this week hearing reports from various budget committees and approving agency budget requests.

TRANSPORTATION: KDOT Budget, Revenue Bills
On Monday, the House Transportation Budget Committee approved the budgets for FY 2019 and FY 2020. Representative Kessinger brought forth and the full committee approved two amendments, The first amendment added $6.35M to FY2019 to complete one additional T-Works project. The second amendment requested an additional $50 to the Governor’s Budget for FY 2020.

On the Senate side, several bills were introduced related to funding sources for transportation. They include:

  • SB 187: Increase in permit fees for overweight and oversized vehicles
  • SB 188: Increase in motor fuel tax and trip permits
  • SB 189: Increase in registration fees for electric and hybrid vehicles
  • SB 190: Allow for state to share in cost to fund local ad valor tax reduction fund and county and city revenue sharing fund for road construction or bridge improvement.
  • SB 191: Tax lid exemption for transportation construction projects
  • SB 192: Related to authorization of toll projects.

HEALTHCARE: SB 32 Farm Bureau “Not Insurance”
On Wednesday evening, by a vote of 28-11, the Senate passed SB 22, legislation that will allow the Kansas Farm Bureau to offer health care policies to their members. The Farm Bureau, who has predicted that they may sell 42,000 policies in Kansas, is specifically not referred to as “insurance,” as it can deny coverage to those with pre-existing conditions and will likely not require supervision by the Kansas Insurance Department.

MARKLEY MUSINGS: Wise Words from Retiring Rep. Greg Lewis
On Monday, Representative Greg Lewis, flanked by his wife Susan and son Josh, announced his retirement from the Kansas House of Representatives. Representative Lewis was diagnosed with brain cancer in December. In a moving speech, he reminded legislators to keep in mind why they were in Topeka. “This is the House of Representatives. This is not the house of self interest. This is not the house of special interest. This is the people’s house and long may it serve the people in this great state of Kansas.” (Read the full text of Rep. Lewis’ resignation speech here.) A good reminder from a good man. As always, if you have any questions or would like to contact me, please feel free to do so.
— Patty