The 2007 Kansas legislative session got underway Monday with the swearing in of all 125 House members. On Wednesday, Gov. Sebelius delivered her annual State-of-the-State message. Here are some highlights from the Governor’s budget message.
The Governor would add to last year’s 3-year school finance plan by increasing funding by $15M to apply toward all-day kindergarten programs. Her long-term plan is to increase this funding each year until each kindergarten student counts as a full-time equivalent student for purposes of the funding formula. They count ½ currently.
The Governor has earmarked an additional $40M for higher ed, of which $30M would go to the regents’ schools. Washburn, the community colleges and technical schools would get 4% increases and $3M would go for increased student financial aid.
An additional $4M in funding would be added for birth-to-age-5 health care coverage for poor children, which is calculated to draw down another $6M in federal funds. Also, an additional $40M would be earmarked for elderly & disabled programs plus $1.5M to add a new government program aimed at assisting autistic children.
The Governor would spend an additional $6M on rural development and other economic development programs and would provide for free State Park admissions, costing $3.2M annually. She’d add another $750K for life insurance for Kansas Guard members, extending last year’s Republican Guard benefit plan.
The Governor apparently supports the Republican’s call for corporate, unemployment and franchise tax relief, at least to a limited extent. She would reduce the franchise tax by about $7 by increasing the threshold from $100K to $1M, removing about 16,000 businesses from franchise tax liability. This would leave approximately 5,000 businesses still paying the same amount of tax. The Governor would drop the corporate surtax on income above $50K from 3.5% to 2.95% next year and to 2.75% the following year. That’s worth about $5.8 M in tax cuts in this budget year and a little over $22M next year. The Governor’s tax reduction proposals are far less than those being proposed by the Republican-controlled House & Senate but the legislature welcomed her proposal to use part of this year’s surplus on tax relief.
In terms of more additional spending in the budget, the Governor proposes adding $7M for correctional facilities and programs and $750K for installation of cameras in Highway Patrol cruisers. Additional Medicaid spending would amount to some $60M and she’d add $22M to fund 4% pay raises for state employees. It doesn’t appear from our initial review that the Governor proposes to pay for pay increases with an overall reduction in the government sector workforce. Kansas ranks at the top in government sector job growth, a statistic that has hampered the state’s status in the business and industry sector.
Importantly, the Governor’s proposed budget honors our continuing commitment to the comprehensive highway plan by providing for the transfer of $175M in sales tax revenue to the Kansas Department of transportation.
Prior to the Governor’s message, House Republicans announced our legislative priorities for the 2007 session. We would set aside sufficient funds this year and next to fund the 2nd and 3rd years of last year’s school finance plan. We would set up a $75M trust fund for specific building repairs for state universities and colleges, and develop a tuition equity plan for the Regents institutions.
On the issue of tax relief, we’d repeal the franchise tax retroactively to January 1 of this year, permanently reduce the unemployment tax rate by 40%, exempt social security income from the state income tax, restructure the corporate income tax rates and push a constitutional amendment to ease the property tax burden for elderly Kansans.
On immigration, we’d establish English as the official state language, require proof of citizenship for state services and enhance worker ID enforcement. Additional House initiatives will be reported on in the weeks to come.