KEPC News: Week 8

  • TAX
The first week after turnaround was only three days. But we’re finally getting to some important committee work and votes in the House and Senate.

SB 22, the “Tax Windfall” bill, finally got its day on the House floor. Before turnaround, the House Tax committee amended the bill to include a reduction in food sales tax from 6.5% to 5.5% and an inclusion of sales tax on internet sales. The net effect of which is a new fiscal note of $207 million reduction in revenues. 

The full House debated the bill on Thursday and passed it by a vote of 76-43 on Friday. Since there were changes to the Senate-passed bill, it goes back to the Senate for them to approve or send to conference committee for compromise legislation. All indications are that the Governor will veto the bill and there are not enough votes to override her veto. So why go through all this? As one House member said today, politics in Topeka is an elaborate dance. Today’s passage of the bill is the beginning. Once the Governor vetoes it, the real negotiations begin, and some sort of tax bill will be negotiated to include thing certain groups want: budget provisions? Medicaid Expansion? We will have to wait and see. 

HB 2345, providing an exemption to the property tax lid, was heard in House Tax on Wednesday. It would allow local municipalities to lower their mill levy in any given year, but give them the ability to increase the levy back to the previous amount (but not above) if done within seven years, and to do so without the provision of the tax lid that requires a vote of the public. This legislation intent is to offer a fix to the unintended consequence of cities and counties being reluctant to lower mill levies when appropriate for fear of not being able to increase them back to previous levels.

On Thursday, over 100 business leaders from across the state, including representatives from several KEPC member organizations, gathered at the Capitol to make the business case for Medicaid expansion. The group heard from Governor Kelly, former Republican State Senator David Kerr, representatives from many of our Chambers of Commerce, and others on how Medicaid expansion is good not only for the health of Kansans, but for our economy as well.

Sara R. Collings, VP of Health Care Coverage and Access with the Commonwealth Fund, presented data showing the economic impact in several expansion states. A copy of the presentation can be found here.

Representative Brenda Landwehr, Chair of House Health and Human Services, held three days of roundtable discussions on Medicaid expansion. For several hours on Wednesday, Thursday, and Friday, stakeholder proponents and opponents, including heath care groups, committee members, and representatives from national think tanks. While there was good discussion, some members expressed frustration that there has been no specific legislation discussed or heard in committee. There was some impassioned debate, including one exchange between Representative Jim Kelly of Independence and the representative from the CATO Institute. You can read the news account here.

This week, the Senate Select Committee on Education Finance passed out favorably SB 142. The legislation hopes to address the Supreme Court’s concerns by adding in approximately $90 million per year to the Base Aid for Student Excellence (BASE), to account for inflation. This legislation is in line with the Governor’s Budget. I anticipate the full Senate will take up the bill this coming week.

As I have mentioned in previous newsletters, several bills enacting recommendations of the Transportation Task Force have been introduced. This week we hear the first of them: SB 192.

SB 192 allows partial funding of road projects through tolls. Current Kansas law requires tolled transportation projects cover all construction and maintenance costs.  This bill loosens those restrictions to allow the partial funding.  As many proponents and committee members noted, it adds another tool in the tool box for transportation funding. KEPC members from the KS Contractors Association and the American Council of Engineering Companies (ACEC) were among those testifying in support of the bill.

On Friday morning, Governor Kelly signed her first bill into law. SB 9 returns $115 million to the State’s retirement fund, KPERS.

For the last couple of weeks, my newsletter has promised that things will soon “pick up steam”. I’m worried I may have misled you.  While the calendar for next week is busy and most believe the legislature will address school funding in the near future, it looks like most of the controversial issues, should they be addressed, probably won’t be looked at in any meaningful way anytime soon.  I was discussing this with a senior staffer this morning and jokingly he said what most everyone under the dome is thinking, “You know how things work around here. Come see me on day 89”. (Legislature usually runs on a 90-day calendar).

Thank you for the opportunity to represent you in Topeka. As always, please reach out to me with any questions or comments.