During this past week, Week 9 of the Legislative Session, the pace picked up somewhat. We continued our discussions of tax increases to ease the State's budget problems, and worked with several bills in Committee sessions.
Bill would allow political candidates to transfer campaign funds
This Wednesday, the House Elections Committee heard testimony on Senate Bill 423, which would allow an incumbent legislator to transfer campaign contributions from one political account to another account that is filed for a different office. For example, if a House member decides to run for Secretary of State, that candidate could transfer funds in his/her political House account to the Secretary of State account. Once transferred, the original political account would be terminated.
This bill has been introduced a number of times, usually during an election year. Currently, there are four sitting senators who have a vested interest in the law change. The bill would enable those legislators to jumpstart their new campaign fundraising operations by thousands of dollars. Specifically, Senator Derek Schmidt would have over $100,000 more at his disposal in his bid for Attorney General in 2010 if this bill becomes law.
The Governmental Ethics Commission has issued an opinion stating that the laws of the state do not allow such transfers. There are legitimate concerns about the donors’ intent of their contributions. It is highly feasible that someone who gave to a candidate in one race may support a different candidate in another race. It would therefore be improper to use their money in race that they did not directly contribute to. This is especially true when the money transfers from a legislative race to a statewide race, as the pool of candidates tremendously increases and the job qualifications are guaranteed to change.
A donor’s support of a candidate is not unwavering; it always depends on the race. If they do support the candidate without question then they will give to the candidate again in the new campaign. As a general rule, it is usually better to have more restrictions on campaign finance than less, especially since there are statutory concerns about this legislation. Elections Committee will deliberate on this bill next week. If it passes, the bill will go on to the full House for consideration.
KPERS fund ranked 49th nationally
Kansas public employees oftentimes work for wages that are lower than the market for similar jobs in the private sector. However, one of the benefits of being a state employee (or local school district employee) is a respectable pension plan. Our Kansas Public Employee Retirement System (KPERS) offers an employee a benefit of 1.75% times the number of years of service times the average of the highest three year’s salary for an employee who reaches retirement age. For example, a state employee who retires after 30 years of service would receive 52.5% (1.75% times 30 years) of his/her salary as a retirement benefit. State employees pay 4% of their salary into the system.
The KPERS fund, like other state retirement funds, was hit hard by the stock market drop two years ago. The market has rebounded, but the KPERS fund is still alarmingly underfunded. The most recent report from the Pew Center on the States (issued in February) found that the Kansas retirement system was only 58.82% funded. This means that we only have 58.82% of the money we need in the system to fund our obligations to current and future state retirees.
This ranking is second worst in the entire United State, with Illinois having a 54.33% funding record. The Government Account ability Office says 80% is the preferred benchmark funding level. The last time Kansas met that mark was in the late 1980’s and early 1990’s. The KPERS actuary told the Kansas Legislature that it needed to increase the employer contribution to keep the fund actuarially sound. The Legislature chose not to heed the recommendation and increased the employer share, although much less than needed. In addition, the state is short by $106.48 per person, in money set aside for post employment health insurance costs for current and future employees.
This is yet another example a critical service provided by state government that must be provided for in FY 2011. There are currently 268,000 Kansans impacted by KPERS funding. All of these Kansans depend on KPERS to survive and none of them have had a cost of living since the early 1990s. It is the Legislature’s responsibility to take care of these retirees. We must reverse the trends of the past two decades and adequately fund our KPERS system so the hard working state employees – past and present – can count on a retirement system which will allow them to retire in dignity.
Disabled Kansans visit Capitol
On Tuesday morning, Kansans with physical and developmental disabilities visited the Statehouse to lobby for home and community based services funding. Some groups placed 58 crosses on the Statehouse lawn to represent 58 disabled Kansans who have died while on waiting lists for services. Other groups highlighted the phrase “Invisible Kansans” and showed their “visibility” by visiting every legislative office to discuss the funding cuts.
