Marti Crow

This Week at the Statehouse
We are now two-thirds of the way through the 2009 legislative session, with only four weeks remaining in the regular session. Because last week was such a slow week, I expected the pace to increase for week 8. Unfortunately, little work was done this week on the House floor. A handful of bills were debated early in the week, there was no legislative action on Wednesday, Thursday, or Friday. At this point in the session several bills should be worked on the floor every day. I am very concerned that legislation which has passed by committees are being held “hostage” in order to be used for political collateral on other, more controversial issues.

Civics 101: Understanding the legislative calendar
The Kansas Legislature meets from early January until early May. We work under a stringent time frame each year. Once the Legislature convenes each January, it has 90 taxpayer-paid days to complete its work for the year. The President of the Senate and the Speaker of the House control the calendar and decide what bills are debated or not. The committee chairpersons decide which bills have hearings and are voted upon. Legislators are paid a daily salary during the session (under $100 per day) and per diem and one trip from home each week. I am concerned about efficiency because each day the Legislature meets over 90 days increases the cost to taxpayers.
February 21, two weeks ago, was the halfway point of the session, known as “turnaround,” the deadline for non-exempt bills to be passed out of the house of origin. Now House committees are considering Senate bills and vice versa. “Drop dead day,” March 28, is the next legislative deadline when all bills from either chamber must be passed both houses or they are essentially “dead” for the year. Some bills are considered “exempt” and are alive until the end of the session.
The Legislature will conclude the 2009 regular session on April 4, I think, referred to as “First Adjournment.” Between drop dead day and first adjournment, we will consider exempt bills, conference reports and the budget for fiscal year 2010. Then, the Legislature recesses for approximately three weeks and all bills passed by both the House and Senate go to the Governor for signature or veto. The last week in April, the Legislature reconvenes for what is referred to as the “Wrap-Up” or “Veto Session.” During this session we must balance the budget for 2010, reconciling the fiscal costs of newly passed law and the revenue estimate made in mid-April. The length of Veto Session varies, lasting from a few days to a few weeks. The longest veto session in history was 17 days in 2002, after the budget drop due to 9/11. The Legislature will convene once more for a ceremonial adjournment called “Sine Die.” Sine Die usually occurs near the end of the May, and marks the final meeting of the Legislature until 2010.
This is the first year of a two year legislative meeting. So far, the House has only recorded 98 final action votes this year. To allow for comparison, after eight weeks in 2007, 142 final action votes had been recorded. Though Veto Session and Sine Die offer opportunities to meet later in the spring, most of the Legislature’s work must be complete by the beginning of April, leaving only a few more weeks to pass meaningful legislation.

Commerce Committee hearing on Minimum Wage
In February, the Kansas Senate voted overwhelmingly, 33-7, to raise Kansas’ minimum wage to $7.25 beginning January 1, 2010. This week, the House Commerce and Labor Committee held a hearing on the proposal, SB 160.
Currently, our state minimum wage is $2.65 per hour, by far the lowest in the nation. The last minimum wage increase was approved more than 20 years ago in 1988. SB 160 is the result of a bipartisan compromise in the Senate. The raise in minimum wage would not apply to workers receiving tips and gratuities (such as servers and bartenders). The law would apply to employees of businesses that are not a part of interstate commerce regulated by the federal minimum. This includes workers in about 20 job classifications, including workers on small farms, in small industries, child care facilities, and in companion care. It is estimated that approximately 20,000 Kansans work in jobs governed by the state minimum wage. A worker working 40 hours a week at our state minimum wage is stuck well below the poverty line.
Proponents argue that a minimum wage increase will lead to several benefits, including more self-sufficient citizens, consumers with greater purchasing power, a more motivated and productive workforce, added cash flow in the local economy, a healthier tax base and new jobs and new businesses through a multiplier effect. The state would receive an estimated $3.6 million in revenue in FY 2010. The current low minimum wage as it currently tends to perpetuate a state economy with 12.4% of the population living in poverty, leading to family instability, a strain on social services, higher cost of doing business due to turnover and absenteeism, and an inadequate tax base.
Opponents contend that no one in Kansas except teenagers actually earns $2.65 per hour so increasing the minimum wage is unnecessary. The Kansas Department of Labor, however, estimates that most Kansans earning less than the federal minimum wage are not teenagers, but heads of households and are disproportionately women. The labor statistics are calculated using the data trusted by economists and government officials to calculate other labor statistics like state unemployment.
In uncertain economic times, it is essential to keep our state economy headed in the right direction. Taking care of the base of the economic pyramid, the workers, assists in that effort. The Kansas Legislature has supported over $1.2 billion in tax relief targeted at business and employers over the past four years to encourage business investment. It’s now time for us all to broaden that focus and invest in the folks who need help most: the Kansas working for $2.65 an hour. To me, this is not a political issue. I think the Kansas minimum wage is shameful and reflects badly on our progressive state, forcing hard working employees to struggle to provide basic food and shelter for their families. Kansans has always been a place that honors hard work and independence. Our state should insist on a wage that dignifies work and commitment to families. In the past few years, other minimum wage proposals have never even received a committee hearing. It is time for the House to follow the lead of the Senate and see this issue through to the finish line.

