The Newton Area Chamber of Commerce held a legislative update at Charlie’s Restaurant in Newton on Saturday morning.
Throughout the meeting, Kansas Senator Carolyn McGinn, and Kansas House Representatives Tim Hodge and Don Schroeder reported on recent state legislative action.
McGinn began with an update from last month, stating that, at this time, about a month ago, they had not passed a recision bill (or amended budget) for 2017.
However, McGinn added that legislators passed one at 10 p.m. on March 16, and ended up using the house bill, which had no cuts in it.
McGinn said "the miracle fund for everyone" is the Pooled Money Investment Board (PMIB) funding, which she said is unclaimed property funding. The state took some of that out of the system and used as a loan to get Kansas through the next couple of "lean years."
"My concern was – I just don't want us to get more and more into debt," McGinn said. "I'm trying to work on getting us out of debt."
The senate package in the works, according to McGinn, is that the state would only draw down enough of the PMIB funding to have a $50 million balance. That way, the state will have enough for next year, which is looking problematic.
Once Kansas gets to 2019, McGinn said it will likely start getting out of its rough patch.
Revenues are somewhere between $63 and $69 million, McGinn said, which is good, but those figures are not yet set in stone because March could be down.
However, McGinn said it is still a positive number, which will be factored in after the April consensus revenue estimates.
Next year, McGinn said, the state will also begin paying back PMIB funds and gradually start leaving them alone, to remain more fiscally responsible.
Hodge said these next three weeks are going to be "very stop and go" and a lot of pieces of the budget are coming together.
One of the main pieces that came together recently, according to Hodge, was a school finance decision which ruled that Kansas is funding its schools unconstitutionally.
Hodge said bringing Kansas into compliance will come with an estimated price tag of about $750 million. Adding that to preexisting debt, Hodge said budgets are short $1.2 to $1.3 billion.
"We can argue about that, but that just seems to be the figure – that things will be short if we continue on the road we're on right now, without doing something structurally different to our tax code, to our revenue code and (to) our spending," Hodge said.
Hodge described the upcoming budgeting process as "a Sunday night term paper," in which many legislators are going to be forced to rush. However, he said many are studying the budget and trying to understand how much raising percentages on certain income brackets will bring in.
"It's not really complex when you think about it, it's just 'how much are you going to spend and how much are you going to bring in, and then how are you going to bring it in?" Hodge said. "Are you going to put it all on the middle class and then say you did something? Are you going to progressively put it on all the classes or are you going to use a flat tax, where in my opinion that falls mainly on the middle class? Or is it going to be a progressive tax system, which depends on income (determining) how much you pay?"
Schroeder said state legislators have three weeks left to work, but they only have one week left to meet in committees to get bills out.
In the second week, Schroeder said they will be out on the floor all day and voting the entire time, so there will be little time for committee meetings.
The third week is when conference committees meet, so Schroeder said, in actuality, there is really only one more week for working bills.
Schroeder said what will happen with the Kansas tax situation mostly unknown at this time, but he has had some free time to take part in the K-12 Budget Committee meetings.
That committee has been hearing pros and cons for the various school funding proposals out there, Schroeder said. They have had hearings over four or five, but have discussed more than that.
Schroeder said that committee was trying to have a bill drafted by the end of this week, but were unable to get something together. However, he noted they were likely still working on it at the time of the chamber's update (March 18).
"Obviously, that's a fairly complex bill to be put together for them, so it will take some time," Schroeder said, "but I expect they'll be hearing that, and the goal of the chairman of that committee is certainly to get ... something out before first adjournment, which is three weeks away from now."
Up to this point in time, all of the reports out from budget committees do not make very many changes to the overall proposed budget for 2018 and 2019, Schroeder said.
However, there are some that have requested enhancements or increases of funding to certain areas. Among those are some of the social services and mental health, which Schroeder said said has taken a large financial hit recently. Those enhancement would depend on whether there is an ending balance.
With all the recent fires, Schroeder said the house recently passed a bill removing sales taxes on those purchasing new supplies to repair burned down fencing, which is about $10,000 a mile to repair.
McGinn clarified that the sales tax break for fences will not apply to those who are purchasing new fencing – where there was not fencing before. The break is only for those whose fences burned down.