Legislative Updates, 2010 Session:

Edited by Ernestine Krehbiel, LWVK President
Reports by Paul Johnson, LWVK Lobbyist

To track bills in the Kansas Legislature go to www.kslegislature.org or call 800-432-3924

#7: February 23, 2010

Last Saturday was “Turn around Day”. It marked the half-way point of the 2010 legislative session – a deadline for almost all bills to pass out of the first chamber - and both the Senate and House are working long hours.

The Death Penalty was not abolished this year.
The Senate floor debate on SB 375 abolishing the death penalty in the State senate was very good and amazingly bi-partisan. But a tie vote fails; it was 20 to 20.

The Ks League and the Ks. Coalition Against the Death Penalty launched what we hoped was a really effective lobbying effort. The League testimony focused on the extreme cost difference in death penalty trials vs. non-death trials and how this is not an effective use of tax funds when citizens can be kept safe by sentences of life without parole. The Senate committee did vote it out 7 to 4 to be debated on the Senate floor. The floor debate was very good. . Senator McGinn reminded lawmakers that they’ve voted to slash funds for social service programs, from agencies that help poor woman have healthy babies. The Senators spoke of morals, meaning of justice and were down right civil with the exchange. AND there were Dems and Repub. on both sides!

There were Senators we thought would vote to abolish who did not. With a tie vote this year and state funds that will still be tight next year maybe we can win next year.

About School Dollars
HB2222 is the rescission (budget) bill for the current fiscal year. However, current revenues are still short to fund this budget. So if revenues don't pick up there could be additional cuts to schools THIS year. (PASSED BOTH HOUSES)

HB2280 dealing with capital outlay. This bill has many components, some good and some very, very bad. It would reduce state aid assistance to those districts that receive it for capital outlay and improvements. The good is it would give some districts the flexibility to transfer back any general funds they put in capital outlay in school year 08/09 back to their contingency reserve in 10/11.(PASSED IN HOUSE)

HB2410 reduces at-risk dollars to schools. This bill would require a second count date for at-risk students, and any schools where parents have not provided the proper paperwork would have their at-risk funding reduced. Now of course the schools would continue to provide at-risk programs for students, just without the money! The department of education estimated that this would result in a savings to the state of about $3.2million dollars. This legislation was based on a Legislative Post Audit Study from 2006. It is important to note that the same study indicated that there are approximately 6900 students eligible for free and reduced lunch in Kansas that never apply because of the stigma or worries about confidentiality. (PASSED IN HOUSE)

SB355 was the bill that would have stripped retired teachers who have returned to the classroom (many because of shortages in their specialty) of the continuing contract right. Which meant that districts could non-renew their contracts as late as the day before school started. (It was defeated in the Senate on final action.)

SB359 is the catastrophic aid bill that has been controversial. It was introduced because Shawnee Mission school district went from 0 claims to over 300 in one school year. What SM did was certainly legal, but other districts and legislators claim it was not the intent of the law and would reduce the special education funds available to all districts. SM claimed this was necessary for them because of the disparity in the funding of excess costs which should be 92%. Shawnee Mission is only receiving 65% of excess costs and about one-third of districts receive over 100% of excess costs. The bill was recommended, then reconsidered and re-referred back to committee. At issue is whether or not it will take effect this school year. This is a prime example of why funding schools based on the LPA cost study of 2006 would have been appropriate. That study was done because of the Supreme Court Case and then instead of enacting it, it was set on a shelf for legislators to pick and choose portions to enact and fund. Might be exactly why another court case is on the horizon!

TAX POLICY -- LEGISLATIVE POST AUDITS
February 19, 2010
by Paul Johnson

The Kansas Legislative Division of Post Audit has just issued two timely performance audit reports on: Reviewing Sales Tax Exemptions and Reviewing Tax Credits. These reports are at <http://kslegislature.org/postaudit>. These reports come after several days of sales tax exemption discussions before the Kansas House Taxation Committee. Tax expenditures may finally be coming under the same scrutiny and detail that is given to budgetary expenditures.

The level of detail in these audits is impressive. One can see in detail how tax credits, sales tax exemptions and property tax exemptions have increased especially in the last 12 years. From 1985 to 2009, tax credits increased from 10 to 51 while sales tax exemptions increased from 30 to almost 100 and property tax exemptions increased from 43 to more than 100. (Property tax exemptions were not detailed in these two reports nor is Kansas auditing the total tax exemptions of income, property and sales given to particular organizations.) The tax considerations divide the preferences into: 1) requirements of the State Constitution, 2) requirements of federal law, 3) necessary exemptions from taxation and 4) public policy tax exemptions. Detailed charts show each tax credit, specific purpose, how often used and whether other states offer it.

Sales tax exemptions have grown even faster than tax credits. The audit states: Sales tax exemptions in several areas provide unequal treatment for similar types of services, including $2.2 million in exemptions granted to 44 specifically named organizations. Kansas also exempts some non-profit organizations from paying sales tax, but not for their for-profit counterparts…The Legislature hasn’t formally adopted a public policy goal regarding the types of organizations, services, or activities it wants to exempt from sales tax. This audit lists each sales tax exemption, the cost to the state, number of beneficiaries and a comparison of these exemptions to other states. The state sales tax is now 5.3% and 716 local jurisdictions in Kansas levy local sales tax averaging about 1.5%. 74 of 168 potentially taxable services have a sales tax now. (Certain services not taxed in Kansas include investment counseling services, limousine services and professional services by accountants, attorneys or architects.)