Energy and Utilities Committee
• Energy storage opportunities
This week, the House Energy and Utilities Committee began discussions on House Resolution 6011, which requests that the Kansas Corporation Commission (KCC) convene a group of stakeholders to study energy storage as a cost-effective way to stabilize renewable energy generation, address transmission congestion costs, increase system reliability, enhance the potential for distributive generation, and other energy storage issues. The main form of storage discussed was compressed-air energy storage (CAES), which is the most cost-effective electricity storage. CAES stores energy made by wind turbines by compressing it and storing it underground to be used as needed. There are some startup costs to running CAES, but it is extremely efficient.. Kansas has many underground resources which can be a valuable resource for CAES. HR 6011 helps position the program serve and get paid by more than one client, which is essential for its success.

House Taxation Committee
• Eliminate tax exemptions on renewable energy resources
This week, the House Taxation Committee held hearings on HB 2196, which would eliminate property tax exemptions for renewable energy resources and technologies during the 2009 taxable year. “Renewable energy resources or technologies” include wind, solar, photovoltaic, biomass, hydropower, geothermal, and landfill gas resources or technologies. The Kansas Department of Revenue testified that delaying the tax breaks would increase property tax revenues by approximately $225,000 and increase state aid to school districts and revenues to local governments that levy property tax.
Proponents of the bill include the Kansas Legislative Policy Group, an association of thirty western Kansas counties. The group believes the incentive to bring wind farms to Kansas aren’t needed because our state is such a valuable wind resource, (the third windiest in the nation) and counties should be able to tax the developers of wind resources. Opponents include Wind Coalition, Clipper Windpower, Wind Capital Group, Gamesa, Tradewinds, Iberdrola, Empire Electric, Sierra Club, and the American Institute of Architects. These groups argued that it is necessary to maintain the incentive to keep Kansas competitive with other states. The Kansas Rural Center was neutral on the bill but believes there is a production tax may work better than the property tax.
• Sales Tax Holiday
The House Taxation Committee held hearings on HB 2328. If passed, which would expand the state’s sales numerous tax exemptions to include a sales tax holiday for the purchasing of school supplies on the first Thursday in August at 12:01 A.M. until midnight on the following Sunday.
Proponents say Kansas businesses are losing revenue to Missouri and Oklahoma, who currently have tax holidays. Instead of shopping in Kansas, consumers who live on the border of neighboring states cross state lines during the holidays to purchase the tax-free goods, and while they are there they spend their money on items that are not tax-free, sending unnecessary Kansas dollars to other states.
Opponents pointed out a number of problems with the bill. The KNEA testified that, although the bill is defended as assistance for low income families, it actually may not help them because low income families are the least able to save up for a tax holiday and are the least able to make these often expensive purchases in a short time frame; while upper income families who can easily afford to pay taxes on school supplies would have the greatest ability to take advantage of a holiday period.
My concern, as I have expressed to you in the past, is that we need to reform Kansas’ method of issuing tax exemptions. Instead of constantly adding more tax exemptions on a case by case basis with no set standard for qualification, the state should set a reasonable standard to judge when an exemption is in the public interest, and then reduce exemptions that do not meet the standard. We would broaden the tax base and allow lower rates for all taxpayers while creating more stable revenue. The continual shifting of the tax burden to a smaller and smaller base results raising other tax rates, such as property tax.

