2011 Session: Veto Session Continues

This week marked the first full week of the Veto Session. As I’ve mentioned in previous updates, Veto Session is traditionally dedicated to addressing bills approved or vetoed by the Governor and finalizing the state budget. Several conference committees were able to reach agreements on crime legislation, tax legislation and KPERS reform over the course of the week. As of Friday afternoon, the conference committee on the budget was still working to reach a compromise and we will not finish the 2011 session until an agreement is reached.

The main point of contention on the budget revolves around the ending balance. The House has stated we have a goal of achieving an ending balance in the $50 million range. Recent history has consistently shown that revenues will remain erratic as the economy struggles to stabilize. Without a sufficient ending balance, a drop in revenues could force the Governor to issue allotments. The budget process is tedious, requiring flexibility, patience—and time. The original negotiations began with over 230 items of disagreement. Even with progress on over 100 issues this week we still face a number of critical and difficult decisions. These items represent months of work on behalf of dedicated budget committees and subcommittees who spend countless hours reviewing each item in the state budget. If the bargaining process is ultimately abandoned for allotments or across the board cuts, this painstaking work is voided. Allotments are less targeted and impact far more individuals and services than what is proposed in the budget. I remain hopeful the new week will revive efforts to come to a final resolution. As we wrap up work on most other topics, the pressure to build a final package will mount next week. While it’s important to make certain we come away with the best product possible, the time has come to finish our work. I look forward to the vote and am eager to return home for the year.

Funding Flexibility for Schools (H Sub for Sub for SB 111)
As budgets remain strained, some of the most direct focus on funding has been drawn to schools. Constituting the bulk of our budget in Kansas, schools account for a tremendous amount of our budget. Accordingly, as we work to reduce spending it’s difficult to ignore school budgets as part of the debate. One consistent focus in this area involves “unencumbered funds” which some contend could be used to help close budget gaps. After researching these accounts, the House passed an important piece of legislation this week that identifies truly unencumbered funds and allows local districts to use them for more critical purposes if revenues decline.

The bill allows school districts to expend a portion of their unencumbered balances in particular funds for use with: at-risk education; bilingual education; contingency reserves; driver training; parent education; preschool at-risk; professional development; summer school, virtual schools and vocational education. School boards are not limited to using the funds on the priority list and are not required to use the total unencumbered balance before using the unencumbered balance in other funds. This bill gives school districts the opportunity to access some of the approximate $358 million in unencumbered funds in over 90 percent of the state’s school districts. These are funds districts have received from the state which have been accumulating in a variety of school district accounts due to use restrictions. To offset the loss of base state aid per pupil (BSAPP) funding, the bill allows districts to use their reserves to help make ends meet. For more than 90 percent of the State’s school districts, funds would be sufficient to restore the BSAPP to $4,012 from $3,762 for the 2011-2012 school year. Furthermore, the bill requires at least 65 percent of the surplus funds to be used on instruction thus protecting teachers and classrooms from budget cuts. A conference committee will be meeting to work out the differences and let’s hope they can move quickly to reach an agreement because this legislation provides school districts with the funding flexibility needed to protect our teachers and classrooms.

Kansas Offender Registration Act (H Sub for SB 37)
SB 37 makes several changes to the Kansas Offender Registration Act to bring Kansas into compliance with the federal Adam Walsh Act. The bill requires offenders to register in person with law enforcement within three business days of coming into any county or location of jurisdiction where they reside or intend to reside, maintain employment or plan to maintain employment or attend or intend to attend school. Offenders must report in person four times a year to law enforcement in the county or city where they reside, work or attend school. If offenders change their name, residence, employment status or school attendance, they must re-register within three days of doing so and provide notice to the KBI. On Thursday, May 5, the House adopted the conference committee report 118-0. The Senate must adopt the conference committee report before the bill can be sent to Governor Brownback for his consideration. I’m confident they’ll do so because this is sound public policy for our communities, which I was proud to support.

Expensing and Job Creation Program Fund (House Sub for SB 196)
SB 196 allows Kansas businesses who purchase equipment and software to take state tax deductions on equipment and software purchases by immediately expensing these purchases instead of requiring smaller deductions over several years. Expensing would allow Kansas businesses to save $47 to $50 million in taxes each year and dedicate those funds to other priorities like job creation and wage increases. If enacted, Kansas will be the first state in the nation to take this action which provides uniform income tax treatment for businesses of all sizes while encouraging broad-based business growth

This is an important tool for businesses working to create more with less, and by incentivizing their growth we help business both large and small create more jobs and help our economy rebound. That’s how we’ll ultimately create and sustain jobs, which makes this critically important work right now. Previously we have enacted a variety of tax policies to advance business development but they have only helped a small number of businesses and, unfortunately, more Kansas businesses have NOT benefited from tax incentives. In the 2008 tax year alone, only 14,300 of the state’s 221,000 enterprises received tax incentives. Research suggests that Kansas must establish an environment that induces business creation and expansion, regardless of size, to create more jobs and we must have a tax policy that maximizes economic growth and encourages businesses of all sizes to invest in the state.

The bill also allows for a new income tax check-off on the state individual income tax form where taxpayers could voluntarily contribute to the Kansas Hometown Heroes Fund. All moneys deposited in the fund must be used solely for funding the operations for the veteran’s services program under the Kansas Commission on Veterans’ Affairs.

KPERS Update
On Wednesday, legislators were able to reach a compromise in resolving the solvency of KPERS. The plan creates a 13 member commission to study the feasibility of a 401(k) like plan and requires the commission to make recommendations to the Legislature during the 2012 session. The current unfunded KPERS liability is approximately $8 billion, ranked by some as the 2nd worst pension system in the United States. It’s something we’ve needed to address for quite some time, and while this is productive first step, it’s certainly an issue we’ll be forced to continue working on.

Sign Unveiling Ceremony
Please mark May 27th on your calendar which be the official sign unveiling by Kansas Department of Transportation at the intersection of US Highway 81 and Highway 18 to honor Captain Donald K. Ross from Beverly. HB 2003 was signed into law at the Veterans Memorial in Lincoln County April 1st by Governor Brownback in front of a large group of veterans and hometown crowd. It renames Highway 18 from the Ottawa County line to the Russell County line through Lincoln and Ottawa Counties. Captain Ross was presented the Medal of Honor by Admiral Chester Nimitz on April 18, 1942, becoming the first World War II recipient of the Medal. Captain Ross was 30 and the chief engineer on the battleship Nevada when the Japanese attacked Pearl Harbor on Dec. 7, 1941. Wounded and blinded by a bomb, he remained at his station until the Nevada was beached, keeping the ship's machinery running and preventing it from sinking and blocking the harbor. He was the first of 16 Pearl Harbor heroes who received the Medal of Honor, 12 of them posthumously. Captain Donald K. Ross died at Bremerton, Washington, on May 27, 1992 and his ashes were scattered at sea over the USS Nevada. This bill has been a grassroots effort for several years by the citizens of Beverly and Lincoln County residents - they will now see their hometown hero honored and remembered by all who travel Highway 18 in North Central Kansas.
I hope you have been tracking the legislature’s work in Topeka. I’m always anxious to hear your thoughts on how the issues discussed by the Legislature affect you. Reliable feedback is very important in making sure I’m accurately representing my friends and neighbors here in the district. Please feel free to call or email and I’d be happy to discuss any topic you are interested in. Thank you for the honor of serving you.

Rep. Elaine Bowers
Kansas State Capitol Building
300 SW 10th St.
Room 54-S
Topeka, KS 66612