KEPC UPDATE: Week 9

In this issue….

  • TRANSPORTATION
  • MEDICAID EXPANSION
  • K-12 FUNDING
  • TAX
  • CONFIRMATION HEARINGS NEXT WEEK
  • MARKLEY MUSINGS

TRANSPORTATION
The package of transportation bills finally started to see movement with most of having hearings in both the House and Senate committees this past week. KEPC provided testimony in support of several bills related to funding the recommendations of the Transportation Task Force including:

  • Increased fees for oversized and overweight vehicles;
  • Changes to the local ad valorum tax and exemptions to the tax lid for local municipalities for transportation projects;
  • Increased registration fees for electric and hybrid vehicles;Increased motor fuel taxes; and
  • Allowance for partial tolling to cover costs of new transportation construction (Current law requires toll projects to be 100% funded through tolling).

MEDICAID EXPANSION
The effort to expand Medicaid was hit with two setbacks this week. Lawmakers on the House Appropriations Committee stripped funding for Medicaid expansion from Governor Kelly’s proposed budget on a vote of 12-11. In a similar move, the Senate Ways and Means Committee also stripped the proposed $14 million from expansion and instead reallocated the funding to a program supporting physicians who treat Medicaid patients.

K-12 FUNDING
Last week, the Kansas Senate Select Committee on Education Finance passed out SB 142 to the full Senate. The bill authorizes approximately $90 million in new funding for the next four years to account for inflation. On Thursday evening, the full Senate approved the bill on a vote of 32-8 and has referred it to the House K-12 Education Budget Committee.

However, the House introduced its version of school funding legislation this week: HB 2395. The new plan, developed by Republican state Rep. Kristey Williams, chair of the K-12 Education Budget Committee, would put $90 million into schools in 2020 and 2021 but not in 2022 and 2023 and included several policy changes and additions. Opponent testimony was Thursday, with oral testimony from KNEA, KSAB and Equality Kansas as well as dozens of written opponent testimony from individual school boards, education advocacy organizations and more. Proponent testimony will be on Monday of next week. With only two weeks left until the end of regular session, it will be interesting to see how this will unfold.

TAX
On Thursday, the full Senate debated a motion to concur with the House version of SB22, the tax “windfall bill.” If you will recall, the House included internet sales tax and a reduction in the food sales tax to the original version of SB22. The discussion in the Senate was whether or not to agree with the House version.  The Senate approved the motion to concur by a vote of 24-16.  The bill now goes to Governor Kelly for her signature, or more likely, her veto.

CONFIRMATION HEARINGS
Confirmation hearings for two of Governor Kelly’s nominees for state agency secretaries will be next week.Monday, March 18 – Julie Lorenz, Secretary of TransportationWednesday, March 20 – David Toland, Secretary of Commerce

MARKLEY MUSINGS
My hopes as we enter the remaining two weeks of session:

I hope we’ve seen the last of the social issue-related debates for this session. I understand and appreciate that certain members of the legislature feel passionately about these issues, however I’d like us to get back to the critical work of funding state government services.

I hope the House approves the Senate-passed version of SB 142, the Governor signs it into law, and the Supreme Court accepts the Legislature’s remedy for funding K-12 education as constitutional.

I hope a path presents itself to allow debate on Medicaid expansion. Studies have shown that the majority of Kansans support it.  Previous votes taken show that a majority of legislators will vote in favor of it. It’s time to allow the debate.

Thanks and as always, I appreciate the opportunity to represent KEPC’s interests in Topeka. Please contact me anytime with any questions or comments.

Fondly,
Patty

KEPC News: Week 8

  • A VERY SHORT WEEK
  • TAX
  • MEDICAID EXPANSION
  • K-12 EDUCATION FUNDING
  • TRANSPORTATION
  • SB 9 SIGNED INTO LAW
  • MARKLEY MUSINGS
A VERY SHORT WEEK
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.

TAX
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.

MEDICAID EXPANSION
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.

K-12 EDUCATION FUNDING
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.

TRANSPORTATION
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.

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

MARKLEY MUSINGS
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.