The legislative hearings on sales tax exemptions along with these audits will be part of the final discussions to finish the Fiscal Year 2011 budget. The Governor has stated that the significant budgetary discussions will come late April after the Consensus Revenue estimators have developed their latest 18 month revenue projections. The Kansas House Taxation committee has already voted down a resolution that would have placed a 3-year moratorium on new tax exemptions.

FOOD ISSUES

The Kansas Women, Infants and Children supplemental feeding program (WIC) has changed the basic food package to include fruits and vegetables for the 77,000 recipients. These fruits and vegetables can be purchased at grocery stores but not at farmers markets…Kansas has 84 farmers markets and 10 of these farmers markets are wired to receive the Vision Card (electronic food stamps). A complete list of these farmers markets can be viewed at the website www.ksfarmersmarkets.org. Unless new revenues are found, it is unlikely any additional farmers markets will be wired for the Vision Card…The First Lady Michelle Obama has initiated a ‘Let’s Move’ campaign to combat childhood obesity. It is estimated that one-third of this nation’s children are either overweight or obese. As part of this campaign, a Food Environment Atlas has been developed. This atlas lists by county the number of grocery stores and restaurants, food assistance, food insecurity, food prices, health, local foods, physical activity levels and socioeconomic characteristics. This atlas can be viewed at http://maps.ers.usda.gov/FoodAtlas/

ELECTION BILLS

League and the mental health coalition to which we belong has strongly supported this: Senate Concurrent Resolution 1622 is a constitutional amendment to delete mental illness as a disqualification to vote. SCR 1622 passed the Senate 38 to 1 and is now in the Kansas House Federal and States Affairs committee. If this concurrent resolution passes the Kansas House by a two-thirds vote, it will be voted on this coming November.

Senate Bill 421 would change the penalty for voting without being qualified from a class A misdemeanor to a level 9 non-person felony. This bill passed the Senate 39 to 0 and is now in the Kansas House Elections committee. This bill was requested by the Kansas Secretary of State and would bring the penalty for illegal voting in line with penalties for other election-related offenses. [Is this just political grandstanding? Has there been a rash of fake voters that we don’t know about]

Senate Bill 426 ‘would expand voting opportunities for certain absentee federal services voters and military personnel or their family members. Overseas voters would be allowed to vote a full ballot at all elections; apply for, receive and return their ballots by electronic means; and vote a write-in ballot, if needed.’ (Supplemental Note On Senate Bill NO. 426). The Secretary of State requested this bill to comply with two federal laws. SB 426 passed the Kansas Senate 39 to 0 on February 2 and is now in the Kansas House Elections committee...[ The LWVUS opposes any voting system that does not have a paper trial so if this electronic voting means would be fax LWV agrees with it but online voting is NOT secure.]

#6: TAX POLICY DEBATE
February 12, 2010
by Paul Johnson

The Kansas tax policy debate has now moved to a full debate over sales tax exemptions. House Bill 2549 will have four days of hearings. The core of this bill is to repeal sales tax exemptions for non-profit, charitable, religious and benevolent organizations as well as the exemption for residential utility bills. The silver lining to this discussion is that tax policy may finally be held to a similar fiscal standard as that for budgetary decisions. Kansas tax policy has been ad hoc at best but tough economic times are forcing a different perspective.

Kansas has granted sales tax exemptions in different ways. The number of sales tax exemptions has increased from 30 in 1986 to 96 today. Exempt sales have grown from $3 billion to $4.2 billion. 20 years ago the tax policy was to exempt purchases so when a non-profit bought office supplies there would be no sales tax. Over the years, sales by non-profits were granted sales tax relief so there is no sales tax paid on Girl Scout cookies. Various legislators would champion the cause of a non-profit in their district and request a sales tax exemption for a particular organization like a foster care provider. There are several such organizations listed in the statue books. Sales tax exemptions were also extended to certain listed services such as recreational activities.

Testimony was given on the unfairness of certain non-profits being sales tax exempt but competing against private firms that must pay sales tax. One obvious example is the non-profit status of the YMCA and YWCA’s that are sales tax exempt but not the private health/fitness clubs. There are approximately 25,000 non-profits in Kansas and 8,000 of them have sales tax exemptions. In assessing the total tax picture, many of these non-profits pay no property tax as well as being exempt from sales tax. This gives these non-profits even more advantage over their private competitors. Legislation has been introduced to place a three-year moratorium on any new sales tax exemptions while a formal policy can be designed and existing exemptions examined.

Several groups testified that tax exemptions for sales or income or property should be considered tax expenditures and treated the same way as budgetary expenditures. State revenues have declined for four years (first time ever in Kansas history) and budgets have been reduced repeatedly but no tax exemptions have been reduced. In the same manner that a state budget is developed and passed so should an annual report on tax expenditures be developed and passed. Most tax exemptions have no sunset provision so once enacted these exemptions are not reviewed. As the sales tax base shrinks and less revenue is gained from the sales tax, local units of government (cities, counties and schools) must rely more on property taxes. (Kansas does not allow local units of government to enact local income or earnings taxes.)

