Legislature Report From Don Schroeder

By KBBE News
May 25, 2017

The session is beginning to sound like a broken record. Not a lot of action in the House or Senate. However, some serious scrambling is going on behind the scenes to find the right combination of tax, budget and school funding to finish up.

The Senate Ways and Means committee passed out a budget some time back, but the House budget continues to languish in the Appropriations committee. Appropriations needs to meet at some point and finish making amendments and changes to finalize the budget. Things are in enough turmoil that it is unknown when those finishing touches will be done. My concern is that if the clock runs too long, the session may simply adjourn without solutions for some of the pressing issues. Constitutionally, we must have a balanced budget, but we it seems we simply cannot get there.

HB 2410, the school funding formula, was on floor debate Wednesday. It passed out of the House relatively easily on final action so it will be going to the Senate. The K-12 budget committee passed 2410 out of the committee about a week ago. Nothing had been done since then other than some discussions regarding the contents and computer runs showing the effects on school districts in the State. One of the original goals was to hold all schools harmless, so every district would not have a funding cut.

The problem that has arisen is that a couple of districts have seen fairly dramatic student count losses in the two years the block grants have been in place. Under a funding formula, State money received by the school would be based on student numbers. The formula magnifies what the problem with block grants is, namely that there is little correlation between block grant funding and student numbers. While some schools have seen large student number decreases, other schools have seen student number increases. Both sides of the issue realize the same funding they received two years ago regardless the student count. The new formula would adjust for that issue.

House and Senate tax committee conferees, those being the Chair, Vice Chair and ranking members of the tax committee, have been meeting often to try working out some type of revenue plan that could actually pass both the House and Senate. So far, no luck. They met again recently and as a result of that at some point we will look at another proposal which is a two-tier income tax plan mixed with several other things. Several of those things do not necessarily relate to income taxes but are put in there to attract votes.

The bottom line is that either we add at least $500M in additional revenue or cut the same amount from the budget. Of course, $500M is enough in the Kansas economy to have a potential effect if taxes are raised that much. On the other side, a $500M cut to the budget is an impossible amount to cut without dramatically affecting basic programs. It has become a classic catch-22 issue.

There was a new proposal talked about that purports to balance the budget without raising taxes. In studying it, what happens is the part of the tobacco settlement is securitized (sold) for a lump sum and the revenue growth numbers are simply bumped up to make the overall numbers work. It does not appear to be a viable solution at this time.

We are in week four of the ‘veto session’ with no light at the end of the tunnel and just past day 100. Apparently we are adjourning the session for a 4 day weekend and expect to be back on Tuesday. Of course, everyone is ready to finish up and get back home, but we also understand we were elected to do a job and need to remain until a solution can be found.