Thursday, March 14, 2013

Senate Tax Plan Advances; Guns, Elections and Charter School Debates Continue

Senate Advances Revenue Plan; Budget Next

The Kansas Senate last night gave tentative approval to a modified version of the Governor's revenue bill, a key step in avoiding cuts in K-12 education funding.  Final action on HB 2059 is scheduled for today.

The bill is projected to raise $316.2 million more than the current law in Fiscal Year 2014 and $276.5 million in FY 2015.  The largest revenue measure in the bill is maintaining the state sales tax rate at the current 6.3%, rather than allowing it to drop 5.7% on June 30, as scheduled under current law.  The Senate Committee of the Whole modified another component, allowing a gradual phase-down of state income tax deductions as the state income tax is reduced.  This measure raises $103.8 million in FY 2014 and $119.7 million in FY 2015.  The Governor had proposed immediate elimination of the home mortgage interest and property tax deductions.

The committee turned back several amendments to allow the sales tax to drop on June 30.  Those efforts were mostly supported by Democrats and moderate Republicans who had originally supported the sales tax when it was adopted as a three-year emergency measure.  Supporting the sales tax extension were many conservatives who had opposed the sales tax increase when it adopted three years ago.

The Senate version also contains the Governor's proposal for continuing reductions in state income tax rates. Those cuts could produce another budget shortfall if state revenues growth slower than historical averages.

Also Tuesday, 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 Senate version, the House 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.

Unlike the Senate version, the House bill has a different approach to future income tax cuts, similar to a formula that passed the House last session.  In any fiscal year that state general fund revenues exceeds 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 Governor's original tax plan was expected to raise $455.4 million in FY 2014 and $356.0 million in FY 2015.  The House committee plan raises $287.4 million in FY 2014 and $290.5 million in FY 2015, but much less beginning in FY 2016.  The Senate plan raises $316.2 million in FY 2014 and $276.5 million in FY 2015, but revenues begin to decline in FY 2017 and FY 2018.  Because both the House and Senate revenue proposals raise less than the proposals in the Governor's budget, each chamber will have to make adjustments to either reduce spending below the Governor's proposals or reduce the state general fund ending balance.

This morning, the Senate Ways and Means Committee begins assembling its version of the state budget bill for the next two years.  The House Appropriations Committee approved its version Tuesday.

School Board Elections Hearings Underway

The Senate Ethics, Elections and Local Government Committee yesterday opened hearings on SB 211, which would move local elections to November of EVEN-numbered years and make these elections partisan, and on SB 145, which moves local elections to November of ODD-numbered years and makes the elections partisan.  KASB Region 3 Vice President Gail Billman represented KASB in opposition to these changes.  The hearing continues at 9:30 a.m. today.

The House Elections Committee delayed its scheduled hearing on HB 2227 until this afternoon 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.

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

Guns in Schools Bills Not Amended

The House will take final action today on HB 2055.  The bill requires most public buildings to either provide specific security measures, such as metal detectors, or allow persons with concealed carry licenses to carry weapons into the building, but specifically exempts school districts from this requirement.  The bill also allows 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.  No proposals to change these provisions were proposed.

However, the Senate Federal and State Affairs Committee holds a hearing today 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 continues discussion today on 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.  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.

Also today, the committee receives a report on student achievement by the Kansas Policy Institute. A hearing on HB 2400, which appears to provide tax credits for contributions to scholarship programs for special education students attending private schools, is now scheduled for a hearing next week.  

Open Records, Meetings

Wednesday, the Senate Federal and State Affairs Committee held 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 opposed the bill because of the potential high cost of complying with certain records request.  The sponsor of the bill, Sen. Jacob LaTurner, R-Pittsburg, proposed several amendments that would address some of KASB's concerns.  The bill is not expected to received further action this year.

Audits and Innovative Districts in Senate Education

The Senate Education Committee hold hearings today on HB 2349, which directs the Division of Post Audit to conduct three school district efficiency audits each year, and on HB 2319, which authorizes school districts to become designed as "innovative" districts and exempted from most state school laws and regulations in exchange for higher student completion standards.  KASB supports both bills.  Tomorrow, the committee hears HB 2109, which extends the military student second count date.

Other Issues

Today, 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, and 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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