Legislative Update: Rep. Don Schroeder

By Rep. Don Schroeder, 74th District
January 22, 2016

As we begin the second week of session, it is anticipated the pace will pick up considerably. If we have any hope of a shortened session, we will need to kick things in gear.

The first thing I need to do is correct something I said last week. I stated that actual State revenue is near or even at an all-time high. However, after rechecking, the actual revenues are not the highest ever but are somewhat below the high mark set in 2012 before the tax cuts were implemented. Tax revenues are increasing annually, but not as quickly as in the three years prior 2012.

In checking on revenues, I also discovered the bond and interest payments required of the State increased by almost id="mce_marker"00M in 2016 and will increase another id="mce_marker"5M above that for 2017. That makes over $500M in bond and interest payable each year. And, yes, some of that comes out of the general fund but most is from KDOT. It concerns me that state debt is increasing rapidly while tax revenue receipts are slow. All this is happening while three big drivers in the Kansas economy, oil & gas, agriculture and aircraft industries are lagging.

Maybe on to a little lighter subject matter. Monday was a State holiday so not much has been done so far this week. Last week there were meetings to review the efficiency report and the governor’s budget proposal. Legislative members are still reviewing the efficiency report, looking for ways to make state government more efficient. I have not finished looking it over yet but soon came to realize some of the recommendations make sense and should be easy to implement but some of them will not be so easy, if they can be done at all.

It’s also interesting to note that one of the recommendations actually says to increase funding for the revenue department to more quickly process tax returns and payments as a way to bump up revenues. Another way to manage expenditures could be to wait with paying vendors until 30 days rather than the current 10 days. The interest gained could be significant, but one has to wonder if the vendors will simply bump up their prices slightly to make up the difference.

As for the Governor’s budget proposal, there is a shortage of about id="mce_marker"70M for 2017. The Governor has proposed several transfers, including additional KDOT money, to close the gap. I am amazed these types of transfers continue and wonder how many more times this can be done until the well runs dry.

One of the other, non-budget issues we will likely see is the property tax vote. This proposal requires a vote on property increases with only a few exceptions. There are questions as to whether the time frame for voting as set out in the bill is even workable and if the exceptions are too restrictive. Of course, the cost of having an election is not cheap and local government will need to pay for that. It will be an interesting debate and what the final proposal will look like remains to be seen.

It is unknown whether a new funding formula for schools will be brought forward. For 2016 and 2017 the schools are being funded with a block grant. A block grant simply means there is a fixed amount of funding. The best information says that issue will likely wait until next year, but around here you never know what may happen next.