–Patty

KEPC UPDATE: WEEK 7

  • TURNAROUND
  • ON THE FLOOR: House
  • ON THE FLOOR: Senate
  • TAX
  • SPEND
  • TRANSPORTATION
  • MEDICAID EXPANSION

TURNAROUND

Turnaround marks the half-way point of this session and the first real deadline for legislative action. Bills must be heard and passed from their original chamber and turned over to the other chamber.

Bills not achieving passage are considered dead for the remainder of the session. However, there is a famous saying in Topeka that “no bill is ever really dead.” There are exempt committees, such as Taxation, Appropriations, Ways and Means, Federal and State Affairs, etc. Any time a bill is referred to one of these committees, it is exempt from deadlines. House or Senate leadership can refer a bill to one of these committees and then re-refer it back to its original committee, therefore keeping it alive, i.e. it gets “blessed.” In addition to the work done on the floor of the House and Senate this week, the Speaker of the House blessed 25 bills and the Senate President blessed 9, so those bills will live on for consideration.

ON THE FLOOR: House

The number of bills heard this past week was fewer than years past, but there were a few of note from the house side:

  • HB 2006: The House unanimously approved legislation introduced by Representative Kristey Williams (R-Augusta), that calls for the Department of Commerce to create a database revealing who receives state development incentives, the amount of the incentives distributed and calls for an audit every three years. The Kansas Economic Development Alliance and the Kansas Chamber were opposed to the bill, citing concerns about the disclosure of sensitive business information. The concerns were addressed and the bill was amended to protect sensitive information and to not include names of individuals who’ve invested in a project in order to receive tax credits. We will monitor this bill closely to ensure those concerns continue to be addressed.
  • HB 2144: A bill also introduced by Representative Williams, would require community colleges to publish information on their website about tuition, fees, and the total cost of attending the school. The bill passed the House on a vote of 84-40. The bill was a limited version of what was introduced in the Education Committee. The original legislation, which garnered much opposition, would have given voters the power to stop community college spending on construction projects costing more than $250,000 and required community colleges to lower their tax rate equal to 80% of any increase in funding they received from the state.
  • HB 2167: the “deer bill”, was approved by a vote of 63-60 and allows landowners and tenants on at least 80 acres to sell a deer hunting permit. Why is this bill of note? A version of this bill has been hotly debated every year for several years. During the two days of floor debate, the vast majority of bills are introduced by a member of the majority party, the ranking Democrat on the committee speaks in support of the bill, there is little or no debate, then the bill is approved–on average about 3 minutes for each bill. The deer bill was debated for over an hour. Passions run deep on both sides of this issue.

ON THE FLOOR: Senate

  • SB 162: A bill requiring foster care case managers to report to the governor, the legislature, and local newspapers within 24 hours of a foster care child going missing. The bill passed the Senate 40-0.
  • SB 81: Passed by a vote of 34-4, a bill that would allow, if local authority approves, law enforcement to follow suspects at high speed without emergency lights and or sirens.
  • SB 16: Allowing school districts to spend “at-risk” funding for non-school programs aimed at improving student performance. Senator Hensley offered a floor amendment to add a two-year finance bill that accounts for inflation in last years passed education funding bill, a move many believe would satisfy the supreme courts’ ruling to adequately fund K-12 education. The amendment failed 28-12.

TAX

On Monday, the last day of Committee meetings, the House Tax Committee amended SB 22, the bill dealing with the federal tax windfall. On an 11-11 vote that Chairman Johnson broke with a yes vote, the bill was amended to add a 1% reduction on the sales tax on food. The committee also added a tax on out-of-state Internet sales. With the new provisions, the fiscal note of SB 22 is $207 million. House leadership did not put SB 22 on the calendar this week, leading some to speculate whether or not there are currently enough votes for it to pass the House. Governor Kelly has not indicated whether or not, if presented with the bill, she would veto it.

MEDICAID EXPANSION

Next week the House Health and Human Services Committee will hold “roundtable discussions” (not to be confused with hearings) with stakeholders to help lawmakers understand the pros and cons of expansion. On Thursday, March 7 at 10:00 a.m., the Greater Kansas City, Wichita, and Pittsburg Chambers, the Alliance for a Healthy Kansas, and the Kansas Hospital Association are hosting an event at the Capitol: “The Economics of Expansion – Moving Kansas Forward.” A copy of the invitation is available here.

