Kansas lawmakers left the Statehouse Thursday for a four-day Memorial Day weekend with a lot of work still waiting to be done — and with money to keep the legislative session going quickly running out.
Lawmakers had budgeted for a 100-day session this year, and Thursday marked the 101st day. They've been working, though, with skeletal staff since early May, which probably saved some money. But Thomas Day, who heads the Legislature's Administrative Services Department, has said there is only enough money in the legislative budget to continue paying legislators their daily salary for a few more days.
Because neither chamber will be in session for more than two consecutive days, the four days they're out do not count as "legislative days," and lawmakers will not be paid for them.
That raises the prospect of lawmakers either having to work without pay, and with no clerical staff at all, even for the key committees, or having to pass a supplemental spending bill for themselves so they can finish the job of passing a school finance plan and a budget, both of which will require tax increases to fund.
It appeared on Thursday, however, that the logjam that has been holding back progress is finally starting to break. That's when the House gave final passage to a new school finance plan that would phase in over two years a $280 million increase in annual education spending, with much of that new money targeting the lowest-performing students.
Critics of that plan say they don't believe it is nearly enough to satisfy the Kansas Supreme Court's definition of adequate funding. But optimists in the House and Senate are hoping it's enough of a good faith effort to convince the court not to follow through on its threat to close schools on July 1, although the court could order additional funding in the out years while keeping jurisdiction of the case.
Quietly, though, some lobbyists and lawmakers have been saying that Democrats and moderate Republicans may have overplayed their hand on school finance. By insisting on passing an education bill first, before they would even consider any tax bill, they ended up getting a much smaller funding bill than they had hoped for. And now it appears likely they'll get a smaller tax bill as well.
The tax debate
In February, both chambers passed a tax bill that would have rolled back many of the income tax cuts that Republican Gov. Sam Brownback championed in 2012. An override attempt passed the House but failed in the Senate.
Soon after, the Kansas Supreme Court handed down its decision in the school finance case, Gannon v. Kansas, striking down current school funding as inadequate and giving lawmakers until June 30 to pass a constitutional funding mechanism.
Democratic leaders in the House and Senate said that decision changed the entire landscape, prompting them to insist on addressing school funding before anything else. Others, however, said the outcome of that case was never in doubt, and the March 2 decision should have surprised nobody.
House Taxation Committee Chairman Steven Johnson, R-Assaria, said that passage of the school finance bill now gives lawmakers an idea of how large of a tax package will be needed to fund state government for the next two years, and he'll start working with the Senate in a conference committee to come up with another plan.
Senate back to work
The Senate, which has been pretty quiet for the past week, plans to debate its own school funding plan when senators return from the Memorial Day weekend. That plan — which was recently stripped of Sen. Jim Denning's controversial proposal to fund it through a tax on utility bills — calls for only about $240 million in new spending, phased in over two years. But it would establish a new, per-pupil funding formula similar to the one in the House bill.
The Senate also is expected to debate concealed-carry in the coming week. After learning that the cost of securing just the four state psychiatric hospitals could run as high as $25 million for the next two years, the Senate Ways and Means Committee advanced a bill last week to permanently exempt state and municipally owned hospitals, health care clinics, community mental health centers, nursing homes and other health care facilities from the law that would otherwise require them to allow people to carry concealed firearms starting July 1.
That would also exempt the University of Kansas hospital in Kansas City, Kan., as well as St. Francis Health Center in Topeka, which the KU Hospital Authority is about to acquire, in partnership with Nashville-based Ardent Health Systems.
It would not, however, exempt public college and university campuses from the concealed-carry mandate.
The only other issue that must be resolved before lawmakers adjourn is typically the biggest issue of any legislative session: passage of a budget.
So far this session, the Senate is the only chamber that has even debated and voted on a budget plan, and that was a preliminary budget outline prepared before the officials revenue estimates were updated in mid-April. Since then, the House and Senate budget committees have put together their "omnibus" budget plans, but neither chamber has yet put those bills on the debate calendar.
One option, which would save time but would likely anger many legislators, is for the House and Senate to go directly into conference negotiations on a budget. That's allowed under the fairly lax rules of the Legislature because the issue of a two-year budget has passed out of one chamber and has been considered in committee by the other.
