Tax Study Released Today

A new study on the ramifications of lowering the state income tax was released today at a statehouse news conference. Bernie Koch, executive director of KEPC, and study author Dr. John Wong presented findings at the statehouse today. The study finds that, for every 1 job created, 1.63 are lost due to study released today finds that a lowering of the income tax would result in a loss of 1.63 jobs due to a reduction in overall state spending. The study was commissioned by the Kansas Economic Progress Council.

The press release is available here, and the ful text of the study is available here.

Dr. Wong’s slide deck is available here.

KEPC WEEKLY UPDATE: Budget, tax, block grant, Abrams school formula, labor bill, UI bill, employment growth, lagging in federal funds?

In this issue …

  • Senate passes budget, House doesn’t try
  • More obligatory tax hearings
  • Governor signs school block grant bill
  • Hearings held on Abrams school formula
  • Senate trips over labor bill
  • UI bill gets strong House support
  • Kansas employment growth vastly different by region
  • Does Kansas lag in federal funds?


Senate passes budget, House doesn’t try

The Kansas Senate passed a budget bill this week that will require tax increases.  The vote was 26 to 13.  The Kansas House leadership decided early in the week not to even bring its budget up for debate,

With the state’s current tax structure the Senate budget is about $141 million short of being funded.  Something’s got to give because Kansas operates on a cash basis law and cannot spend what the state doesn’t have.  That means either tax increases or budget cuts or something else.

The House of Representatives had been tentatively scheduled to debate its spending plan on Tuesday, but media reports indicate turmoil over the weekend among Republicans caused the cancellation.  That turmoil probably revolved around conservative lawmakers who refuse to vote for anything that requires a tax increase.

Because the House decided not to run a budget bill, the Senate inserted the Senate budget into House Bill 2135 in a parliamentary maneuver.  That would bring the Senate’s version of the budget to the House for a straight up or down vote.  House members would not have the opportunity to offer amendments.

It’s likely that the House will vote Monday to send the bill to a conference committee where three senators and three representatives will negotiate over it.

The Kansas Legislature has adjourned until Monday.  Some conference committees have meetings scheduled.  Next week is the final week of the session prior to the First Adjournment.  Lawmakers will try to pass a budget before they leave the Statehouse.  They will then break until the veto session, which begins April 29th.


More obligatory tax hearings

Meanwhile, more hearings were held this week on tax legislation designed to raise the needed revenue to fund the budget.

The plan of tax committee leadership is to hold hearings (so they can say they did) before decided what taxes to raise during the veto session.  At that time, information on March and April tax collections will be available, as well as the best guess of the consensus revenue estimating group.

The Senate Assessment and Taxation Committee held a hearing on SB 233, the Governor’s cigarette and alcohol tax increases.  The proposal is widely viewed as unlikely to receive any legislative support.

The committee also heard testimony on SB 234, Governor Brownback’s other revenue raising proposal.  It includes some changes to the 2012 and 2013 income tax cuts, including near-freezing of rates and eliminating more of the itemized deductions sooner.


Governor signs school block grant bill

As the legislature was winding things up for the week late Wednesday afternoon, Governor Brownback signed the controversial school block grant bill in a private ceremony.  The bill deletes the 23-year-old school finance formula from the law and puts a two-year system of block grants into place while a new formula is developed.

News media were not informed and were not invited to the signing.

As of this writing, the panel of three judges hearing the school finance lawsuit has not taken action to stop the block grant legislation from going into effect, as was hinted last week.


Hearings held on Abrams school formula

The Senate Education Committee held two days of hearings on Senator Steve Abram’s (R-Arkansas City) pilot school finance proposal.   Testimony was mixed, with some school officials in favor of the legislation.  It would start with six school districts and expand over two years.

The plan includes six categories of state aid to K-12 public education:

  • Enrollment state aid
  • Poverty state aid
  • Sparsity state aid
  • Success incentive state aid
  • State equalization aid
  • KPERS employer contribution

Two large items of concern seem to be a lack of funding for students from non-English speaking families, as contained in the present formula, and the difficulty in tracking graduated students to gather information on the success state aid category.


Senate trips over labor bill

A bill to eliminate the Public Employees Relations Board and disallow payroll deductions for union dues got tripped up in the Kansas Senate, apparently over not allowing state workers and school district employees to deduct charitable contributions from their paychecks.  In particular, the United Ways in Kansas has been on the warpath, saying the provision will hurt the fundraising efforts of the charitable organizations.

The bill has been set aside for now.

Also tripped up in the Senate this week was Senate Substitute for HB 2326, concerning professional negotiations.  It was killed on a 13 to 27 vote.

It would have revised the Professional Negotiations Act concerning negotiable items, and provisions related to fact-finding when there is an impasse.


UI bill gets strong House support

Senate Bill 154, which revises the state’s Employment Security Law (Unemployment Insurance) passed the House this week 99 to 26 and is now in a conference committee to iron out differences between the two chambers.

The bill changes the calculation of maximum weekly benefits for the unemployed, as well as the unemployment taxes paid by employers.

The proposal moves from an “arrayed” system to a “fixed” system, based on an employer’s experience rating that reflects their usage of the unemployment system.  Many businesses have complained they have had no claims or few, yet pay big UI taxes.


Kansas employment growth vastly different by region

The latest Kansas Department of Labor report on nonfarm job growth shows jobs grew only 1.5% in the yearlong period from February of 2014 to February of 2015.

The differences in Kansas by region are striking.

The healthiest job growth was in the Manhattan Metropolitan Statistical Area (MSA) with a whopping 3.7%.  That was driven largely by growth in government jobs and the service sector .  The Manhattan MSA is made up of Pottawatomie and Riley Counties.