It looks like when the Legislature reconvenes next Wednesday, things will start to heat up.

Until then, please feel free to contact me with any questions or comments. Thanks and have a safe and warm weekend.

–Patty

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


KEPC UPDATE: Feb 2, 2019

In this issue…
TAX: SB22 and Fed Tax Windfall
SPEND: Governor’s Budget Introduced in Committees
TRANSPORTATION: Final Report Issued
COMMERCE: Eco Devo Overview, HB 2006, HB 2043
SPORTS GAMING: Two bills introduced in Fed and State
MEDICAID EXPANSION: Governor unveils plan
MARKLEY MUSINGS: Things are starting to heat up

TAX: SB 22 AND FED TAX WINDFALL
The Senate Select Committee on Federal Tax Code Implementation held hearings this week on SB 22. Tuesday, Wednesday, and Thursday of this week were dedicated to testimony from the Kansas Chamber, tax attorneys, and corporations potentially affected by the Federal Tax Cuts and Jobs Act (TCJA), specifically how multi-national corporations during business in the United States and state income taxed owed. TCJA moves business taxes from a worldwide taxation system to a territorial system. Kansas is a rolling conformity  state, meaning that any changes to the Federal Tax code will flow through to Kansas unless the legislature specifically alters statute (often referred to as “decoupling”). Regarding corporations, there are two primary issues:

965 Repatriation of Foreign Funds: the Federal Act provides for a one-time tax at preferential rates on deemed repatriation of certain deferred income of US Owned foreign companies. These preferential rates are anticipated to bring back $34 trillion into the U.S. Current Kansas law allows for a subtraction modification of 80%, so only 20% of the dollars would be taxed. SB 22 allows for a 100% modification. These repatriated funds are a one time thing.  They cannot be relied on as a future revenue source

Global Intangible Low-Taxed Income (GILTI): the new law significantly broadens the scope of foreign earnings that had been subject to current US taxation, effectively imposing a worldwide minimum tax on foreign earnings and subjects US shareholders of foreign corporations to current taxation on most earned income. It is intended to deter taxpayers from locating high-value activities and assets in low-tax countries. SB22 seeks to decouple Kansas from this provision.

Individual Tax Filers: TCJA nearly doubled the standard deduction rate for individual tax filers: married filing jointly increased from $13,000 to $24,000. It is anticipated that almost 88% of federal tax payers will take the standard deduction.  Again, Kansas is a rolling conformity state, so the legislature would actively have to decouple to allow Kansas filers to itemize deductions on their state income tax.

The fiscal note for SB 22 is significant. $192 million for FY2020, $113 million for FY2021 and $118 million for FY2022.

On Thursday, the Committee approved the bills passage as amended (technical amendment). The full senate is anticipated to debate SB 22 this upcoming week.

SPEND: GOVERNOR’S BUDGET INTRODUCED IN COMMITTEES
On Thursday, Governor Kelly’s budget was introduced in the Senate Ways & Means Committee and and House Appropriations Committee. Ways and Means Chair McGinn divided her committee into subcommittees to work the different portions of the budget.

TRANSPORTATION: FINAL REPORT ISSUED
The Transportation Task Force issued it’s final report on Monday. Key recommendations include:
Creation of a new, long-term plan of at least 10 years that includes funding for preservation, modernization and expansion of our transportation infrastructure;
Restoration of funding for preservation to protect previous investment in our transportation system;
Prioritization and completion of 21 modernization and expansion projects that were announced but unfunded in the previous T-Works long-term plan;
Amending statutes to authorize KDOT, working with the KS Turnpike Authority, to modify restrictions on what tolling can pay for and allow exploration of tolling on local projects with appropriate community input and support;
Adding an exemption in the tax lid statute for transportation purposes and modifications to demand transfers and consider other revenue options; and
Supporting KDOT’s current project selection process but adding additional merit for projects identified as priority corridors and/or include local participation.

COMMERCE: ECO DEVO OVERVIEW – HB 2006, HB 2043
On Monday, Acting Secretary of Commerce David Toland gave an overview of our state’s primary economic development tools: Promoting Employment Across Kansas (PEAK), High Performance Incentive Program (HPIP), Rural Opportunity Zones (ROZ), Sales Tax Revenue (STAR) Bonds, Angel Investment Tax Credits, and the Job Creation Fund.

