May 5, 2008 Legislative Report

Rep. Mike O'Neal — Mon, 05 May 2008 02:16:00 +0000

I had anticipated that this would be my last report of the 2008 legislative session. However, the House and Senate budget negotiators failed to reach agreement on the final budget bill Saturday evening and we adjourned until Monday. The differences between the House & Senate on the final budget are significant. The House, on Saturday, rejected the Senate’s version of the budget by a vote of 116-4. The House had hoped that Senate negotiators would agree to stay and continue working on a compromise, but when the Senate learned that the House planned to adjourn to allow the remaining lawmakers to return to their districts Sunday, the Senate adjourned and Senate budget negotiators broke off negotiations. So, it appears that no further progress on the budget will be made until sometime Monday and it’s likely the session will extend into Tuesday or possibly Wednesday, depending on their progress.
The budget stalemate is disappointing as the House has agreed to give the Senate over 60 of the Senate’s positions on the final budget while retaining only about 20 of the House positions. Two powerful Senators are still holding out for special projects for their districts; projects that the House has overwhelmingly rejected. Senate Majority Leader Derek Schmidt wants $39.5M in bonding authority for the Department of Corrections to build additional prison space, including an $11.4M facility in the Senator’s district. Our bed space projections show we have no need for the additional bed space and won’t have a need for the foreseeable future. The community of Yates Center has candidly admitted that it wants a substance abuse prison facility built, not because of a demonstrated need for bed space, but rather for economic development reasons. Such a facility would create jobs for the region. The Senator has made funding of this unnecessary bed space a higher priority than other critical state funding needs.
Senator Dwayne Umbarger, the Senate Ways & Means Committee Chairman, has insisted that we include $750,000 in funding in the budget bill to build a road and entrance to the abandoned Parsons Ammunition Plant. The State has no interest in the property but the Senator wants the State to fund the road and entrance project rather than have it funded locally or privately. These two personal projects have held up negotiations and have caused a good deal of bitterness among lawmakers who want to wrap up the session and return home.
While budget negotiators continue their work, the House is working on one more attempt to salvage the session’s energy bill, including authority for Sunflower Electric to build their proposed energy plants. The plan is being rolled into an economic stimulus package which includes economic development projects still in play. One piece has state bonding assistance for an intermodal rail project in Johnson County near Gardner, some economic development assistance for Hills Pet Food Company in Topeka, and an IMPACT aid program for new and expanding businesses that would provide some corporate tax relief and allow for a mechanism for the state to accumulate funds to create incentive packages to lure new businesses to the state. It is hoped that the package will succeed in garnering enough voters to withstand another veto by the governor which could be overridden when the legislature returns for the ceremonial adjournment May 29.

April 28, 2008 Legislative report

Rep. Mike O'Neal — Sat, 26 Apr 2008 23:09:00 +0000

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.

April 6, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 06 Apr 2008 00:44:00 +0000

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.

March 31, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 30 Mar 2008 15:23:00 +0000

The legislature is nearing the end of the regular session. We wrapped up work on all non-exempt bills for the session Friday and will spend this week working on conference committee reports, hopefully wrapping up the regular session on Friday. We return to Topeka on April 30 for the traditional wrap-up session where we’ll consider any gubernatorial vetoes and finish the budget and holdover conference committee reports.
We’re still trying to reach consensus on a coal-fired energy bill that will allow for development at Holcomb in southwest Kansas. The Governor’s veto has angered Republicans and Democrats alike. The support is overwhelming in both the House & Senate but we’re a handful of votes short of the 2/3rds majority in the House for a veto override. A second energy bill is in the works and there is still a chance votes for the override will be secured by week’s end. Our future base-load energy needs depend on this development, which also will include wind-power development as a supplemental energy source.
Both the House & Senate have now taken action on their respective versions of illegal immigration legislation. We debated the House version for nearly 4 hours Thursday before passing a heavily amended bill. The House bill came out of Committee heavily amended after working with business groups on a version they could support. Kansas business had taken the position that it was up to the federal government to police illegal immigration and they opposed any effort to place the responsibility on businesses to crack down on the problem. The House bill tried to accommodate businesses concerns. However, the business coalition still objected to the bill and on the House floor a proposal that stripped out most of the bill’s teeth was adopted.
As amended, the bill would impose criminal penalties on those who knowingly register an illegal alien to vote, would prevent illegal aliens from receiving state-funded public assistance such as food stamps, would enhance the penalties for dealing in false identification documents, would establish civil contempt penalties for any business found to have knowingly employed an illegal alien or failed to comply with federal law regarding the verification of an employee’s legal work status, would require businesses to enroll & participate in the E-Verify network to receive any state contract or grant and would require the Department of Labor to use E-Verify to verify all employees hired in the state. Businesses would have an absolute defense if they use E-Verify.
Another effort to repeal provisions in current law that allow for in-state tuition for the children of illegal immigrants failed. The House & Senate versions will now go to conference committee to iron out the differences between the two bills, which are very similar. It remains to be seen whether the resulting Kansas law will be upheld if challenged in the courts as there is language in federal law that would appear to pre-empt states from passing their own illegal immigration reforms. States have had to act due to the utter failure of the federal government to enforce its own laws. Illegal immigration costs the state millions of dollars each year.

March 31, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 30 Mar 2008 14:48:00 +0000

The legislature is nearing the end of the regular session. We wrapped up work on all non-exempt bills for the session Friday and will spend this week working on conference committee reports, hopefully wrapping up the regular session on Friday. We return to Topeka on April 30 for the traditional wrap-up session where we’ll consider any gubernatorial vetoes and finish the budget and holdover conference committee reports.
We’re still trying to reach consensus on a coal-fired energy bill that will allow for development at Holcomb in southwest Kansas. The Governor’s veto has angered Republicans and Democrats alike. The support is overwhelming in both the House but we’re a handful of votes short of the 2/3rds majority in the House for a veto override. A second energy bill is in the works and there is still a chance votes for the override will be secured by week’s end. Our future base-load energy needs depend on this development, which also will include wind-power development as a supplemental energy source.
Both the House & Senate have now taken action on their respective versions of illegal immigration legislation. We debated the House version for nearly 4 hours Thursday before passing a heavily amended bill. The House bill came out of Committee heavily amended after working with business groups on a version they could support. Kansas business had taken the position that it was up to the federal government to police illegal immigration and they opposed any effort to place the responsibility on businesses to crack down on the problem. The House bill tried to accommodate businesses concerns. However, the business coalition still objected to the bill and on the House floor a proposal that stripped out most of the bill’s teeth was adopted.
As amended, the bill would impose criminal penalties on those who knowingly register an illegal alien to vote, would prevent illegal aliens from receiving state-funded public assistance such as food stamps, would enhance the penalties for dealing in false identification documents, would establish civil contempt penalties for any business found to have knowingly employed an illegal alien or failed to comply with federal law regarding the verification of an employee’s legal work status, would require businesses to enroll & participate in the E-Verify network to receive any state contract or grant and would require the Department of Labor to use E-Verify to verify all employees hired in the state. Business would have an absolute defense if they use E-Verify.
Another effort to repeal provisions in current law that allow for in-state tuition for the children of illegal immigrants failed. The House & Senate versions will now go to conference committee to iron out the differences between the two bills, which are very similar. It remains to be seen whether the resulting Kansas law will be upheld if challenged in the courts as there is language in federal law that would appear to pre-empt states from passing their own illegal immigration reforms. States have had to act due to the utter failure of the federal government to enforce its own laws. Illegal immigration costs the state millions of dollars each year.

