While the calendar is moving by quickly, the number of bills being worked is still on the low side. Some may think that is a bad thing, but remember that no action means things stay as they are with no change which may be a good thing.
Several issues are beginning to come into focus as regular session moves into the final 2 weeks. The first one I will mention is the budget. A preliminary budget was passed a month ago making some changes and reductions to certain programs to get it to balance. Since then, revenues have come in lower than anticipated, so the budget adjustments just passed are already out of date. It appears additional budget work will wait until later in April after the new revenue estimates are finished. If any additional expenditure adjustments have to be made, there will only be about two months for departments or agencies to adjust for the changes.
Now for the school equity issue. The House and Senate leadership have apparently decided to tackle the issue slightly differently. The House Appropriations committee heard a bill that reinstates the local option budget (LOB) and capital outlay, which is the equalization part of the court decision. With that, the id="mce_marker"7M in extraordinary needs money is redistributed, plus about $23M, to make it equitable. The House bill was not popular in committee, so it is unlikely it will pass out.
The Senate, on the other hand, wants to try simply redistributing the same money within the system without adding any new money to fund the equity decision. With either plan, some schools would gain funding for 2017 but others will lose. Because of oil and gas valuations going down, the LOB plays a big part in who gains and who loses. The Senate bill has passed committee for full Senate consideration.
Several bills have been introduced as a result of the A&M efficiency study. Drawing the most attention are proposals to move all purchases for supplies and insurance to a large State pool. If that were done, smaller local vendors for insurance, lawn mowers and paper, as examples, may not be able to compete for business. On several of those ideas, it may save money up front but may cost on the back side.
HB 2444 had a hearing in Tax Tuesday. That bill would eliminate the non-wage tax exemption and would apply the proceeds to reducing sales tax on food. Rumor says when the bill is worked in committee there may be an amendment to simply put income taxes on the non-wage income but not apply the proceeds to food sales tax. Kansas has the second highest food sales taxes in the nation so while it may be nice to reduce those taxes, the fact remains that overall revenue for the State continues to be lacking since the 2012 tax cuts.
It is a well understood concept that spending is controlled by keeping revenues down. However, Kansas tax revenues are so low that funds are being taken from other sources not intended to be used for annual expenditures. This is creating a deficit spending situation, one which cannot continue much longer. As a legislature, we need to decide if we need to cut programs the State should not be doing, increase taxes or implement a combination of both. The sooner we do this the better.