February 23, Legislative Report

2009-02-20T18:31:00.000-08:00

We reached the midpoint of the session last Friday, the deadline for considering all non-exempt bills in either chamber. We reconvene the House Tuesday to start considering exempt House bills and Senate bills that have come over. The week was highlighted by the signing by the Governor of our 2009 rescission bill, which provides for what we hope are sufficient cuts in the current fiscal year to end the year in the black, as required by law. With almost 5 months left in the fiscal year and with revenues continuing to fall, we tried to pass sufficient cuts to leave some cushion going into FY 2010, where we may need to trim as much as 10-12%from total state expenditures.
While the House & Senate had productive weeks, the Governor and her Secretary of Administration didn’t. The Governor’s office created a wholly unnecessary payroll and tax refund crisis last week with a belated attempt to issue debt instruments that weren’t legal. The Secretary certified on the Thursday before that state funds were insufficient to pay debts and so the Governor ordered a mere $3.5M in allotments, or cuts, in state spending to cover a single expenditure. On Monday, the Secretary and Governor sought to issue certificates of indebtedness in the amount of $225M, in addition to certificates already totaling $550M, for a whopping $775M in the current year.
Unfortunately, since it had already been determined there were insufficient funds to pay expenditures for the year, more certificates of indebtedness were not legal. After Legislative staff and Legislative leadership pointed this out to the Governor on Monday, she tried to cover by running to the press and claiming that the Legislature was holding up state employee paychecks and tax refunds by balking at her request to issue more debt. She also fired up her state e-mail account to have state employees on state time send 1000’s of hateful e-mails to legislators. All the Governor had to do was add to the $3.5M allotment from the week before to cover the amounts needed for the week. She has allotment power and had that power even before the session started in January when she knew we faced a deficit. No legislative approval is required.
House & Senate leadership quickly responded to her failure to act by expediting delivery of the rescission bill to the Governor so she could sign it and put us in a legal position to issue certificates. Why the Governor or her office failed to follow the law or make provision for the week’s payroll and tax refund liability remains the subject of much speculation. She did sign the bill, with some notable line-item vetoes, and payroll was met. Payroll was never in jeopardy but fumbling by the Governor’s office needlessly worried 1000’s of state workers.
Also last week, we discovered the Governor had authorized the sale of $14M in refinance bonds, including $10M in KPERS bonds. This was part of her plan to defer paying principal totaling $53M over the next two years by selling 3 bond issues. Incredibly, the bonds would be paid over 25 years at an interest cost of $68M! Our staff caught wind of the sale and upon discovering that part of the sale involved KPERS bond refinancing, alerted leadership to the fact that the law prohibits refinancing KPERS bonds without KPERS Committee and State Finance Council approval. Since the closing on the bonds was scheduled for next week, we were able to stop them and the Governor had to veto her own proposal in the rescission bill to refinance debt in the current year.
One of the Governor’s notable vetoes in the rescission bill was a veto of a demand transfer from the State General Fund to the Health Care Stabilization Fund. We have learned that this is apparently contrary to law as well since the transfer is not an item of appropriation subject to line –item veto. As to these legal miscues, it’s true that neither the Governor nor her Secretary of Administration are attorneys. However, she has legal counsel on staff who should be giving her sound legal advice before she acts.
Finally, another veto involved striking additional funding for the Wichita Center for Graduate Medical Education, a vital program to train doctors primarily for the medically underserved rural areas. This has left many observers scratching their heads as Governor Sebelius is said to be a prime candidate for appointment as President Obama’s Secretary of Health & Human Services. The veto would presumably give rise to some sharp questioning during the confirmation process. If the Governor fails in her bid to be selected, her actions of this past week will certainly be seen as having played a role.
Thursday, the House is scheduled to debate its comprehensive energy bill, where passage is assured thanks to broad bi-partisan support. Unfortunately, the Governor has threatened a veto even before seeing the comprehensive legislation. Prospects for a veto override are promising.