March 24, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 23 Mar 2008 20:40:00 +0000

Last week was budget week in Topeka, with both the House & Senate debating and passing their respective versions of the State’s spending package for fiscal year 2009. Both versions spend less than the Governor’s proposed budget but both put off until April nearly $150M in spending decisions. The final Consensus Revenue Estimate before adjournment comes to us in early April and will signal what funding is available for the final budget bill. Revenues have been running ahead of estimates so far this year but sales tax receipts have been flat and there is concern that revenues may lag in the next reporting periods.
Included in funding deferrals is the new state employee pay plan. A new improved state employee pay plan has received tentative approval, subject to finding the funding in the final days of the session. The new plan implements market adjustments to try to raise salaries to comparable market rates. In exchange, traditional longevity pay would be phased out. The proposal contains a 2½% base increase. I voted against the base bill due to the fact it didn’t address non-judicial state court employees but we took steps Thursday to address those salaries with docket fee increases to make non-judicial court employee pay track with the state employee pay plan.
Two of my floor amendments were successful. One removed the expense of $39.5M in bonding authority to build new prison bed space that we have determined is not currently necessary due to favorable bed capacity data. The other amendment added $1M in spending for the initial planning and design for two KU pharmacy school expansions that will add 45 new pharmacy student slots at the KU campus in Lawrence and expand the KU School of Medicine in Wichita to add 40 first time pharmacy school slots there. We are facing a critical pharmacy shortage in the state with 7 counties currently without a pharmacy and as many as 8 more in jeopardy of losing their pharmacy if new pharmacists are not recruited to take over the businesses. The average age of independent pharmacists in the state is 54.
In other legislative news, as expected, Governor Sebelius vetoed the legislature’s energy bill. The Senate passed the measure with veto-proof numbers and there was a strong bi-partisan vote in the House but we’re currently a few votes short of a veto override. The veto is a huge blow to rural Kansas development. On the one hand, the governor says she’s opposed to the legislature placing restrictions on the Secretary of Health & Environment’s authority while on the other hand she’s trying to negotiate for a smaller energy plant in western Kansas. In fact, the Legislature has unanimously passed legislation that places the same restrictions on the Secretary of Agriculture. Those restrictions merely say that the Secretary may not promulgate rules & regs that are more restrictive than current state or federal law without legislative approval. The legislature’s energy bill represents a “win-win” for the state and would serve as a model for future energy development in the state and a model for CO2 mitigation among the existing plants coming up for renewal of their energy permits. Work is underway to muster the votes for an override of the Governor’s veto.

Marxh 17, 2008 Legislative Report

Rep. Mike O'Neal — Mon, 17 Mar 2008 03:35:00 +0000

We’re more than half-way through the session and finally one of the key issues of the session has been teed up for consideration. The issue is illegal immigration and whether Kansas will join a number of other states in moving ahead on an issue that Congress has failed to handle. While laws passed by Congress suggest that states are pre-empted from enacting their own laws addressing illegal immigration, the federal government has utterly failed to enforce its own laws and as a result, states have had to deal with the issue on their own.
The cost to taxpayers of illegal immigration is huge, with millions of individuals accessing taxpayer paid welfare, health and educational benefits while failing to have legal resident status. On the other hand, American employers, including thousands in Kansas, depend on immigrants to perform hard-to-fill employment positions and fear what may result if there is a sudden crackdown on illegal immigration. Federal law already prohibits employers from knowingly employing illegal immigrants but there is little true enforcement. Employers may, on a voluntary basis, sign up for an internet based employee verification system called E-Verify, which allows employers to access a website to confirm the legal status of a proposed worker. However, the system is not fool-proof and does not guarantee against identity theft. Still, several states have proposed making the E-Verify system mandatory such that all employers in the state would be required to verify prospective employees or face possible fines and penalties. Several of the bills pending in Kansas have this provision. Kansas business leaders are concerned about the possible mandate of a system that is known to contain errors and are concerned about provisions in proposed bills that would impose criminal penalties on businesses where honest hiring mistakes were made but knowledge of illegal hiring is imputed to the business based on circumstantial evidence.
Also controversial are provisions in some of the proposed legislation that would deny certain educational benefits, such as in-state tuition, to children of illegal immigrants. Kansas currently allows for in-state tuition at the Regents institutions for children of undocumented immigrants as long as they attended and graduated from a Kansas high school. The practice has been not to penalize the children for their parents’ status but the policy has been criticized as being, for example unfair to the children of soldiers stationed in Kansas but who do not qualify for in-state tuition. Less controversial are the provisions that would deny public state or local benefits to those without legal residential status.
Both the Senate and House have had hearings on proposed legislation to crack down on illegal immigration. Surrounding states have already passed legislation in one form or another. All are expected to face legal challenges by those who will argue that Federal law pre-empts state law. It remains to be seen whether the Kansas House & Senate will reach agreement this year on an immigration package. Public support for legislation is strong, particularly as it relates to denial of taxpayer paid benefits to those not in the country legally.

March 10, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 09 Mar 2008 02:33:00 +0000

The big news in Topeka last week was passage of the compromise energy bill. The House-Senate Conference Committee reached agreement on the mega energy bill and the House and Senate both acted quickly to pass the measure overwhelmingly. The numbers in the Senate suggested veto-proof support while the House was still a few votes short of a veto-proof margin.
The bill would establish energy efficiency standards for state buildings and equipment. New and renovated state buildings would need to exceed by 10% national energy efficiency standards and property leased by the state would also have to meet national energy standards. In addition, new and existing energy generating plants would be required to use the best available technology to implement carbon dioxide capture. For the first time ever, a renewable energy standard would be placed in law. By 2012 at least 10% of the 3-year average peak load of public and cooperative electric utilities would need to come from renewable resources, increasing to a 15% requirement by 2016 and 20% by 2020.
Net metering for solar energy would be available to the public under the legislation. Customers would receive a credit applied to the succeeding billing period, equal to at least 150% of the avoided energy cost, for electricity generated in excess of that provided by the utility. The bill would also create tax incentives for energy efficient improvements to non-owner occupied housing units and would require mercury emission reduction of 80% by generating units beginning operation after January 1, 2008 and which use coal to produce over 10% of their heat input. Finally, the bill would put in place procedures for Sunflower Electric to reapply for permits to build their two new coal-fired plants based on current state and federal rules and regulations. Even with the strong bi-partisan support and energy efficiency reforms the Governor is expected to veto the bill, setting up a possible veto override.
At this point in the session several of the key planks of the Republican majority platform in the House are becoming reality, including a new law allowing all county election officers to designate advance satellite voting locations in the state. Campaign reform legislation has now passed over to the Senate for consideration there and the historic state budget transparency project is now a reality. On March 1 a new state searchable database for Kansans to keyword search their government’s receipts and expenditures went on-line at www.kanas.gov/kanview/. The House is also well on its way of holding the growth in state spending this year to 5%.
Other priorities include criminal sentencing reform, limiting the discretion of courts to grant probation in serious sex offenses and requiring jail and prison time for chronic repeat property theft offenders and drunk drivers. Hearings have been underway on the issue of illegal immigration, which I’ll talk about more next week and the House Tax Committee has kicked out legislation to reform the corporate tax structure by closing certain tax loopholes and reducing the top rate from 7.35% to 6.85%. The House Tax Committee is also working on legislation that would make more uniform sales tax exemptions for not-for-profit organizations. There are over 30proposed sales tax exemption proposals pending in the House alone.

