Marti Crow

This Week at the Statehouse
    After 12 weeks, today is First Adjournment and the completion of the 2009 regular session. We will now break for three weeks and return for Veto/Wrap Up Session on April 29th. The Legislature main things that the Legislature will take up then will be the Budget Reconciliation bill that takes into consideration revenue estimates made on April 17 and any veto made by the Governor. There are other items of unfinished business, conference reports and such but those will often have to wait for next session. During April, the Governor will review bills that have reached her desk for signature or veto.
    Many House members are leaving today frustrated with the lack of productivity in the House this session. We got off to a slow start, have had a significant number of “pro forma” Fridays (meaning we did not meet), and legislative leaders have been reluctant to allow bills to be heard in committees or debated by the House. Much productive policy was never considered at all.
At the end, conference committees are cramming Senate bills together with House bills that have languished into mega-conference committee reports on a similar subject. One normal way for a legislator to get a bill debated without the Speaker’s blessing is to amend a Senate bill. That outlet has been stymied. Instead bad proposals have been folded toggther with good bills, and the House is expected to swallow the whole thing. This is not the way the legislative process yields good policy.

Civics 101: The Omnibus Bill
    One of the primary tasks of the Wrap Up Session is to approve the Omnibus Bill. I call it the “ominous” Bill because it is so huge that items can easily be hidden and overlooked, and it is scary to try to balance the entire state budget for the next fiscal year. It normally contains three basic items: technical adjustments to previous appropriations bills, financing for Governor’s budget amendments which were not considered as part of regular appropriations bills and considering Governor line item vetoes, and financing of substantive legislation that passed the Legislature earlier in the session.
    You have heard a lot about “earmarks” in Congress. The Omnibus bill has been known to include various items of interest to individual legislators or lobbyists, some offered as amendments during either Appropriations/Ways and Means Committees or Committee of the Whole deliberations, some sneaked in during late night conference meetings. The Omnibus Bill is usually the last bills passed each session.

FY 2010 BUDGET
    The House and Senate FY 2010 Mega Budget Bill was officially approved by both chambers this week. I opposed the bill. The $13 billion budget, as passed, includes $58.3 more in spending than Governor Sebelius proposed, while cutting public education- one of our most important state investments that I have worked to protect all session. And the cuts put our state at risk to lose all or part of the federal stimulus funding for public schools. As you know, the state economy is weakening. This budget has been created using a financial forecast made in November 2008. The next forecast, on April 17, two weeks after the end of the regular session, will probably show a continuing drop in revenue. If tax collections continue to fall short of estimates, the mega budget approved this week will not balance, and we must revise it during the veto session. The mega bill will provide a blueprint to be adjusted to create a balanced budget by the last day of this session in late May. Once the session adjourns in May, the Governor can make allotments and cuts during the interim to prevent the state from operating in the red or a special session can be called.
K-12 Education
    Although K12 education cuts are being portrayed as a mere .7% reduction, the actual cuts are more like 2.7%. According to the three year funding plan approved in the school finance lawsuit, schools should be receiving $4433 per pupil this school year. That was cut in the recission bill but the Governor’s line item veto confined the cut to $33. Last session, the legislature added a fourth year to the funding plan. Schools would have received $4,492 budget per pupil for 2010 fiscal year under that “Keeping Education Promises” provision. So, school districts will actually see a $125 per pupil cut next year, along with a cut to special education funding and a failure to fund the promised increases based on the inflation CPIU.
    I oppose the cuts to schools for several reasons. These cuts are unnecessary. There is currently $50 million available to Kansas by virtue of casino proposals in Wyandotte County and in South Central Kansas ($25 million each) which the leaders refused to factor into the budget. Including these revenues would have allowed full funding for public schools next year.
    The federal stimulus bill clearly dictates that the state must “maintain effort” at a certain level. If the state has decreased school funding from 2006 to 2009, the maintenance must be at the 2006 level. If funding has increased, the funding must be maintained at the highest of the 2008 or 2009 level. The mega bill funding is below both of those years. Our stimulus funds are certainly in jeopardy.
Vulnerable Kansans
   The Mega Budget bill has no money to fund new developmental disability waivers. The federal government allows us to use federal matching funds to provide home and community based services (HCBS) to allow disabled Kansans to stay at home rather than a nursing home, which is much more expensive. The House voted to include $2.5 million in the bill, which would draw down over $7 million federal dollars and reduce number of disabled folks that have been on waiting lists for services for years. The conference committee omitted that funding.
    The bill does provide $4 million to fund physical disability waivers, which will draw down over $9 million in federal matching funds. The House had approved $8 Million to reduce PD waiting lists.
Earlier this year SRS placed a freeze on HCBS servicesdue to 2009 revenues shortfalls. Nursing home admissions jumped by 303 persons in January 2009 so a freeze and a lengthening waiting list does not save costs for Kansas taxpayers. HCBS services could have helped more than 600 persons for the cost of the 303 that were forced into nursing homes because of the freeze.
State Employees
    State employees get a phantom 1% salary increase and longevity bonus payments which must be self-funded by each of the agencies. Since most agencies are getting a 5 to 10% cut in funding, most employees won’t see an increase. And, ironically, those who work for general fund agencies, Aging, SRS, Corrections, which are most crucial in hard economic times are the least likely to see salary increases. Funding is provided in the bill for the next step in the new pay plan designed to make state salaries and benefits competitive with similar private sector jobs.
Corrections
    Public safety was cut $17.6 million, or 6.4%, and eliminates 500 beds in our prison system, closes drug and alcohol programs, discontinues day reporting programs, and shuts down community correction beds in Johnson and Sedgwick County.
Unnecessary Expenditures
    At the same time, this budget continues unnecessary bureaucratic fluff, Kansas, Inc. and Kansas Technology Enterprise Corporation (KTEC) remain separate state agencies, rather than merging into the Department of Commerce, as proposed by the Governor. Placing the duplicative eco-devo work under one agency would have saved the state about $5 million annually.
    When the economy is strong, it is not so crucial to be efficient, but in a year when we are not funding schools, public safety and services to the most vulnerable of our neighbors,s, we should no continue to fund different agencies to do overlapping work. In the Mega bill, KTEC not only remains a free standing state agency but it receives a budget of about $12.1 million for fiscal 2010, an increase of funding over the funding provided in 2009.
    A 2006 audit showed that the CEO of KTEC had a base salary of $150,000 and was awarded a $60,000 bonus and a $52,000 payment and KTEC paid its employees more than $550,000 in additional compensation from 2004 to 2006, including nearly $333,000 in annual bonuses and up to $224,000 in supplemental payments. Parts of the 2006 bonuses paid to three KTEC employees appear to have been contrary to State law because the bonuses were based on work done for a subsidiary of KTEC which is prohibited. And the Mid-America Manufacturing Technology Center, a KTEC subsidiary, also paid about $437,500 in bonuses to its employees. The salaries at KTEC and Kansas, Inc. are set by their board of directors, not by the state legislature. A more recent audit could not document actual economic benefits from the eco-devo activities of these expensive agencies.
Cities and Counties
    Cities and counties will split up to $5 million in the Special City County Highway Fund, but they will receive no revenue sharing money from the state in the Local Ad Valorem Tax Reduction Fund. The slider, that was passed in order to help local governments adapt to the loss of property tax revenue when the legislature eliminated all tax on business machinery and equipment, will be paid in June of this year but The 2010 slider payments will not be made as promised.
Children's Health Insurance
    Both Houses voted to add $1.2 million for expanding the state SCHIP/HealthWave health insurance program to include children whose families' income is up to 250% of poverty. The funding comes from the Children's Initiative Fund which was created from the tobacco settlement funds.

