Kansas agency fee hikes irk some state lawmakers
Topeka ? Kansas residents soon may have to pay more if they want to be licensed as beauticians, tattoo artists, stock brokers or even financial advisers.
But the new money generated by the increased cost of testing and licenses is not needed to fund the agencies that issue those licenses. Rather, some lawmakers complained this week, the additional funds are needed to make up for money that has been swept out of their bank accounts to pay for shortfalls in the state general fund.
“The purpose isn’t to pay the costs of the agency,” said Rep. Jim Ward, D-Wichita. “That’s not what this is about. This is about raising money that they expect to be swept into the state general fund.”
Ward serves on the Legislature’s Joint Committee on Administrative Rules and Regulations, which met Monday to review proposed new regulations from several state agencies, many of which involved increasing the cost of various licenses and permits.
He was speaking primarily about the Kansas Securities Commissioner’s proposal to raise the cost of brokers and dealers to $60. While that would be only a $5 increase, members of the panel said it is not needed because the commissioner’s office already generates far more than it needs to fund its operations.
In fact, Securities Commissioner Josh Ney told the panel, the agency generates nearly $14 million a year through various fees, while the agency’s total budget is only about $2.9 million a year. The excess, he said, is routinely transferred over to the state general fund.
“I believe what (Ney is) trying to do is ensure that his agency will have $11.5 million to transfer,” said Sen. Vicki Schmidt, R-Topeka, who also serves on the panel. “He’s different than most agencies in that he submits his budget that he needs to run his agency which, quite frankly, is always looked upon favorably because of the transfers that he does.”
Ward acknowledged that it has long been a practice for governors or the Legislature to sweep ending balances out of fee funds at the end of a fiscal year, after the agencies have paid the cost of their operations, in order to bolster the state’s own ending balance.
But he said the practice has grown substantially under Republican Gov. Sam Brownback’s administration.
During the recent legislative session, lawmakers passed a bill giving the governor’s budget director expanded authority to sweep balances out of those funds to make up for anticipated shortfalls this year in the state general fund.
According to information from the Legislature’s Research Department, the administration has taken more than $25 million out of various fee funds and other special revenue funds in the first two months of the fiscal year.
The Securities Commissioner is one of several agencies proposing fee increases.
The Board of Cosmetology is proposing even larger increases in fees it charges for written and practical licensing exams: a $25 increase in testing fees for cosmetologists, estheticians, nail technicians and electrologist apprentices; and a $50 increase in exam fees for tattoo artists and body piercer apprentices.
Last month, the administration swept $700,000 out of the Board of Cosmetology’s account. That was just one part of a $63 million package of budget adjustments and fund transfers the administration made to beef up the state general fund.
The cosmetology board has an annual budget of about $900,000 a year. Before the fund sweep, it was projected to end the current fiscal year with nearly $1.2 million in its account.
Ward and Schmidt both cast recorded votes in opposition to those fee increases, as did Rep. Tom Hawk of Manhattan and Sen. Oletha Faust-Goudeau of Wichita, both Democrats.
Ward also opposed a planned 7 cent increase in the monthly 911 tax on cellphone bills, bringing that fee to a total of 60 cents a month.
While officials from the 911 Coordinating Council told the panel that money actually is needed to pay for technology upgrades, Ward said he opposed the increase anyway because the administration is sweeping balances from the Board of Emergency Medical Services and Board of Healing Arts, agencies that represent people called to respond to 911 emergencies.
Ward said those were only symbolic votes because the committee’s only role is to offer comment and suggestions on proposed regulatory changes. State agencies are authorized by statute to adopt rules and regulations to administer their functions, and while state law sometimes caps the amount agencies can charge for various fees, the final decision is typically up to the agencies themselves.