Political Awareness Update
Tuesday, March 22, 2011
In 2010, YPW began a series of events that bring awareness to the importance of our local and state government. Our goals are to educate our members on the roles of city, county and state officials, create knowledgeable YPs who will get out and vote, and provide a non-partisan view on local issues that affect YPs and the Wichita community.
Last week saw considerable movement on key issues facing the Kansas Legislature as lawmakers enter the final stretch leading up to first adjournment. Most significant in the Senate was the Ways and Means Committee’s passage of its fiscal year 2012 budget. Thursday and Friday were designated as tax policy days in the House, and after some maneuvering and caucusing, the House did take major action on altering the state’s tax policy.
Taxes
What has now become House Substitute for Senate Bill 1 is legislation drafted by Senators Ty Masterson and Terry Bruce. The legislation is a comprehensive overhaul of the Kansas corporate and personal income taxation method. In short, the bill would lead to decreases in personal and corporate income rates that are equal to the percentage growth in state tax receipts from the previous year. Basically, if the state received 12% more money in 2011 then corporate and personal income tax rates would drop by 12% in 2012. If there is no growth – there is no decrease. Nothing in the legislation prohibits the legislature from raising other taxes, nor does it contain any spending limits as some opponents of the bill have tried to assert. It is conceivable that over time the state’s personal income tax rate could be “bought” down to zero (0).
The House initially rejected the bill on Thursday. Conservatives were generally supportive of the bill, but several voted no due to a provision that would have made last year’s sales tax increase permanent. That provision was removed Friday morning and the bill passed with 72 votes. The bill is now headed over to a Senate that is likely not as impressed with tax reduction as is the House.
The House also passed the major components of the governor’s economic plan. The expensing and reformulated HPIP and deal closing fund, as well as the rural enterprise zones intended to spur growth in low population areas, all passed the House.
Budget
The Senate Ways and Means Committee, after several weeks of work, did pass a budget on to the full Senate. The bill cuts $535 million in spending next fiscal year and includes portions of the governor’s original rescission bill.
The House Appropriations Committee, just today, completed work on their budget. At the time of this update, the total amount of cuts had yet to be determined, however the House Appropriations Committee made significant cuts beyond what the governor recommended, including the total elimination of the Kansas Affordable Airfares Program. It’s probably fair to say that even conservative budget hawks will view this budget as somewhat harsh in terms of the cuts made to state funded programs. After a several weeks long process of budget subcommittees trimming budgets, the full committee, over a four day period, made even more cuts. Among the casualties - school budgets were hit, as were Meals on Wheels, Disaster Relief, assistance for the aged and the Departments of Health and Environment and Social and Rehabilitation Services. The Judicial Review Panel was completely eliminated.
Typically, the House and Senate would work their respective budgets this week and conference to work out the differences. However, that scenario seems unlikely at this point as the Senate may be hesitant to enter into house “politics” prior to first adjournment. The conference committee between the two Chambers on the FY 11 rescission bill was less than productive. They never did reach an agreement and the Senate walked away clearly frustrated with the House negotiators. Remember, brand new revenue estimates are out April 1 and to many it may make more sense to just wait for the new numbers and work through the budgets the last week of April when legislators return for Veto Session.
Clearly, many people are alarmed at the actions taken by the House Appropriations Committee. It remains to be seen if the actions are simply the result of overzealous budget cutters or if the House has proposed cuts even beyond their comfort level in an attempt to force the Senate to cut more in conference. Conference committees typically meet somewhere in between their two chamber’s final numbers. The House, in the past, has not really been very strategic in planning their budgets with Senate negotiations in mind. The Senate, on the other hand, has.
Both Chambers are on the floor today (Monday) through Wednesday this week. Conference committees will start meeting this Thursday and will run through the end of next week heading towards first adjournment which is Saturday April 2.