In the midst of this budgetary struggle, Kansas may finally have a full and complete debate on the proper balance between budgets and tax policy. The Kansas Advisory Council on Intergovernmental Relations (KACIR) was created by the Kansas Legislature to develop tax policy recommendations. KACIR was worried about the erosion of the sales tax base, higher property taxes caused by less sales tax and the consequences of even deeper budget cuts. They made the policy choice to leave business, agriculture, government and major health care (hospitals, doctors, nursing homes) sales tax exemptions alone. They wanted to raise $200 million with their tax recommendations. $60 million will come from the non-profit sales tax changes and $140 million from the sales tax exemption elimination on residential utilities. Even though the Kansas economy is moving towards a service economy, no recommendation was made to extend sales tax to services like accounting or law. This tax debate has begun in earnest!

KANSAS MILITARY INDUSTRIAL COMPLEX

The Governor’s Military Council (GMC) was created in January of 2006. GMC is chartered to 1) protect the gains in military installation expansion such as Fort Riley, 2) recruit/acquire new missions & forces plus implement initiatives and 3) enhance the quality of life for all military personnel. GMC commissioned Wichita State University to develop a complete economic analysis on the direct and indirect fiscal impact of military/civilian employment, wages and contracts.

The numbers are both impressive and sobering. The summary of these statewide annual impacts are as follows: Output is $7.7 Billion (7% of gross state product), Employment – 169,560 jobs (9.4% of total Kansas employment), Earnings - $5.7 Billion – (5.8% of state earnings), Tax Revenue - $393.6 million. The five military installations included in these numbers are Forbes Field, Fort Leavenworth, Fort Riley, McConnell Air Force Base and Smoky Hills Weapons Range. GMC estimates a $2 million public benefit for every additional 1,000 military personnel. The average annual wage in 2007 for military service personnel was $77,087 compared to the average Kansas’ salary of $44,500. GMC wants to grow the military anyway it can. The Kansas Legislature is passing a law – HB 2445 – to settle land disputes between military bases and adjoining landowners.

With GMC, Kansas is positioning itself to fight off any base closings in the next round. How long can a ‘deficit-funded’ United States military empire continue? How can we afford to spend more on the military than the rest of the world combined? What are the foreign policy and domestic infrastructure costs of being the largest military arms exporter by a factor of 10 (U.S. - $33 Billion – Italy $3B)? The Pentagon budget is so large and unmanageable that auditors cannot find tens of billion of dollars when they report to the Congress. If Congress ever gets serious about deficit reduction, can the military budget be left off the table? President Dwight Eisenhower warned us of the ‘military-industrial complex’ and that an unnecessary dollar spent on the military is a dollar unavailable for schools, health care or infrastructure investment. www.nationalpriorities.org

LEGISLATIVE TIMETABLE

The Kansas Legislature moved up the turnaround date to February 20. This is the mid-point of the legislative session. The regular session is now scheduled to end Tuesday April 6 but may get pushed ahead to end before Easter Sunday on April 4. The Kansas Legislature will have the revenue numbers from February and March to assess their progress with the budget. Today, the 2010 Fiscal Year budget is out of balance by $39 million and in mid-April the consensus revenue estimators will produce new 18-month revenue projections. The veto session starting late April may well last two weeks to find agreement on further budget reductions and revenue increases.

THE GOVERNOR SAYS STATE NEEDS TO FIND AT LEAST $400, MILLION MORE
Governor proposes a $.01 sales tax increase.
LWVK says sales taxes are regressive; Proposes instead to raise income tax. Governor says no one will vote for any raise in income tax, that the sales tax is seen by public as "no big deal."

#5: BUDGETARY SCRAMBLE
February 5, 2010
by Paul Johnson

The Kansas Legislature is scrambling to develop a ‘rescission’ budget to finish out this fiscal year on June 30, 2010. The Kansas Senate passed such a budget that was fashioned on recommendations by the Governor. The Kansas House of Representatives could have passed the same Senate bill and send it immediately to the Governor for his signature. The Speaker of the Kansas House decided to send it to the Kansas House Appropriations committee for more review. In the meantime, revenues have declined and Kansas Legislative Research have stated that even with the Senate bill the State’s budget is out of balance by $39 million.

CUT K-12 SCHOOL FUNDING TO GIVE TO COURTS SO THEY DON’T HAVE TO HAVE FULOUGHS?

The House Appropriations committee is now in a box to find even more budgetary cuts. At the same time, the courts have a budgetary shortfall of $5 to $8 million. The Senate bill restored $5 million of that shortfall. In order to assist the courts and grapple with the growing deficit, Rep. Joe McLeland proposed taking $5 million from K-12 supplemental aid and use that for the courts. This proposal was soundly defeated by the full committee.

