KEPC UPDATE: Session picks up speed, eco devo, transportation task force, rural jobs, rainy day funds threatened, bill tracking

In this issue …

  • Legislative activity picking up speed
  • Economic development hashed out in committees
  • Transportation task force passes Senate
  • Ad astra rural jobs act has hearing
  • Rainy day funds thrashed out once again


Legislative activity picking up speed

The pace is starting to pick up in Topeka at the Statehouse.  Doctor Jeff Colyer began his term as the new Governor of Kansas, but gave little indication he had any new ideas on how to fund schools to meet the Kansas Supreme Court’s order to fix constitutional problems with the formula.

The budget committees of the legislature are beginning to go though budgets agency by agency and building the framework for a budget.  However, their work may be altered later in an effort to find money for schools.

Friday was the deadline for bill introductions in most committees.  That resulted in a flood of last-minute bills being introduced.

We are now within two weeks of the “turnaround,” considered the halfway point of the legislative session.  Lawmakers will be gone from February 23 through February 27th before returning.  The significance of the turnaround is that most legislation must be passed out of the originating house or it is considered dead for the year.

About three weeks after that, the long-awaited school finance study should be available, telling legislators how much they must raise to satisfy the Kansas Supreme Court.  It’s then that the real work begins.

The other activity of interest that is probably being overlooked by most lawmakers and observers is a joint hearing next Wednesday by the tax committees on the impact of federal tax reform.  The federal changes could affect revenue collected by Kansas in either a positive or negative way.  Kathleen Smith of the Revenue Department and Jay Langley of the Kansas Society of Certified Public Accountants will testify.


Economic development hashed out in committees

A couple of legislative committees spent considerable time this week discussing the state’s economic development programs and whether they were working.

In House Appropriations on Wednesday,  Interim Commerce Secretary Bob North said his agency completed 108 projects in 2017, creating 11,291 jobs and retaining 4,444.

Representative Henry Helgerson (D-Wichita) questioned some of the STAR Bonds projects.

“Some of these projects look great but some look marginal,” Helgerson said, “especially when you look at pure economic development.  Seems like with Heartland Park and others; the state jumps in, there is lots of talk about the beef but there is no beef.”

Testifying on behalf of the Kansas Economic Development Alliance, Andrew Nave of the Greater Wichita Partnership said budget cuts over the last decade have been making an impact on local efforts to work with the Commerce Department on economic development projects.  He said attractions are down, leads are down the same percentage as the budget, and project completions are down as well.

Nave said there needs to be a strategic economic development plan, the state needs to reinstate the sales tax project exemption legislation, and workforce development is an issue.

Appropriations Chairman Troy Waymaster (R-Bunker Hill) expressed concern about the disappearance of Main Street organizations that focused on making downtown areas more inviting, giving out loans to businesses for improvements.

Nave agreed, saying when state funding for the Main Street program was eliminated, many local groups went away.

Representative Helgerson commented that he’s seen good analysis and development go away when the Kansas Department of Commerce budget gets cut.  Nave said a Texas A & M Study referenced that very situation.  He said, “We have to have a strong state agency to drive the message and relationships.

Meanwhile, the Senate Commerce Committee also reviewed economic development programs and seemed favorable toward extending the HPIP program (High Performance Incentive) past is current 16 year limit.  They discussed having beneficiaries giving up 25 percent of their tax credits after the 16th year (if not claimed) and only being able to claim 25 percent of the remaining credit in any given year.

For several years, lawmakers have been concerned about tax credits from HPIP being carried over and having an impact on the state general fund all at once.

This discussion occurred as the committee talked about Senate Bill 334, which extends the time that taxpayers may carry forward the tax credits, but with the 25 percent “haircuts” included.

Patrick Fucik of Sprint supported the legislation, as did John Idoux of CenturyLink (the second largest landline telecom in the U.S.), and Eric Stafford of the Kansas Chamber of Commerce.


Transportation task force passes Senate

By a vote of 33 to 5, a bill setting up a task force to begin the process of putting together the next transportation program for Kansas passed the state senate Thursday.

The task force would be required to submit its report to the Kansas Legislature by January 31 of 2019.

Here’s a link to the Legislative Research summary of what is in the bill.

Not included in this summary, but added on the Senate floor was the addition of the chief executive officer of the Kansas Turnpike Authority, or their designee.


Ad Astra rural jobs act has hearing

A holdover economic development bill from last year had a hearing in the Senate Commerce Committee this week.  House Bill 2168 had passed the Kansas House of Representatives last year on a vote of 97 to 22.

The bill authorizes nonrefundable tax credits for taxpayers who contribute capital to an “approved investment company” to fund a “rural business concern” in a “rural area.”

Those terms are defined in the bill.

Beginning in tax year 2020, 20 percent of the tax credit could be claimed annually over a five-year period.  The amount of tax credits claimed in any one fiscal year could not exceed $20 million, exclusive of the tax credit amounts carried forward.

The Senate Commerce Committee has taken no action on the bill.


Rainy Day Funds thrashed out once again

The subject of a Budget Stabilization Fund for state revenue emergencies (also known as Rainy Day Funds) was discussed again this year in the Senate Ways and Means Committee.  Many states have such a fund to get them by in times when revenues are down.

The committee heard a presentation from the Pew Charitable Trust on the subject.  

Stephen Bailey, Associate Manager for State Fiscal Health from the Pew organization, gave the presentation.  He said Pew’s work in other states found, “ It is often very difficult to require saving when revenues are down, but it is important for a Rainy Day Fund structure to be in place when revenues return to health.”

Bailey recommended tying any Rainy Day Fund to a stable funding source that contributes to the fund when revenue is growing at above average levels.

Kansas does have a so-called Rainy Day Fund but it has no criteria or rules.

In response to a question from Senator Laura Kelly (D-Topeka), Bailey said 12 states have the fund requirement in their constitution while three have it in both statute and the constitution.


Bill tracking

Here’s our latest bill tracking on measures we think are of interest to our readers. All of these bills are held over from 2017.  As new bills of interest are introduced, I will add them to the list.

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.