The Kansas City Area did well with 3.0% growth with strong showings by construction and financial activities.  That’s Johnson, Leavenworth, Linn, Miami, and Wyandotte Counties.

At the bottom end of the scale and most troubling was a very weak 0.4% growth in the Wichita MSA, made up of Butler, Harvey, Kingman, Sedgwick, and Sumner Counties.  The poor showing can be attributed to a dismal 1.7% decline in manufacturing, the economic lifeblood of the region.  There was also a 4.3% reduction in government jobs for the region.

Another way to look at the South Central Kansas employment situation is that the job rate growth at the state level was almost four times as fast as the Wichita MSA.

You can see the growth statewide and by region here. 


Does Kansas lag in federal funds?

Kansas gets 24.9% of its overall revenue from federal funds (less than most states) and 50% from taxes (more than most states).

The national average for states is 30% from federal funds.  That’s money used for programs like health, education, and transportation.

The information comes from Stateline, a publication of the Pew Charitable Trusts. Stateline based a chart on the latest 50-state data from the U.S. Census bureau for the fiscal year ending June 30, 2013.  The data accounts for all money used to pay for government services statewide.

Here’s a link to the Stateline information.


Find your legislator

Want to contact your legislator by letter, phone call, or e-mail to let them know what you think of any issue?

Here’s a quick and easy way to do it.  CLICK HERE and then enter your full address, click on Search.  The page will not appear to have changed, but it has. Scroll down to find all of your elected officials.  Click on who you want to contact.

This site will give you contact information on your legislators, including office and home phone and e-mail.

KEPC NEWS: Pilot school finance formula hearing Tuesday

New pilot school finance formula hearing is Tuesday: Could be ready if court stops the block grants As Governor Brownback gets ready to sign the school block grant bill, there is speculation that the courts could prevent it from becoming law. The three-judge panel hearing the current lawsuit reopened the equity portion of the suit […]

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KEPC WEEKLY UPDATE: Budget debates, tax hearings, employment lags, renewable energy, school finance & formula

In this issue … Budget debates next week Tax hearings continue 2014 Kansas employment growth lags the region KanCare expansion hearings draw big crowds Renewable energy – three hearings The school finance vote New school formula plan available Friday   Budget debates next week The Kansas Legislature is expected to take up the House and […]

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KEPC WEEKLY UPDATE: Block grants, effects of SB 7, passive income, rural/urban opportunity zones, STAR bonds

Operating Funds Summary  - 2015 block grants SB 7_Page_1

In this issue … Block grant for schools given tentative approval What happens to your school district with SB 7? Hearing held on passive income change More tax hearings next week Rural opportunity zones Urban opportunity zones STAR bonds   Block grant for schools given tentative approval After four hours of debate Thursday, the Kansas […]

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KEPC ALERT:  Rushed school funding bill to be debated Thursday

Major changes to school funding were voted out of a House committee Tuesday and could theoretically pass the Kansas Legislature by the end of this week.  A pivotal vote on the legislation (House Substitute for Senate Bill 7 – H Sub for SB7) will take place in the House of Representatives on Thursday.  As of this writing […]

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KEPC WEEKLY NEWS: Block grant, transpo day, farm tax, tax bill opposed, tax hearings, Medicaid expansion, KanCare, STAR bonds

In this issue … Block grant plan…finally Transportation Day is Thursday More heat on farmland property tax Governor’s tax bill opposed by Kansas Chamber Senate committee will hold tax increase hearings Brownback says he could sign Medicaid expansion KanCare expansion hearing scheduled STAR bond changes could be coming   Block grant plan…finally Thursday was seven […]

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KEPC WEEKLY UPDATE: Halfway – no school finance, revenue buffet, ag tax, unemployment, ROZ, arts districts

In this issue … Legislature is at the halfway point; still no school finance plan More tax bills added to the revenue buffet Ag land property tax issue heats up Unemployment Insurance bill passes the Senate Is ROZ in trouble? Arts districts tax credit hearing is next week   Legislature is at the halfway point; […]

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KEPC UPDATE: Tax passive income, use value bill attacked

In this issue … Bill would tax “passive income” Agriculture secretary attacks use value bill   Bill would tax “passive income” A bill that appears to tax the “passive income” of business was in Friday’s legislative packet. Senate Bill 260, introduced by the Senate Assessment and Taxation Committee, seems to reverse some of the 2012 […]

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KEPC WEEKLY UPDATE: Deadline, rankings fall, transpo reversal reversed, tobacco and liquor, passive income, tax bills, two can play that game, ROZ, unemplyment insurance, KS OSHA?

In this issue … Deadline approaches Kansas’ Tax Foundation ranking falls, despite income tax cuts Transportation reversal is reversed Tobacco and Liquor tax hearings held Will Kansas tax “passive” income Other tax bills introduced In the “two can play that game” department… Extending rural opportunity zones (ROZ) Unemployment insurance discussion continues Establish a Kansas OSHA? […]

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KEPC WEEKLY UPDATE: Breaking News! Subcmte reverses hwy cuts, rescission, income tax, liquor/tobacco, KPERS, farm property taxes, KanCare, E-verify, Unemployment

In this issue … Subcommittee reverses highway cuts Rescission bill signed Governor’s income tax changes introduced Liquor/tobacco tax increases introduced KPERS bonding out of committee Bill would increase farmers’ property taxes KanCare expansion bill is printed E-verify bill introduced Unemployment Insurance re-do discussed   Subcommittee reverses highway cuts A legislative subcommittee has voted to reverse […]

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