The Kansas League of Municipalities provided testimony in on the issue. Referring to a study published in 2005 by the Institute on Taxation and Economic Policy called “Talking Taxes,” KLM pointed out that there is evidence suggesting there has been a fair amount of abuse of tax holidays. The study, part of which took place in Florida, observed that while the tax holiday was in effect, some retailers simply raised the price of the items in question, effectively negating up to 20% of the potential benefits from the sales tax holiday to consumers.
See http://www.talkingtaxes.org/

House Appropriations Committee
On February 3, 2009, the House Appropriations Committee heard testimony on HB 2095 which would allow school districts to levy up to two mills in property taxes for the next two years to pay for insurance and utility costs. The bill amends the previous law by doubling the amount that can be taxed to pay for municipal bonds issued by cities and allowing for payment not just of municipal bonds but for insurance and utility costs. Opponents argue the tax authority would be unequally advantageous to districts with a higher assessed valuation per pupil. Proponents support the intention of the proposed changes in the bill but admitted it needs work.

Kansas Board of Regents to study opportunities to increase efficiency in technical education
The Legislature has been taking steps for a couple of sessions to improve technical education across the state. I think it is one method to help for expedite Kansas’ economic recovery. Technical education should merge the best of the private and public sectors. The new Technical Education Authority (TEA) brings together stakeholders in both education and business to make technical education more efficient and responsive to the needs of business and industry. TEA will allow technical education institutions to receive direct input from the business world, enhancing technical education curriculum to include real world issues and needs.
At the direction of the Legislature, the higher education institutions and leaders report that they are taking steps to get all institutions in Kansas to a “per credit hour” funding formula. This formula will help provide the technical education institutions (and also the institutions that have combined with technical education schools) more balanced funding and help streamline federal funding for technical education. The work is beginning to gain momentum. The Kansas Board of Regents has been requested to study the issue further and report back to the Legislature the best methods for implementing a new formula and the strategy to complete the multi-year process of standardization of technical education programs. Kansas has an opportunity to capitalize on providing quality statewide technical education that can help pull us out of this recession and lead this country into a bright future with a highly skilled workforce.

Kansas House continues to look at gaming legislation as a means of economic growth
As the national and international economic downturn begins to effect our state, the Governor and state legislature are looking outside of Kansas to see what other states are doing to stabilize and improve their economic vitality. Several states are attempting to attract large projects aimed at drawing in tourism and providing jobs. Building a new casino resort in Kansas remains of great interest to some communities as a method to create jobs and stimulate the economy.
There is still a gaming license to build a casino resort in Ford County, which requires a $5.5 million privilege fee and an investment of over $45 million. The House is currently considering a bill that would lower the investment amounts for the construction of a resort casino in southern Kansas to the same amounts required in Ford County. The hope is that lowering the investment up front could act as an incentive for developers to invest in a casino despite the tough economy and help to establish jobs.
Opponents of the bill oppose casino gambling in Kansas. They contended that even resort casinos will not provide a stable source of income for the state and that gambling facilities bring a greater propensity for crime and illicit activities. Supporters argued that the project could provide the state with an additionally $200 million in revenue which would go a long way to helping that state budget’s short fall. And they pointed out that a resort casino is more than a gambling house; it is intended to be a destination for tourists with lodging, restaurants, shopping and other amenities. Resort casinos tend to provide much more sustained growth by offering a wider variety of opportunities for economic development.
President Obama selects Governor Sebelius for Secretary of Health & Human Services
This was a proud and exciting week for Kansas. President Obama’s announced that Governor Kathleen Sebelius is his nominee for Secretary of Health and Human Services. Although I am saddened to lose our talented and accomplished leader, I know that Kansas and the entire nation will benefit to have Governor Sebelius guiding health reform.
I do not expect the Governor to depart immediately. The Cabinet confirmation process is very in-depth. While the Governor is currently preparing for confirmation hearings before the United States Senate, she has made clear that her main priority will continue to be Kansas and the legislative process, including balancing the state budget. Meanwhile, Lieutenant Governor Mark Parkinson and her Cabinet are preparing to continue her work when she is confirmed.