Feb. 16, 2009 Legislative Report

2009-02-14T18:30:00.000-08:00

Last week we made great progress on the 2009 rescission bill. We were able to reach agreement with the Senate in Conference Committee and the compromise passed both Houses Thursday by healthy margins. It makes $325M in adjustments, including just over $200M in true expenditure cuts in the current year. Without the cuts, the State would end the fiscal year in the red, a constitutionally impermissible situation.
Although K-12 public education accounts for 51% of all state spending, it will take only a fraction of the cuts other agencies will take, including public safety and social services. We were able to hold our position to assist with additional funding for physical disability waivers, reducing or eliminating the current waiting list. We were, unfortunately, unable to get the Senate to budge off it’s refusal to add the additional funds the House added to help with the developmentally disabled waiting list.
Even with the limited cuts to education, the governor has threatened to line-item veto the school cuts. Friday she exercised her authority to make forced cuts in spending (allotments) to stop the payment of tax relief payments to local units of government, but she plans to then ask us Monday afternoon in the State Finance Council meeting to issue more certificates of indebtedness to address cash flow problems the State is having this month. Our chief fiscal analyst was left scratching his head over this maneuver. Before seeking an intra-governmental loan, the Governor simply needs to sign the budget rescission bill and allow those cuts to address cash flow. Her strategy is fiscally unsound and repeats the mistake she made before the session began when instead of ordering reductions in expenditures to come into line with revenues, she sought intra-governmental loans. It’s as though she does not yet grasp the extent of the fundamental problem the state is having with government spending greatly outpacing revenues.
The daily buzz over whether the Governor will be offered a cabinet position has created an unfortunate distraction at a time when there needs to be an unwavering focus on the budget. The so-called Stimulus package in Washington is also an unwelcome distraction. Some suggest this one-time infusion of federal funds is an answer to our current budget woes. Nothing could be further from the truth. We can ill afford to use federal borrowing to support agency budgets that would require a recurring source of revenue in future years when federal funds would not be forthcoming. No, what we need to do is simply get a handle on government spending that exceeds state revenues. Stimulus money may be helpful in shoring up our ending balances, paying down debt, creating an economic development incentives fund and addressing some infrastructure needs, but it is certainly not a substitute for making fundamental changes in the way we craft annual budgets.
We will be debating this week a comprehensive energy bill passed out of the Energy Committee late last week. It incorporates many of the provisions sought by Governor Sebelius and includes a broad mix of energy sources for future energy needs, from renewable resources such as wind, hydro and solar to the reliable and affordable base load energy sources of coal and nuclear power.
Also included in the legislation are provisions addressing and restoring regulatory certainty. The current Sec. of Health & Environment denied Sunflower Electric’s application to build a new state-of-the art power plant in Holcomb, even though Sunflower had complied with and/or exceeded all state and federal regulations that protect the public health and environment. He cited concerns over carbon dioxide emissions, even though there is no law regulating such emissions for even our numerous older existing plants. Holcomb would be the cleanest plant in the country when built, would provide a huge $3.8B boost to an ailing Kansas economy and would provide a steady, affordable and reliable source of energy for the future. For those interested in wind energy development, the Holcomb proposal includes a $100M investment in high voltage transmission lines to allow wind developers to move power load centers outside the region. I expect strong bi-partisan support for the measure and, ultimately, a veto-proof majority should this Governor or a new Governor continue to try to block this critically needed project.

Feb. 16, 2009 Legislative Report

2009-02-13T20:10:00.000-08:00

Last week we made great progress on the 2009 rescission bill. We were able to reach agreement with the Senate in Conference Committee and the compromise passed both Houses Thursday by healthy margins. It makes $325M in adjustments, including just over $200M in true expenditure cuts in the current year. Without the cuts, the State would end the fiscal year in the red, a constitutionally impermissible situation.
Although K-12 public education accounts for 51% of all state spending, it will take only a 1% cut, a fraction of what other agencies will take, including public safety and social services. We were able to hold our position to assist with additional funding for physical disability waivers, reducing or eliminating the current waiting list. We were, unfortunately, unable to get the Senate to budge of it’s not to add the additional funds the House added to help with the developmentally disabled waiting list.
Even with the limited cuts to education, the governor has threatened to veto the school cut provision. Friday she exercised her authority to make forced cuts in spending to stop the payment of tax relief payments to local units of government, but plans to turn around and ask us today in the State Finance Council meeting to issue more certificates of indebtedness to address cash flow problems the State is having this month. Our chief fiscal analyst was left scratching his head over this maneuver. Before seeking an intra-governmental loan, the Governor simply needs to sign the budget rescission bill and allow those cuts to address cash flow. Her strategy is fiscally unsound and repeats the mistake she made before the session began when instead of ordering reductions in expenditures to come into line with revenues, she sought intra-governmental loans. It’s as though she does not yet grasp the extent of the fundamental problem the state is having with government spending greatly outpacing revenues.
The daily buzz over whether the Governor will be offered a cabinet position has created an unfortunate distraction at a time when there needs to be an unwavering focus on the budget. The status of the so-called Stimulus package in Washington is also an unwelcome distraction. Some suggest this one-time infusion of federal funds is an answer to our current budget woes. Nothing could be further from the truth. We can ill afford to use federal borrowing to support agency budgets that would require and recurring source of revenue in future years when federal funds would not be forthcoming. No, what we need to do is simply get a handle on government spending that exceeds state revenues. Stimulus money may be helpful in shoring up our ending balances, pay down debt, create a economic development incentives fund and address some infrastructure needs, but it is certainly not a substitute for making fundamental changes in the way we craft annual budgets.
We will be debating this week a comprehensive energy bill passed out of the Energy Committee late last week. It incorporates many of the provisions sought by Governor Sebelius and includes a broad mix of energy sources for future energy needs from renewable resources such as wind, hydro and solar to the reliable and affordable base load energy sources of coal and nuclear power.
Also included in the legislation are provisions addressing and restoring regulatory certainty. The current Sec. of Health & Environment denied Sunflower Electric’s application to build a new state-of-the art power plant in Holcomb, even though Sunflower had complied with and/or exceeded all state and federal regulations that protect the public health and environment. He cited concerns over carbon dioxide emissions, even though there is no law regulating such emissions for even our numerous existing plants. Holcomb would be the cleanest plant in the country when built, would provide a huge $3.8B boost to an ailing Kansas economy and would provide a steady, affordable and reliable source of energy for the future. For those interested in wind energy development, the Holcomb proposal includes a $100M investment in high voltage transmission lines to allow wind developers to move power load centers outside the region. I expect strong bi-partisan support for the measure and, ultimately, a veto-proof majority should the Governor continue to try to block this critically needed project.