CUT LEGISLATOR’S PAY?
HOW ABOUT CUTTIN' PLANNED PARENTHOOD? ---
Eerrrr-- HOW MUCH DOES PLANNED PARENTHOOD GET ANYWAY

Rep. Ray Merrick proposed an 11.1% reduction in legislator’s pay to save $297,000. This proposal was accepted.

Rep. Peter DeGraaf proposed eliminating all funding for Planned Parenthood and use those savings for the deficit. Rep. DeGraaf had no idea what those savings would be. Planned Parenthood services are a Medicaid service and arbitrarily ending those services could threaten all Federal Medicaid funding to Kansas.

EVEN WITH $200 MILLION CUTS WHERE DOES THE OTHER $200 MILLION COME FROM?

The budget clock is ticking. With every week passing, this fiscal year gets closer to the end on June 30 and budgetary reductions get more challenging. If across the board cuts are made, the state agencies have only a few months to find the savings so a 1% cut is magnified to 3 or 4%. There are some budgetary tricks available such as delaying school or Medicaid payments from June to July thus saving the costs in FY 2010 and deepening the $416 million deficit in FY 2011. In regards to 2011, Senate Ways and Means Chair Jay Emler has given directions to cut all state agencies by 2.5% and continue the 10% cut to Medicaid providers. This combination of reductions would raise around $200 million thus necessitating revenue increases of $200 million. As the weeks go by, every conceivable budget solution of all cuts to all revenues will be proposed. Latest news is that House Appropriations passed a budget bill without solving the $39 million deficit for now. That debate may come on the floor of the House next week or more likely in April.

WATER LEGISLATION

Senate Bill 510 is a change in water rights law that recognizes conservation as a distinct beneficial use of water, statewide, with no time limit. Presently if a water right is not used it can be decreased or lost. Kansas has a ‘use it or lose it’ policy. This water right change is voluntary and the owner can choose how long to keep his water right in conservation use. This bill was proposed by the Kansas Department of Agriculture <www.ksda.gov>. You can read their talking points on this website. When visiting this website homepage, click on Division of Water Resources and on the left side of this page click on maps and you will see color maps depicting the draw down of groundwater in Western Kansas.

CHILDREN’S ISSUES

Inspecting all child care facilities. There are two bills on the table regarding child care inspections, one in a Senate committee and one in a House committee. On the Senate side, SB 447 was heard Monday in Public Health and Welfare. Kansas Action for Children, parents and other advocates gave compelling testimony about the need to inspect all child care facilities in Kansas and to implement adequate supervision requirements

Infant mortality. The Blue Ribbon panel that has been working over the past several months on infant mortality released its recommendations Wednesday during a Statehouse press conference. One of the panel’s recommendations - increasing data collection around infant deaths in Kansas - would be accomplished by SB 448, which was introduced last week in Public Health and Welfare. Sen. Jim Barnett (R-Emporia), chair of Public Health and Welfare, spoke during the press conference about the importance of having solid data around infant mortality so that lawmakers could more effectively craft solutions to the problem.

Children’s Initiatives Fund. Senate Ways and Means heard testimony Monday on SB 327. Kansas Action for Children testified in opposition to this bill, which would divert almost a million dollars of tobacco money from the Children’s Initiatives Fund (CIF) each year. The CIF funds most of the early childhood programs in the state. The committee has taken no further action on the bill.

Tax Loopholes. Kansas Action for Children testified Thursday in opposition to HB 2538 before the House Taxation Committee. This bill would expand the circumstances under which businesses could keep their employee’s income tax payments for the business’ use. This type of tax loophole is relatively new in Kansas and there is little, if any, evidence to show that it is effective in attracting or keeping business in the state.

Mid-Year Budget Cuts. The Rescission bill (Senate Substitute for HB 2222), which would enact mid-year budget cuts the Governor could not accomplish through the allotment process, was passed out of the House Appropriations Committee yesterday. This action brings the bill one step closer to becoming law.

Financial Literacy. The Senate Education Committee introduced a bill to provide funding for teacher professional development in the area of personal financial literacy. Under the bill, SB 503, this funding would come from a $1 surcharge on every payday loan and car title loan made in Kansas.

SENATE TO VOTE IN COMING WEEK ON DEATH PENALTY ABOLITION

The bill was voted out of committee by a vote of 7 to 4 and now goes to floor for debate and vote. Contact your Senators!!!

#4: TAX AND BUDGET ISSUES
January 29, 2010
by Paul Johnson

The Governor’s effort to raise the sales tax has hit a brick wall so far. The option to raise the cigarette tax has more promise. Conservative business leaders and their supported anti-tax crowd are rallying to fight any tax or fee increase. The conservative think tank – Kansas Policy Institute – is out with the promise that idle funds in state agencies and school districts can be tapped this year without any reduction in service. The January tax receipts to the state were down more than $18.6 million. The Kansas Legislature may well put off the toughest budgetary decisions until the veto session late April after the consensus revenue estimators have come up with new 18 month revenue projections in early April.