March 3, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 02 Mar 2008 21:19:00 +0000

The Legislature reached its first major landmark of the 2008 session Friday as the House and Senate finished up work on their respective bills and passed them over to the second house. The House is in recess until Wednesday to give staff time to catch up with the numerous bills worked late last week.
The Energy conference committee is said to be close to agreement on a compromise of the energy bill essential to revisiting the Sunflower Electric application for permits to build two new energy efficient coal-fired plants near Holcomb. The Secretary of Health & Environment is in the process of negotiating with existing plants to reach agreement on CO2 emission reduction standards. We are hopeful of having sufficient votes to override a threatened gubernatorial veto and end up with a bill that represents a win-win situation for Kansas, one that protects the unprecedented $3.6B economic development project for Western Kansas and one that contains incentives for CO2 mitigation and renewable energy sources.
Bills passed by the House last week included a rewrite of the state’s stalking law to make it one of the toughest in the nation. Drafted in the wake of the Jodi Sonderholm tragedy in Ark City, the new legislation will give prosecutors more tools to seek prosecutions earlier in a perpetrator’s course of conduct toward a stalking victim. Other legislation passed last week would reduce judges’ discretion in granting probation to violent sex offenders. That legislation was written in the wake of highly controversial rulings by a Topeka judge last year who used downward departure authority in the state’s sentencing guidelines to grant probation to at least two sexually violent felons. We also beefed up criminal sentencing laws aimed at repeat property theft felons.
Disappointments last week included three education bills that were defeated by heavy lobbying from the states teachers’ union. One proposal would have addressed a legislative post audit recommendation to reduce low-enrollment weighting for school districts that are small by choice. Another curious defeat involved legislation aimed a distributing high density at risk funding more equitably. The vote was curious since many whose districts would have benefitted voted against the measure. Finally, a measure aimed at getting schools more money to attract math & science teachers was narrowly defeated because the teachers union objected to any class of teacher getting more pay than another; this in spite of the fact that we have a huge shortage of math & science teachers, many of whom take higher paying jobs in the private sector. These defeats don’t bode well for our efforts to provide schools with alternative certification programs to address the teachers shortage. The teachers union opposes that proposal as well.
The Senate has passed a measure that would mandate kindergarten attendance while the House defeated a proposal to fund all-day kindergarten.
At week’s end we received more good news on the revenue side. February tax revenues were up $16.7M over estimates, putting us a total of $29M ahead of estimates for the year. Sales tax receipts continue to stagnate but personal and corporate income taxes came in ahead of projections.

February 18 Legislative Report

Rep. Mike O'Neal — Sun, 24 Feb 2008 00:58:00 +0000

Energy is still the big story in Topeka going into this week. Last week the Senate took strong action on legislation limiting the power of the Sec. of Health & Environment to block construction of two coal-fired energy plants near Holcomb. The move had strong bi-partisan support. Similar legislation is scheduled for debate and action on the House floor this morning. The House bill does include some renewable energy requirements supporting supplemental wind power.
Currently, neither the state nor federal government regulates CO2 emissions. Yet, Sec. Bremby took unprecedented action to block Sunflower Electric’s construction permits where their planned CO2 emissions would have been vastly lower and the plant more energy efficient than any of the state’s existing plants. As to the existing plants, Bremby admitted that he had no current authority to revise their air quality permits and he admitted that at the present time he wasn’t even sure how much of a problem CO2 emissions were for the state.
In other news, Thursday the House Education Budget Committee that I vice-chair took action to recommend over $20M in increased funding for the state’s schools of higher education and approved planning money for construction of expansions of KU’s Pharmacy programs in Lawrence and Wichita. We also added Aviation research and technical training funding for the aviation initiative in Wichita and additional funding for the Wichita Center for Graduate Medical Education. We view these programs as essential “value-added” programs for Western and South Central Kansas.
Our Committee was also briefed by Legislative Post Audit regarding their concerns following an audit of the state’s 28 “virtual schools”. These virtual schools are valuable programs that reach out to rural students and others who would benefit from distance learning but the audit found abuses by school districts who were using the programs as money raisers. Schools who enroll these students get full weighted per pupil funding even where the actual costs of educating these students is thousands of dollars less. We then learned that some districts are recruiting drop-out to enroll, not in traditional GED programs but actual high school enrollment to obtain full weighted per pupil funding. One district was making so much money on this tactic that it started trading students with neighboring districts. The Legislature benefits greatly from the work of the Division of Legislative Post Audit in monitoring state programs for potential abuses.
The House Governmental Organization Committee will have hearing soon on an annexation bill I’m having introduced to address the questionable annexation attempt in Mulvane. In Mulvane’s attempt to attract a potential casino, the city fathers, along with casino-friendly property owners, are proposing annexation of a narrow, meandering, several mile long strip of land, as narrow as 100 feet in places, connecting the city with a potential distant casino site along I-35 in Sumner Co. Such a move, even if consented to by pro-casino landowners, would set a very poor precedent as to future proposed annexations of land. If allowed, annexations of land as narrow as a foot or less would be legal if technically contiguous. My bill would prevent such annexation of less than full tracts.

Feb. 11, 2008 Legislative Report

Rep. Mike O'Neal — Sat, 16 Feb 2008 17:25:00 +0000

Topping the news in Topeka last week was suspension of committee action on HB 2711, this year’s mega-energy bill. The House Utilities Committee had hearings all week on the bill and was scheduled to work the bill Friday. However, the bill picked up much opposition by both sides of the energy debate, with conservationists saying the bill did not go far enough and supporters claiming the bill had too many moving parts when all that was needed at this point were provisions providing regulatory certainty.
The bill stems from unprecedented action taken by Sec. of Health & Environment Bremby to apply emergency powers limited to existing plants to deny an original application for construction of two coal-fired energy plants near Holcomb. Sunflower had complied with all state and federal regulations and had been given a “thumbs up” by KDH&E staff only to have the Secretary block the permit, citing concerns over CO2 emissions. The statute he used clearly applies to plants already in existence and producing quantities of CO2. Incidentally, all the state’s coal-fired energy plants currently emit far more CO2 than the Holcomb plants would as the Holcomb plants would be state-of-the-art facilities. Each of these facilities’ air quality permits will be up for renewal in the next 5 years and the Secretary’s action has caused a great deal of regulatory uncertainty in the state, where investments in energy contribute substantially to the state’s economy. The Holcomb plants alone represent an investment of over $3B, with much of the energy production being sold out-of-state, making Kansas a net exporter of energy.
The bill, among other things, would clarify the current law regarding permitting and would provide a procedure for Sunflower to reapply. The Secretary would be prohibited from applying standards more stringent than those that exist under state or federal law. The bill, as originally introduced, would have established energy efficiency standards for newly constructed state owned buildings, including public schools, and state motor pool vehicles. It would have also set in statute carbon dioxide emission limitations with a carbon tax applied where emissions exceeded limitations. The later has received much criticism as such limitations are generally reserved to the rule & regulation process rather than statute and there is greater interest in providing financial incentives for conservation and efficiency than imposing yet another tax.
The Senate has identical legislation that appears to be moving forward. Look for House to be more deliberate in its approach, perhaps concentrating, for now, on the regulatory provisions of the original bill as this is where time is of the essence this session. I’ve been pulled in to work on the regulatory piece, with a view of looking at the bigger picture. This is not just about Sunflower’s desire to invest billions of dollars in new energy efficient plants in Western Kansas. What we do will affect all our energy plants and investments in all parts of the state and the air quality permits for existing plants come up for renewal in the next few years. Providing regulatory certainty to energy producers as well as reliable and affordable energy to consumers is vital.
Another issue that will receive much debate this session is immigration reform. At least a half a dozen bills have been filed or are in the process of being filed. Patterned after similar laws in such states as Arizona and Oklahoma, sponsors are trying to address illegal immigration issues being experienced by our neighboring states so that Kansas is not behind the curve. It is still uncertain whether Congress will try to pre-empt state laws but, up until now, Congress has failed to be anything more than hopelessly inconsistent with how it deals with illegal immigration. The cost of this uncertainty has fallen on the states and their taxpayers. I’ll be providing more on this issue as it develops this session.

Feb. 4, 2008 Legislative Report

Rep. Mike O'Neal — Sat, 02 Feb 2008 17:06:00 +0000

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.