Two bills regarding economic development and incentives heard this week:
HB 2006: requiring the Department of Commerce to compile and disclose on their website data related to various economic incentive programs. The Kansas Economic Development Alliance (KEDA) testified against the bill, citing confidentiality and unfunded mandate concerns.
HB 2043: requiring an inventory and evaluation of all major incentives, tax credits, and exemptions. 

SPORTS GAMING: TWO BILLS INTRODUCED IN FED AND STATE
The House Fed and State Committee heard testimony on two bills related to the expansion of sports gaming in Kansas:
HB 2032: Introduced by Representative Frownfelter, allows for expansion of sports betting solely at racing facilities
HB 2068: The Kansas Sports Wagering Act, Introduced by Representative Kessinger, allowing for the expansion of sports betting conducted by the Kansas Lottery, through lottery retailers, casinos and racetrack facilities managers. It also allows for sports wagering through the internet and mobile apps.

MEDICAID EXPANSION: GOVERNOR UNVEILS PLAN
On Tuesday, Governor Kelly unveiled her plan for medicaid expansion. The proposal to expand to 150,000 Kansans, is almost identical to the plan that  passed the House and Senate two years ago, but was vetoed by then Governor Brownback.  The House failed to override the veto. The plan would cover Kansans under 65 years old who earn less than 133% of the federal poverty level.

MARKLEY MUSINGS: THINGS ARE STARTING TO HEAT UP
First of all, can we all agree that GILTI is a horrible acronym for taxable income? Seriously. Things are starting to heat up as bills are making their way through the committee process.  It looks like there will be some floor action next week, especially in the Senate. One thing I know for sure, the significant pieces of legislation: tax reform, budget, education, Medicaid expansion, etc., will change and look much different when we get to the end of session. Thanks for allowing me to be your eyes and ears in Topeka.  Please call or email me anytime. Until next week.

KEPC UPDATE: Week Two

Week two of the 2019 session is a wrap. Here are the highlights.

House Rules
On Wednesday, by a vote of 104-15, the House approved a package of rules changes, primarily dealing with transparency and increasing from 63 to 70 the number of votes needed to bring a bill “above the line” with one day’s notice. The new transparency rules mirror changes made last year as a matter of policy.

Representative Victors brought an amendment to allow breastfeeding of infants on the house floor. The amendment was approved and included in the package.

Wagle Creates “Special” Tax Committee
Senate President Susan Wagle formed a special committee to study SB 22, the legislation returning the revenue windfall attributed to the change in the federal tax code. Wagle appointed herself Chairman, and the committee is made up of eight members of the Senate Committee on Assessment and Taxation, with one notable exception: Chair Sen. Caryn Tyson. Wagle has scheduled hearings on Tuesday, Wednesday and Thursday of next week, with an anticipated Thursday committee vote on the bill.

KPERS Re-amortization
The Governor’s plan to re-amortize KPERS to free up $145 million has drawn strong opposition from the KPERS Board as well as Senate and House leadership. In presentation to Ways and Means and Appropriations, Alan Conroy, Executive Director of KPERS, noted that extending the current amortization schedule keeps KPERS vulnerable to volatile market conditions for many years.

It’s worth noting that while it’s important to debate KPERS funding, the state of KPERS is generally secure. KPERS has $19 billion in assets, with approximately $1 billion in yearly contributions.

Governor’s Cabinet
Governor Kelly continues to fill out her top administration posts. Posts named to date include:
• Secretary of Administration: Duane Goosen
• Secretary of Agriculture: Mike Beam
• Secretary of Transportation: Julie Lorenz
• Sec of Commerce: David Toland
• Secretary of Corrections: Roger Werholtz
• Secretary of Children & Family and Aging: Laura Howard
• Adjutant General: Lee Tafanelli*
• Budget Director: Larry Campbell*
• Superintendent of Highway Patrol: Mark Bruce*
• State Fire Marshall: Doug Jorgenson*
*Tafanelli, Campbell, Bruce, and Jorgenson are held over from the previous administration

