After a three week break following first adjournment, the Kansas Legislature returns Wednesday for the traditional wrap-up session. The Legislature should finish its work for the 2008 session by the weekend at the earliest, and more likely the first part of next week.
The major remaining pieces of the legislative puzzle include the final budget bill for the fiscal year, consideration of either a veto override on the energy bill or a new compromise, and passage of final conference committee reports on issues held over from the regular session. Immigration legislation may also be considered during the wrap-up session.
The major budget work of the year always follows the last consensus revenue estimates preceding final adjournment. Those estimates were released April 16 and, unfortunately, the Committee decreased the overall estimates for both fiscal years 2008 and 2009 by a combined $129M relative to the previous estimate last November. The group consists of members of the Legislative Research Department, Division of the Budget, Department of Revenue, and three consulting economists from our state universities.
The decision to reduce fiscal year 2009 estimates relates primarily to the presumed effects on state revenues from the recently passed federal “stimulus” package. Because state tax rates are tied to the federal rates, the new federal depreciation and expensing provisions will automatically flow through and also affect state income tax rates. State revenue estimators have concluded that there will be a negative impact on state receipts that is in excess of any positive impact on sales or other state excise tax receipts occasioned by the federal stimulus package, which will put millions of dollars of rebates into the hands of Kansas taxpayers. The revenue estimators fear that, based on poll data, only about 19% of taxpayers will make new purchases with their rebate money. Approximately 45% claim they will pay existing bills and 32% claim they will put theirs into savings. The legislature relies on the estimating group’s projections, so, accordingly, the final budget bill for the session will reflect the projected lower revenues. House & Senate leadership have agreed to hold state spending increases this year to 5% or less, after back-to-back years of increases over 9%.
With regard to the status of the Sunflower Electric energy bill, the Governor vetoed a second attempt at a regulatory compromise and the House is within one vote of having enough support for a veto override that may well come up this week. In the meantime, a third compromise has been floated out that would reduce from 700-megawatts to 600 mega-watts the size of each of the two new proposed plants near Holcomb. The new proposal would also accelerate renewable energy development, add more load management/energy efficiency programs and would add carbon dioxide measurement and verification features. This is the best offer the Governor is going to get and a refusal to deal may well bring onboard sufficient votes for a veto override, if the votes aren’t already there. Recall that there has been broad bi-partisan support for the prior energy compromise. The bill is seen as critical for Kansas and particularly western Kansas which would benefit greatly from the resulting economic development in the area.

The Kansas Legislature reached first adjournment Friday night and will break until April 30 when we’ll return to Topeka for the traditional wrap-up session. Passage of the mega-appropriations bill was the final item standing in the way of adjournment. Many issues, such as immigration and health reform and the Sunflower Electric energy bill are still pending and will hopefully be resolved when we come back the end of the month.
The appropriations bill, totaling over $13B from all funds, was held up by two powerful SE Kansas Senators who want two pet projects in their districts funded. Senate Way & Means Committee Chairman Dwayne Umbarger from Thayer wants the State to fund $750,000 for a local road project at the now abandoned Parson Ammunition Plant site. Senate Majority Leader Derek Schmidt, of Independence, wants the State to issue nearly $40M in prison bonds so Yates Center, in his district, can build a substance abuse treatment prison. Neither project is needed, certainly not at taxpayer expense. The House has twice passed legislation to block the prison bonds. Earlier in the week the House rejected a budget compromise that included the road and the bonds by over 100 votes. The final bill, passed Friday night, moves any road project at Parsons off state budget and defers the prison bond issue to the wrap-up session when the omnibus appropriations bill for the year will be considered. The omnibus appropriations bill will contain the final items of funding for the year and will be based in large part on what the consensus revenue estimating committee projects the state will receive in revenues for the next fiscal year.
A new energy bill closely resembling one vetoed earlier by the Governor was passed overwhelmingly by the House and Senate before adjournment. The Senate again passed the measure with veto-proof numbers. This time, the House came within one vote of a veto-proof majority and I predict that by the wrap-up session sufficient votes for an override will be found. Interestingly, the Governor signed a bill Thursday that places the same restrictions on the Secretary of Agriculture with regard to food safety as the proposed energy bill would place on the Secretary of Health & Environment.
In other Legislative action, the House and Senate have both passed school finance bills that would fund a 4th year of a school finance plan by adding $59 to the base budget per pupil, worth more than $37M in additional funding. We’ve also sent to the Governor by a strong vote a comprehensive abortion reform act that would not change current laws dealing with who can obtain an abortion but would crack down on coerced abortions and would address problems occurring when prosecutors fail or refuse to enforce existing abortion laws. Reforms aimed at the Kansas Board of Healing Arts have also passed both Houses and the final version will be voted on in the wrap-up session. Efforts in both the House & Senate have led to the resignations of two top officials with the Board, which has been exposed as neglecting to operate the agency in the best interests of the public and health care community. Our new law regulating funeral picketing has now been signed by the Governor.