The Kansas House Taxation committee voted 12 to 7 to report the sales tax increase proposal unfavorable to the full Kansas House. The chairman of the committee did say that certain sales tax exemptions would be debated. So far the sales tax exemptions for business and agriculture would be off the table. The sales tax exemptions for non-profits would be considered along with the exemption that protects residential customers from paying sales tax on your electric or natural gas bills. This one exemption is by far the largest and would raise $130 million. The Kansas Senate President Steve Morris has stated there is little support in the Senate for an overall sales tax increase but sales tax exemptions could be considered and it is impossible to find over $400 million in budget reductions. The citizens of Oregon voted to keep a tax increase on higher income residents and certain corporations. Here in Kansas, some Democrats will push for increased income taxes on higher income residents.

The Kansas Chamber of Commerce (KCCI) has come out with the proposal to do away with all corporate and personal income taxes by increasing the sales tax. The Koch, Inc. endowed business professorship at Kansas University – Dr. Art Hall – made the proposal to replace the income taxes with an increase in the state sales tax from 5.3% to 8.3%. The sales tax may be applied to certain services such as law or accounting that are now exempt. The logic is that the states without income taxes are the most business friendly and prosperous. The sales tax is subject to economic downturns thus undermining stable revenues.

The Kansas Policy Institute (KPI) has been publicly debating the school lobby over the funding of public education. KPI has demonstrated that the funding per student varies greatly among different school districts and that the higher per student districts should be brought in line with the average per student districts. Funding for public schools has increased every year in the last decade except for 2009. The Kansas Supreme Court mandated the increases for the previous three years. Public school advocates respond by saying the funding decisions are in the hands of locally elected school boards and that the educational expectations mandated by the Kansas Legislature have increased over the years. While public school funding in Kansas is under the national average, performance by public school students in Kansas have been well above the national average. This debate on proper and necessary funding for K-12 education will never be completely settled. As the number of poor children and ‘english as second language’ students increase, school districts are under greater pressure to perform. The paraprofessionals hired for these students are the first ones cuts.

The Kansas Senate has now passed the budget reductions proposed by the Governor to make it through FY 2010 that ends June 30, 2010. These reductions included a 10% cut to hospitals, nursing homes, home care services, doctors, pharmacies and other Medicaid providers. There was no funding option offered to replace this $22 million Medicaid reduction if this cut was withdrawn. Time will tell if this cut will put any providers such as the smaller nursing homes out of business. Unless new revenues are found for the FY 2011 budget, this 10% Medicaid cut may be permanent. While this reduction results in $70 million in savings for the state general fund, it means the loss of $150 million in federal Medicaid funds. The hope is that the experience of the 10% Medicaid cut in 2010 will bring the necessary political resolve to find new revenues for 2011.

WATER POLICY

The Kansas Department of Agriculture has drawn up legislation to change the use of water rights towards more conservation. Presently, if a landowner does not use their existing water rights they are subject to having that water right reduced. This ‘use it or lose it’ policy would be changed so a landowner would not be penalized if they did not use their full water rights in one year. There will be much discussion on this issue as it proceeds through the legislative process. I will cover this issue in more detail as the testimony is presented.

#3: ENERGY EFFICIENCY UPDATE
January 15, 2010
by Paul Johnson

Kansas is slowly developing a range of energy conservation programs. Certain major electric and natural gas utilities have programs or are developing ones. The major impetus for Kansas has come through federal stimulus dollars. There will be spirited discussions on how to pay for these utility sponsored energy conservation programs and will the rate design for residential customers change?

The Kansas Corporation Commission (KCC) received $48.7 million of federal stimulus dollars. The bulk of the funding has been used to create new energy efficiency and renewable energy programs at the Kansas Energy Office. The new Efficiency Kansas Loan Program www.efficiencykansas.com will channel $34 million in energy efficiency loans to existing houses and small businesses. Average loans will be $5,000 to $6,000 and must pay back in less than 15 years. A comprehensive energy audit is required. Loan repayments will be made to a lender or to your utility if your utility is participating in this program. 15 lenders have signed on so far. The website has the list of participating lenders and utilities. $350 rebates are being offered for the first 1,000 participants who elect to implement projects through Efficiency Kansas. Kansas now has 44 certified energy auditors and funds are being used to offer scholarships to train more auditors at the three institutions qualified to provide effective training.

Grants of $3.5 million in renewable energy incentives will be available for local units of government, school districts, community colleges, cities and counties to invest in wind, solar, biomass, hydropower or geothermal projects. Grants will cover up to 25% of the approved project cost, not to exceed $250,000. The first awards of four rounds will be announced in mid-February. $2.5 million will be available for coalitions of local units of governments to hire energy managers for up to two years. This is targeted to rural areas and these energy managers will be expected to develop strategic plans to determine energy usage and energy savings strategies. The Kansas Energy Office has developed the Energy Efficiency Building Codes Working Group to assist cities and counties develop energy codes for residential and commercial buildings. These codes would apply to both new construction and retrofits. Data compiled in 2008 indicate that 90% of the state’s building permits were issued in just 8 counties.

Kansas City Power & Light - that serves over 200,000 residential customers - was the first major electric utility to offer energy conservation programs. KCP&L has audit and rebate programs for residential and commercial customers. These programs can be accessed by visiting their website. KCP&L has installed over 20,000 programmable thermostats that can be accessed via the internet. The customer can access their thermostat remotely and KCP&L can impact their air conditioning load by increasing the temperature setting during peak load times. The thermostat is installed free for the customer and financed by all customers since the peak savings will avert the need for more power plant construction.