Feb. 16, 2009 Legislative Report

2009-02-13T19:51:00.000-08:00

Last week we made great progress on the 2009 rescission bill. We were able to reach agreement with the Senate in Conference Committee and the compromise passed both Houses Thursday by healthy margins. It makes $325M in adjustments, including just over $200M in true expenditure cuts in the current year. Without the cuts, the State would end the fiscal year in the red, a constitutionally impermissible situation.
Although K-12 public education accounts for 51% of all state spending, it will take only a 1% cut, a fraction of what other agencies will take, including public safety and social services. We were able to hold our position to assist with additional funding for physical disability waivers, reducing or eliminating the current waiting list. We were, unfortunately, unable to get the Senate to budge of it’s not to add the additional funds the House added to help with the developmentally disabled waiting list.
Even with the limited cuts to education, the governor has threatened to veto the school cut provision. Friday she exercised her authority to make forced cuts in spending to stop the payment of tax relief payments to local units of government, but plans to turn around and ask us today in the state Finance Council meeting to issue more certificates of indebtedness to address cash flow problems the State is having this month. Our chief fiscal analyst was left scratching his head over this maneuver. Before seeking an intra-governmental loan, the Governor simply needs to sign the budget rescission bill and allow those cuts to address cash flow. Her strategy is fiscally unsound and repeats the mistake she made before the session began when instead of ordering reductions in expenditures to come into line with revenues, she sought intra-governmental loans. It’s as though she does not yet grasp the extent of the fundamental problem the state is having with government spending greatly outpacing revenues.
The daily buzz over whether the Governor will be offered a cabinet position has created an unfortunate distraction at a time when there needs to be an unwavering focus on the budget. The status of the so-called Stimulus package in Washington is also an unwelcome distraction. Some suggest this one-time infusion of federal funds is an answer to our current budget woes. Nothing could be further from the truth. We can ill afford to use federal borrowing to support agency budgets that would require and recurring source of revenue in future years when federal funds would not be forthcoming. No, what we need to do is simply get a handle on government spending that exceeds state revenues. Stimulus money may be helpful in shoring up our ending balances, pay down debt, create a economic development incentives fund and address some infrastructure needs, but it is certainly not a substitute for making fundamental changes in the way we craft annual budgets.
We will be debating this week a comprehensive energy bill passed out of the Energy Committee late last week. It incorporates many of the provisions sought by Governor Sebelius and includes a broad mix of energy sources for future energy needs from renewable resources such as wind, hydro and solar to the reliable and affordable base load energy sources of coal and nuclear power. I expect strong bi-partisan support.

Feb. 9, 2009 Legislative Report

2009-02-06T19:57:00.000-08:00

House Republicans joined together last week to pass, on a strong vote, a rescission bill for the 2009 fiscal year in an effort to address a growing cash deficit for the current year. The Senate had passed its rescission bill earlier, but the House plan goes much further in protecting the most vulnerable Kansans, those with developmental and physical disabilities.
The total expenditure adjustments, including cuts and transfers, are a little over $300M and are intended to fill the deficit hole in the current year and maintain a modest ending balance going into next fiscal year. Although we worked closely with school district administrators on proposed cuts in K-12 funding the teachers’ union protested cuts of any amount, arguing that necessary cuts should come from other agencies, including social services, corrections, higher education and veterans. Had the House bent to the will of the teachers’ union, and held K-12 harmless from cuts, the result would certainly have meant even higher tuitions, release of inmates, suspension of some parolee supervision, a freeze on assistance for the physically and developmentally disabled and some state employee furloughs.
The House did restore $22 per pupil to cuts in base state aid for schools to soften the loss to schools in the current school year. The school cuts amounted to $66 to the base. This allowed us to provide a total of $16.4M in additional funding for the physically and developmentally disabled waivers and also allowed us to provide a greater amount of funding back to local units of government. I’ve been disappointed by the tone of e-mails we’ve received from some in the education community, administrators not included. Many communications were, frankly, unprofessional and fraught with factual errors. In fairness to the senders, it appeared most e-mail communications were form e-mails suggested by the union, who requested that teachers flood legislators’ computers with them. Many had spelling and grammatical errors.
In working with school administrators we learned what their options were and what additional options were needed. For example, statewide, school districts have a cumulative total of some $119M in contingency reserves, some districts having more than others. That alone is over half of the total current cash deficit of the state and K-12 education is 51% of the state budget. The Governor’s proposed budget would sweep many agency fee funds to balance the budget. We will NOT propose to sweep education surplus funds. We have agreed to allow schools as much flexibility as possible this current year, understanding that they are close to finishing up the current school year. The Legislature’s commitment to schools remains solid, to the point that K-12 education will share a small fraction of the cuts that other worthy agencies will suffer.
The 2009 budget bill is now in Conference Committee to work out the differences between the House & Senate versions. We anticipate the Senate will accept our proposal on schools but they are thus far reluctant to accept our position for more funds for the physically and developmentally disabled.

