January 26, 2015

The 2015 Legislative session got underway January 12th. This session could prove to be a challenging and complex one. I think the best way to describe the mood in the Capitol is to quote Charles Dickens's first line in his book, A Tell of Two Cities: "It was the best of times; it was the worst of times." First: the best of times...

Typical of most years, our first week back in Topeka for the start of the 2015 legislative session was spent making needed contacts, unpacking, organizing, and attending ceremonial activities. Visitors and dignitaries lined the rotunda as we prepared for the inaugural ceremonies. The halls of the Capitol were filled with the music of state high school bands and choirs. The Kansas National Guard and Highway Patrol stood by and a poet and prayer from a local minster filled the House Chamber with words of encouragement as the 86th Legislative session convened.

The rest of the week was off to a slow start as members settled in and committees held a few informational hearings. On Thursday, January 15th, the Governor presented the Legislature his two-year budget plan in his 2015 State of the State address. Confronted by a $600 million deficit this fall, the Governor laid out a plan to reform some of the state's major functions. And so begins the work on embarking on the "worst of times," or maybe better stated, uncertain times.

State statue grants the Governor authority to make targeted reductions or allotments when there is a significant shortfall in the state general fund (SGF). The allotment plan has already been introduced although the Legislature is primarily responsible for making the changes necessary to balance the budget for the remainder of the fiscal year.

The Governor's budget focused on three major budgetary cost drivers: K-12 school finance formula, Medicaid, and Kansas Public Employees Retirement System (KPERS). The goal is to limit government while still meeting the expectations that citizens require from their government.

 


EDUCATION

The Governor suggests to sunset the current school finance formula by July 1, 2015. The current formula has been in place since the early 1990s. The governor did not provide a new funding plan to legislators on Friday but rather suggested we take a look at a new approach for school financing. In short, he proposes to determine what each district receives, send that to schools in the form of a block grant, and then spend the next two years deciding how to approach the long-term solution in the form of a new funding formula.


MEDICAID

Two years ago, the Governor reorganized the state's Medicaid system because it was not adequately addressing the needs of Kansans while at the same time costing the state millions. He reformed the state's Medicaid system to an integrated care system, formally called KanCare. While the implementation of KanCare has led to slower growth in expenditures as compared to the projected baseline growth of the old fee-for-service system, additional changes are needed to absorb the cost of Medicaid. A mix of KanCare policy and contractual changes were proposed and implemented by the Kansas Department of Health and Environment (KDHE) and the Kansas Department of Aging and Disability Services (KDADS). These changes will achieve $50 million in savings to the SGF.

Additionally, the Governor is proposing an added $5 million in SGF expenditures and $10 million in all funding sources to reduce the waiting list for the Home and Community Based Services (HCBS) for the Physically Disabled and Intellectual and Developmentally Disabled programs. The Governor is also seeking $7 million from SGF expenditures and $15.9 million from all funding sources to allocate to the under-served waiting list for the Intellectual and Developmentally Disabled program that was eliminated in 2014.


KPERS 

The solvency of KPERS has always been a critical issue for the state. Just a few years ago, Kansas had one of the least solvent plans in the country, ranking near the very bottom. Thanks to the cooperative efforts of the legislature and a bi-partisan initiative to improve these rankings, Kansas now falls in the middle of the pack, which represents a substantial improvement in such a short time. The Governor has now proposed working with us to examine the possibilities of further reform to the state's retirement system in an effort to improve these rankings while controlling cost in one of our largest drivers. In his budget recommendation, he reduced the payment to KPERS by over $40 million. This year, he proposed two policy changes: (1) issuing bonds, and (2) extending the current amortization period for payments to KPERS. A selected committee in the Senate will be studying the issue and will be making recommendations to both the House and Governor's office as we move forward.


STATE'S REVENUE  

The final notable moving piece of the Governor's budget is a change in tax policy. In 2012 and 2013, a pro-growth tax package was passed significantly reducing personal income tax rates. Realizing the reduced tax rate would be unsustainable, the Governor proposed halting future tax reductions. In addition, he is asking to create a rainy day fund as well as a tax reduction fund designed to buy down income rates as returns allow and the legislature sees fit.

Education, Medicaid, and KPERS are the three largest expenditures in the state budget; however, they are not the only details in the Governor's budget proposal. The Governor has recommended a four percent reduction to select state agencies and another $100 million transfer from the State Highway Fund for the FY 2015 and FY 2016 budgets. KDOT indicates this will not hinder any current or proposed projects. He has also suggested an increase on consumption taxes for cigarettes, tobacco products, and liquor enforcement.

As you can see, we have some heavy lifting to do this session. With the budget shortfall, major reforms and another look at tax policy, we will have to make hard decisions. In the end, we will have to sort through the details, get into specifics, and analyze the information that will allow us to agree on a sensible solution. I want to know what you think about the issues and topics that impact our district and the State. This is just the beginning of a long road for the Governor's budget proposal. We will indeed see changes in this plan. I appreciate your emails and consider them when making my decisions and casting my votes.


Other highlights:

  • I enjoyed visits from members of the local CO-OP at the Capitol for their Legislative Action Day last Wednesday. 
  • I was honored to join in pro-life Kansans at the Rally for Life March this past Thursday on the south steps of the Capitol. What a wonderful showing of support for the pro-life movement. I will support the Dismemberment Bill, which will limit this type of abortion, when introduced this year on the floor. 
  • I am pleased to be one of 26 co-sponsors of Senate Bill No. 45, an act concerning firearms and relating to the carrying of concealed firearms. 
  • I also sat in on the copper theft bill hearing where some of my constituents testified. Hopefully this will get out of committee this year and on to the floor for a vote. 
  • There was good attendance from my district at the Kansas Association of School Boards meeting here in Topeka Thursday evening--I value their input greatly.

This session is definitely shaping up to be a busy one where a lot of good work for the state and District 26 can be accomplished, pushing us always forward to "the best of times."