Programs that serve those with disabilities in Kansas have been drastically cut recently because of the state’s budget problems. In December of 2008, the Kansas Department of Social and Rehabilitation Services imposed a freeze on physically disabled waivers for the home and community based services list. The State waiting list for persons with developmental disabilities already exceeds more than 4,000 Kansans waiting receive help. In November of 2009, a 10% across the board cut to Medicaid services (which includes HCBS) was imposed.
We are all impacted by budget cuts, but these are some of the Kansans whose lives literally depend on state services. Advocates urged legislators to consider tax increases as a means of filling the budget gap and protecting them from further cuts. Although no one likes to discuss tax policy, it will cost the state much more in the future if persons with disabilities are denied proper care now. Providing the funds they need to live independently in their homes is an investment, not an expense.
Tax discussions continue
On Wednesday, the House Taxation Committee tabled HB 2593, which would increase taxes on alcoholic beverages. Although the bill has been tabled, the discussion will likely resurface before the end of this legislative session.
The increase in the wholesale tax on alcoholic beverages in HB 2593, which has not been changed since 1977, is aimed at helping to close the more than $400 million dollar budget gap in the state’s general fund, and would also shifts increased revenue from the tax to programs that care for the developmentally and mentally disabled. The tax increase is estimated to increase state revenue by about $21 million in 2011, and would provide a great deal of relief for community mental health agencies who have experienced $20 million in cuts recently.
This week the Senate Tax Committee also addressed legislation that would raise taxes on tobacco products and retail sales tax. SB 615 includes a measure that would raise the tobacco tax by $0.55 to the national average of $1.34. The same bill would also increase retail sales tax by 1% until 2013. The Department of Revenue estimates that SB 615 would raise approximately $377 million dollars for the state’s general fund. A similar measure regarding sales tax was addressed in the House Tax Committee earlier this year, but was unsuccessful. The Senate Tax Committee is expected to vote on this measure sometime next week.
Legislators are currently divided on these tax increases. Although legislators understand that taxes are generally unpopular, there is a growing consensus that at some point new taxes must be considered to bridge the increasing budget gap. Without additional revenue through new taxes or cutting tax exemptions, many legislators believe that there is simply not enough that can be cut from the current budget to cover the more than $400 million gap.
New energy efficiency programs available for local governments
As part of its statewide strategy to promote energy-efficiency retrofits in public buildings, the State Energy Office has established two new grant programs to assist cities and counties—the Public Projects Grant Program and the Energy Manager Grant Program. The programs are funded with $5.7 million in federal funds received from the Department of Energy as part of the American Recovery and Reinvestment Act (ARRA).
The Public Projects Grants are designed to supplement the existing Facility Conservation Improvement Program (FCIP) by focusing on energy efficiency projects in public buildings that are either too small for FCIP or include specific improvements that exceed FCIP’s 30-year statutory payback period. Examples of improvements funded through these grants include lighting, heating and cooling equipment, energy management controls, and insulation or other envelope measures. The application deadline for this program is July 15, 2010. For eligibility requirements and additional information, see the State Energy Office web site (http://www.kcc.state.ks.us/energy/arra/publicproj.htm) or contact Peter Armesto (785-271-3241; p.armesto@kcc.ks.gov).
The Energy Manager Grants provide coalitions of local governments (cities, counties, school districts) with an annual stipend of $50,000 for up to two years to hire an energy manager. Energy managers will develop both short- and long-term plans for each of the coalition members, with the goal of reducing energy usage in both the public and private section. The application deadline for this grant is April 15, 2010. For eligibility requirements and additional information, see the State Energy Office web site (www.kcc.ks.gov/energy/arra/energymgr.htm), or contact Stuart Yoho (785-271-3352; s.yoho@kcc.ks.gov).
Please visit the State Energy Office website (http://www.kcc.state.ks.us/energy/index.htm) for more information about these new grant programs and all the programs administered by the State Energy Office.