Westar serves over 565,000 residential customers in Kansas and is the largest electric utility in Kansas. Westar has had an energy efficiency division for a few years that offer energy conservation advice to all customers. Westar is following the lead of KCP&L in starting to offer the same type of programmable thermostats in an effort to dampen peak load electrical usage. Westar is taking the next step with federal stimulus dollars in an energy efficiency grant to install smart meters in the 45,000 households in the Lawrence area. These thermostats give customers a complete picture on the electrical use in a customer’s home and how that usage compares to other similar customers in Westar’s service area. If the pricing of electricity ever tracks the time it is used - as peak time pricing does with phone service -, these smart meters would offer that option. Westar is investing in another large wind farm near Spearville in Western Kansas.

Kansas Gas Service (KGS) is by far the largest natural gas company in Kansas providing natural gas service to 650,000 residential customers of the 1 million homes in Kansas. KGS is now requesting Kansas Corporation Commission approval to offer 5 different energy conservation programs. These programs would vary from rebates for energy efficient furnaces and water heaters to yearly appliance check-ups to programmable thermostats to community outreach education. KGS estimates that these programs will impact only 1-3% of their customers over three years. These programs will be funded by the participating customers or by all customers through an energy conservation rider. In exchange for offering these programs, KGS wants the authority to change existing natural gas bills. Right now, one-half of KGS’s fixed costs (gas meters, piping system, billing) are covered by the customer charge and the remaining costs are added to the price of natural gas. KGS wants all fixed costs to come through an increased customer charge. This change is called ‘revenue decoupling’ and will be challenged before the KCC by consumer groups.

CONGRESSIONAL REDISTRICTING

The process has started to redraw the 4 Congressional districts, the 125 Kansas House districts and the 40 Kansas Senate districts. The final vote on the new districts will be taken in the 2012 Kansas Legislative session. Kansas Speaker of the House Mike O’Neal is chairing the committee to draw the new maps. Senate Bill 291 would change the process by adopting the method used in Iowa. Iowa is the only state that has developed a non-partisan mechanism to redraw maps that do not track party affiliations. Iowa tries to draw compact districts that keep communities in tact. SB 291 had a hearing last March in the Senate Federal & State Affairs committee but needed to pass last year to impact the new district maps. Conservative Republicans and Democrats opposed this non-partisan bill.

LEAGUE URGES PUTTING ISSUE ADS UNDER CAMPAIGN FINANCE LAWS

S.B. 418 was scheduled for hearing by the Senate Ethics and Elections Committee.
Kay Hale gave testimony for LWVK after Lawrence League member Carolyn Jacobson did excellent research on good campaign finance bills. The testimony urged establishing laws that would require any organization that sponsors a political campaign “issue ad” to report the sources of their funding and their expenditures to an appropriate governmental agency and such reports should be made public prior to election voting.

ONE CENT SALES TAX TO SAVE SCHOOLS?

HB2475 which would have increased the sales tax by 1% and sunset in three years had a hearing in House Taxation Committee. Fourteen proponents testified in favor of the sales tax increase including: Kansas Action for Children, Kansas Association for School Boards, Kansas National Education Association, Interhab, SILCK, and a couple of individuals.

When the Legislative Post Audit Division (LPA)was ask to find efficiencies, these are what they found for ways to save money which are sure to impact student achievement: increase class size, eliminate block scheduling, close schools, replace librarians with aides, cut coaching positions, fire teachers and principals.

#2: ENERGY CHOICES AND QUANDRIES
January 5, 2010
by Paul Johnson

Kansas Governor Mark Parkinson has stepped to the plate to raise two taxes to fend off more major cuts to the 2011 State Budget. The Governor has had to cut almost $1 billion in the 2010 budget from the original adopted 2009 State General Fund (SGF) budget ($6.404 Billion in 2009 to $5.451 Billion in 2010). The increase in the sales and tobacco taxes will raise $378 million for 2011 and without these increases very severe budget reductions have been identified. The battle of revenue increases versus further budgetary reductions has been joined. If history is the guide, this painful process will take the full 90 days to settle. A court suit on school finance before the Kansas Supreme Court may play a role in this legislative session or possibly force a special session this summer. In early April, the consensus revenue estimators will meet to determine new 18-month revenue estimates and recovery of the Kansas economy will be closely examined.

The tax increase and revenue debate will under go much iteration. The Governor's proposal is to increase the state sales tax from 5.3 to 6.3% for 36 months and the annual increase is $308 million. (The majority of cities and counties have local sales taxes in addition to the state tax so for example the Lawrence sales tax is 7.8% today before any increase in the state rate.) Kansas does have a sales tax on food. Of the 45 states in the country with a sales tax, 25 have taken the sales tax off food like Nebraska. Some states have a lower sales tax on food like Missouri. A 15 member Kansas Inter-Governmental Task Force (of state lawmakers and local officials) supervised by Kansas Secretary of Revenue Joan Wagnon has proposed legislation to raise $200 million by imposing the sales tax on residential utility bills (natural gas & electricity) and eliminating sales tax exemptions for non-profits. A second bill would put a three-year moratorium on any new sales, income or property tax exemptions. A task force to develop a new 10-year comprehensive transportation has floated a proposal to put the sales tax on the purchase of gasoline in addition to the existing per gallon fuel tax. Revenue options discussed might include the sale of the Kansas University Medical Hospital for an estimated $1 Billion (only 5 states now have their own state hospitals) or sell off the Kansas Turnpike as Indiana did.