That would mean the full House and Senate would only have the opportunity to vote straight up-or-down on a budget plan negotiated by six people, three from the House and three from the Senate, with no opportunity to offer amendments.
The Kansas House advanced a nonbinding resolution Wednesday that declares pornography a "public health hazard."
House Resolution 6016 has the strong backing of two conservative Christian organizations, American Family Action of Kansas and Missouri, and Family Policy Alliance of Kansas. Lobbyists from both organizations testified in favor of the resolution in the Federal and State Affairs Committee earlier in March. An identical resolution is pending in the Kansas Senate.
Although it does not enact any new laws or regulations, it makes a sense-of-the-House statement that pornography is "a public health hazard that leads to a broad spectrum of individual and public health impacts and societal harms."
The resolution also does not direct county health departments or any other public agency charged with addressing public health hazards to take any specific actions regarding pornography. It does, however, state that "we recognize the need for additional education, prevention, research and policy change at the community and societal levels, and we urge this chamber and other governing bodies to take appropriate steps to ensure progress is made."
"The data is increasingly undeniable and disturbing," Rep. Chuck Weber, R-Wichita, said. "Pornography correlates with a wide range of negative health outcomes including violence against women, child abuse, divorce, prostitution, sex trafficking and addiction."
Rep. John Carmichael, D-Wichita, was the only member of the House who spoke against the resolution. He pointed to such works of art as Michelangelo's sculpture of David and passages in William Shakespeare's play "Romeo and Juliet" as examples of things that some people could construe as pornographic.
Weber, however, shrugged off those suggestions as "ludicrous."
Carmichael further explained his taking exception: "I hope that members of this House, my constituents and the citizens of this state understand that my vote 'no' today, and presumably on final action (Thursday) is not meant as encouragement of violent and graphic depictions, but rather it is in defense of freedom, liberty and the First Amendment, despite the fact that the price of freedom is high."
A bill that would legalize the use of marijuana for certain medical purposes could come up for a vote soon in a Kansas Senate committee, possibly in early March after lawmakers return from their midsession break. But the chairman of that committee isn't predicting its chances of passing.
"I think we ought to vote. We shouldn't try to dodge votes. But I haven't made a final determination on that," said Sen. Jacob LaTurner, R-Pittsburg, who chairs the Federal and State Affairs Committee.
LaTurner said he plans to start working bills in that committee after lawmakers return on Monday, March 6.
Lawmakers adjourned Thursday for a 10-day break after passing the midpoint of the session known as "turnaround day," the deadline for most bills to pass out of the chamber where they originated. But the Federal and State Affairs Committee, which often deals with hot-button social issues, is one of a handful of committees whose bills are exempt from that deadline.
The medical marijuana bill — Senate Bill 155, also called the Cannabis Compassion and Care Act — is the work of Sen. David Haley, D-Kansas City, who said he has introduced it in four of the last five years, with no success so far.
Haley, however, said he thinks "the greater national awareness of medical marijuana" may give it a better chance this year.
In short, it would authorize the Kansas Department of Health and Environment to issue permits for people with certain medical conditions to use marijuana for treatment of those conditions. It also authorizes the creation of nonprofit "compassion care centers" that would be allowed to dispense marijuana to those registered patients.
The medical conditions covered include cancer, glaucoma, positive HIV status, AIDS, hepatitis C, amyotrophic lateral sclerosis, Crohn's disease, agitation of Alzheimer's disease or nail-patella syndrome. People could also qualify if they have any medical condition that results in cachexia or wasting syndrome; severe pain; nausea; seizures; or severe and persistent muscle spasms like those associated with multiple sclerosis.
The language of the bill notes that marijuana use is still a violation of federal law but that states are not required to enforce or prosecute violations of federal law. It also notes that 26 other states and the District of Columbia have legalized the medical use of marijuana.
Haley said LaTurner has not personally given him an assurance that the bill will come up for a vote. "But I know that he is hearing from many of his own constituents in his district in Crawford County that the bill deserves to be heard," he said.
At least one of two bills that would partially roll back a mandate to allow concealed weapons in most public buildings is likely to come up for a vote Wednesday in the House Federal and State Affairs Committee.
Rep. John Barker, R-Abilene, who chairs that committee, told the Journal-World Friday that he plans to consider amendments and possibly vote on one of the bills Wednesday, but he had not yet decided which one.