January 28, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 27 Jan 2008 15:57:00 +0000

The second full week of the legislative session saw standing committees get into full swing, with some action being taken on bills carried over from the 2007 session and some hearings on newly filed legislation. The House took quick action to send to final action a proposal that would expand the use of mail ballots state-wide, after a pilot program in two counties proved successful.
The House Judiciary Committee heard testimony on a bill that would expand the rights of law enforcement to investigate and prosecute cases where auto accidents involving death or serious injury may have involved alcohol or drugs. We’re also planning on hearing legislation that would crack down on repeat DUI offenders. Thursday state and local sexual abuse and domestic violence program representatives were in the Capital to promote new legislation to track crimes involving domestic violence and a new bill that would reform the current stalking law. Those bills will be approved for introduction this week in the House Judiciary Committee.
After the House Judiciary Committee received good news on the status of prison bed space, the Senate Judiciary Committee took testimony on a bill that would, if passed, create a need for around 1500 prisons beds this next year alone, using up all the bed savings we’ve worked on during the past two years. The bill’s sponsor is perceived to be trying to develop pressure to build a new facility in his Senate district in SE Kansas. The House is not likely to take any action this year that would strain our current prison bed situation, although legislation is expected to pass that will have some bed space impact. We’re working on ways to be smarter about the use of expensive bed space, utilizing high cost space to house the most dangerous felons and utilizing new highly effective risk assessment tools to allow for lower security placement of lesser felons.
The State Budget picture continues to take shape after a briefing on the Governor’s budget Thursday morning. Adding updated disaster relief funding needs, we learned that the Governor’s proposed budget would put us $4.8M in the red after required expenditures over last year’s budget is taken into account. The Governor’s proposed $15M in state matching funds for disaster relief doesn’t take into account the recent ice storm damage that was state-wide in scope. The State’s 15% cost share with federal and local governments adds another $25M in expenses. Hopefully not all the funds would need to be expended in FY 2009, which begins July 1 of this year, but it points out the thin margins we are working with and illustrates why we need to revisit the base budgets of most if not all government programs. Simply assuming that agencies should automatically get at least what they got last year plus another 5% has put us into a situation where we have no margin for discretionary spending, and leaves us with less than the statutorily required 7 ½% ending balances. Look for the budget to dominate this year’s legislative session going into the fall elections where all 165 legislative seats are up for election.

January 21, 2008 Legislative Report

Rep. Mike O'Neal — Tue, 22 Jan 2008 00:21:00 +0000

THE 2008 SESSION OF THE KANSAS LEGISLATURE GOT UNDERWAY LAST MONDAY IN TOPEKA. GOV. SEBELIUS GAVE THE TRADITIONAL STATE OF THE STATE MESSAGE THAT EVENING, ANNOUNCING HER PROPOSED BUDGET FOR THE UPCOMING FISCAL YEAR. AFTER TWO PRECEDING YEARS WHERE HER PROPOSED SPENDING OUTSTRIPPED INFLATION MORE THAN 3-FOLD, SHE PROPOSES A MORE MODEST GOVERNMENT SPENDING INCREASE OF AROUND 5%. HOWEVER, EVEN THAT PROPOSAL HAS US SPENDING MORE THIS YEAR THAN WE TAKE IN, REDUCING OUR ENDING BALANCES FROM 8.8% AT THE END OF LAST SESSION TO JUST 5% THIS YEAR. STATE LAW REQUIRES A 7 ½ % ENDING BALANCE. TO MEET THE 7 ½ % LAW WOULD REQUIRE HER TO REDUCE SPENDING BY SOME $147M. TO SELL HER 5% ENDING BALANCE PROPOSAL, SHE SUGGESTS IN HER STATUTORY BUDGET CUTS OF $147M IN EDUCATION FUNDING, SOMETHING SHE KNOWS THE LEGISLATURE WILL ABSOLUTELY NOT DO.
ANOTHER TROUBLING ASPECT OF THE GOVERNOR’S PROPOSED BUDGET IS HER USE OF PROJECTED GAMING REVENUE TO FUND PAYMENT OF STATE OBLIGATIONS AND NEW PROPOSALS. SHE WANTS TO SPEND $57M TO DISPLACE STATE GENERAL FUND MONEY NOW USED FOR CAPITAL IMPROVEMENTS AND BOND PAYMENTS AND PROPOSES TO SPEND ANOTHER $24M ON NEW PROGRAMS. FIRST OF ALL, LAST YEAR’S CASINO LAW IS BEING CHALLENGED IN STATE COURT AND THERE IS ABSOLUTELY NO ASSURANCE THAT IT WILL BE UPHELD, OR IF UPHELD, THAT IT WILL RESULT IN ANYTHING NEAR $81M IN REVENUES NEXT FISCAL YEAR. THE CHALLENGE TO THE LAW IS A STRONG ONE. THE STATE CONSTITUTION BANS ALL GAMBLING EXCEPT THE STATE OWNED AND OPERATED LOTTERY. LAST YEAR’S CASINO BILL TRIES TO DRESS VEGAS STYLE CASINOS IN A SUIT OF LOTTERY CLOTHING AND PASS IT OFF AS STATE OWNED AND OPERATED. A REVIEW OF THE LAW SUGGESTS THAT THE STATE WOULD NEITHER OWN NOR OPERATE THE CASINOS OR SLOTS AT THE TRACKS. IF ANYTHING, THE LAW WOULD HAVE THE STATE REGULATING PRIVATELY OPERATED GAMING, SOMETHING CLEARLY BANNED BY THE STATE’S CONSTITUTION. IT WILL BE INTERESTING TO SEE IF THE STATE COURT, AND ULTIMATELY THE STATE SUPREME COURT, RULES BASED ON THE CONSTITUTION AND THE LAW OR BASED ON WHAT THE GOVERNOR WANTS AND WHAT REVENUE MAY COME IN. IN ADDITION, EVEN IF THE LAW IS UPHELD AND CASINOS ARE BUILT, THE LAW PROVIDES THAT THE REVENUE IS TO BE USED PRIMARILY FOR DEBT REDUCTION AND IT’S QUESTIONABLE WHETHER THE GOVERNOR’S PROPOSED USE OF GAMING DOLLARS COMPLIES.
PART OF THE PROPOSED FY 2009 BUDGET INCLUDES STATUTORY SPENDING MANDATES, SUCH AS THE $167M TO FUND THE 3RD YEAR OF THE SCHOOL FINANCE PLAN THE SUPREME COURT FORCED US TO PASS IN 2005. THERE IS ALSO $57M IN REQUIRED INCREASED SPENDING FOR MEDICAID CASES AND ANOTHER $10M TO FUND PAYMENTS ON PENSION BONDS WE AUTHORIZED IN AN EFFORT TO SHORE UP THE UNFUNDED LIABILITY IN THE STATE EMPLOYEES PENSION PLAN.
THE GOVERNOR’S BUDGET APPEARS TO CONTAIN NO TAX RELIEF, BUT THE LEGISLATURE IS EXPECTED TO LOOK AT FURTHER TAX RELIEF FOR KANSAS TAXPAYERS THIS SESSION. ALSO LOOK FOR EFFORTS TO REDUCE THE NUMBER OF UNINSURED KANSANS IN THE AREA OF HEALTH CARE AND EFFORTS TO GET A HANDLE ON THE ILLEGAL IMMIGRATION SITUATION IN THE STATE. FINALLY, DEVELOPMENT OF A STATE ENERGY POLICY WILL BE A HIGH PRIORITY, GOING HAND-IN-HAND WITH RURAL ECONOMIC DEVELOPMENT. THE DECISION BY THE SECRETARY OF HEALTH & ENVIRONMENT TO DENY SUNFLOWER’S APPLICATION TO BUILD A COAL-FIRED ENERGY PLANT AFTER SUNFLOWER COMPLIED WITH ALL STATE AND FEDERAL REGULATIONS AND GOT THE GREEN LIGHT FROM KDH&E STAFF HAS BEEN VERY UNPOPULAR AMONG BOTH REPUBLICANS AND DEMOCRATS AND BOTH URBAN AND RURAL LAWMAKERS. LOOK FOR THE LEGISLATURE TO TAKE ACTION TO PRODUCE A WIN-WIN SCENARIO FOR THE STATE BEFORE ADJOURNMENT.

