Legislative Updates, 2008 Session:

Diane Kuhn, President
Janis McMillen, Editor

LEGISLATIVE WRAP-UP & FUTURE ISSUES
by Paul Johnson

BUDGET
The Kansas Legislature has finished the regular session and has only the final sine die ceremony on May 29 to finish the year. The tightened revenue picture had quite an impact on the final Omnibus Budget bill and the revenue picture for 2009 is considerably restricted. The fight over the Holcomb coal plant drove the veto session as it did the regular session. It was announced on May 21 that there will not be an attempt during sine die to attempt an override of the Governor’s veto of the third “Holcomb Plant” energy bill.

The political season is in full swing. Over half of the 40 incumbent State Senators have already filed for re-election and about 3/4 of incumbent House members have also filed for re-election. There may be 5-7 truly competitive state senate races. Historically, 30-40% of the senate and house races are uncontested and only 25% of all the races are competitive either in a primary or the general election. The filing deadline is June 10. Senator Peggy Palmer from Augusta has announced her retirement, as has Senator Dennis Wilson from Johnson County who may be running for State Treasurer. Senator Nick Jordan is challenging Congressman Dennis Moore so his state senate seat will be open. Representative Kenny Wilk from Lansing is retiring, as is Rep. Candy Ruff from Leavenworth. There may well be a challenge to Speaker Melvin Neufeld next January given the loss on the Holcomb plant and his inability to block state-owned casinos.

The newly elected 2009 Kansas Legislature may come to town next January with some immediate budgetary choices to be made. The revised 2009 Fiscal Year (FY) budget that ends on June 30 2009 has an ending balance of $119 million or just 1.9% of the state general fund. The ideal balance should be 5% which would be over $300 million. The Governor is mandated by law to present a budget with a 7.5% ending balance but there is no law that the actual budget adopted by the Kansas Legislature and signed by the Governor must meet that criterion. The revenue consensus estimators - that met April 16 and lowered the revenue estimates by $130 million – will meet this November and could very well lower the revenue estimates again. These estimators have been using a 4% growth estimate in the out years of 2010 and 2011 but that may not be the new economic projections for the next 18 months. The new revenue estimates (determined in November) will be the basis for the Governor to build her new budget and the Kansas Legislature to consider for future spending. Casino and slot machine revenue will start flowing by 2010 if the Kansas Supreme Court upholds the constitutionality of the new casino law. Higher commodity prices for grain and oil should help state revenues some. Kansas is completely phasing out the estate tax that will reduce revenues by $32 million in 2010. Kansas will have some tough budgetary choices but 15 other states are in much greater debt.

ENERGY
The Holcomb coal bill overshadowed all other energy discussions. The last gasp to override the Governor’s veto will come on May 29. The Kansas Senate has had the votes all along to override the vetoes. The Kansas House has only been able to muster 76 votes and 84 votes are needed for the override. The rules are clear on May 28 that 84 votes will be needed for an override regardless of how many Kansas House members are present. This latest version of the Holcomb bill was packaged with several other economic development initiatives - such as the rail complex at Gardner and certain employment training funds for Wichita – to leverage more votes. The Governor has indicated she will sign the other parts of this bill if the Holcomb part is removed.

Kansas City Power & Light fought all session to change the accounting rules at the Kansas Corporation Commission so that energy conservation investments would be included in the rate base and greater profits made for the stockholders of KCP&L. While this passed many times, it was always tied to the Holcomb issue and KCP&L did not lobby hard enough for the Holcomb complex itself so the legislation did not pass. Legislation did pass and is sitting on the Governor’s desk to force utility ratepayers to pay for the construction of a nuclear plant as it is being constructed. The Kansas Corporation Commission opposed this legislation as did David Springe at CURB. It is unclear what happens if a nuclear plant is started but not completed. What are reasonable costs for a nuclear plant? Wolfcreek started out at $800 million and ended up at $3.5 Billion. The Governor may well sign this law to balance the grief she has taken on Holcomb. Practically, Kansas will probably never see a second nuclear plant unless the federal government heavily subsidizes and guarantees the cost. John Redmond reservoir - that is filling up with sediment - does not have the storage capacity to support a second Wolfcreek unit and that is the preferred site for Kansas’ lawmakers.