Feb. 2, 2009 Legislative Report

2009-01-31T16:25:00.000-08:00

The budget and the State’s economy continue to dominate the news in Topeka. Thursday the Senate passed its version of a FY 2009 rescission bill, reducing current year expenditures by some $200M and making another $134M in one-time adjustments to help balance the books for the current year. Our House Appropriations Committee, which had been having hearings on the budget the past two weeks in anticipation of the Senate budget plan coming over, worked quickly to pass a House rescission bill out Friday. The bill will be printed and read in Monday but by rule, must lay over two days before debate, meaning we’ll have the bill on the House floor for debate Thursday.
In the Senate, the leadership plan to make at least $300M in true cuts of roughly 3.4% across the board was rejected in favor of a compromise plan that addressed the Governor’s threat to veto anything that had much in the way of cuts to K-12 education. To reduce the impact of cuts to K-12 education, however, other programs took bigger hits, like social services, public safety, higher education and help for the developmentally disabled.
The House plan makes $208M in true cuts and makes revenue and transfer adjustments totaling another $114.2M to trim some $322M in expenditures exceeding revenues in the current fiscal year. At least this much in cuts will be needed. January tax-only revenues dropped another $21M below estimates so we’re down a total of $67M now since the Nov. 4 revenue estimates were announced. Corporate tax revenues continue to be down dramatically, but somewhat surprisingly, sales tax receipts are, for now, holding their own.
Key to the House version of the ’09 rescission bill is the fact it cuts more from K-12 in the current year and uses those funds to protect social services such as home and community based physically disabled and developmentally disabled assistance. The House is uncomfortable protecting K-12 funding at the expense of this group of Kansans. As the Governor contemplates how far she will go to protect K-12 funding, she’ll need to consider the impact on other important programs that would have to take bigger hits if K-12, which gets 51% of every tax dollar, is left alone. Even in the House plan, however, K-12 still takes a significantly smaller % cut than other programs, including Higher Ed. The House plan also protects more funds coming to local units of government than does the Senate plan and takes less from public safety than does the Senate plan.
The House Energy & Utilities Committee in continuing this week to hold hearings on various components of what will become a comprehensive energy plan for the state. In visiting with the Chairman and interested parties, I believe the House bill will have well over a dozen separate components, including much of what the Governor has proposed. The plan will embrace the goal of increasing the availability of renewable energy sources and will certainly include wind technology. It will also, again, support construction of a new state-of-the-art coal fired plant in SW Kansas, one that will have the latest environmental-friendly technology. The Holcomb plant would not only provide a critical boost to the Kansas economy, it would be paid for in large part by out-of-state consumers and make Kansas a net-exporter of clean and cost-efficient energy. The project will also support wind development with its construction of part of the critical transmission component to get wind generation to the consumer. With coal being responsible for 80% of our energy and responsible for our ability to have some of the most affordable energy rates in the country, this is an important piece of legislation for the state.