Medicaid Expansion Group
Governor Kelly has created a committee to provide input on expansion of KanCare. There is a short timeline for the committee to meet and provide input, as the governor has stated she wants to have a plan by the end of January. Members are:
• Tom Bell: Kansas Hospital Association
• Rep. Susan Concannon: state representative
• Denise Cyzman: Community Care Network of Kansas
• Cathy Harding: Wyandotte Health Foundation
• April Homan: Alliance for a Healthy Kansas
• Kyle Kessler: Association of Community Mental Health Centers
• Dr. Lee Norman: Kansas Department of Health and Environment
• John Russell: Kansas Medical Society
• Michael Stephens: Sunflower Health Plan
• Suzanne Wikle: Center for Law and Social Policy
• Rep. Kathy Wolfe Moore: state representative

Tax Foundation
This week, the DC-based Tax Foundation, was in Topeka to discuss tax policy and present a well-deserved award. The Tax Foundation is one of the nation’s leading independent tax policy nonprofits. Each year, they recognize state policymakers who take steps to reform taxes to make them more neutral, transparent, stable, and pro-growth. The 2018 Outstanding Achievement in State Tax Reform honored Representative Steve Johnson and Representative Tom Sawyer, Chair and Ranking Minority Member of the House Taxation Committee. In announcing the award, the Foundation praise them for “…deftly handling difficult negotiations on solutions for closing the state’s recurring budget shortfalls and secured the repeal of the state’s decidedly non-neutral pass-through exemption…Its repeal represented the best way for the state to address its revenue shortfall.”

In Committee: Senate Committee on Ways and Means
On Tuesday, the committee held a hearing on SB 9. This bill authorizes the transfer of $115 million from the state general fund to KPERS State/School Group employer contributions for FY 2019. In FY 2016, Governor Brownback ordered $97 million in allotment cuts when he signed the state budget. The $115 million represents the $97 million, plus interest.

House Committee on Appropriations
The Appropriations Committee this week held several informational meetings
• KPERS
• K-State overview of the federal Agricultural Improvement Act of 2018 (known as the farm bill), specifically how it relates to research and extension programming
• Transportation Task Force Update: the committee heard an overview of the task force’s work done the past year, protections in state law for transportation funding, meeting locations and topics, makeup of the task force membership, and information on delayed T-WORKS projects, both modernization and expansion projects. The estimated cost for the 21 delayed projects is $535 million in FY 2020. That number increases to $600 million if spread out over the next five years. The task force anticipates that it will submit its report to the legislature early next week. I will send out a notice with links to the report as soon as it is available.

House Committee on Taxation
On Tuesday, the Department of Revenue gave an informational briefing on internet sales.

Hearings were held on HB 2033 and HB 2040, providing sales tax authority for Dickinson, Finney, Jackson, Russell, and Thomas counties. HB 2040 (Finney County) was incorporated into HB 2033 and passed committee on voice vote.

On Thursday, the committee held an informational meeting on itemized deductions. The Kansas Association of Realtors and the Kansas Society of CPAs testified.

Under current Kansas law, Kansas income tax filers may only itemize deductions on state income tax filings if the itemize on their federal return. The recent changes in federal tax law doubles the federal standard deduction. Because of this, many Kansans will not benefit from itemized deductions as they have done in the past (charitable donations, mortgage interest, property taxes, medical).

House Committee on Commerce, Labor and Economic Development
On Tuesday, the Commerce Committee held an informational briefing on Workers Comp litigation and medical standards. On Wednesday, the Greater Kansas City Chamber of Commerce (GKC Chamber) presented to the committee an overview of their Workforce Development Initiative. The GKC Chamber has made education and workforce development a top objective. They report that the Kansas City area currently has an immediate need to fill 63,000 jobs with qualified skilled workers. Coupled with a 2.7% unemployment rate, the need to train skilled workers and get more people in the workforce is clear.

Markley Musings
Several people commented this week that the tone in the building seems different this year. Some of that is to be expected. This is the first time in eight years that legislative leadership and the Governor are not of the same party. But it seems a bit more than that. People have started retreating to their “corners”, something that tends to occur towards the end of session, not the beginning. We will have to wait and see if and how this affects the body’s ability to craft sound policy and work for the good of our state. As always, please feel free to contact me with any questions, comments, concerns. I can be reached at 913-709-5985 or patty@markleystrategies.com.