The first bill, which is considered to have the least chance of passing out of committee, would give a permanent exemption for public college and university campuses, public hospitals and mental health centers as well as other buildings owned by local governments.
A hearing on that bill Wednesday drew a large crowd of people testifying in favor of it. But it is believed there are not enough votes on the committee for it to pass.
The second bill, requested by the University of Kansas hospital, would exempt only the hospital facilities within a defined district in Kansas City, Kan.
That bill is thought to have a better chance of passing out of committee, but it will likely be subject to amendment. Rep. John Whitmer, R-Wichita, a supporter of the concealed-carry law, indicated during a hearing Thursday he would be more amenable to it if the exemption is strictly limited to health care facilities in the complex, not to any residential or other type of buildings that he speculated might be developed in the future like a hotel, restaurant or apartment building.
Unless the Legislature acts this year, the four-year exemption that most public facilities received in 2013 will expire July 1.
Others on the committee, though, have said they might want to broaden the bill to include all publicly-owned health care facilities such as hospitals, clinics and community mental health centers.
Even if the bills fail in the committee, supporters of them have said they will look for opportunities to offer them as amendments to other bills that deal with related topics.
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.
Sitting in the Senate Republican caucus meeting Wednesday as elected lawmakers openly talked about defying the Kansas Supreme Court if it closes schools next month, it was hard for people of a certain age not to think back about Richard Nixon and Watergate.
At the height of that scandal, a federal judge ordered the White House to hand over hundreds of hours of tapes of conversations in the Oval Office that had been secretly recorded. The White House refused and appealed to the U.S. Supreme Court.
The Nixon White House had never been particularly forthcoming with information, and the people there had little apparent respect for the authority of any other branch of government to tell them what they could or could not do, up to and including the secret bombing of Cambodia.
So there was naturally great concern about how Nixon would respond to a Supreme Court order to hand over the tapes — tapes that everyone knew would lead to the search for the proverbial "smoking gun" that would bring Nixon down.
As the political tension reached its zenith, the question being asked in American living rooms throughout the country was, "If the president of the United States doesn't have to obey a court order, why should anyone else?" It challenged the very fundamental American notion that no person is above the law, not even the president.
Ultimately, the only power any court has is the power that the public agrees it has. Its power is based on the shared public acceptance that its rulings, however much one might disagree with them, must be obeyed. Day in and day out, that sentiment generally goes unquestioned in Kansas and across the country.
It was a constitutional crisis in the truest sense of the term. In the end, though, Nixon did turn over the tapes, which did produce the "smoking gun." Whatever support he had left in Congress by that time suddenly evaporated, and before the week was out Nixon had resigned.
Later, during a series of interviews with British TV host David Frost, Nixon gave this bone-chilling assessment about his view of presidential power: "When the president does it, that means it is not illegal."
"By definition?" Frost asked. "Exactly, exactly," Nixon replied.
Frost was asking about the president's power to order covert intelligence operations, both at home and abroad, in the interests of national security. And Nixon's response reflected the kind of expansive view about presidential power that historian Arthur Schlesinger Jr. had described in the title of his 1973 book, "The Imperial Presidency."
Fast-forward to the present and Wednesday’s Senate GOP caucus meeting.
"Eventually, we're going to have to stand up to this court and let them know that we are the Legislature, they are not the Legislature. Capitulating with them is, I think, a poor strategy and would continue to be unsuccessful," said Sen. Jeff Melcher, of Leawood.
"We are the appropriators. We are the policymakers. End of discussion," said Sen. Julia Lynn, of Olathe.
"We're going to listen to a court that can't even follow the law?" asked Sen. Greg Smith, of Overland Park. "They have one job, and one job only, and that is to reason and listen to the evidence and make an opinion. And that's all it is, an opinion. They can't tell us what to do. They can opine, and that's the end of their authority."
In the Nixon era, the fear was that his expansive sense of presidential power could erode the power of the other branches, along with public confidence in them. The president, after all, is a citizen like everyone else. If Nixon could defy the court, why couldn't anybody?
Likewise, if taken to their logical extreme, the comments of those legislators Wednesday might lead one to ask: If the Legislature doesn't have to obey a court order, why should a divorced parent who has been ordered to pay child support? Why should any debtor who has been ordered to repay his creditor?