January 25, 2009 Legislative Report

2009-01-25T08:57:00.001-08:00

As I mentioned last week, the budget continues to dominate our legislative session, with the House & Senate both working on their own versions of proposals to deal with the significant budget shortfalls in both the current and next fiscal year. The Legislature is not pleased with the Governor’s proposal to fill the bulk of the budget hole with sweeps of fee funds and defaults on loan repayments. More than 150 years ago, French economist Frederic Bastiat wrote in his book “The Law” about the ills of socialism and the greatest threat to liberty being government. He advised to “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”
We are deeply troubled by a gubernatorial budget that attempts to balance the State General Fund balance by literally stealing from funds the Legislature created for a particular purpose and diverting them to cover spending for an entirely different purpose, a maneuver that if committed by managers of the fee funds, would constitute embezzlement. That the media is not outraged by this tactic is equally troubling. Fees collected from taxpayers to support various functions would be swept into the State General Fund by the Governor, forcing the fee agencies to go back to their fee payers and collect more fees. Indeed, this is not the first time fee funds have been raided. The last time this happened I was successful in getting the amounts taken converted into loans that we required the State to begin repaying over a period of time. The Governor, as a part of her budget proposal, would not only make another round of sweeps but would default on the repayment of the loans from the last round of sweeps. Included in the loan defaults are repayments to the Highway Fund of over $30M each this year and next, potentially jeopardizing the K61 Highway project.
Both the House & Senate are looking to balance the 2009 budget as quickly as possible with actual cuts in government spending. We are hopeful the Senate will be able to work their bill this week and get it to the House for quick action.
The House Energy Committee is currently considering at least 14 separate energy bills as a part of an anticipated comprehensive energy package, one that will contain a broad range of energy policy and incentives. Thursday the Republican caucus heard from a representative of Westar who stressed that while we need to continue to research and develop alternative energy sources, including wind energy, these renewable sources are not capable of supplying the ever-increasing energy needs of the state. Coal and natural gas will continue to be critical suppliers of base load energy for the state for many years to come. The Governor’s refusal to recognize the essential role of coal as a reliable and cost-effective energy source is disturbing and she’s considered an extremist and isolationist by many outside the state who are considering Kansas as a potential site for economic expansion.
The proposed Holcomb plants would be among the cleanest and most technologically advanced projects in the country and a model for future cost-efficient energy production. The plants would also be committed to advancing wind energy and would provide the transmission lines to get the wind to market. The $3.6B project would also be a huge stimulus for a lagging Kansas economy, particularly in the west half of the State. While the Governor has recently argued that we have plenty of energy for the foreseeable future her own Lieutenant Governor has admitted that Kansas will need 600 to 700 megawatts of additional base-load power over the next 10-20 years. Wind is an important non-baseload source of energy and we need to embrace the growing wind technology industry, not as a replacement for coal, but rather in addition to coal. Our energy bill will provide a true “win-win” scenario for the State.

January 25, 2009 Legislative Report

2009-01-25T08:55:00.001-08:00

As I mentioned last week, the budget continues to dominate our legislative session, with the House & Senate both working on their own versions of proposals to deal with the significant budget shortfalls in both the current and next fiscal year. The Legislature is not pleased with the Governor’s proposal to fill the bulk of the budget hole with sweeps of fee funds and defaults on loan repayments. More than 150 years ago, French economist Frederic Bastiat wrote in his book “The Law” about the ills of socialism and the greatest threat to liberty being government. He advised to “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”
We are deeply troubled by a gubernatorial budget that attempts to balance the State General Fund balance by literally stealing from funds the Legislature created for a particular purpose and diverting them to cover spending for an entirely different purpose, a maneuver that if committed by managers of the fee funds, would constitute embezzlement. That the media is not outraged by this tactic is equally troubling. Fees collected from taxpayers to support various functions would be swept into the State General Fund by the Governor, forcing the fee agencies to go back to their fee payers and collect more fees. Indeed, this is not the first time fee funds have been raided. The last time this happened I was successful in getting the amounts taken converted into loans that we required the State to begin repaying over a period of time. The Governor, as a part of her budget proposal, would not only make another round of sweeps but would default on the repayment of the loans from the last round of sweeps. Included in the loan defaults are repayments to the Highway Fund of over $30M each this year and next, potentially jeopardizing the K61 Highway project.
Both the House & Senate are looking to balance the 2009 budget as quickly as possible with actual cuts in government spending. We are hopeful the Senate will be able to work their bill this week and get it to the House for quick action.
The House Energy Committee is currently considering at least 14 separate energy bills as a part of an anticipated comprehensive energy package, one that will contain a broad range of energy policy and incentives. Thursday the Republican caucus heard from a representative of Westar who stressed that while we need to continue to research and develop alternative energy sources, including wind energy, these renewable sources are not capable of supplying the ever-increasing energy needs of the state. Coal and natural gas will continue to be critical suppliers of base load energy for the state for many years to come.
The Governor’s refusal to recognize the essential role of coal as a reliable and cost-effective energy source is disturbing and she’s considered an extremist and isolationist by many outside the state who are considering Kansas as a potential site for economic expansion.
The proposed Holcomb plants would be among the cleanest and most technologically advanced projects in the country and a model for future cost-efficient energy production. The plants would also be committed to advancing wind energy and would provide the transmission lines to get the wind to market. The $3.6B project would also be a huge stimulus for a lagging Kansas economy, particularly in the west half of the State. While the Governor has recently argued that we have plenty of energy for the foreseeable future her own Lieutenant Governor has admitted that Kansas will need 600 to 700 megawatts of additional base-load power over the next 10-20 years. Wind is an important non-baseload source of energy and we need to embrace the growing wind technology industry, not as a replacement for coal, but rather in addition to coal. Our energy bill will provide a true “win-win” scenario for the State.

