Parking lots were full and few table settings remained as an eager crowd filed into the main ballroom at the Meridian Center for June’s Breakfast with the Chamber.
Interest for the event, put on by the Newton Area Chamber of Commerce, was high as guest speaker, registered lobbyist Bernie Koch, had recently returned from the highly publicized Kansas Legislative session. Koch represents the Harvey County Council of Governments and Kansas Counseling Association. He is executive director of the Kansas Economic Progress Council.
With more than 44 years experience in government relations, including 39 different Kansas Legislative sessions, Koch shed light on the events at the state house and theorized on what the results might mean for the future.
He began with a self-deprecating joke, dispelling any notion of his relation to well-known Wichita brothers Charles and David Koch.
“So you don’t have to suck up to me,” he said.
A brief presentation on the history of American lobbyists followed before getting into the meat of the discussion — the longest legislative session in Kansas history.
“If the House of Representatives had been a P.O.W camp the sessions would have been a violation of the Geneva Conventions,” he said.
After state income tax cuts signed into law by Gov. Sam Brownback in 2012, the current legislature — and Brownback — were tasked with filling the more than $600 million budget deficit for FY 2016 when the session began, Koch told the crowd. The session closed June 12 after 113 legislative days.
Koch credited former seven-term Kansas Rep. and budget director Duane Goossen, now senior fellow at Kansas Center for Economic Growth, for his predictions on the 2012 cuts, as well as Goossen’s suggestions on their repeal.
The shortfalls affected schools. Even with the addition of block grants for education
“Some schools had to close early,” Koch said.
Some university presidents reported worrying they would have to double tuition.
Bethel College vice president of business affairs Allen Wedel said had non-profit sales tax exemptions not continued “tuitions at Bethel could have increased as much as 3 percent.”
Some of the lost money was shifted over from the highway fund, but Koch said it has slowed highway work, and likely would in the future.
The issuance of $1 billion in Kansas Public Employment Retirement System bonds freed up an estimated $64 million toward the deficit.
Income tax rates of 2.7 percent for single filers making up to $15,000 and 4.6 percent for those earning more than $15,000 will remain unchanged up to and after 2018. The threshold is $30,000 for joint filers, among whom those making less than $12,500 would pay no tax.
Koch mentioned the restoration of food sales tax rebates and income tax deductions changes. The latter change is seen by many as an attempt to redress the effects of the regressive sales tax hike from 6.15 percent to 6.5 percent in July.
“Some of these elements are good …,” Koch said. “But overall this is a grab bag of ideas.”
The bag, Koch said, does little to address the budget problem, saying it was “filled with stop-gaps.”
He used KPERS and the highway fund as prime examples.
Koch also noted neither cities nor counties could increase budgets from property taxes exceeding the rate of inflation unless voted on at election until 2018. Examples of which include new infrastructure, special assessments and paying judges.
After a short question and answer session with Koch, Rep. Don Schroeder R-Hesston, also recently returned from Topeka, spoke briefly.
He said the possibility remained the state would run into more money problems in the near future. Schroeder echoed Koch’s statements on taxes, saying projections showed income tax trended above needs, while sales tax remained below.
“We’re moving away from the stability of income taxes to less stable sales taxes,” Schroeder said.