It seemed that the only thing missing from Wednesday's debate was for someone to stand up and say, "When the Legislature does it, that means it is not illegal."
Burdett Loomis, a Kansas University political science professor and an active Democrat, said it's not unreasonable to think that Kansas is witnessing the emergence of an "Imperial Legislature."
"It does strike me that the Legislature thinks that whatever it does should not be questioned," he said. "And it’s even broader than that. They think they represent the state, so if they want to not enforce federal laws, or reach down to the local level and tell localities what to do, all wisdom resides in the state and the state Legislature."
Loomis, who worked briefly in Democratic Gov. Kathleen Sebelius' administration, said the trend became noticeable after Brownback and his conservative allies swept the 2010 elections in Kansas, wresting control of the Kansas House from the coalition of Democrats and moderate Republicans who had formed an effective governing majority. And it was sealed two years later when conservatives purged the Kansas Senate of most moderate Republicans in the 2012 GOP primaries.
In some ways, Loomis said, what Kansas is seeing now goes beyond what America saw in the Nixon White House.
"I think in the end, it was the legislative branch that came to Nixon and said, you’ve got to go. It was Nixon defying the court in every way," he said. "Here you’ve got both the governor and the Legislature. The governor could have stepped up and demanded the Legislature confront the issues before it. But he was unwilling and they were unwilling."
Brownback so far has not said whether he will call a special session later this month to deal with the school finance issue. And even if he did, it remains unclear whether the Legislature can muster the votes to pass a bill that would satisfy the court.
There was a lot of hall chatter, and more than a few tweets, during the Kansas Legislature's wrap-up session that the House had voted on more than twice as many bills in those final five days as it had in the whole 68-day regular session.
I don't know if that's exactly true, but I have tried to cobble together some figures on the number of bills actually passed by the Legislature and sent to the governor this year, and the results lend some credence to that claim.
By my rough count, sifting through the journals of House and Senate, lawmakers did pass slightly more bills (66) during the wrap-up session than they did in the regular session (62). That's a total of 127 bills for the entire 73-day session (by Senate President Susan Wagle's count), or an average of about 1.7 bills per day.
But what really catches the eye is the number that went through on that final marathon day that started around 12:30 p.m. Sunday and lasted until 3:30 a.m. Monday: 18 bills in that one day, or more than one per hour.
Now, before getting too indignant about that, we should all probably admit that everybody procrastinates. In the news business, there's a saying that if it weren't for the last minute, nothing would ever get done. But many people have asked me why lawmakers always put everything off until the last minute, and the answer is actually fairly complicated. In the Legislature, procrastination isn't just a matter of work habits. It's also about strategy and leverage.
"That’s when the powers that be feel they have the most leverage," said Sen. Tom Holland, D-Baldwin City, who has raised his voice in protest more than once about the slow and odd pace of the Legislature.
Granted, the first few weeks of a session have to be excused because that's the time when eager lawmakers are trying to introduce new bills and, they hope, get them scheduled for committee hearings. That takes time. And even in even-numbered years like this one, when bills are allowed to carry over from the previous session, the House and Senate don't just dive in to those leftover bills because most of them were abandoned the previous year for a reason.
What really drives the legislative calendar, and what makes the end of the session a whirlwind of activity that's nearly impossible to follow, is the fact that every bill in the system can be, and often is, used as a bargaining chip for something else.
That's why the vast majority of action that occurs in the wrap-up session involves conference committee reports in which several bills are bundled together. The practice known as the "gut-and-go" — whereby one bill is stripped of its contents and repackaged with the contents of two, three or sometimes even four other bills — used to be considered rare, and even a bit shady. Today, it has become standard procedure.
And so, even when bills have been through the committee process and are ready to be voted on, they can still be held back to be used as a bargaining chip later when it's time to run conference committee reports. Even seemingly innocuous bills that are noncontroversial can get held back, under the theory that putting them into a package will make passage of less palatable bills a little easier.
Sometimes, though, even that doesn't work. That was the case with the seemingly easy bill to name a bison herd in southeast Kansas after a recently deceased former legislator from that area. It ended up packaged with two bills that a lot of people had problems with: one let private zoos allow children to get up close and personal with dangerous animals like baby tigers and leopards; and another to authorize research into the production of industrial hemp.
