Tax and elections bills coming up in Week 2

An election bill and the first tax bill of the session are awaiting Kansas lawmakers as they head into the second week of the session starting Tuesday, with most lawmakers coming off of a four-day weekend.

Friday was a “pro forma” day, meaning only a handful of lawmakers in each chamber show up to gavel in, read the introduction of a few bills, and gavel out, ensuring that it counts as a legislative business day, and that they all get their daily salary and allowance. Lawmakers are off Monday for the Martin Luther King, Jr., holiday.

The Senate Ethics, Elections and Local Government Committee will get to work at 9:30 a.m. Tuesday on the elections bill that the House passed on Wednesday. That’s the one that cleans up the outdated statute on special elections to fill vacancies in U.S. House seats. Lawmakers are rushing to get that bill to Gov. Sam Brownback to sign before Rep. Mike Pompeo of Wichita is confirmed as CIA director.

Probably the most exciting hearing next week, however, will be in the House Taxation Committee at 3:30 p.m. Thursday. It will hold a hearing on House Bill 2023, which would repeal the so-called LLC loophole that allows the owners of more than 330,000 farms and small businesses to pay no state taxes at all on the income they derive from those operations.

The bill would repeal that provision, and make the repeal retroactive to Jan. 1, 2017. It also repeals several other minor provisions of the 2012 tax bill dealing with adjustments that the state makes to federal adjusted gross incomes when people use that figure to file their state income taxes.

That law is thought to be the most unpopular part of the tax cuts that Gov. Sam Brownback and conservatives in the Legislature pushed through in 2012, and many of the new legislators who won election in 2016 campaigned specifically on a promise to repeal it.

By itself, though, repealing the LLC loophole would only generate about $250 million a year, give or take. The official “fiscal note” on the bill hadn’t been published at the time of this writing. The biggest part of the 2012 tax cuts — the part that resulted in the largest drop in income tax revenue — was eliminating the top tax bracket for the wealthiest filers and reducing individual rates across the board on the remaining two brackets.

There are members on both sides of the aisle, and in both chambers of the Legislature, who would prefer to see a more comprehensive tax package that would actually put the state back on the road to long-term financial stability, and they fear that passing a stand-alone bill on the LLC exemption will make it tougher to pass any other tax legislation this year.

The traditional practice on tax bills is to bundle several things together so there’s something in the bill for everybody to dislike, but also one or two things that different constituencies want. But that’s usually only successful if there’s a governor who is willing to hold his or her nose and swallow a few things, and Brownback hasn’t given much indication that he’s willing to cave on any part of his tax plan.

That means the only alternative is to put together a broad-based tax package that can get two-thirds majorities in both chambers to override an almost certain governor’s veto. That’s a monumental task on almost any topic, but none more so than tax increases.

Other committees are still in their early stages of the process, getting briefings on various issues and meeting with the cabinet secretaries in charge of each committee’s policy area, mainly for the benefit of new legislators who are unfamiliar with all the details of issues that their committees deal with.

The House Appropriations Committee will get a briefing at 9 a.m. Wednesday on the unclaimed property portfolio. Currently, the state puts a portion of its idle funds, equal to the amount it holds in unclaimed property, into a special investment fund managed by the Kansas Public Employees Retirement System where those assets can earn interest.

Brownback has proposed liquidating those assets and cashing in the estimated $45 million in accrued earnings.

On Thursday, the same panel will hear presentations on the KPERS fund and Children’s Initiatives Fund. Brownback has proposed freezing the state’s contribution into KPERS at 2016 levels for the next two years and writing off the nearly $93 million payment that the state delayed making last year and was supposed to repay this year.

He has also proposed selling off the state’s interest in future tobacco settlement payments, the sole source of funding for the Children’s Initiatives Fund, and putting CIF-funded programs into the state general fund.

The K-12 Education Budget Committee, which will be in charge of writing a new school finance formula on the House side, will hear presentations at 1:30 p.m. Wednesday from Dale Dennis, a deputy education commissioner and expert on school finance issues, as well as Madeleine Burkindine, director of the Schools for the Deaf and Blind.

On the Senate side, the Transportation Committee will hold a hearing at 8:30 a.m. Tuesday on Senate Bill 5, which would enable certain people whose driver’s licenses are suspended for failure to pay a traffic fine to apply for a restricted drivers license.

The Senate Federal and State Affairs Committee will hear from the Attorney General’s office Wednesday on the status of a lawsuit pending at the Kansas Supreme Court challenging an abortion law. It will also be briefed on the state’s concealed-carry law, including provisions set to take effect July 1 requiring most municipal buildings, as well as college and university campuses, to allow people to carry concealed weapons unless they provide adequate security to ensure nobody can bring weapons into the same places.

The Senate Utilities Committee will hear a presentation at 1:30 p.m. Wednesday from the Kansas Independent Oil and Gas Association on the status of the oil and gas industry in Kansas. The Brownback administration asserts that low commodity prices in the oil and gas industry are largely responsible for the sluggish economic growth and lower-than-expected tax revenues in Kansas for the last few years.

The above list is a partial schedule of events, as published in the House and Senate calendars on Friday. All schedules and topics are subject to change.