KEPC 2019 Membership Survey

KEPC NEWS RELEASE: Kansas Economic Progress Council hires Patty Markley as new lobbyist

CLICK HERE FOR A PRINTABLE VERSION OF THIS PRESS RELEASE

Topeka, Kan. – The Kansas Economic Progress Council (KEPC) has hired former State Representative Patty Markley as their lobbyist in Topeka.

Founded in 2005, the KEPC is a statewide non-profit organization of businesses, trade organizations, chambers of commerce, and others interested in advancing sound public policy in Kansas to enhance our state’s quality of life.

“During my time in the legislature, I supported and voted in favor of legislation important to KEPC members: economic and workforce development, transportation, Medicaid expansion and a stable and predictable tax structure,” said Markley. “In replacing Bernie Koch, I know I have very large shoes to fill and I’m excited to continue his great work advocating for these issues.”

Patty Markley served District 8 in the Kansas House of Representatives from 2017-2018. Prior to serving in the legislature, she was a full-time parent, community volunteer, and member of the Prairie Village City Council. Her previous experience includes work as a not-for-profit executive, and as a staff member for a United States Senator.  She lives in Overland Park with her husband Brian and two daughters.

“Patty not only has direct experience serving in the Kansas House of Representatives but understands the issues as an engaged and involved parent and community advocate,” said Mary Birch, a member of the KEPC board of directors. “A large portion of the business community in Kansas believes in the value of stable tax policy, a new transportation plan, adequate funding of our educational system, and Medicaid expansion. With Patty at the helm, KEPC will be able to leverage partnerships and ensure that these issues are addressed during the coming legislative session.”

#  #  #

The Kansas Economic Progress Council is a statewide business organization whose members include businesses, local chambers of commerce, trade organizations, and individuals. KEPC is a 501(c) (4) not-for-profit organization. The purpose of KEPC is to provide information, research and education on statewide issues that affect the economy of the State of Kansas as well as the quality of life of its citizens.

KEPC UPDATE: Jobs & wages, state budget, Ks Statistical Abstract, tax reform, Ks Bioscience Authority

In this issue …

  • Jobs and wages grow in Kansas but there’s a catch
  • Where we are on the state budget
  • Kansas Statistical Abstract is published
  • Economic Policy meeting will discuss reforming Kansas taxes
  • Should we resurrect the Kansas Bioscience Authority?

 

Jobs and wages grow in Kansas but there’s a catch

The latest labor report for Kansas has been released and shows that jobs have grown in Kansas in August, but with a big catch.

Of the 3,600 new jobs reported, 3,300 were school employees returning to work for the new school year.

A tight labor market has forced paychecks up, according to the Kansas Department of Labor.

“August estimates indicate a tightening labor market in Kansas,” according to Labor Economist Emillie Doerksen. “The number of private sector jobs continued to increase and employers reported over the year growth in average weekly earnings for both goods producing and service providing industries. The household survey also shows a tightening labor market, with the unemployment rate falling to 3.3 percent.”

Manufacturing jobs grew 3.5 percent over the past year. Mining and logging (primarily oil and gas) grew 7.5 percent over the year.

Here’s a link to the numbers in the report over the past year and for the month of August.

 

Where we are on the state budget

The Legislative Budget Committee met earlier this month and took a look at revenues and expenditures for Fiscal Year 2018, which ended June 30.

J.G. Scott of the Legislative Research Department said by the end of the fiscal year, the State General Fund was $267 million ahead. Most was from individual income tax, including $218 million from the 2017 legislation that restored much (but not all) of the Brownback tax cuts.

So far, receipts for the new fiscal year are $13.4 million above estimates.

Scott said he couldn’t really put a trend together from only two months, but the state may have a better idea after September income becomes due.

Scott warned that, beginning in 2020, the profile showed the state will be spending more than it’s bringing in due to school finance, KPERS catch-up, and other obligations.

 

Kansas Statistical Abstract is published

The 52nd annual edition of the Kansas Statistical Abstract is now available online.

The document contains data collected through August for sixteen categories of information on Kansas: Agriculture; Banking and Finance; Business; Industry; Exports; Climate; Communications and Information; Courts; Crime and Public Safety; Education; Employment and Earnings; Energy and Natural Resources; Government; Housing and Construction; Income; Parks and Recreation; Population; Transportation; and Vital Statistics and Health.