Jan. 25, 2009 Legislative Report

2009-01-24T15:04:00.000-08:00

As I mentioned last week, the budget continues to dominate our legislative session, with the House & Senate both working on their own versions of proposals to deal with the significant budget shortfalls in both the current and next fiscal year. The Legislature is not pleased with the Governor’s proposal to fill the bulk of the budget hole with sweeps of fee funds and defaults on loan repayments. More than 150 years ago, French economist Frederic Bastiat wrote in his book “The Law” about the ills of socialism and the greatest threat to liberty being government. He advised to “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”
We are deeply troubled by a gubernatorial budget that attempts to balance the State General Fund balance by literally stealing from funds the Legislature created for a particular purpose and diverting them to cover spending for an entirely different purpose, a maneuver that if committed by managers of the fee funds, would constitute embezzlement. That the media is not outraged by this tactic is equally troubling. Fees collected from taxpayers to support various functions would be swept into the State General Fund by the Governor, forcing the fee agencies to go back to their fee payers and collect more fees. Indeed, this is not the first time fee funds have been raided. The last time this happened I was successful in getting the amounts taken converted into loans that we required the State to begin repaying over a period of time. The Governor, as a part of her budget proposal, would not only make another round of sweeps but would default on the repayment of the loans from the last round of sweeps. Included in the loan defaults are repayments to the Highway Fund of over $30M each this year and next, potentially jeopardizing the K61 Highway project.
Both the House & Senate are looking to balance the 2009 budget as quickly as possible with actual cuts in government spending. We are hopeful the Senate will be able to work their bill this week and get it to the House for quick action.
The House Energy Committee is currently considering at least 14 separate energy bills as a part of an anticipated comprehensive energy package, one that will contain a broad range of energy policy and incentives. Thursday the Republican caucus heard from a representative of Westar who stressed that while we need to continue to research and develop alternative energy sources, including wind energy, these renewable sources are not capable of supplying the ever-increasing energy needs of the state. Coal and natural gas will continue to be critical suppliers of base load energy for the state for many years to come.
The Governor’s refusal to recognize the essential role of coal as a reliable and cost-effective energy source is disturbing and she’s considered an extremist and isolationist by many outside the state who are considering Kansas as a potential site for economic expansion.
The proposed Holcomb plants would be among the cleanest and most technologically advanced projects in the country and a model for future cost-efficient energy production. The plants would also be committed to advancing wind energy and would provide the transmission lines to get the wind to market. The $3.6B project would also be a huge stimulus for a lagging Kansas economy, particularly in the west half of the State. While the Governor has recently argued that we have plenty of energy for the foreseeable future her own Lieutenant Governor has admitted that Kansas will need 600 to 700 megawatts of additional base-load power over the next 10-20 years. Wind is an important non-baseload source of energy and we need to embrace the growing wind technology industry, not as a replacement for coal, but rather in addition to coal. Our energy bill will provide a true “win-win” scenario for the State.

January 20, 2009 Legislative Report

2009-01-19T05:41:00.000-08:00

Well, as legislative sessions go, this one will be of added significance to me and of huge importance to the State. Last Monday I was sworn in as the new Speaker of the Kansas House of Representatives. I take the position during the worst economic times Kansas has faced in decades. After watching the Governor propose spending far in excess of our revenues each year and watching the legislature respond by allowing expenditures to outstrip revenues to the point that we went from a $935M surplus just a few years ago to a projected $1+B deficit in the next fiscal year, we must now pull together and approach budget decisions in a fundamentally different way and right the ship of state.
We were headed down a path toward a deficit the past 4 years, but the historic collapse on Wall Street last Fall was the proverbial straw that broke our back. Every state in the nation has been affected; Kansas to a lesser extent, but still, the situation in Kansas is such that we now have a projected deficit in the current fiscal year of nearly $200M. We must act to fill that hole first, before tackling an upcoming fiscal year deficit that hovers around $1B.
The Governor has been aware of the looming deficit for months but decided to take no action to address the deficit by using powers delegated to her by the Legislature to make targeted cuts in the current year’s budget and/or issue an Executive Order making across-the-board cuts to guarantee a positive ending balance in the current fiscal year. Instead, she proposed issuance of additional certificates of indebtedness. We did not see and weren’t briefed on her budget proposals until last Tuesday, the day after her State-of-the-State speech, during which she gave no specifics on her plan to balance the State’s budget.
What she has proposed is woefully inadequate to address our current budget problems. Over 50% or $100M of the Governor’s current FY adjustments are done with one-time funding sources, which include sweeping (i.e., taking) special revenue funds that are earmarked for other purposes, issuing “stop payments” on State obligations, and suspending payments to local units of government.
Faced with a current year deficit of nearly $200M, she reduces expenditures by a mere $55.8M and still grows government spending by $247M or 4% over last year’s spending. Additional government employees increase by over 334 positions from the previous year. Her FY 2010 budget, which covers the year beginning July 1, 2009, has a structural budget imbalance of $57.7M, where expenditures exceed revenues by that amount. Expenditures would still exceed last year’s numbers by $52M. She bases her budget on Nov. revenue estimates but December numbers show a further reduction in revenues of some $44.6M. Her projected ending balance for FY 2010 of only $600,000 is already under water, based on these new figures.
Notwithstanding the collapse of the casino industry nationally and in Kansas, the Governor plugs in $56.7M in anticipated casino license revenue in FY 2010 and then diverts the revenue from what we directed it to be used for. Any revenue from casinos was to be used for debt reduction, infrastructure and/or property tax relief. She would use it to pay for expenditures in excess of revenues. Given the state of the State’s budget this year, the Governor’s proposed budget does not comply with the 7 1/2% ending balance law. Her statutory 7 1/2% ending balance law budget would require across-the-board cuts of 14.4%.
Needless to say, the legislature’s work from here on out will be devoted to truly balancing the State’s budget and ending the year with a positive balance in the State’s checkbook, as required by the State Constitution. With the state and nation in a recession, don’t look for any tax increases as this would only fuel and prolong the recession. What is needed is an approach that gets government spending under control and cuts that get us back in the black with a minimum of disruption in essential governmental services.