Not surprisingly, a lot of senators had qualms about putting children into a tiger's cage. And anything that smacks of legalizing marijuana, or even tilting in that direction, gives most Kansas lawmakers heartburn. But then when somebody changed the effective date of the bison herd-naming bill, angering even the people who most wanted to honor the late legislator, the entire package collapsed from its own weight.
But there was another dynamic this year that bogged the process down even more that has many lawmakers frustrated, and worried for the future if it continues. That was the utter reluctance for the last two years of House Speaker Ray Merrick, R-Stilwell, to allow any bill dealing with certain subjects to be fully debated and subject to amendments on the floor of the House because doing so would open them up to amendments that neither he nor Gov. Brownback wanted to deal with.
Specifically, Merrick has tried to avoid putting bills on the open floor dealing with health care and Medicaid, for fear of a Medicaid expansion bill. The same is true with taxes, for fear of an amendment to repeal all or part of the 2012 tax cuts.
Although the House did vote on, and eventually rejected, a bill to repeal the most controversial of those tax cuts, the total exemption for certain kinds of business income, it's important to note how that bill came out of a conference committee, even though it had never been considered by either chamber before, and it was put into a Senate bill so that, under rules in the Legislature, the House would have to vote first.
Conference committee bills are not subject to amendment on the floor. They are always straight up or down votes.
In fact, of all the House bills that passed the Legislature this year, many, if not most, were actually Senate bills, the result of a gut-and-go maneuver in which the Senate put its bill into the shell of a House bill so that House members would only have the option of voting yes or no on the package as a whole.
Bills are also held back until the final days, not because anyone has designs about the contents of the bill, but because they need the bill number so it can be used as a vehicle to carry something else.
Perhaps the most glaring example of that was the final budget bill itself, Senate Bill 249, which actually began as a bill about purchasing and competitive bidding when it was introduced in February. After it passed the Senate, the House stripped out its contents and inserted a different bill dealing with the authority of state agencies to issue bonds.
The Senate did not go along with that change to its bill, and so it was sent to a conference committee where it became a vehicle for an entirely new bill, the final state budget, a bill that was never the subject of any committee hearings or public testimony — not even on the provision reallocating cuts to state universities — and could not be amended on the floor of either the House or Senate.
As the old saying goes, there are two things most people never want to watch being made: sausages and laws.
Rep. Travis Couture-Lovelady, a leading supporter of a new law that allows people to carry concealed handguns without training or a permit, resigned from the Kansas House over the weekend to accept a job as a lobbyist for the National Rifle Association.
Couture-Lovelady, a two-term Republican from Palco, in central Kansas, was one of the lead proponents in the House this year of S.B. 45, known as the "Constitutional Carry" law, which removed the requirement that people undergo eight hours of training and obtain a permit in order to carry a concealed handgun, as long as they are not prohibited by state or federal law from possessing a firearm.
He was also a sponsor of H.B. 2199, the proposed "Second Amendment Protection Act," which would have excluded guns manufactured and possessed in Kansas from any form of federal gun regulation. That bill became the target of a "gut-and-go" procedure in which its contents were stripped out and replaced with a bill on an entirely different subject.
But the Constitutional Carry bill did become law, and it was immediately lampooned on the late-night comedy TV circuit, including a segment on "The Daily Show," in which host Jon Stewart called it a signal that Kansas had ceased to be a national symbol of normalcy.
Couture-Lovelady confirmed in an email that he will become a multistate lobbyist for the NRA. He said Kansas will be part of his portfolio, but he could not say at the time in which other states he would be lobbying.
The Kansas Senate is expected to take up a tax bill Friday which, if it passes, could bring the 2015 legislative session to a close on its record-setting 113th day. But the bill falls far short of actually balancing the state budget, analysts say.
The House, after working through the night and into the early hours of the morning, finally passed the Senate's tax plan, along with a "trailer" bill that changes some parts of the Senate bill.
That complicated procedure was necessary because Senate Republican leaders have refused to put a second tax bill on the floor.
Combined, the two bills would raise the state sales tax to 6.5 percent and they would slow down scheduled cuts in individual income tax rates. They also include a 50-cent per pack increase in cigarette taxes and a variety of other measures expected to generate $384.4 million in the upcoming fiscal year.