SOCIAL SERVICES
Some tough budgetary choices were made in regards to social services in the final Omnibus budget bill. A key decision came down to the early childhood block grant proposed by the Governor versus expanded services for the disabled and community mental health centers. $11.1 million was agreed to for the early childhood block grant while $8.8 million for additional mental health services was deleted. $5.1 million of state funds (that will leverage a total of $12.5 million) was added for the Medicaid waivers serving traumatic brain injuries, the physically and developmentally disabled but this is not enough to keep waiting lists from increasing. This battle will continue for years to come.

The good news is that extra funding of $2.5 million was added to provide child care services to 800 more families in 2009 for a total of 22,500 children. The real story is that SRS can only assist about 20% of the families that are income eligible for childcare. For now the Legislature and the Governor’s office agree to automatically fund increased caseloads in certain social service programs such as nursing facilities, general assistance, temporary assistance for families, foster care, mental health and regular medical services. For FY 2009, these services total $2.09 Billion (of a total Kansas budget of $13.6 Billion) with $884 million of that coming from the State General Fund. These increases totaled $30 million in state funds for the remainder of 2008 and 2009. As these programs continue to skyrocket in cost and number of clients served, there are more voices in the Legislature asking for changes and reductions in these programs.

HEALTH POLICY
The 21-point health plan proposed by the Kansas Health Policy Authority (KHPA) was predicated on the passage of a 50 cent/pack cigarette tax to fund the expansion of medical services for low income adults and children. There was no consideration of this tax given by the Kansas Legislature. KHPA advocated a statewide no smoking ban in public places but that failed to go anywhere. There was no agreement on how to offer health insurance to low-income adults and the funding was not available at Omnibus time. The 36 primary safety-net clinics in Kansas that serve the uninsured were given an additional $2.5 million. Income eligibility for pregnant women to receive Medicaid services (including tobacco cessation and dental services) was increased from 150 to 200% of the federal poverty line. Medicaid now funds 33% of all births in Kansas (13,000 of 38,000) and this change may take that percentage up to 46% of all births. The Kansas Legislature will study the health insurance for poor adults again this summer.

Dave Ranney’s reporting for the Kansas Health Institute had a direct impact on increasing the staffing by 26 positions at Osawatomie State Hospital for direct care and nursing staff. You can check out the summaries of the health care battles under the Dome at www.khi.org.

IMMIGRATION
The Kansas Legislature did not pass any immigration legislation this year. The business community worked hard to derail legislation that would penalize employers for knowingly hiring undocumented laborers. The House Democrats worked hard for legislation that would penalize contractors who use the cover of hiring independent contractors to skirt existing law disallowing using undocumented workers. This was unacceptable to the business community and the Kansas Senate. Many legislators were fine with having no legislation succeed. The Kansas Legislative Post Audit division will now have an audit entitled ‘Estimating the Economic Impact of Illegal Immigration on the State of Kansas. View the Scope Statement as a PDF file. Alsp visit Audit Reports In Process. Scroll down near the bottom of the page to find the listing for Illegal Immigration. There may be an interim committee on immigration this summer.

STATUS OF SPECIFIC LEGISLATION
Here is the status of several bills that we reported on via E-Reports and/or Action Alerts:
SB 196 – the campaign finance reform legislation we followed and also was discussed when Carol Williams, Ex. Director of the Kansas Ethics Office, spoke to us at Day at the Capitol – actually passed and has been signed into law. During the final negotiations, elements of several of the other campaign finance bills were folded into SB 196. We supported these different bills.
HB 2019 is a photo ID bill that originated early in the 2007 session, was passed by the House and the Senate and got hung up in Conference Committee. It was brought out very late this session – after the recent Supreme Court ruling that photo ID laws are constitutional – the conference committee resolved the differences and it was passed by both chambers. However, the Governor vetoed the bill! We opposed a very similar bill (SB 169) that was in the Senate last year, portions of which were folded into
HB 2019 prior to its passage this year.
HB 2799 and HCR 5013 – were both designed to abolish the merit selection method for selecting Appeals Court judges and Supreme Court justices. We opposed these bills, and they did not advance on the House floor.
SB 329 AND SB 458, both dealing with new immigration laws, did not have enough votes to advance this year. We opposed both of these bills.

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