Just over three weeks into the 2017 legislative session and there have been no major plot twists. The overarching concern of all is still the gaping difference between how much money the state is expected to bring in over the next couple of years and how much it will spend.
Another Positive Revenue Report
On a lighter note, the Department of Revenue reported that, for the third month in a row, the State of Kansas brought in just a little bit more revenue that it expected to. In January, tax receipts were almost $24 million ahead of projections. Some cite this as evidence that the Kansas economy is on the upswing. Others note the bar had already been lowered several times, so the fact the state was able to step over it proves little. Legislators gave the news a half-hearted “Huzzah,” and quickly put their heads back down to the task of finding almost 15 times that amount by June 30.
Senate Tax Bill
Senate leaders brought forth their package for reforming the state’s tax code. The Senate bill does two things. First, it raises the individual income tax rates paid by individual Kansans. (The lowest rate would go up from 2.6% to 3.0% and the highest rate would go up from 4.6% to 4.9%.) Second, it eliminates the so-called LLC Exemption. All told, the bill would raise an estimated $288 million in the year beginning July 1, 2017 and closer to $372 million the following year. This package is said to have a good deal of support amongst Republicans in the Senate and is expected to move quickly, though the Governor quickly scolded the Senators publicly for announcing a plan which he says punishes the middle class and job creators.
Arguments for and against the bill were heard in committee yesterday. These are more or less the same themes explored by more or less the same people who appeared last week before the House Taxation Committee, which has been debating the same issues, though in the form of multiple bills rather than a single package. Those favoring the bill contend the LLC Exemption and the other tax cuts passed in 2012 have not achieved job growth as promised. Opponents hold the Kansas economy and jobs picture is actually better than it would have been without the tax cuts and that most of the blame for revenue shortfalls lies in falling oil and commodities prices. They urged committee members not to risk damaging the Kansas economy by raising taxes but rather to redouble their efforts to curb spending and make the government more efficient. The tax package is expected to head to the full Senate in very short order. (In fact, just seconds before this update was sent to press, the Senate Assessment and Taxation Committee was on the verge of passing the bill and sending it to the Senate floor.)
Following hearings teeming with some Kansans worried by the prospect of strolling across campus next to a gun-toting classmate and other Kansans worried about running into that classmate without being armed to defend themselves, the Senate Federal and State Affairs Committee killed a bill which would have exempted college campuses from the requirement that they allow concealed carry as of July 1, 2017. A number of other bills in the House designed to accomplish the same thing are still being considered. So this issue is far from over.
Other Bills of Interest
The Senate Committee on Ethics, Elections and Local Government completed its hearings on a bill to streamline the process cities use to recover abandoned houses and put them into the hands of organizations which will rehabilitate them. Cities like Topeka are advocating for this change in the law and the Chamber expressed its support. Click here to read the Chamber’s testimony. The bill balances the individual rights of property owners against the rights of neighbors and municipalities trying to address the pervasive problem of blight.
The House Health and Human Services Committee will hold hearings this week on the Kancare Bridge to a Healthy Kansas program. This program could be Kansas’ response to the problem of 150,000 Kansans who make too much money to qualify for Medicaid but not enough to afford private insurance. The bill makes those individuals eligible for coverage under Kancare, the state’s Medicaid program, and takes advantage of the federal government’s obligation under the Affordable Care Act to reimburse 90% of the cost. Even though the future of the ACA is uncertain, Kancare should be expanded to ensure the State of Kansas is in the best position possible to benefit from whatever system Congress develops in lieu of Obamacare. Click here to read the Chamber’s testimony.
To see our previous Legislative Updates, click here.
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