You can view the Governor's Budget Report - Fiscal Year 2011 at http://budget.ks.gov (click on the icon in the current events red box and than click on the Budget Director's Overview Presentation. Kansas is not publishing a hard copy of the budget so the 800-page budget has to be read on line). The budget pie charts are very helpful in detailing how the state budget is financed and the major area of spending. There is a list of specific budgetary reductions if no new revenues are enacted such as further reductions to: the mental health grants, primary health care clinics, nutrition grants for seniors, general state aid to schools, court operations, community correction programs, etc., etc.

FOOD STAMPS UPDATE

The food stamp program (distributed electronically through the Vision Card) has increased 61% in the last 12 months. In November 2009, 255,887 Kansans received food stamps with 120,332 being children and 135,555 being adults. The dollar amount has gone from $19.6 million in November 2008 to $31.7 million in November 2009. SRS has been adding close to 1,800 new households a month in the fall of 2009 compared to less than 1,000 in the fall of 2008. The food stamp program is the largest child nutrition program in Kansas and served over 330,000 Kansans in 2009. The federal stimulus program increased the individual benefit from $105 a month in FY 2009 to $123 in FY 2010. The household benefit increased from $232 to $272 per month. SRS has been working with the Kansas Rural Center to increase from 2 to 9 the number of farmers markets that can accept the Vision Card. The Kansas Rural Center now manages the website, training and development of farmers markets in Kansas. The website is www.ksfarmersmarkets.org .

LONG TERM CARE PLAN

Representative Bob Bethell chairs the Aging and Long-Term Care Committee in the Kansas House. Rep. Bethell is working on a plan to bring all long-term care programs into one agency to coordinate a better care of plan for all clients. The home and community based waivers for the disabled are now found in SRS while the home and community based waiver for the frail elderly is in the Kansas Department of Aging along with the nursing home program. The future of the state hospitals for the disabled and mental health would also be part of this broader plan to balance community options versus institutional settings. Rep. Bethell is chairing a health advisory committee for Sam Brownback and may well play an important role in health care options for Governor Sam Brownback. The Kansas Health Institute reporters will be writing in-depth on the evolving issues of health care changes and reductions in Kansas at www.khi.org .

KANSAS DEATH PENALTY DEBATE

The Kansas Senate Judiciary Committee will hold hearings on Senate Bill 208 – Abolishing the Death Penalty - January 19 thru January 21. Kansas would be the third state to abolish the death penalty. SB 208 will probably be voted out of committee for a full debate on the Senate floor. The cost of the death penalty is forcing a few lawmakers to reconsider their previous support now that Kansas has a ‘life without parole' option. When Governor Mark Parkinson was a state senator he helped re-establish the death penalty in Kansas and it is unclear what his position would be on this bill if it ever reaches his desk. Governor Joan Finney allowed the death penalty be re-established without her signature.

You may be familiar with SB 291 - legislation patterned on the Iowa method of redistricting Congressional and state legislative seats that tries to avoid heavy partisan influence. The maps are drawn by Kansas Legislative Research with a plan to draw districts that are compact with no regard to party registration. There is a five member review committee of members who are not elected officials or lobbyists. This committee helps with decisions in the gray area. This commission holds 3 public hearings. The maps are presented to the Kansas House and Kansas Senate - I think - without the ability to amend. If the maps are voted down, reasons have to be stated. Senator Derek Schmidt was involved in requesting the legislation but he only presented written testimony. Conservative Republicans opposed the bill.. The hearing was March 16 in Senate Federal and State and I doubt there will be any movement. You should read this bill on-line.

PREVIEW OF LEGISLATIVE SESSION
December 17, 2009
By Paul Johnson

The 2010 Kansas Legislature will meet in January to debate what constitutes essential governmental services? After several rounds on budgetary cuts in 2008 & 2009, Governor Mark Parkinson has now implemented $259 million in budgetary reductions to balance the 2010 budget that ends June 30, 2010. The budgetary picture for 2011 is further complicated by the reduction in federal stimulus funds that provided several hundred million dollars for the 2009 and 2010 State budgets. The federal stimulus dollars are completely exhausted by 2012 unless Congress appropriates new dollars. Will the Kansas Legislature have a substantive debate on adequate revenues and the proper mix of tax sources at the same time that further ‘program eliminating’ budget cuts are debated?