Last legislative report for 2007 Session

Rep. Mike O'Neal — Mon, 04 Jun 2007 23:06:00 +0000

This is my final legislative report of the 2007 Legislative Session. The Legislature reached adjournment last Wednesday afternoon after a 6 ½ day wrap-up session. Notably, it was the first time in recent memory we adjourned while the sun was still high overhead. Equally noteworthy was the fact we adjourned on time and did not exceed 90 days. Few states in the country can boast sessions as short as ours.
After working hard all session on hundreds of issues important to a broad range of people and interests, I was disappointed to read the editorial published recently in the Hutchinson News criticizing the work of this year’s legislature. The author of the editorial obviously had not spent even one day at the Capital this year. Also, I’ve found over the years that what is important to Kansans and what is important to the print media is vastly different.
I do find myself agreeing with the Hutchinson News, however, with it characterization of the gambling bill as being bad for Kansas. The appropriate way of handling the gambling issue would have been to submit the question to the voters as a proposed constitutional amendment, rather than trying to pound a square peg into a round hole by passing legislation that hadn’t even had a hearing and would make Kansas the first and only state in the country with state-owned and operated casinos. In fact, it is that feature that makes the law passed this session at the Governor’s urging unconstitutional, in my opinion. There really wasn’t much of an effort to make the actual legislation comply with the state’s constitutional requirement that any expanded gambling be state owned and state operated. Under the gambling bill, the state is not even entitled to the net profits of a gambling enterprise, as a true owner would be. Instead, the state’s take is a mere 24% with an additional 3% going to local units. The state is hardly an owner, as required by the constitution, and under the legislation the casinos would be managed and operated by private gambling interests with the state maintaining only regulatory oversight, again, in violation of the constitutional required of state operation, in my opinion. The battle will be fought in the courts and we’ll see if by this time next year Kansas is any closer to having casinos and slots at the tracks.
Significant tax relief was approved this session, including over $56.9 M over the next five years for those on Social Security. Homestead property tax relief refunds and earned income tax refunds were increased as well. For Kansas businesses, the unpopular franchise tax was cut and is then completely phased out over the next few years and huge cuts were approved in unemployment taxes.
A big step toward health care reform was passed as well with overwhelming bi-partisan support. While some had advocated for Hillary health care in the form of socialized medicine, Kansas plans to involve the private sector in the solution by incenting health coverage at reduced rates through private insurance and moving more families off the government roles.
We were finally able, in the closing days of the session, to address deferred maintenance needs at our regents institutions and community colleges. While not as much financial support as the universities had asked for, the $210M plan is a huge first step toward addressing their needs. Significant tax credit availability will incent the private sector to support the effort as well so the state doesn’t have to shoulder the entire burden.
Other significant legislation this year included passage of a primary seat belt law for drivers 14 to 17 years of age, a move aimed at saving lives in the age group most responsible for accident injury and fatality statistics. We also passed stricter laws dealing with drunk drivers, got tougher on burglars and sex and drug offenders, took action to shut down drug paraphernalia vendors and moved to close a gaping loophole in abortion reporting.
A huge bi-partisan majority of lawmakers overturned the Governor’s veto on concealed carry legislation, secured the funding for the 3rd year of the school finance plan and made English the official language. The final budget provided for the needs of Kansans with developmental disabilities and those on Medicaid. Overall, the Legislature worked efficiently to address the requests of constituents from all across the state and from all walks of life. There were successes and disappointments, as there are every year, but I give the session high marks for providing for the needs of the state while protecting taxpayer dollars.
Sine die adjournment is May 22 at 10:00 a.m. Aside from various interim legislative committees meeting to study proposals for next year, the legislature’s work is complete until the 2008 Legislature convenes the second Monday in January, 2008.

May 7, 2008 Legislative Report

Rep. Mike O'Neal — Sun, 06 May 2007 22:02:00 +0000

This is my final legislative report of the 2007 Legislative Session. The Legislature reached adjournment last Wednesday afternoon after a 6 ½ day wrap-up session. Notably, it was the first time in recent memory we adjourned while the sun was still high overhead. Equally noteworthy was the fact we adjourned on time and did not exceed 90 days. Few states in the country can boast sessions as short as ours.
After working hard all session on hundreds of issues important to a broad range of people and interests, I was disappointed to read the editorial published recently in the Hutchinson News criticizing the work of this year’s legislature. The author of the editorial obviously had not spent even one day at the Capital this year. Also, I’ve found over the years that what is important to Kansans and what is important to the print media is vastly different.
I do find myself agreeing with the Hutchinson News, however, with it characterization of the gambling bill as being bad for Kansas. The appropriate way of handling the gambling issue would have been to submit the question to the voters as a proposed constitutional amendment, rather than trying to pound a square peg into a round hole by passing legislation that hadn’t even had a hearing and would make Kansas the first and only state in the country with state-owned and operated casinos.
In fact, it is that feature that makes the law passed this session at the Governor’s urging unconstitutional, in my opinion. There really wasn’t much of an effort to make the actual legislation comply with the state’s constitutional requirement that any expanded gambling be state owned and state operated. Under the gambling bill, the state is not even entitled to the net profits of a gambling enterprise, as a true owner would be. Instead, the state’s take is a mere 24% with an additional 3% going to local units. The state is hardly an owner, as required by the constitution, and under the legislation the casinos would be managed and operated by private gambling interests with the state maintaining only regulatory oversight, again, in violation of the constitutional required of state operation, in my opinion. The battle will be fought in the courts and we’ll see if by this time next year Kansas is any closer to having casinos and slots at the tracks.
Significant tax relief was approved this session, including over $56.9 M over the next five years for those on Social Security. Homestead property tax relief refunds and earned income tax refunds were increased as well. For Kansas businesses, the unpopular franchise tax was cut and is then completely phased out over the next few years and huge cuts were approved in unemployment taxes.
A big step toward health care reform was passed as well with overwhelming bi-partisan support. While some had advocated for Hillary health care in the form of socialized medicine, Kansas plans to involve the private sector in the solution by incenting health coverage at reduced rates through private insurance and moving more families off the government roles.
We were finally able, in the closing days of the session, to address deferred maintenance needs at our regents institutions and community colleges. While not as much financial support as the universities had asked for, the $210M plan is a huge first step toward addressing their needs. Significant tax credit availability will incent the private sector to support the effort as well so the state doesn’t have to shoulder the entire burden.
Other significant legislation this year included passage of a primary seat belt law for drivers 14 to 17 years of age, a move aimed at saving lives in the age group most responsible for accident injury and fatality statistics. We also passed stricter laws dealing with drunk drivers, got tougher on burglars and sex and drug offenders, took action to shut down drug paraphernalia vendors and moved to close a gaping loophole in abortion reporting.
A huge bi-partisan majority of lawmakers overturned the Governor’s veto on concealed carry legislation, secured the funding for the 3rd year of the school finance plan and made English the official language. The final budget provided for the needs of Kansans with developmental disabilities and those on Medicaid. Overall, the Legislature worked efficiently to address the requests of constituents from all across the state and from all walks of life. There were successes and disappointments, as there are every year, but I give the session high marks for providing for the needs of the state while protecting taxpayer dollars.
Sine die adjournment is May 22 at 10:00 a.m. Aside from various interim legislative committees meeting to study proposals for next year, the legislature’s work is complete until the 2008 Legislature convenes the second Monday in January, 2008.

