Don Schroeder Legislative Report

By Don Schroeder
January 23, 2015

Week two of the legislative session has come and gone. Probably because of a concerted effort of the Speaker and the Senate President, things are moving faster this year, but we have a long way to go. Budget issues are on everyone’s mind. Most of the regular committees and the budget subcommittees will meet next week.

When I reported last week, budget proposals were not yet available. Since then I have attended several meetings explaining the current and future budget proposals. Briefly, for the current 2015 fiscal year adjustments, the Governor is proposing taking an additional $150M from KDOT. $263M is already supplied for non-KDOT purposes and the $150M would be in addition. This would total $413M for the current 2015 fiscal year

Also proposed is sweeping $55M from KDHE. This is money received from the Federal government in additional reimbursements for medications in the Medicaid program as provided in the Affordable Care Act. Approximately $31M is to be repaid. Several other fund sweeps between $3M and $18M require Legislative approval.

Changes that the Governor can accomplish on his own are withholding nearly $41M in employer contributions to KPERS and the allotment reductions of 4% for Departments and agencies. Also proposed is an increase in tobacco and liquor taxes and freezing the income tax rates at the 2016 level as a boost to revenues.

As for the 2016 budget, several proposals are on the table. The Governor wants to get a handle on the three largest cost drivers in the budget. Those are: K-12 education, social services and KPERS. The plan is to further pare down social service costs through elimination of caseloads and improved efficiencies through Kancare. In regard to KPERS, the Governor is encouraging bonding up to $1.5B to shore up the unfunded liability and also to move the amortization period out by 10 years to 2043. That is similar to refinancing your house for a longer time. The payments may be lower, but for a longer time and the bottom line is more interest is owed by the end of the period.

Finally, the K-12 proposal is to sunset the current funding formula and replace it in the future. In the meantime, block grants will be made to School Districts for funding at current levels until a new formula is devised. Again, we will learn more as time goes forward. I have some concerns about sunsetting the formula before a new formula is in place.   How this may affect rural schools is unknown.

Overall, the 2016 and 2017 budget proposals have not received much attention yet, but additional KDOT funds of $100M each year is proposed to be transferred. If everything is added up, it looks like transfers from KDOT would be $1.139B over three years.

It is a pleasure to serve the People of Kansas as your Representative. Please call or email if you have questions or issues to address. My phone is 785.296.7500 and email is [email protected] . Planned forums on January 31 are in Burns and Peabody. Please call my office assistant for further details.