LEGISLATIVE INSIGHT Number 5, 2010

By: Shirley Palmer, 4th District State Representative

Week 5
I’m happy to report that the pace has picked up significantly in the Statehouse. Most committees had a full schedule on a variety of high profile issues, including: the FY 2010 rescission bill, tax policy, school funding lawsuits, health care, smoking bans, and liquor sales.

My Husband Ron
I’m sure many of you know my husband, Ron, has been very ill and in the hospital with pneumonia and other health issues. We have been to the Mayo Clinic in Rochester, Minnesota for further evaluation. We are happy to report he is doing well and full recovery is expected soon. Thank you for your thoughts and prayers.

Secretary of State Resigns
Kansas Secretary of State Ron Thornburg announced this week that he planned to resign in order to take a position in the private sector. Thornburgh said his last day in the state office will be Feb. 15th. Governor Mark Parkinson will appoint a replacement to serve out the remainder of Secretary Thornburgh’s term, which is set to expire on January 10th, 2011. The Secretary of State is one of four state-wide officers elected by voters every four years. The Secretary’s primary responsibility is to ensure the safe and fair administration of statewide elections. The office also oversees business entities and the uniform commercial code.

K2 Bill Passes Both House and Senate
This week, the House followed suit with the Senate by passing a bill that will add three chemicals to the state’s list of illegal drugs. Two of the chemicals, called “K2” or “Spice”, are added to herbs and smoked like marijuana. The substance is typically sold as incense. The third is a form of the drug Ecstasy. Under this legislation, it will become illegal to possess or sell those chemicals, just as it is for marijuana. No other state has banned this substance. (If K2 is a synthetic version of marijuana, making it illegal eliminates one possible option for easing the discomfort of cancer patients without exposing them to THC.) There are some differences between the House and Senate versions, so the two chambers must reconcile those differences before the legislation can go to the Governor for his signature or veto. A ban would take effect within two weeks of the Governor’s signature.

Budget Update
Because state revenues have been consistently lower than expected, it was necessary to make additional cuts to the FY 2010 budget that will ensure we end the fiscal year with a positive ending balance (referred to as a rescission bill). Most of the necessary cuts were made in November by Governor Parkinson, but some required statutory action. The Appropriations Committee voted the rescission bill out of committee last week and we took it up on the House floor this week.
For the most part, the Legislature accepted Governor Parkinson’s proposal, with only a few amendments. Specifically, a floor amendment was adopted that will reduce the salary of every elected official by 5 percent (this includes all public officials who are paid with state monies: statewide offices, state legislators, district judges, etc). Some Medicaid cuts were also shifted that will enable health care providers to receive more in matching funds. The total state cut remains 10 percent, but by making a few changes we were able to lessen the loss of federal dollars.
We probably aren’t finished with FY 2010 budget. Revenues were lower than expected again in January, and the state will likely be short approximately $40 million by July even with the additional cuts we approved this week. I expect we will revisit this again in April when the most updated round of revenue estimates are released and we have a more accurate picture of the shortfall. In the interest of the legislative calendar, it is best to turn our attention to FY 2011 for now.

School Finance
The Kansas Supreme Court has denied a petition by the school districts to reopen the 2006 MONTOY school finance case. Friday’s ruling from the court means that any new challenge to the state’s school finance system must start over at the district court level.

Taxation
After five rounds of budget cuts and a $400 million budget deficit still looming – revenue proposals have been a major component of the budget debate. The House Committee on Taxation began a series on various proposals. HCR 5028 would establish a three-year moratorium on the granting of new tax exemptions, tax credits or economic development incentive programs involving employer withholding taxes. This idea in addition to rolling back some tax exemptions has been widely floated throughout the interim as an alternative to a sales tax increase. This proposal is a nonbinding resolution and would not affect exemptions already in place (a repeal of any tax exemptions already on the books would require additional legislation). The Kansas Advisory Council on Intergovernmental Relations testified that the number of tax credits has increased exponentially in recent years, putting a significant dent in the state’s revenue stream. As we work through massive cuts in Medicaid and public schools, it is critical to protect what revenue we have until the economy stabilizes.
Opponents came forth from the business community who testified that a moratorium would prevent Kansas from being open to new business investments. For years, the Legislature has arbitrarily granted or denied tax exemptions with no set criteria on which to base its decision. If nothing else, this proposal highlights the need for clearly defined and consistent guidelines for granting exemptions in the future.
There are several other proposals out there and will discussed this week.

Unemployment
The Secretary of Labor talked to us Thursday about the surge in unemployment claims. If you are having trouble filing for your unemployment benefits consider going on line to: Kansas Benefits. This process is fast, simple and secure. You simply click, claim and collect! Kansas is working hard to reduce the congestion in the call center to better serve claimants. (Kansas has paid out over $766 million in unemployment benefits. Kansas processes nearly $14 million a week in benefits.) We will have to borrow from the Federal Government by the end of February. 38 other states will be borrowing by the end of the year. This is a program that has been in existence for 75 years and was created by President Franklin D. Roosevelt.

Keep In Touch
It is a special honor to serve as your state representative. I value and need your input on the various issues facing state government. My office telephone number is 785-296-7646 and my home number is 620-223-4105. You may e-mail me at Shirley.Palmer@house.ks.gov. or rspalmer1862@sbcglobal.net.