April 9, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 08 Apr 2007 20:43:00 +0000

The 2007 Kansas Legislative session reached first adjournment at about 3:00 a.m. Wednesday morning after a flurry of activity debating and passing conference committee reports. The House and Senate will be in recess until April 25th when we’ll return for the traditional wrap up session.
Key measures passing the legislature and sent to the governor included a tax relief package that the House & Senate negotiated in the closing days of the session. Here the House clearly prevailed in pushing for more tax relief than the Senate had wanted to offer. The total package of cuts saves Kansas taxpayers nearly $32M the first year. The largest tax cut eliminates the state franchise tax over time. The threshold for application of the tax would increase to $1M this year and then the rate is cut 25% per year until eliminated. Kansas businesses would enjoy $7M in tax relief the first year, rising to $48M in the 5th year when the tax is eliminated. Total savings to businesses over 5 years is estimated to be $135M.
For Social Security recipients the legislature passed a measure exempting the first $50,000 of social security income from state income taxation. Next year the exemption would cover the first $75,000 of income. The five year total for SS tax relief is estimated to be nearly $57M. An increase in the Earned Income Tax Credit for poor Kansans also passed. The break is worth about $7.5M this year and it boosts to 17% the percentage of federal earned income tax credit the state matches. Five-year tax savings are estimated at $45.8M. There is also an increase in the Homestead Property Tax Relief credit in the tax relief package. The maximum credit increases to $700. The tax relief package, coupled with the earlier passage of major breaks in the unemployment security tax totaling nearly $82M means huge savings for individual taxpayers and Kansas businesses this year and for years to come.
The legislature has also sent to the governor increases in the state pay plan. The state’s nearly 22,000 civil service workers will receive 2% salary increases and money will be set aside for average 2% raises for 20,400 workers outside the civil service. In addition, civil service workers will receive a one-time $860 bonus in December. About 1,500 civil service workers whose salaries are 25% or more below market rates would receive additional 5% salary increases. Longevity bonuses paid to employees who have worked for the state 10 or more years would increase from $40-$50 per year. The total cost of the new pay plan is estimated at $86.5 next fiscal year.
Prior to first adjournment the legislature was successful in passing the state budget for fiscal years 2007 and 2008. Republicans were successful in limiting spending increases to about 5.1%, significantly less than the Governor’s spending proposal. School districts were given additional local option budget authority in the bill and the presidential preference primary was scuttled. Still ahead, however, is work on the Omnibus Appropriations bill, the final budget bill of the session. We’ll take the final budget piece up when we return to Topeka April 25th. The State’s Consensus Revenue Estimating Committee meets during the break to release the final revenue estimates before final adjournment and that announcement will affect the legislature’s final spending decisions. Left to be determined is the final tally of funding that the state will make available to our community colleges and universities for deferred maintenance needs on their buildings.
A potentially dramatic additional gambling vote may come during the warp up session. The Governor wants to run a trailer bill to make revisions to the gambling proposal that narrowly passed and to add the provisions she promised to get the 2 Senate votes needed for passage. Now that the Governor got her 2 votes, there is talk that she may abandon the bill in a classic “bait & switch” maneuver. My next report will be in 3 weeks.

April 2, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 01 Apr 2007 22:19:00 +0000

At the start of the 2007 legislative session, Gov. Sebelius indicated that among her highest priorities were increased benefits to retired state employees, funding for all-day kindergarten, health care funding for children from birth to age 5 and increased funding for mental health services. Last week we learned, however, that instead of these priorities the Governor’s true top priority was to bring expanded gambling to the state. The gaming plan she crafted behind closed doors with out-of-state gaming interests and pro-gambling lawmakers, calls for the state’s portion of gambling revenues to go to state building maintenance, debt reduction and local ad valorem tax relief. Make no mistake, these are worthy places to spend money and perhaps better choices, but last week’s vote on gambling demonstrated that the Governor was more than willing to throw education, children, and state employees, including teachers, overboard in order to muster votes for her gambling initiative.
In lengthy floor debate, Republicans, who believe that expanded gambling in the state is bad public policy, offered a number of amendments aimed at making the bill more palatable. The Governor and pro-gambling legislators held off amendments aimed at targeting some of the revenues to teachers’ salaries, all-day kindergarten funding, additional benefits to retired state employees and funding for health coverage for children birth to age 5. I was the presiding member during the floor debate in the House and so was in a position to see the faces of every legislator during debate and votes on the various amendments. I could see the angst on the faces of many who wanted to vote on some of the amendments but couldn’t because they had either agreed with the secret coalition or had been ordered by Democrat leadership or the Governor to fend off all amendments. Local Democrat Representative Mark Treaster was quoted as saying his side had been told not to mess with the bill so he didn’t.
As a result, we are left with a flawed bill, one that supporters now admit needs to be fixed with what is called a trailer bill, legislation run after the main bill passes to clean up conflicts or technical problems. We are now told the trailer bill is also necessary to carry out deals made with two Senators who switched their “no” votes to “yes” in exchange for certain provisions or concessions. Our own Sen. Terry Bruce was one of the Senators who switched. He had assured me he was not in favor of the bill as it left the House and I’ll be interested to see what agreement was reached to cause him to change his mind. Without his change of vote, the measure would have failed and the bill would have gone to a conference committee where we would have had an opportunity to make the bill digestible and maybe even constitutional.
Controversy over gambling will likely extend the legislative session. We are scheduled to reach first adjournment Tuesday, but I can’t see us getting done by then. Negotiations over the budget and the various tax bills have stalled in the wake of the gambling vote and conference committees to iron out differences in House and Senate bills on a variety of issues were delayed when the Senate President failed to take final action on Senate bills and appoint conference committees before he started the gambling debate.

March 26, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 25 Mar 2007 22:46:00 +0000

After over 13 hours of debate, the House voted to advance to final action a comprehensive expanded gambling bill Friday. The debate, which ended at nearly 2:30 a.m. early Saturday morning, was on an amendment offered to a bill that did nothing more than extend the life of the Kansas Lottery, which is scheduled to sunset July 1, 2008. The amendment was over 100 pages in length and had never had a hearing in committee, so only those who had been working behind closed doors on the proposal knew exactly what was in the bill. In fact, at a caucus called to discuss the proposal, even the carrier of the amendment was unable to answer many questions raised by legislative members. Nevertheless, there were a block of about 65 votes that had been lined up among Democrats and moderate Republicans sufficient to pass the measure and fight off dozens of amendments aimed at improving the proposal from the standpoint of good public policy.
Gambling interests and their lobbyists claimed they had picked up between 8-10 pro-gambling legislators as a result of the November election and they appear to have been right. The bill, which will be on final action this morning in the House, would then go to the Senate, where its fate is uncertain since the Senate composition hasn’t changed since it last voted down expanded gambling.
The bill would allow destination casinos in Wyandotte Co., one in either Sedgwick or Sumner Counties and one in either Cherokee or Crawford Counties in Southeast Kansas, subject to a vote of the residents in those counties only. While expanded gaming substantially affects contiguous counties, they would be denied a voice. Minimum investment in the destination casinos would be $225M, although an amendment added to the bill would allow a casino in Ford County with as little as a $50M investment. The entities getting the casino management contracts would have to pay an up-front privilege fee of $25M for each location, with the Ford County privilege fee being $5M. Slot machines would be allowed at the racetracks at the Woodlands in Wyandotte County, the Wichita Greyhound Park and at Camptown racetrack, near Pittsburg, which has been closed for some time.
In my opinion and the opinion of other attorney members of the Legislature, the proposal is unconstitutional. In 1986 the voters approved a constitutional amendment allowing for a state owned and operated lottery. Voters also approved the regulation, licensing and taxation of horse and dog racing and pari-mutuel wagering. The tracks are state regulated but not state owned and operated. The lottery, however, must be state owned and operated. The expanded gambling proposal attempts to expand the state lottery to allow casinos but language in the bill makes it obvious that the state would not be operating the casinos. The state would enter into management contracts with casino operators. This would be in direct violation of the constitutional requirement that lottery-type games be both owned and operated by the state. A 1994 Attorney General’s Opinion made it clear that the word “operate” is the same as the word “manage” and that a state owned and operated lottery or casino must be owned as well as directly controlled or managed by the state. If the bill passes there will certainly be a legal challenge.