DRIVING AGE RAISED
    Gov. Sebelius signed a bill last Friday which will raise the minimum age for obtaining an unrestricted driver’s license to 17 and impose more limits on the state’s least experienced drivers. Kansas becomes the 49th state to adopt a graduated license program, leaving North Dakota as the lone state out of step. The bill applies to teens who enter the Kansas licensing system after Jan. 1, 2010 and prohibits teen drivers' use of cell telephones while driving until after completion of a six-month probationary period featuring restrictions on late-night driving and vehicle occupancy unless the teen is reporting an emergency.
    Privileges under these licenses will be limited during the first six months. During this probationary period, no more than one non-sibling passenger under 18 can ride with the teen driver and the teens can drive only to or from work and school from 9 p.m. to 5 a.m. In most cases, a full, unrestricted license would only be available to teens after turning 17, although, for practical purposes, full privileges might be achieved as early as the age of 16 1/2 if the driver satisfactory completes all requirements.
    The existing restricted driver’s license statute in Kansas is not changed by HB 2143. By completing a driver’s education course, a teen aged 15 can get a restricted license. Holders of a restricted license can drive unsupervised to and from work or school. These teens can transport siblings and adult passengers, but not non-siblings under age 18. A learner’s permit is still available at age 14, and a learner/driver still will have to be accompanied by someone 18 years of age or older when driving. The new law requires a learner to drive with the permit for 12 months before obtaining a restricted or full license.
    Under the new law, teen drivers who violate license restrictions will get a 30-day suspension on the first offense, 90-day suspension for the second infraction and one-year suspension on the third offense.
    The Governor said that the legislation will make our roads safer and our teen drivers more prepared. Parents can, hopefully, feel a little bit better about handing over the keys to their offspring. The bill was endorsed by the Kansas Highway Patrol, Kansas Action for Children, State Farm, Kansas Department of Transportation, Safe Kids, and Kansas Department of Health and Environment. States adopting similar graduated licensing systems have experienced 20% to 50% declines in teen vehicle accidents.

