Legislative Updates

Legislative Update - Week 8 - March 2-6, 2009

The Kansas Legislature entered March more like a lamb than a lion, so we all know what that’s going to mean down the road. While every legislative session has its own unique pace and quirkiness, this session defies description. It is well into the second half and only one bill has been sent to the Governor for her signature; committees are holding far fewer hearings than in previous sessions and there are easily a third fewer bills being introduced. On top of that, there is the swirling of political upheaval with Governor Sebelius nominated to join the Obama Administration and considerable speculation on who among her cabinet and other top advisors is headed east with her. With news of her appointment hitting the press last weekend and the official White House announcement Monday, folks are now starting to sort out how her departure will impact various public policy initiatives ~ namely energy. She will, of course, remain actively engaged with gubernatorial duties until confirmed by the U.S. Senate which is likely to occur in late March or early April. To add to the sub plot of all this is who will be nominated to fill the vacant Lieutenant Governor position as current Lieutenant Governor Mark Parkinson advances to the top spot when Sebelius departs. Our Kansas constitution allows the governor to name the replacement. Whomever he picks will have the inside track on the Democratic nomination for the office of governor in 2010 (remember Parkinson has said that he will not run in 2010). Very early speculation includes these potential nominees: Joe Reardon, mayor of the Unified Government of Kansas City, Kansas, and Wyandotte County, state Senator Laura Kelly of Topeka, State Treasurer Dennis McKinney, and state Representative Raj Goyle of Wichita. Of course these are all politicians and someone from the business community or elsewhere could emerge. The likely Republican candidate will be retiring Senator Sam Brownback or Kansas Secretary of State Ron Thornburgh.

BUDGET

Work on the fiscal year 2010 budget continues to absorb most of the bandwidth at the statehouse. The first six weeks were dominated by making the cuts in the current year spending plans, and now attention is turning to the federal economic stimulus package and how states are and are not allowed to spend the billions of dollars sent their way. For Kansas, the funding is estimated to total $1.7 billion over the course of the next two years. Governor Sebelius presented lawmakers with a Governor’s Budget Amendment (GBA) outlining her recommendations for where the funds could best be appropriated for the FY 2010 budget.

Her recommendations call for investing the funds in K-12 education, higher education, health care and general fiscal stabilization. Clearly, the amendment reflects both the Governor’s priority of education and the restrictions of the stimulus dollars. The GBA also calls for an expansion of the State Children's Health Insurance Program (SCHIP), called Healthwave, to 250% of the federal poverty level which would allow more Kansas children to access the statewide health insurance program. It is estimated that this step alone would insure an additional 8,000 young Kansans.

The Legislature is diving deep into the details of the Governor’s budget proposal and in most quarters, reacting positively to the recommendations. It is likely that final decisions on where to invest these additional dollars will not be made until the omnibus budget bill is crafted in April when it is hoped more details about the restrictions on use of the funds will be known.

PROPOSITION K

The House Taxation Committee held hearings on HB 2150, legislation referred to as Proposition K, which would bring sweeping change to the state’s property tax system. Prop K would do away with the current ad valorem system and impose a capped 2% standard increase across the board. Proponents of the measure claim the current system is flawed and note that appraised values and property taxes have increased nearly three times the rate of inflation. The proposal has been developed largely by business groups headquartered in Wichita and others who often advocate for low taxes or artificial budget caps. Prop K supporters argued that the new system would bring predictability and transparency to property taxes. Opponents, however, question the constitutionality of the measure. The constitution states that property tax must be assessed uniformly and equally based on market values. Therefore, the opponents of the measure argue that Prop K would not be based on market value and, over time, would become unequal. Tax Committee Chairman Richard Carlson appointed a subcommittee to study the measure further and the subcommittee is scheduled to begin meeting next week. It is highly unlikely that this measure will advance in the 2009 session.

SALES TAX HOLIDAY

Hearings were held this week in the House Taxation Committee on HB 2328, a bill which would impose a sales tax holiday directed at exempting from sales tax back to school items families purchase including clothing, computers and computer related items. The four-day “holiday” would take place near the first weekend in August. Proponents argue the sales tax holiday will allow Kansas retailers the ability to compete with border states who currently have similar tax holidays while helping families by easing their tax burden. Opponents expressed their concerns for the loss of tax dollars. The measure carries a $5.7 million fiscal note for FY 2010 which makes its passage extremely unlikely.

LIQUOR LAWS DEBATED IN SENATE

The Senate Federal and State Affairs committee, chaired by Salinan Senator Pete Brungardt, worked SB 76, which would have allowed the sale of cereal malt beverages of a higher alcohol content to be sold in convenience stores and grocery stores statewide. The measure failed to receive a second in committee and therefore died without advancing to the full Senate. So, we’re still safe from “strong” beer being sold anywhere but liquor stores for the next year. Meanwhile, the Kansans who want wine shipped directly to their home like other Americans can embrace SB 212. It has advanced from the Senate Federal and State Affairs Committee onto the Senate floor for consideration and is likely to become law this year.

ANNEXATION BATTLE IN THE HOUSE

The House is scheduled next week to debate HB 2029, a controversial annexation measure which would prohibit annexation in a number of ways including entities from annexing any portion of a tract of land which is 21 acres or more and devoted to agricultural use without consent from the landowner. Many cities testified against the measure in committee arguing that it would greatly reduce their ability to carry out much needed annexations. Floor debate is slated for Wednesday in the House.

DEATH PENALTY REPEAL

The Senate Judiciary Committee has advanced legislation which would repeal the state’s death penalty, reversing a decision the committee had made just the day before to NOT advance the measure. Opponents of the death penalty argue that, with the state’s budget shortfalls, the scarce resources shouldn’t be spent on capital punishment cases. A recent audit showed that death penalty cases cost as much as $1.2 million to the state as compared to $740,000 for other murder cases. The bill calls for the death penalty to end July 1, but current cases on death row would not be affected by the legislation if enacted.

ENERGY BILLS ADVANCE

Legislators ended the week giving a strong vote in the Senate to a broad energy policy measure. A 31-9 Senate vote sends the measure to the House where a similar, but not identical, bill was passed last week. Common to both measures was language clearing the decks for two coal-fired power plants to be constructed in Holcomb, Kansas.

Word from the Governor’s office has been clear: the measures are veto material and the legislature would have to muster 2/3rds vote in both chambers to override her veto. Clearly, the Senate vote indicates that wouldn’t be a problem, but the House is still up in the air.

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