March 19, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 18 Mar 2007 21:43:00 +0000

The big news in Topeka this past week, at least as far as Hutchinson and Reno Co. is concerned, was the overwhelming approval and passage of the Eaton Corp. job retention package. SB 164, which passed the Senate earlier in the session, easily passed in the House and is on its way to the Governor, who has announced she will sign the bill. The measure utilizes a percentage of the state income tax withheld from Eaton employee pay and allows it to be used to further upgrade the plant in the expectation that a newer, better product line will be made in Hutchinson leading to the long term success of the plant. Total state assistance is capped at $2M over ten years. In order to reach the $2M boost over 10 years, Eaton will have to maintain an average of $12.9M in payroll or nearly $130M over 10 years. Not only does the state have no out-of-pocket cost or risk, the state comes out ahead by 10% of taxes the first 3 years and 60% of taxes the last 7 years.
Other news of significant import for the state was passage in the House of the mega appropriations bill for FY 2007 and 2008. House Republicans were successful in holding off dozens of amendments calculated to inflate the amount of state spending. Of the overall state budget of $5.9B, only a little more than a net $1M was added to the State General Fund spending. Key votes on the mega bill included one eliminating $2M in funding for a presidential preference primary. Another key vote, important to central and western Kansas health care, would require approval by the Wichita Center for Graduate Medical Education before the proposed Kansas Medical Center St. Lukes Hospital affiliation is allowed to go through. We added $1.2M for newborn health screening and $2M for domestic violence and sexual assault outreach services, another important vote for rural Kansas. Another $1.6M was added to expand the HeadStart program, funded exclusively with tobacco settlement funds. The Senate appropriations bill will probably be debated this week and then a joint conference committee will work out the differences in anticipation of the Omnibus appropriations bill coming out during the wrap-up session, after the final consensus revenue estimates for the session are released in early April.
Those supporting expanded gaming in Kansas are still hard at work on a bill to debate in the closing days of the 2007 session. However, statistics show that live pari-mutuel racing is a dying industry throughout America and Kansas. The live handle at Kansas tracks has decreased from $273M in 1990 to $20M in 2005, an average 15% decrease per year. In fact, revenue has decreased so much that the state tax on wagers no longer covers the state’s cost to regulate the industry!
Economists say slot machines have had little impact on halting declining attendance at pari-mutuel racetracks in other states. Putting casinos at racetracks does nothing but prop up an ailing industry and line the pockets of track owners. Over 75% of regional casino revenues would come from the home county and surrounding contiguous counties. At the same time, social costs imposed on local governments by the casino would be at least 25% of revenues. Nevertheless, the proposed House bill provides only 3% to the home county and home city, while providing 24% to the state.

March 12, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 11 Mar 2007 22:59:00 +0000

The 2007 Kansas legislative session is fast approaching first adjournment. The House and Senate reached agreement last week on the final calendar for the year. The legislature will reach first adjournment April 3 this year. Committees will meet until March 23. The House and Senate will then wrap up work on non-exempt bills March 28. Conference committees will meet to work out differences between House and Senate versions of bills on March 29th and 30th and the House and Senate will return on April 2nd and 3rd to work final conference committee reports. The Legislature will then recess until April 25 for what is expected to be a 4 day wrap-up session. If all goes according to plan, this year’s session will be only 86 days.
House Republicans last week released our expanded health insurance initiative, utilizing federal funding flexibility and waivers. The basics of the plan include reducing insurance mandates, expanding private-sector offerings of health insurance through reduced regulation of insurers, Medicaid reform and incenting charitable health care for the poor. Unique to the House plan is individually owned health insurance policies which employees can take with them when they change jobs. Availability, affordability and portability are the key components to the plan. The House plan would also expand so-called “Section 125” health plans that allow individuals to use pre-tax dollars to pay for health insurance, which could save individual policyholders, whose premiums aren’t paid by employers, up to 15% of the cost of buying health insurance with after-tax dollars.
The House Select Committee on State Employee Pay has recommended a plan on state pay. The plan includes a 1% base pay increase, a 5% targeted increase for classified employees who are paid more than 25% below private market levels, a $1,450 bonus which would be excluded from retirement calculations and $150 to match employee contributions to a pension plan. The cost of $44.3M is the same as the Governor’s spending proposal for a 2.5% step movement and 1.5% base salary adjustment plus longevity bonuses, but the key to the House proposal is the fact that the bonus provision would not be included in retirement calculations. This lowers the total annual cost of the bonus by millions of dollars. The 5% targeted increase would go to at least 1,533 state employees whose jobs pay at least 25% less than similar jobs in the private sector.
Work continues on the House Mega Appropriations bill for the year. The base bill was passed out of committee last week and should be worked sometime this week on the House floor. The committee added some $160M of spending to the bill, which was still some $50M less than the proposed spending in the Governor’s budget. In addition to the state pay plan funding, the committee added $28M in social services spending, including replacement of lost Medicaid funds. A total of $10M was restored to the Regents operating grants and $7.6M of additional funding was provided for re-entry and day reporting, parole and post-release supervision. Another $5.1M was added for offender education and training programs in the Department of Corrections.

March 5, 2007 Legislative Report

Rep. Mike O'Neal — Mon, 05 Mar 2007 01:20:00 +0000

As we enter the second half of this year’s legislative session we continue to receive positive economic news. The State’s tax-only revenues were $21.5M above estimates for February, putting the state $83.2M above the amount upon which the Governor based her FY 2008 budget. The February increases were mainly from individual income tax receipts (28.4% above estimates or an additional $14.2M) Corporate income tax receipts were a whopping 131% above the latest $2M estimate and sales tax receipts were nearly $8M above estimates. There was a significant decline in the cigarette tax receipts, $2.6M below the $9.5M estimate, but many would say this is actually good news since it translates to lower consumption and perhaps lower overall health care costs in the long run.
After a relatively slow January revenue-wise, the beefed up February numbers bode well for finishing the session and the fiscal year in good economic shape. The income tax receipts, in particular, are putting us in a position to provide some significant tax relief this legislative session. In addition to trimming or completely eliminating the state’s franchise tax and reducing significantly the unemployment tax, the House this week is also considering elimination of the state income tax on social security benefits for the elderly. The House is trying to muster support in the Senate for at least $60M in tax relief, not counting the unemployment tax cut which simply draws down the balance in the unemployment trust fund and does not affect the State General Fund.
The House Economic Development Committee held its hearing on the Eaton job protection legislation this week and we had a positive reception. The measure has already passed the Senate and we’re optimistic the House will also approve the measure, providing the final financial piece of the incentive package to retain the Eaton plant jobs.
In the coming couple of weeks, look for the House to announce its health care reform initiative and a plan to address the state universities’ and community colleges’ deferred maintenance needs. Ticket and tuition surcharges are on the table for negotiation in addition to other funding proposals.
The House Federal & State Affairs Committee will start holding hearings next week on one or more gaming proposals. The Governor is pushing expanding gaming in the state and trying to garner support by tying revenues to several projects, such as pay raises for state employees, COLA’s for retirees, deferred maintenance and more. Unfortunately, the expected additional revenue wouldn’t completely fund any particular initiative, especially on an ongoing basis, and probably only represents a redistribution of the same revenue dollars. There has been no credible data that expanding gaming in the state would attract a significant amount of out-of-state dollars. Kansans would, instead, be spending their disposable money on expanded gaming and not for other goods and services. A mere redistribution of income away from existing Kansas merchants to expanded gambling interests is probably not the way to grow the Kansas economy. Nevertheless, a good deal of time will be spent again this year debating the subject.