House Education Committee hears several bills
House Bill 2409: Catastrophic Aid
The House Education Committee held hearings on the education catastrophic aid issue with House bill 2409 during the first week of March. This aid helps districts pay the high costs of care for students with significant needs. The catastrophic aid law would increase the eligibility amount from $25,000 to $36,000 per student and cut the total amount of current aid funding. This reduction would allow for more funds for regular special education to become available.
Legislation is being put forth through both the Senate and House in regards to changing the current funding formula and including more restrictions. The previous wording of the catastrophic aid funding allowed for three major Johnson County school districts: Blue Valley, Shawnee Mission, and Olathe, to maximize their claims and receive $7.8 million out of the state’s total budget of $12 million.
Shawnee Mission alone accounted for 44% of all of the claims statewide last year, with 333 claims. With the new legislation, these school districts will be unable to continue the requests for large amounts of funding and significantly reduce aid while increasing available amounts for other districts. This will cause Shawnee Mission to lose major funding during this school year, along with the sales tax revenue we have already lost.
The school districts’ acquisition of the large amounts of funding was done legally, but, other school districts were left with significantly less funds for the school year. House Bill 2409 has had strong support in the Education Committee and school districts across the state, with the exception of Blue Valley and Olathe. The companion bill (SB 359) passed the Senate on Thursday. The House Education Committee will likely put any policy changes desired on that bill when it comes over from the Senate.
Senate Bill 485: Private and Out-of-State
Postsecondary Educational Institutions Act
During the first week of March, the Education Committee held hearings of Senate Bill 485 regarding amendments to the Private and Out-of-State Postsecondary Educational Institutions Act. This legislation has already been passed in the Senate and aims to put controls on out of state higher education institutions coming to Kansas. This legislation would generate $182,200 for fiscal year 2010 and $390,100 for fiscal year 2011.
The amendment would require secondary education institutions to notify the State Board of Regents of an existing branch campus within the state. The branch campus would become eligible for fees and would be reviewed by the Board of Regents to ensure that the campus is also in compliance with laws and regulations.
SB 485 would also effect how student complaints are handled. In regards to the complaints, all institutions would adopt, publish and adhere to the same procedure, including a requirement which specifies that complaints must be posted where it can be seen by students.
New definitions, alterations to the renewal and application process and clarification to the approval of degrees requiring certificates were also addressed in the new legislation. Fees for degree and non-degree granting institutions were also established. A compilation of educational information of both private and out-of-state post secondary educational systems will also be instated state wide in order to analyze and collect information such as program, student, course and financial aid demographics.
House Bill 2704: School consolidation
The House also passed House Bill 2704, dealing with consolidation. The bill would allow three or more districts to consolidate into two districts (essentially allowing one district to split itself among some others in consolidating) and keep the incentive funds for consolidation.
As it came out of the House Education Committee, the bill changed low enrollment weighting such that the cap on low-enrollment weighting which is at 100 students in current law would change to 200 students for any district with less than 200 square miles and fewer than 200 students. This had started with a 400 student cap but was amended in committee. Districts that meet these size and enrollment limits would lose some low-enrollment money if the bill becomes law. The intent of the bill was to encourage consolidation among districts that are “small by choice.” That portion of the bill was stripped out on the floor, but may come back in the Senate deliberations.
House Bill 2699: Teacher Probationary Period
The House Education Budget Committee held a hearing on HB 2699 which would change the probationary period from three to five years for teachers in our public schools. This means that school districts could non-renew a teacher’s contract at the end of the school year without having to justify the decision for five years instead of the current three. This is a very contentious issue that is being fought between the administrators’ organization (United School Administrators – proponent) and the teacher’s organization (KNEA -- opponents). No action was taken on the bill. It is interesting that the bill came up in the Education Budget Committee rather than the regular Education Committee.