Wednesday, March 13, 2013

House Budget and Tax Plan, Guns, Elections, Much More

The House Appropriations Committee voted Tuesday to approve a budget bill that reduces spending levels proposed by Governor Sam Brownback, but did not consider any reductions in K-12 state aid.  Also Tuesday, the House Tax Committee approved an alternative to the Governor’s tax plan that raises more revenue that current law, but less that originally proposed by Governor.  We hope to learn today how closely the spending bill matches the revenue bill.

Other issues under considering beginning today include a House floor debate and a Senate committee hearing on guns in public buildings, including schools; hearings on local election changes in both House and Senate committees; continuing discussion of dramatically expanding the state charter school law; limiting charges for open records requests, and much more.

House Committee Budget Cuts Spare K-12 Aid

Governor’s Brownback’s budget recommendations released in January essentially held state general fund spending flat from the current Fiscal Year, 2013, through the next two years, FY 2014 and 2015, and maintained the statutorily required ending balance of 7.5% both years, despite a projected $700 million drop in state revenues due to the income tax cuts enacted last years and expiration of a temporary sales tax increase.  The Governor accomplished this primarily by transferring over $100 million from the State Highway Fund to partially pay for school district transportation weighting and special education transportation; by keeping the state sales tax rate at 6.3% instead of dropping to 5.7% (raising $262.3 million next year), eliminating the mortgage deduction from the state income tax ($162.5 million), and reducing state ending balances.  From the beginning, however, there was strong opposition to the Governor’s proposals on the sales tax and mortgage deduction.

On Monday, the Appropriations Committee received documents showing it had reduced spending below the Governor’s budget by $20.8 million in FY 2014 and $37.7 million in FY 2015.  However, without the Governor’s revenue additions, the general fund ending balance would drop from $568.9 million (9.2% of expenditures) this year to $73.6 million (1.2%) next year, and projected an unconstitutional deficit of $328.4 million (-5.4%) in FY 2015.  That would require either much deeper cuts in spending or additional revenue.  By 6 p.m. Tuesday night, the committee had adopted an untallied batch of additional spending cuts, mostly focused on saving in the state highway plan, a four percent cut to higher education funding, and capping expenditures on state employees.  Although the total impact of the cuts was not yet available, it appears to be somewhere around $100 million each year.  The combined budget bill, containing adjustments in the current year and appropriations for FY 2014 and 2015, was passed out of committee in HB 2231.

The bill adds funding to maintain the base budget per pupil at $3,838 this year and next year, with a small projected increase in FY 2015, keeps local option budget state aid and special education aid at the same level all three years, and provides the formula increases for bond and interest aid and KPERS contributions for school employees.

Alternative Revenue Plan Passes House Committee

 After 90 minutes of debate, the House Taxation Committee Tuesday approved an alternative to the Governor’s revenue plan that was inserted as a substitute bill into SB 84.  (Placing the plan in a Senate bill is designed to expedite negotiations with Senate.)  Unlike the Governor’s proposal, the new bill allows the state sales tax rate to drop from 6.3% to 5.7% on July 1, as scheduled under current law.  However, it keeps 0.4% of the sales tax flowing into the state general fund for the FY 2014 and 2015.  Beginning in FY 2016, the 0.4% would go to the state highway fund.  Under current law, that 0.4% would go to the SHF beginning in 2014.  This change is expected to raise $179 million for the state general fund in FY 2014 and $202 million in FY 2015.  The bill also provides a phase-out of income tax deductions, rather than immediate elimination, raising $108 million in FY 2014 and $87 million in FY 2015.  The total additional revenue under this plan is about $137 million less than the Governor’s plan for each of the next two years.

To entice votes from conservative Legislators, the Governor’s revenue plan also included further income tax rate reductions through 2018, which was projected to create a new budget shortfall.  The new bill has a different approach, similar to a formula that passed the House last session.  In any fiscal year that state general fund revenues exceeded 2%, the percentage increase above 2 percent would be used to automatically reduce state income tax rates under a complicated formula.  In effect, the more state revenues increase over 2% per year, the faster income taxes would be reduced.  If revenues grow less than 2 percent per year, or actually decline, taxes would not be cut.  The committee did not release a document showing long term projections of the plan, but it seems likely the state would again face a budget shortfall in FY 2016, when the 0.4% sales tax portion is shifted to the highway fund.