The document contains over 500 pages of data, tables, maps, and graphs on Kansas.

For example, with the current debate on trade and tariffs, there’s information on U.S. agricultural exports to the world and Kansas agricultural exports by commodity.

There’s information on total U.S. exports via Kansas by the countries receiving them and commodities being exported from the state.

Here’s a link to the online document.

Economic Policy meeting will discuss reforming Kansas taxes

The Kansas Economic Policy Conference held annually by the University of Kansas Institute for Policy and Social Research will be held October 25 at the University.

This year’s topic is “Pragmatic Policy: Reforming Kansas Taxes.” It features experts from state government, education, and the legislature.

Here’s a link to the program.

 

Should we resurrect the Kansas Bioscience Authority?

In a story this week in the Lawrence Journal-World, Democratic candidate for governor Laura Kelly said she wants to bring back the Kansas Bioscience Authority.

Established in 2004, the program was designed to be the state’s venture capital firm to spur high technology bioscience research and development. It was sold off in 2016 after embarrassing problems with management of the program.

The Authority was the idea of former Republican legislators Senator Nick Jordan of Shawnee and Representative Kenny Wilk of Lansing. It is widely credited with being a major factor in the location of the National Bio and Agro-Defense Facility (NBAF) at Manhattan, a $1.2 billion project.

Here’s a link to the Journal-World story.

KEPC UPDATE: Transpo Task Force, Economic Lifelines Leadership, job growth, revenue up, 2018 legislative summary

In this issue …

  • Transportation Task Force meetings set
  • DeSoignie takes helm at Economic Lifelines for now
  • Kansas grows jobs above national average
  • State revenues up but will they continue?
  • 2018 legislative summary now available

 

Transportation Task Force meetings set

The Transportation Task Force set up by the 2018 Kansas Legislature has organized.

At a recent meeting, members heard about the system’s current condition and the 21 projects approved but now delayed due to lack of funding.  Because of the diversion of revenue intended for highways, there is $2 billion less than the original estimate.

Here’s the schedule of meetings to be held across the state:

  • Salina – September 6
  • Wyandotte County – September 12
  • Pittsburg – September 20
  • Newton – October 4
  • Garden City – October 11
  • Wichita – October 18
  • Hays – October 24
  • Johnson County – November 8
  • Manhattan – November 9
  • Topeka – November 28-29

Those who wish to testify need to follow guidelines.

Here’s a link to those rules about presenting testimony.

 

DeSoignie takes helm at Economic Lifelines for now

Ed DeSoignie, the retired executive of the Kansas City Heavy Constructors, has been named the interim director of Economic Lifelines, the statewide transportation coalition.  DeSoignie will take over for Tara Mays, who is leaving the organization to work for the Kansas Electric Cooperatives.

DeSoignie has headed the Heavy Constructors for 20 years and has been deeply involved in transportation issues, going back to the 1989 Comprehensive Transportation Program.

 

Kansas grows jobs above national average

Kansas may have finally turned things around on one measure of economic recovery.  For the first time in many years, the state’s 1.8 percent employment increase over the past year is outpacing the national average. That’s about 24,800 new jobs.

Kansas Secretary of Labor Lana Gordon said, “Job growth has exceeded the national average and the number of people receiving unemployment benefits is the lowest in ten years.  However, the labor force has shrunk over the past year by 1,500 workers and wages don’t appear to be growing.

The latest employment numbers are expected to be released later this week.

 

State revenues up but will they continue

Kansas revenues were $11 million over estimates for June. That’s less than the revenue above estimate growth of the past several months, which were likely driven up by new taxes, passed in 2017.  Those were a partial reversal of then-Governor Sam Brownback’s income tax cuts.

Also driving the increase may be the U.S. Supreme Court decision that allows states to tax Internet sales.

All that could change, depending on the election for governor and the legislature.  If state government becomes more conservative, the probability of a tax cut becomes more likely.

 

2018 legislative summary now available

Every year after the legislature adjourns, the Kansas Legislative Research Department publishes a summary of the laws that were passed.

The 2018 summary is now available online. The 250 page-plus report contains everything you ever wanted to know (including bill numbers).