Day 90 + 1
After ten days of Veto Session, the legislature has made little progress on the state budget and might have gone backwards on tax policy. Last week the Senate shot down another tax plan. This plan was like one passed during the regular session but ultimately vetoed by Gov. Brownback. The plan would have closed the LLC Loophole, stopped the glide path to zero income tax and reverted to a 3-tiered tax bracket again. Overall, it would have raised nearly $1.1 BILLION over the next two years. This is a bill most democrats and moderates campaigned on but the x-factor is the cost of school finance plan.
Many are hesitant to pass a tax plan before the final numbers are in for school finance because the tax plan may not raise enough money to fund both. This would lead to another fight on raising taxes and another vote. So, we wait until they complete the school finance issue.
Speaking of the school finance issue, it has long been agreed that funding levels should be increased by $150 million per year for 5 years, for a $750 million bump. However, this bill has been amended nearly 60 times, with dozens more amendments to come. Many of these additions will require more money. How much more is unknown, but democrats believe leadership is using the amendment process to create a bill so large, it is impossible to fund. The endgame for this strategy is to run out the clock without a school finance plan, force an agreement on a smaller plan with the promise to fix it later, allow some of the governor’s proposals (securitization etc.) to be discussed again, and pass a much smaller tax increase with some cuts. For conservatives/leadership to accomplish this, they must break the Mod/Dem coalition built upon school finance. How this plays out remains to be seen.
For KBA purposes this has been a good week. Both chambers have passed HB 2153 dealing with public benefit corporations, and the bill now heads to the governor’s desk. Special thanks to the KBA General Corporation Code review subcommittee chaired by Bill Matthews. Members include, Bill Quick, Prof. Hecker, Prof. Harper-Ho, Joe Jarvis, Bob Alderson, Bill Wood and several members of the Kansas Secretary of State’s Office. Once signed, this brings to a close a nearly three-year project to update the Kansas General Corporate Code.
Also, the judicial budget got their extension on a surcharge bill passed last Thursday. The bill will now go to the governor’s desk. I am happy to report that the judicial budget will be funded to requested levels, sans pay raises for employees. Democrats bit their tongues in voting for the surcharge bill because this single provision raised a fee from $59 to $100. Many thought this was too large an increase on individuals already having difficulty paying fines/fees. Rep. Carmichael carried the issue to the Democrats during caucus and did a fine job of clarifying the issues. Many thanks to him.
Beginning next Monday, both chambers will work 7 days a week till the job is done. Items that still need to be completed are FY18 & FY19 budgets, the school finance formula & a tax plan to pay for it all. This could take a while.