While this new approach is headed to the House floor, the Governor’s original plan, now contained in HB 2059, is scheduled for debate on the Senate floor today (Wednesday).  Governor Brownback met with the Senate Republican caucus Tuesday evening.  The Senate Ways and Means Committee is scheduled to develop its budget bill this Thursday and Friday.  So far, that committee has also sustained the Governor’s recommendations for K-12 education.  If the Governor’s plan is defeated or substantially reduced, the Ways and Means committee will also have to consider reductions in the Governor’s spending plans.

School Board Elections

Both House and Senate committees hold hearings on major local election bills today.  The House Elections Committee hears HB 2227 at 1:30 p.m.  The bill would shift local municipal elections, including school boards, from April of odd-numbered years to November of odd-numbered years.  However, it maintains the non-partisan nature of these elections and does not require all local officials to run for at-large positions – differences that were included in HB 2271, which received a hearing last month.

The Senate Ethics, Elections and Local Government Committee holds a hearing on SB 211, which would move local elections to November of EVEN-numbered years, and make these elections partisan.  On Tuesday afternoon, the committee announced it would also be hearing SB 145, which moves local elections to November of ODD-numbered years, like HB 2227, but also makes the elections partisan.

KASB will oppose all three measures, based on positions adopted by the Delegate Assembly supporting the current election system.

Guns in Schools

The House will debate three measures dealing with firearms today on general orders at 11 a.m., including HB 2055.  The bill requires most public building to either provide specific security measures, such as metal detectors, or allow persons with concealed carry licenses to carry weapons into the building.  However, as recommended by the House Federal and State Affairs Committee, the bill exempts school districts from this requirement.  The committee did add an amendment allowing local school boards to permit employees who are licensed to bring weapons into school facilities, even if buildings are posted to prohibit concealed carry by the public.  KASB is neutral on the bill because it leaves the decision on local weapons policy for school to the local school board.

However, the Senate Federal and State Affairs Committee holds a hearing Thursday on SB 186, which has provisions similar to HB 2055 regarding security in public buildings, but does NOT exempt schools.  KASB opposes the measure because it overrides the decisions of local boards.

Charter Schools, Common Core and Education Tax Credits

 The House Education Committee Tuesday began working HB 2320, which would allow the State Board of Education, the State Board of Regents, public and private universities, cities and counties, and local schools boards to “authorize” public charter schools that would exempt most state school laws and regulations, and (except for those approved by local boards) essentially operate independently of local boards.  The committee began considering amendments offered by committee chair Kasha Kelley, R-Arkansas City.  KASB strongly opposes the bill, believing that it violates the Kansas Constitution’s requirement that public school be “maintained, developed and operated” by local elected boards.

Today, the committee continues its discussion of Common Core academic standards.  Thursday, the committee receives a report on student achievement by the Kansas Policy Institute.  Friday, the committee is tentative scheduled to hear a HB 2400, just introduced today, which appears to provide tax credits for contributions to scholarship programs for special education students attending private schools.  KASB is studying the impact of the new bill.

Open Records, Meetings

Wednesday, the Senate Federal and State Affairs Committee holds a hearing on SB 10, which would limit fees that public agencies may charge for making copies of documents for Kansas Open Records Act requests, and also requires that all public meetings have minutes kept under a format determined by the Kansas Secretary of State.  KASB opposes the bill because of the potential high cost of complying with certain records request.

School Finance and More in Senate Education

The Senate Education Committee held a hearing Tuesday on SB 244, which would eliminate the virtual, bilingual, vocation, non-proficient at-risk and new facilities weightings, and require the at-risk weighting be prorated in order to achieve a base budget per pupil of $4,492.  There were no proponents of the bill; in fact, Committee chair Steve Abrams, R-Arkansas City, said he did not know where the bill came from.  KASB joined a long list of opponents, including several school districts who said they would receive additional funding under the bill, but opposed shifting funds within the current formula.

Wednesday, the committee holds a hearing on two bills, including HB 2221, which requires schools to provide equal access to employee mail boxes and other treatment for any teacher organization that engages in collective bargaining, professional development or liability protection.  KASB is neutral on the bill.  Thursday, a hearing is scheduled on HB 2349, which directs the Division of Post Audit to conduct three school district efficiency audits each year.  KASB supports the bill.  On Friday, the committee hears HB 2109, which extends the military student second count date.

Other Issues

On Thursday, the House Federal and State Affairs Committee holds a hearing on HB 2197, which makes certain changes to the Kansas State High School Activities Association Board of Directors.  Also Thursday, the House Education Budget Committee holds a hearing on SB 23, which reauthorizes the statewide 20 mill school district levy for two years.

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