The past two weeks my reports have focused on a tight budget picture for the upcoming fiscal year. Late last week, though, we did get some positive news with the release of the January revenues report. The January tax-only general fund revenues jumped $35M over estimates, which helped offset the $28M shortfall from estimates in December. A one-time corporate tax payment of $10M helped and we learned that several corporate tax checks expected by year-end were received in early January, so the December shortfall was not as bad as it had appeared.
Sales taxes receipts in January were nearly $8M over estimates, bucking a trend seen nationally that reflected an economic slowdown in consumer spending. In all, we’re now running about $13M ahead of projections for the year, a good sign considering what’s going on in the national economy. The key numbers will be those released in early April. Those will signal where we’re at in terms of available resources to close out the final FY 2009 budget.
The big news from last week included introduction of bi-partisan energy legislation aimed at breaking the deadlock between lawmakers and the Sec. of Health & Environment & Governor over construction of coal-fired power plants in SW Kansas and a Shawnee Co. District Judge’s preliminary ruling that last year’s casino legislation is constitutional. Identical mega-energy bills were introduced in the House & Senate late last week with hearings and committee action scheduled for this week and perhaps debate and final action in the House & Senate as early as next week.
The key component in the legislation is language that would prevent the Sec. of Health & Environment from rejecting a construction application that otherwise complies with state & federal environmental regulations. Sec. Bremby’s rejection of Sunflower’s Holcomb plant application came after regulatory staff had given it the green light based on current standards. The legislation would place carbon emission limitations in state law, imposing a carbon tax to the extent emissions exceeded those limitations. An accelerated timeline for Sunflower’s reapplication is included and is aimed at avoiding protracted litigation in the courts over the Secretary’s rejection of the initial application.
The bill also contains a number of provisions aimed at promoting energy efficiency in other areas, including new state & public school buildings and the state motor pool.
The Shawnee Co. District Court’s decision in the Casino gambling case sets the stage for an immediate appeal of the decision to the Kansas Supreme Court, where a final decision will be handed down on the constitutionality of so-called state-owned casinos in Kansas. The initial decision found that the law “as written” seemed to suggest that the state would have ultimate control over casino operations and that was enough to satisfy the requirement of “state-owned and operated” in the Kansas Constitution. I strongly disagree, as does the new Attorney General, who has already filed a notice of appeal to the Supreme Court. I have a meeting with the new AG Wednesday and plan to discuss the case with him then. What’s more important than the language of the law is how it is actually applied once casino operator contracts are let. It’s uncertain when a final decision from the Supreme Court will be handed down.