Feb. 26, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 25 Feb 2007 21:07:00 +0000

The 2007 Kansas Legislative session reached the halfway mark Friday with the House & Senate finishing up work on their respective bills. This week the House will start hearings and debate on Senate bills and the Senate will start working House bills.
Included in the numerous bills passed by both bodies last week was a bill that would cut unemployment taxes for Kansas employers by an estimated $81M this year. The measure represents a permanent tax cut for employers with positive account balances and would stimulate reinvestment of funds into the Kansas economy. Added to the bill during House floor debate was an amendment eliminating the decades old waiting week for receipt of unemployment benefits, a move supported by labor. The Senate is expected to concur in the amendments in order to get the bill to the Governor as soon as possible. The bill makes the tax cut retroactive to the beginning of the year. The tax break has no effect on the State General Fund as unemployment taxes are collected from employers and placed in a trust fund that is currently over-funded. The $81M in tax savings comes from a reduction in the trust fund surplus.
The House has also approved legislation creating incentives for Kansas students to return to the state to complete their post-secondary education. For the next three school years Kansas would extend in-state tuition benefits to students who had left the state for no more than 5 years to pursue other opportunities. Currently, the right to in-state tuition applies only if the leave of absence from the state does not extend for more than one year. A floor amendment was approved to ensure the benefit did not extend to those with illegal immigrant status.
The House also passed, on a vote of 114-7, legislation making English the official state language to re-enforce programs to ensure that non-English speaking residents learn the language. $500,000 in funding was added to the bill for adult English-language training. Non-English speaking students in the public schools already receive English-language training.
Neither the House nor Senate has, as yet, come up with a plan to pay for the deferred maintenance needs of the states universities and community colleges. The Governor’s proposal to increase turnpike fees as one source of revenue has met with stiff resistance and an informal suggestion by the Senate President that local units of government in college towns should help out hasn’t fared much better. Predictably, those favoring expanded gambling in the state have suggested gaming as a solution. The current gaming proposal, introduced the first week of the session, has gone nowhere. That proposal would allow destination casino developments in Wyandotte County and Southeast Kansas. Slots would be allowed at three existing race tracks plus one new track in Ford County, if built. A vote of the people in the county in question would be required, and the minimum investment would be $200M for any destination casino development. Finally, there would be a 5-year moratorium on any further development and the number of slots would be limited. An expanded gaming proposal is also being touted as a way of funding state employee pay increases and colas for retired KPERS employees. Tying gaming to some popular funding need is the only way it will pass, which is why we should question what is good public policy.

Feb. 19, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 18 Feb 2007 22:17:00 +0000

This week marks the first major deadline of the 2007 legislative session. All non-exempt bills must be worked by the committees by Wednesday and by Friday all non-exempt bills must be worked by the house of origin. We’ll be on the floor most of Thursday and Friday working bills. Next week we’ll start hearing Senate bills in the House and the Senate will start working House bills.
A major piece of crime legislation came out of my House Judiciary Committee last week and was debated and passed to final action by the House Thursday. Given the name Alexa’s law in memory of an unborn victim of violence, the bill creates for the first time in Kansas a law protecting the unborn by imposing a separate criminal penalty for injury or death to an unborn child at the hands of a criminal. Similar laws are already in place in 26 states, including California, where Scott Peterson sits on death row for the brutal murder of his wife and unborn daughter. In Kansas he would have been charged with but one crime, the murder of his wife, and would not have been eligible for the death penalty. Attempts to water down the bill on the House floor to limit it to crimes against the mother only failed by a wide margin.
A similar debate is expected soon on the issue of prenatal health care. Governor Sebelius has been pushing an initiative to provide health coverage for all children from birth to age five. The House is expected to change the initiative to one from conception to age five to recognize the importance of prenatal care. Kansas case law currently recognizes a separate duty of care owed by a physician to an unborn child, separate and apart from the duty owed an expectant mother. There are legislators, however, who are reluctant to recognize that an unborn child has any rights apart from the mother. Question, will the Governor accept the House plan in order to achieve her goal of providing health coverage to those birth to age five or veto the plan due to her philosophical hang-ups over rights of the unborn?
Two tax cut proposals are well under way in Topeka. The House has passed over to the Senate a 3-year total elimination of the state franchise tax, worth $15M a year in tax relief to Kansas businesses each of the next 3 years until the tax is eliminated altogether. And, the Senate has passed a measure providing $112M in tax relief in the form of cuts in the unemployment insurance tax. The cut this year takes into account the fact that the Unemployment Insurance Trust Fund has accumulated more money than needed to pay out in benefits. The big winners would enjoy elimination of the tax. These are employers with positive balance accounts. The Senate rejected a proposed amendment that would have eliminated the one-week waiting period for unemployment benefits.
Having completed my duties as Chair of the Special Committee on Contested Elections, I was named Thursday to Chair a Special Joint Committee on Corrections Reform, a 6-member committee of 3 House and 3 Senate members. Our goal is to evaluate prison bed space in the state, determine the need for new beds and develop a plan to reduce recidivism and promote successful re-entry programs for inmates coming out of the system. We’re looking to balance the expectations of the public that dangerous felons remain incarcerated with the increasing costs of incarceration and prison bed construction.

Feb. 12, 2007 Legislative Report

Rep. Mike O'Neal — Sun, 11 Feb 2007 21:47:00 +0000

Several House races this past election were decided by no more than a handful of votes. One in particular, the 16th Dist. House race in Johnson County, was initially determined to be a 27 vote margin for the Republican. A final canvas reversed the result in favor of the Democrat by 4 votes and a recount narrowed the margin to three. Due to irregularities in the processing of provisional ballots by the Johnson County Election Commissioner an election contest was filed and a Johnson County judge found the margin of victory for the Democrat to be a mere two votes.
By law the election contest was sent to the House for final resolution. I was appointed to chair the select committee on the election contest and after 6 days of hearings our committee of 3 Republicans and 3 Democrats agreed with the judge and determined that the Democrat Representative should be seated. By law the election could have been determined by a vote of the full House but the Republican challenger gracefully withdrew his election contest on the basis of our committee’s work.
I have served on two other contested election committees. One, in 1991, involved a contested ballot faxed back to Kansas by a deployed soldier serving in Saudi Arabia during Desert Storm. His vote was one of a handful that determined the winner in the extremely close election. The other, in 1995, resulted in a tie vote after judicial review and House review and the outcome was determined by drawing a colored backgammon chip out of a hat. Each election I stress the importance of your vote. These three close elections illustrate the importance of every vote.
As Vice-Chairman of the House Education Budget Subcommittee I’ve spent the last week listening to the various budget proposals of each of the Regents Universities and the Community Colleges. All have stressed the need for millions of additional dollars for repairs to their aging buildings. When asked why they are so far behind on maintenance the schools have complained that state funding has not kept up with their maintenance needs, although most have enjoyed the benefits of newly constructed facilities on their respective campuses. New construction has moved maintenance of existing structures to a lower priority, apparently. We’re considering a requirement that all new facilities, whether built with public or private funds, be sufficiently endowed with corresponding ongoing maintenance and upkeep funds.
The current maintenance and upkeep needs are said to be in the $600-700M range in spite of a move several years ago to issue bonds to help with maintenance needs. The Governor has proposed significant increases in turnpike fees to fund a portion of the costs, a move roundly criticized by the Kansas Turnpike Authority and the Kansas Motor Carriers Association in particular.
This week, our Education Budget Committee hears from K-12 public education interests. With the legislature taking quick action to set aside the 2nd and 3rd years of the 3-year school finance plan passed last year, this budget should be fairly easy to reach agreement on, although we expect to hear requests, as we do every year, for more funds even though the Court has now found our level of funding to be adequate. Additional funding to implement all-day kindergarten everywhere is on the agenda.

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May 5, 2008 Legislative Report

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Last legislative report for 2007 Session

May 7, 2008 Legislative Report

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April 2, 2007 Legislative Report

March 26, 2007 Legislative Report

March 19, 2007 Legislative Report

March 12, 2007 Legislative Report

March 5, 2007 Legislative Report

Feb. 26, 2007 Legislative Report

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Feb. 12, 2007 Legislative Report