Jeff Pittman's Statehouse Update - May 10, 2017

Hello from Topeka. I wanted to provide an update from last week in the Legislature and at home.

The Kansas legislature adjourned for a three-week recess, a 150 year tradition where farmer-legislators are given a chance to go back and plant seed. It’s also the time the governor traditionally signs off on or vetoes bills passed thus far and the legislature reconvened May 1st in what is known as the ‘veto session’. At this point, financial forecasts have been updated with April figures and the budget committees have a good idea of what revenues and costs are being currently projected.

Before diving into the bills and other issues on our plate this week, I want to put in a plug for a fundraiser going on this weekend. I’ll be the emcee at the Edge of Forever concert this weekend at Haymarket Square. Edge of Forever is a national Lynyrd Skynyrd tribute band and its been seven years since they’ve played in their hometown of Leavenworth. It's only $5 and all the proceeds go to the VFW Relief Fund. The entertainment starts at 5:00 with DJ, food, beer, and fun. Please support this worthy cause! I’ll see you there.


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Bills and Laws Over Past Few Weeks

We continue to make progress on finalizing a series of bills including those this week which target decreasing human trafficking, SB 112 which provides extensive needed legislation around domestic abuse and sexual assault and many others detailed below.

A major change is in House Sub. for SB 13. Debate over where certain alcohol products can be sold has been a highly-contentious issue in the Kansas Legislature for more than a decade. This year, due in large part to changes coming in 2018 in Oklahoma and Colorado in 2019, which is likely to reduce the availability of cereal malt beverage (CMB) in Kansas, the proponents and opponents negotiated this compromise bill. It will allow grocery stores to sell up to 6% strength beer as of 2019, while also allowing liquor stores to sell up to 20% of their revenue in non-alcohol related sales.

In another bill, Senate Sub. for HB 2304, the Legislature updated standards for childcare facilities. It's hard to believe this wasn't in the statutes but we added prohibitions for individuals who have been convicted of arson; individuals who have been convicted or adjudicated of a crime that requires registration as a sex offender under the Kansas Offender Registration Act, as a sex offender in any other state, or as a sex offender on the National Sex Offender Registry; and individuals who have committed an act of physical, mental, or emotional abuse or neglect, or sexual abuse and are listed in any child abuse and neglect registries maintained by another state or the federal government that are similar to the Kansas Child Abuse and Neglect Registry.

In defense of our cyber borders, before the break we passed out of the house SB 184, which creates the Fusion center in state law. The law enables an already ongoing collaboration among federal, state, local, and tribal agencies, as well as certain private-sector entities. This is a cyber intelligence collaboration meant to be a resource to help state and private sector entities. As a member of the technology and security committee, we will continue to review how to minimize threats to our constituents and the state.

The House passed out HB 2319 before the break. This was a bill put in place specifying that a physician’s history be actively disclosed to women, such as any malpractice suits, complaint history, certification and other such information when they are considering an abortion procedure.

In HB 2391, the House passed out bill that tightened drinking and driving laws, especially related to restrictions of driving privileges and use of a ignition interlock device that prevents a car from starting if the driver can’t pass the blow-test.

With limited impact in Leavenworth, the house passed out SB 55.This was bill was around public construction contracts—there was an effort to put in place what is known as a prevailing wage clause which would allow local governments to decide, within bounds, if they wanted to issue contracts to suppliers that paid a higher wage and wasn’t necessarily the lowest bid. This would allow local control if the municipality found a higher quality local provider, for example, but the majority voted against this amendment.

You can read about all of the bills to hit the floor this week here.

 

Major Initiatives

Three major things are on everyone’s mind to finalize before we end session for the year:

  • School Finance
  • Funding
  • Budget


School Finance

The Supreme Court has issued a ruling that the Legislature needs to address school funding to comply with our Kansas Constitution.

Legislative leadership found it necessary to hire an individual to review what would be minimally constitutionally in terms of education finance. This outside consultant is a former legislator. Jeff King was brought in by Republican leadership on Senate and House side over the three week break as an objective view of interpreting the Supreme Court's ruling. While some expected a view that we could just focus on the bottom 25%, King came back with three major points of major significance to keeping our schools funded, equitable and open:

  1. Funding should be based on a per pupil basis versus block grants and more money is necessary to remain constitutional...and the more funding the better. This was surprising to some who felt that there may not be a correlation between funding and constitutionality. Bringing us to point 2...
  2. The Legislature couldn't just focus on the bottom 25% of student performance as some sources advocated. The general ruling was that it was important to weigh funding towards these percentages, but this could not be the sole remedy.
  3. That any plan must be funded or the Supreme Court would see through the plan as inadequate. This means that any tax-budget plan must have the school finance totally backed in the plan for the next few years. Currently as noted above, the state revenues are projected at a negative so that either the state must cut non-school spending or raise taxes to keep the schools open.

The House Education Finance Committee has come up with a finance formula that is based on per pupil spending instead of the block grant system that froze education funding over that last few years—a block grant system that penalized the Leavenworth school districts versus others. The proposed school funding formula does give extra funding to schools for ‘at risk’ factors among students—those qualifying below poverty levels, special needs situations and other types of factors that cause schools to spend more on certain students. Leavenworth and Ft Leavenworth school districts in the 41st House District see an increase. While it’s still in process, it proposes $150-170 million extra in the first year, then increases that funding incrementally by $150 million for the next 4 years.

This adds a burden of spending onto the budget, but without it we are in jeopardy of being unconstitutional. We need to stabilize school funding to bring the funding responsibility back from the Supreme Court and into the Legislature.