KANSAS DEPARTMENT OF SOCIAL & REHABILITAION SERVICES (SRS)

As part of the Governor’s budget reductions for 2010, several SRS programs were severely impacted. SRS now has a 17% (1 in 6 positions) vacancy rate at the area offices. SRS central office has a vacancy rate of over 30%. The Mental Health consolidated grant funds mental health services for the uninsured statewide and was reduced by $3.9 million. Since 2007 this grant has declined from $31 million to $10 million. The support grants for the Developmentally Disabled were decreased by $1.3 million and the waiting list is now 2,848. The General Assistance (GA) program for disabled single adults was shortened to just 12 months reducing the clients served by 480 on January 1, 2010. The GA program count has fallen from 4,461 clients in November 2008 to 2,323 today. The food stamp program has been increasing from 200 new households a month in 2007 to 2,087 new households a month today. The food stamp program now serves over 250,000 Kansans providing over $30 million in benefits monthly. Projections are that the Temporary Assistance for Families households will increase 37% from 2009 to 2011 (12,571 cases to 17,724 cases). What pressure on limited SRS staffing!

KANSAS DEPARTMENT OF AGING

The Kansas Department of Aging (KDOA) has very limited options to reduce budgets. 75% of KDOA’s budget - $365 million – funds nursing homecare for 10,149 clients statewide. The Governor has ordered a 10% reduction in all Medicaid provider rates that will impact a range of medical care from nursing home care to primary care to mental health services. The Home and Community Based Services for the Frail Elderly (HCBS-FE) now assists 5,609 clients statewide with a budget of $75 million. Unlike nursing home care that is a federally mandated under the Medicaid program, HCBS-FE is provided through a waiver granted by the federal Department of Health and Human Services. HCBS-FE has not had a waiting list in the past but that may change as budget cuts increase. KDOA’s nutrition programs were preserved by $1 million in federal stimulus dollars. If not restored by the Kansas Legislature for 2011, providing 3.5 million meals to seniors will have to be reduced. The Senior Care Act - that provides homecare services with only state dollars to the elderly that have incomes just above Medicaid eligibility - now has a waiting list of 269. With these homecare service options reduced, more senior citizens will end up in nursing homes at a much higher cost to Kansas’ government.

KANSAS HEALTH POLICY AUTHORITY

Like KDOA, the Kansas Health Policy Authority (KHPA) has few options to reduce their budget. KHPA funds a private clearinghouse where applications for medical programs are processed. As KHPA reduces the contract to operate this clearinghouse, the backlog of 20,000 applications will increase significantly. KHPA is ending its customer service contract that handles 250,000 calls a year from providers and clients. The 10% reduction in Medicaid provider rates will impact the availability of medical care especially for the underserved in urban and rural areas. KHPA estimates that 41% of the 41,000 births in Kansas last year were funded by Medicaid. Approximately half of all nursing home clients are funded by Medicaid. KHPA now provides medical services to 318,000 Kansans. KHPA is mandated by federal law to process a medical application in 45 days. With this latest round of staff reductions and cuts to contracts, the 45-day rule may not be met and the accuracy of processing claims will suffer!
(Check out the new, reformatted Kansas Health Institute website for the most comprehensive coverage of medical/social service issues. www.khi.org)

KANSAS REVENUE

The best estimate is that the Kansas Legislature will start developing the 2011 budget (July 1, 2009 – June 30, 2010) with a deficit well over $200 million. Kansas has experienced three years of declining revenues and this has not happened since the Great Depression. Since state budgeting was fully formalized in 1966, the State General Fund had experienced just 3 years of decline (1986, 1999 and 2002) and all were single years of decline. Kansas has not had a complete review of our tax system since the Bill Graves administration in 1995.

Combined state and local tax revenue in Kansas is now 31% property tax, 28% income tax, 26% sales tax and 15% from several minor sources. Property tax is the most politically unpopular tax but also the primary source of income for counties and cities. The income tax is the most progressive tax and Kansas needs one more bracket for higher income households. The sales tax is the most regressive tax especially in Kansas since we tax groceries. There are dozens of services that are exempt from the sales tax. Kansas needs to stop providing more sales tax exemptions and review all existing exemptions every 5 years.

OTHER ISSUES

The process is now starting to redraw the 4 Kansas Congressional districts, the 125 Kansas House districts and the 40 Kansas Senate districts. The final bill to redraw these districts will happen in the 2012 Kansas Legislative session. Projections are that Kansas will not lose a Congressional district as we did in 1990. Iowa is the only state in the country that has established a non-partisan committee to develop their Congressional map with an eye towards community balance. Most redistricting in this country is a partisan war among the Democrats and Republicans. The net effect is to design safe Congressional districts for one party thus subverting a necessary civic dialogue to compromise and solve our country’s most troubling problems. For the Kansas House and Senate districts, rural representation will decline further as the population continues to shift to northeast Kansas and areas around Wichita.

The debate to develop a new 10-year Comprehensive Transportation Plan will increase in the coming Legislative session. The first 10-year plan was 1989 to 1999 and the second plan started in 2000 and now ends in 2010. The Kansas Legislature will wait to see whether Congress can pass a new transportation plan? The Federal Highway Trust Fund is under-funded and must be made solvent. With the push for more jobs, highway funding along with some high -speed rail development is considered most promising for employment. The last 10-year Comprehensive Transportation plan in Kansas was $13 billion – 9% of total state spending. The new request will be closer to $16 Billion. There should be an extended discussion on how this plan should be funded so as not to compromise funding sources for other vital educational and social service needs.