Even with that, House Taxation Committee chairman Marvin Kleeb of Overland Park said, Gov. Sam Brownback would have to cut $30-$50 million out of the budget that passed earlier this month.
But some lawmakers say the cuts will have to be worse than that because they seriously doubt estimates of how much money certain provisions will actually bring in. Among them are:
• A tax amnesty program that would waive interest and penalties for taxpayers who pay up their past-due tax accounts. That's supposed to bring in $30 million next year. But critics say unless the Department of Revenue hires more staff and devotes resources to collecting on those accounts, the amnesty program is likely to fall short.
• A tax on "guaranteed payments" to business partners — a contractual arrangement where partners are guaranteed certain payments regardless of the profit or loss of the business — is expected to bring in $23.7 million. But critics say it would be easy for those businesses to reorganize their structure or change the contracts in order to shield those payments from state taxes.
• And the increase in sales tax, which the bill would make effective July 1, is projected to bring in $164 million. By law, however, retailers are entitled to 30 days notice before sales tax rates can change. And because the session has dragged into the middle of June, Senate tax committee chairman Les Donovan of Wichita said, retailers aren't legally obligated to charge the tax starting July 1, although he believes many will.
Meanwhile, internet and mail order retailers may not be obligated to charge the tax until Oct. 1 because, under a multi-state "streamlined sales tax" agreement, not only do states have to give 30 days notice, they also are only supposed to change tax rates on the first day of a calendar quarter.
The Senate is expected to start debating the second bill at 2 p.m. Friday. If it passes, both the underlying tax bill and the "trailer" bill will go to the governor and lawmakers will adjourn.
But if it fails to pass the Senate — and Donovan says some Senate Republicans will have serious concerns about it — the tax and budget debate will go back to square one.
Republican leaders in the Kansas House offered their "trailer bill" proposal Wednesday afternoon that could pave the way for lawmakers to end the 2015 session. But the process of getting both bills through the House, and then getting the trailer bill through the Senate, could be difficult.
House Taxation Committee chairman Marvin Kleeb, R-Overland Park, outlined the proposal in a conference committee meeting Wednesday afternoon.
The trailer bill would clean up, or completely undo, many of the add-on policies that the Senate put into its tax bill. Specifically, it would:
• Continue the food sales tax credit program in which low-income, elderly and disabled individuals can get an income tax credit equal to a portion of the sales tax they paid on food during the year. The Senate bill called for eliminating that program.
• Establish a commission to review various tax exemptions and credits and make recommendations to the Legislature next year about which ones to keep and which to repeal, a clarify which exemptions are eligible for repeal and which are not. In particular, the commission would not review imposing sales taxes on motor fuels, or items purchased by non-profit hospitals, blood banks or schools.
• Clarify language about a property tax lid on cities and counties, providing a number of exceptions under which those local governments could increase property tax revenue beyond the rate of inflation without having to seek a public vote. One area still hazy in the plan would be instances when property tax revenues grow due to new construction and population growth. Kleeb would only say the bill gives "flexibility" in that area, but did not define that further.
• And modify language in the Senate's bill regarding private school scholarships that pay for low-income students in public schools to transfer to private or parochial schools.
Getting that bill through both chambers could be a difficult task, however. Kleeb outlined the following steps that would need to take place.
First, the House must vote on and pass the Senate's tax plan. If it passes, the House will hang on to that bill - i.e., not send it to the governor - until all the other steps are completed.
Second, the House would vote on the trailer bill. If it fails, the House would vote to reconsider its action on the underlying "mega-bill" and go back to the drawing table to come up with a new plan. But if it passes, the House would send the trailer bill over to the Senate.
If the Senate fails to pass the trailer bill, then again, the House would reconsider its passage of the underlying bill. But if the Senate passes the trailer bill, both would go to Republican Gov. Sam Brownback, who has indicated he would sign them.
Another complicating factor is that many of the items in the trailer bill would repeal or scale back positions that were popular with conservatives in both chambers. So leaders may need to rely on Democrats and moderate Republicans to support the trailer bill.
Rep. Tom Sawyer, D-Wichita, the ranking minority member on the House tax panel, said it is possible that some Democrats could vote for the trailer bill because it improves the underlying bill. But he would give no guaranty until House members see the exact language of the bill.
Sawyer said it is a certainty that no Democrats will vote for the underlying Senate bill.