SPEEDWAY MAKES NEW CASINO PROPOSAL
    The partnership of the Kansas Speedway and a Baltimore-based company, Cordish, have filed a new application with the Kansas Lottery for a casino at the race track in Wyandotte County. The Speedway was on the verge of approval to build a Wyandotte County casino when it withdrew in December because of the economy, saying it planned to reapply. Speedway President Jeff Boerger said the proposal is the same the original proposal with a $680 million resort, but this time the partnership wants to build in phases rather than all at once.

MARCH REVENUES DOWN
    Kansas’s financial forecast continues to look grim, as reports from the Kansas Department of Revenue indicate that the state took in $57 million less in tax-only revenues in March than previously estimated. Several factors played into the report, including individual income taxes which came in nearly $50 million below the $190 million estimate, a nearly 25% loss. To date, Kansas is down $135 million in tax revenue from the November 2008 estimates.

FEDERAL STIMULUS FOR UNEMPLOYED
    In March, the Kansas Department of Labor announced that our state unemployment rate is the highest it has been in 25 years. Legislation passed this week to take a first of two steps necessary to access federal stimulus funds for helping unemployed workers and their families. The first provision that will draw down $23 million from stimulus modifies the method of determining a worker’s base wage period and increases the number of workers eligible for unemployment benefits. Under HB 2374 a worker's most recent wages in a completed quarter will be used to determine eligibility for jobless benefits. State officials presently leave out the most recent quarter when examining whether employees have earned enough over the last five quarters to receive unemployment aid.
Unlike many states, Kansas has a substantial reserve in its unemployment pool. The state started the year with $510 million in that fund and is projected to have $400 million at year's end. On the other hand, Kansas had a January jobless rate statewide of 6.4% (11% in Leavenworth), up from 4.9% in December and 4.3% in January 2008. About 48,000 Kansans are already receiving jobless benefits.
    The KCCI (state chamber) has opposed the changes to our law, worrying that expanding benefit eligibility could indirectly to higher premiums for businesses. The Labor Dept. says that the changes could lead to some businesses with high employee turnover paying slightly more in unemployment premiums, but that would not happen until years from now.
    The plan signed by President Obama in February adds $25 per week to the unemployment benefits being paid out to individuals through the rest of the year. Those on unemployment can receive up to $423 a week, depending on their wages while employed, labor officials said. Individuals receiving their maximum 26 weeks of unemployment benefits would also be allowed to apply for an additional 20 weeks of help through Dec. 26. The deadline for applying for extended benefits had been set to run out by March 31. In addition, the federal package suspends federal income tax on the first $2,400 received in unemployment benefits.
    The second piece, the remaining portion of the original bill - worth some $46 million in stimulus funds - will be considered during the Legislature’s wrap-up session in late April. It proposes a change to provide that individuals are not disqualified from applying for unemployment benefits when they return to the labor market after having left work to care for a sick or disabled immediate family member. They would not receive unemployment while they do the caretaking, but they would be qualified for unemployment when they began actively looking for employment again.

REBUILDING GREENSBURG
    To help Greensburg businesses rebuild after the May 4, 2007 tornado disaster, the House overwhelmingly passed HB 2388 this week, which will extend the deadlines associated with the Business Restoration Assistance Program. Businesses in Greensburg have already been pre-approved to receive benefits from this program, but they need more time to use the money wisely. This bill extends the time when a pre-approved business would be required to complete repair, replace, or rebuild its facility using the benefits from this program.
    $5 million was provided for business assistance in Kiowa County and businesses are eligible for payments of up to of the investments made by June 30, 2008 to rebuild and up to $3,500 for each full-time employee rehired by that date. The Businesses now have until June 30, 2010.

CREDIT FREEZE
    A bill that does what I have worked for three years to accomplished passed this week. HB 2292 will increase a consumer’s ability to place a security freeze on credit reports. Currently, you can get a freeze only after you have been a victim of identity theft and you must show a police report to prove it. This legislation will provide all consumers with the option to place a security freeze on their credit report. The bill deletes the requirement for a police report.
    You may request a security freeze by mail, through a consumer reporting agency’s secure website, or by telephone. The agency may charge a fee of $5 or less for placing, temporarily lifting or removing a freeze. No fee can be charged to you if you are a documented identity theft victim.
    The best part is that now consumers who suspect that the confidentiality of their financial or personal identification information has been breached to file a police report and get a credit freeze before someone steals their identity. The police where you live are required to send their report to another jurisdiction if that’s where the breech occurred.
    The freeze will prohibit credit reporting agencies from releasing the credit report or credit score of the consumer, so individuals can take control over who is allowed access to the personal and financial information. Each agency must place a security freeze on a consumer report no later than five business days after receiving your request. They must lift a freeze within three days if requested by mail and within 15 minutes when requested electronically. Within 10 days of placing a freeze, the agency must issue you a personal identification number to use like a password if you choose to remove the security freeze or authorize the temporary release of your credit report for a specific person or period after the security freeze is in place.