Revenues

With the current draft budget from both the Senate and the House, as well as with input from the Governor, it appears we need to raise revenues. However, I’m of the mind that we need to finalize the education funding first so we understand just what we need. And so we need to look at the state with an eye to revenue reform. The Senate continues to struggle with how to raise revenues and have not proposed any spending cuts. The House has come through with a number of plans and since we need both chambers on board, there continue to be many discussions on looking at the budget and how to make up the difference.

The Senate proposed a flat tax that fell flat—very flat. Governor Brownback signaled he would sign off on a new tax plan if it were a flat-tax. The Senate tried to pass such a flat tax before the break, but the effort failed with only three senators voting for it—the Senate president, the Senate Republican lead and one other senator. There was clearly no appetite for this type of tax plan, and it was particularly bad for my constituents in Leavenworth. The median income per household in my district is $54k; the flat tax would have nearly doubled taxes on a good portion of my constituents and not even have fixed the budget holes we have.

There is broad agreement that the LLC tax holiday needs to be eliminated. In fact a recent study by federal resources and Universities in Indiana and South Carolina focused on how well these LLC appeared to work. These studies appear to show that most business growth was switching of status of workers to this type of business form (the LLC or Limited Liability Company) to take advantage of the zero tax rate on pass through income. You can read the article here: Wichita Eagle article on LLC tax cuts.

We will continue to work, recognizing that we want recurring revenues as well as efficiencies to stabilize our budget and to stop the Borrow and Bankrupt trend.


Budget

While some economic indicators such as unemployment are leveling out, the state still is struggling with its own balance sheet because of the past few years of fiscal mismanagement. Recurring revenue is still far below spending levels, despite 8-9 successive budget cuts over the past few years. We still face a monumental task of funding a large hole in our projected budget. Our current year ending in June 2017 had a $350 million hole that I inherited as I came into the office; we have another projected $500 million hole in 2018 still ahead of us.

Even the extent of the budget mismatch turned into a controversy. The Legislative budget director went through the exercise with different representatives and went through the numbers. He clearly outlined that the state would be $150 million in the hole next year and $240 million in the hole in 2019 as it stands, continuing with the Governor's budget without fully funding KPERS, with no more money into K12, and continuing to sweep highway funds from KDOT among other things. For full funding of KPERS (the state retirement fund), the state would go further into the hole by an extra $135 million and $194 million in 2019. Add to that the Education Funding required to remain constitutional as ruled by the courts and we are on a continued downward path.

Prior to the recess two weeks ago, the House and Senate passed Senate Sub for Sub HB 2052, a bill that essentially fixed the budget for the current fiscal year. The governor has since signed off on this ‘rescission’ bill. One area the Senate differed on the House is in funding the Kansas Public Employee Retirement System (KPERS). To make the budget work after the Governor’s massive cuts in 2012, a couple of years ago legislature skipped out on a 4th quarter payment in 2016 and the governor signed off on not paying these obligations. The Senate wanted to do this again, but the House insisted that KPERS was fully funded through the fourth quarter of fiscal year 2017. Not paying these types of obligations now would have meant a much heavier debt on our future generations, effectively ‘kicking the can’ down the road.

While I'm convinced there are still agencies that have budgets we could reduce, we need to stabilize the financial ins and outs so that we stop borrowing money to pay our bills and stop our credit rating from plunging any further. Agencies have been presenting their budgets to the House Appropriations committee all session. While the legislature is very tight with any spending increases, implementing savings and efficiencies is slow going. But there is a general acceptance that these opportunities are out there in certain areas, and I for one will continue to look for them.

 

Around town during the break

As we had some downtime, I was able to return to work on my profession as a supply chain consultant and catch up on some activities I had put off for business. I was also able to visit with constituents around town at different venues, from liquor store owners regarding the uncorked compromise and my opposition to further alcohol taxes to hunters regarding the proposed legislation to open up out of state hunting licenses to visiting schools in the area.

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I was honored by the Rotarians as the beneficiary of a Paul Harris Fellow award.

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We had a great time sponsoring the CASA Night at the Races this past weekend.

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As well as sponsoring a hole for the Richard Allen Cultural Center annual golf tournament.

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At the Child Abuse Prevention Breakfast, I was honored to serve with others in order to raise funds for our vulnerable citizens.

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I competed in the Ducks Unlimited fun shoot on Ft Leavenworth and the subsequent fundraiser. Our Leavenworth chapter is one of the pre-eminent chapters across the US in terms of the money they have raised for our the Lake Perry marshland preservation and restoration.

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And I continue to serve the community not only in Topeka, but in trash collection. Spring cleanup was this past weekend and the PITT CREW had a team do our share of pickup.

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I had a fantastic time helping out with the annual Queen’s romp. The rain didn’t seem to deter the mainly women runners, coming out to run 3 miles in support of the charity event that goes for things like our own Unity in the Community movement.

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And finally we had the send off of our own 35th National Guard Infantry Division at Lansing High School. It was a moving time as our local heroes get activated for 9 months and our families bear the sacrifice of service. God bless and Godspeed for a safe return.

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Thanks for reading and be sure to check out my facebook page at http://www.facebook.com/pittman41 or follow me on twitter @votepittman.

 

CONTACT ME

I want to hear from you. It continues to be a special honor to serve as your state representative and look forward to any input on the various issues facing state government.

Please feel free to contact me with your comments and questions. My office address is Room 559-S, 300 SW 10th, Topeka, KS 66612. You can reach me at (785) 296-7522 or call the legislative hotline at 1-800-432-3924 to leave a message for me. Additionally, you can email me at jeff@votepittman.com. Some of the action is streaming and you can follow the legislative session online at www.kslegislature.org


For Leavenworth,
Rep. Jeff Pittman

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