For most of the week, the legislature was still idling as we waited for the budget and tax committees to finally engage the gears and start moving things along. Late in the week, the Tax committee began hearings on a variety of bills to explore different tax options to close the budget/revenue gap.
This part of the Legislative session is typically the most difficult as sometimes things move at a snail’s pace, and then suddenly we are supposed to hurry a vote on something. The elements of delay and surprise are used, depending on the situation. An example is that Monday, no budget or tax committee meetings were scheduled and we only met for 10 minutes on the House floor. Of course, the budget and tax committees are the two that have to meet to reconcile the budget with revenues.
One committee that did meet on Monday was a commerce committee. They met to amend the ‘uncork’ bill with a county option. Apparently someone has been assured a vote would be taken on this proposal. This is the seventh year the Legislature has had this issue before us and so far it has not passed.
Tuesday, the tax committee met and simply reviewed the Governor’s proposals to increase the tobacco and liquor taxes as well as the tax amnesty. There is conflicting information about how much revenue those taxes would actually raise, but as proposed, the total is slightly over $200M. The current difference between the proposed budget and revenues is $422M.
House Tax heard a proposed five cent increase in fuel taxes, including adding the five cents for off-road fuel, also known as dyed diesel. As written, the five cents is supposed to sunset in three years on the clear diesel, but would remain on the dyed diesel. The clear diesel is for highway use. The entire package would raise about $96M for the highway fund. The other part is that the $96M would be immediately diverted to the SGF, which is a tortured path to get it into the SGF.
Earlier in the session a bill was introduced to change the use value appraisal of farm land, increasing the taxes significantly and recently a bill was introduced in the Senate to put a $3 excise tax per acre of farmland. Obviously, the ideas continue to flow as the search for a solution to the revenue questions continues. It just seems the most sensible thing would be to simply reverse the problem created in 2012. The next week or two could determine the direction of the State for years to come.
House action late in the week saw the Renewable Portfolio Standard (RPS) go from a 20% by 2020 mandate to a voluntary 20%. All utilities in Kansas except one are already at the 20% level and this was agreed to by all parties. The agreement should bring more business certainty to the industry.
House floor action also had two amendments on a bill to adjust sentencing for drug possession. One amendment would allow the purchase of hemp oil for medical use and the other allows industrial hemp production in a farm operation. Generally hemp products have very low THC levels, which is the hallucinogenic product.
The 90thday is May 16, but it appears we will not finish by that time. At this point there does not seem to be a majority of votes for any tax or budget proposals, and the courts are deciding the fate of the block grants and school funding as I write this. One thing is certain, we will remain in session until a solution is found.