May 5, 2008 Legislative Report

2008-05-04T19:16:00.000-07:00

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

2008-04-26T16:09:00.001-07:00

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

2008-04-05T17:44:00.000-07:00

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

2008-03-30T08:23:00.000-07:00

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

2008-03-30T07:48:00.000-07:00

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

2008-03-23T13:40:00.000-07:00

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

2008-03-16T20:35:00.000-07:00

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

2008-03-08T18:33:00.000-08:00

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

2008-03-02T13:19:00.000-08:00

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

2008-02-23T16:58:00.000-08:00

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

2008-02-16T09:25:00.000-08:00

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

2008-02-02T09:06:00.000-08:00

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 22, 2007 Legislative Report

2007-01-21T14:05:00.000-08:00

Last week I reported on some of the key components of the Governor’s State-of-the-State message. One additional point worth mentioning is the fact that the Governor’s proposed budget honors our continuing commitment to the comprehensive highway plan by providing for the transfer of $175M in sales tax revenue to the Kansas Department of Transportation.
The Governor’s call for a universal health care plan has drawn a good deal of skepticism and concern. Specifics details of the Governor’s proposal haven’t been released but many are concerned it calls for what would essentially be socialized medicine and a shift to significant reliance on government sponsored health care at the expense of the private sector. As I’ve reported previously, Kansas ranks at the top of all states in government sector job growth and near the bottom in private sector job growth. What we need are more incentives for employers to offer health care plans and incentives for a more favorable health insurance market.
To that end, House Republicans have announced the formation of a special task force on health care to put together a comprehensive health care strategy for Kansas based on free market principles and not socialized medicine. I have been appointed to the task force and look forward to helping to improve the availability and affordability of health care coverage.
Prior to the Governor’s message, House Republicans announced our own legislative priorities for the 2007 session. We would set aside sufficient funds this year and next to fund the 2nd and 3rd years of last year’s school finance plan. We would set up a $75M trust fund for specific building repairs for state universities and colleges, and develop a tuition equity plan for the Regents institutions. As Vice-Chairman of the House Education Budget Sub-Committee I’ll be working on these initiatives in the coming weeks.
On the issue of tax relief, we’d repeal the franchise tax retroactively to January 1 of this year, permanently reduce the unemployment tax rate by 40%, exempt social security income from the state income tax, restructure the corporate income tax rates and push a constitutional amendment to ease the property tax burden for elderly Kansans. These proposals go much further than the Governor’s tax relief plan as we would limit overall state government spending. Increases in the cost of health care coverage have been characterized as a CRISIS by the Governor, but her own budget would increase government spending by a greater percentage. We feel that the need to curb government spending is as important as reducing the cost of health care coverage. They go hand-in-hand and include lessening the tax burden on Kansans.
On immigration, we’d establish English as the official state language, require proof of citizenship for state services and enhance worker ID enforcement. There has been much confusion over the English as the official language initiative. It has little to do with the spoken language and more to do with what the State and private businesses are required to do in print. The proposal would protect the state and private business from having to print official documents in a language other than English. Printing in other languages would be permitted as an accommodation but not required. The state would not be allowed to burden private businesses with a requirement to print in multiple languages. It would have no effect on bi-lingual education in the schools. Immigration is a fact but it shouldn’t be too much to ask that our foreign guests learn English if Kansas is to be their chosen residence.

January 15, 2007 Legislative Report

2007-01-14T19:41:00.000-08:00

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

Jan. 8, 2007 Newsletter

2007-01-07T17:53:00.000-08:00

TODAY, MONDAY JANUARY 8, MARKS THE START OF THE 2007 KANSAS LEGISLATIVE SESSION, HELLO AGAIN, AND THIS IS THE FIRST OF MY WEEKLY LEGISLATIVE UPDATES FOR THE 2007 SESSION. THE 2007 SESSION KICKS OFF WITH THE TRADITIONAL SWEARING-IN CEREMONY AT 2:00 FOR ALL 125 HOUSE MEMBERS. NEARLY 20% OF THE KANSAS HOUSE TURNED OVER IN NOV., WITH 24 NEW MEMBERS TAKING OFFICE TODAY. (One veteran legislator resigned after the election) THE 2006 ELECTIONS SAW THE HOUSE REPUBLICAN MAJORITY DROP FROM 83 TO 78 MEMBERS. DEMOCRAT MEMBERSHIP WENT FROM 42 TO 47.
MY ASSIGNMENTS REMAIN NEARLY THE SAME AS LAST TERM. I CONTINUE TO SERVE AS CHAIRMAN OF THE HOUSE JUDICIARY COMMITTEE. THE SELECT COMMITTEE ON SCHOOL FINANCE I VICE-CHAIRED LAST TERM HAS BEEN ELIMINATED BUT I NOW VICE-CHAIR THE EDUCATION BUDGET SUB-COMMITTEE AND SO WILL STILL HAVE A SUBSTANTIAL ROLE IN DETERMINING SCHOOL FINANCE ISSUES, WHICH WILL NOW INCLUDE HIGHER EDUCATION BUDGETING AS WELL.
THE GOOD NEWS FOR 2007 IS THAT OUR REVENUES HAVE GREATLY EXCEEDED ESTIMATES AND IT NOW APPEARS LIKELY WE WILL BE ABLE TO FUND THE SECOND AND THIRD YEARS OF THE 3-YEAR K-12 SCHOOL FINANCE PLAN WE PASSED LAST SESSION WITHOUT A TAX INCREASE OF ANY SORT. WE ACTUALLY START THE SESSION WITH A BUDGET SURPLUS AND MANY OF MY COLLEAGUES AND I ARE INTERESTED IN BANKING THAT SURPLUS TO GUARANTEE PAYMENT OF THE SCHOOL FINANCE PLAN AND ELIMINATE THE TEMPTATION FOR SOME TO SPEND THE MONEY ON NEW GOVERNMENT PROGRAMS.
KANSAS LEADS THE COUNTRY IN THE RATE OF GOVERNMENT JOB GROWTH AND IS NEARLY DEAD LAST IN PRIVATE SECTOR JOB GROWTH. WE HOPE TO BE ABLE TO ACCOMPLISH THINGS IN 2007 THAT WILL STIMULATE PRIVATE SECTOR JOB GROWTH AND INVESTMENT, REDUCE THE LEVEL OF BUREAUCRACY AND REVERSE THE TREND OF ADDING GOVERNMENT JOBS AT TAXPAYER EXPENSE.
AS OF YEAR-END, TAX-ONLY REVENUES WERE UP $61.3 M OVER ESTIMATES. BIG GAINERS WERE CORPORATE INCOME TAXES ($26.1m OVER ESTIMATES) AND INDIVIDUAL INCOME TAX PAYMENTS ($34M OVER ESTIMATES) SALES TAXES WERE UP SLIGHTLY. YEAR-TO-DATE TAX-ONLY RECEIPTS ARE UP 9.2% OVER LAST YEAR, SPURRED IN LARGE PART BY ENERGY-RELATED RECEIPTS WHICH WILL LIKELY DECLINE IN 2007. STILL, THE REVENUE NEWS IS GOOD AND WE’RE LIKELY TO BE ABLE TO GRANT BUSINESS TAX BREAKS IN THE 2007 SESSION, INCLUDING A MORATORIUM OR MAJOR REDUCTIONS IN UNEMPLOYMENT TAXES. WE EXPECT THE GOVERNOR TO AGREE AND INCLUDE THIS TAX BREAK IN HER STATE OF THE STATE MESSAGE WEDNESDAY.
2007 LEGISLATIVE PRIORITIES FOR HBUTCHINSON/RENO COUNTY WILL INCLUDE FUNDING OF THE STATE’S PORTION OF THE EATON, CORP. JOB RETENTION INITIATIVE AND CONTINUED FUNDING OF THE FINAL COMPONENT OF THE 1999 COMPREHENSIVE STATE HIGHWAY PROGRAM – THE 4-LANE HIGHWAY BETWEEN HUTCHINSON AND MCPHERSON.