Dear Friend:

The House passed dozens of bills of very low import, but a few rose to the top and are discussed below. Thank you for your patience as I waited out the education committee process. It was premature to share it with you last week as the committee broke over the weekend and returned last Monday to work on the biggest piece of that puzzle – funding. I now can provide a more accurate picture of the committee’s work and how it will impact our districts.

It is good to be home for a few weeks to reconnect with family, friends, and my normal routine. I’ll return to Topeka on May 1st for the Veto Session as we finalize the next year’s budget, school finance, and tax reform to pay for it.  

Thank you to those who joined us for the Chamber’s monthly legislative coffee at the zoo. It was a great turnout of respectful citizens with engaging questions.:

Please join me for the following upcoming events:

April 20:

• State Farm Good Neighbor Citizenship grant award to KSU Powercat Financial Counseling
• Big Lakes Developmental Center Annual Board Meeting

April 21: WWI Memorial Stadium Dedication

April 28:

• Inauguration of KSU President Richard Meyers
• Military Relations Committee Luncheon

AT&T recently launched a Text to Donate campaign in support of the Kansas Fire Departments that responded to the wildfires last month. Text WILDFIRES to 80077 to make a $10 donation to the Kansas State Firefighters Association. When prompted, reply to confirm the donation. All wireless carriers are participating.

It was a pleasure to welcome K-State students from the Staley School of Leadership. They were presenting their projects on community engagement. Thanks Professor Andy Wefald for bringing your students to the Capitol:

Finally, congratulations to the Manhattan CHIEFS (Christian Homes in Educational Fellowship) basketball team on their national championship!

Medicaid Expansion Veto Override
The House and Senate passed Medicaid Expansion and it was sent to the governor for consideration at the end of March. He vetoed it the next morning. With your strong support, and that of our Chamber of Commerce and Via Christi Hospital, I voted to override Governor Brownback’s veto, but the vote failed 81-44 (84 required for override).

Current Year Budget
The House and Senate agreed on a compromise and sent the rescission bill to the governor. It relies on borrowing funds from the Pooled Money Investment Board, with a six-year repayment schedule beginning in 2019. I was willing to vote for a one-time fix for a few reasons:

1. I saw this as the best of the bad options by borrowing to resolve a 3-month cash shortfall of approximately $300 million,
2. The bill avoided further K-12 and higher education cuts (attempting to impose cuts in the last three months of the fiscal year would have been devastating), and
3. Reinstated the state’s full contribution to KPERS.

• Jargon Alert: Rescission – to rescind, to take back.
  • Since actual revenues came in a few hundred million below the estimates on which the budget was created, we had to reconcile the difference and make current-year cuts or find a one-time revenue source to balance the budget.
• Substitute for Senate Bill 2052 passed the House 108-15 and the Senate 30-10.

School Finance Progress
The K-12 Education Budget Committee met from 1:00 pm to 8:30 pm on March 30 to craft a school finance plan from the various options considered in committee. After dozens of amendments, Sub HB 2410 now resembles a new-and-much-improved version of the 1992-2014 formula. We know from the 2005 Montoy case the formula is constitutional, if adequately funded. The key components now include:

• Critical for our area – a military “2nd Count” on February 20. This allows for funding based on the net gain or loss of student population between then and the first count on September 20.
• Fully funded all-day kindergarten beginning this fall
• $2 million per year dedicated to at-risk 4-year olds
• Local Option Budget (local property tax commitment which stays with local school districts) remains at 33%.
  • While LOB was originally intended for local communities to tax themselves to provide supplemental opportunities, due to more than a decade of cuts, this funding is now used to fund general operating expenses, so it was renamed “Local Foundation Budget” (LFB) to more appropriately describe its use.
  • More than 30% of districts are already maxed out to the 33% level, but for those which aren’t, the bill allows their boards of education to make that call, with the opportunity for a protest petition by voters in the district if they oppose the move. 
• Allowed flexibility in enrollment counts: Per Pupil funding is based on the student headcount on September 20. The new bill allows flexibility to use that number or the previous year’s count, whichever is higher. 
• Restored funding for English Language Learners programs, with funding based on student contact hours or the number of ELL certified teachers, leaving the choice up to the school district. 
• Capital Outlay: Allows schools to pay utility bills with money from their capital outlay fund, which is levied separately from general operating expenses.
• Funding: Prior to the block grant formula, the amount given to districts on a per-student basis was called Base State Aid Per Pupil (BSAPP). The state’s per-pupil portion of school funding will now be called Base Aid for Student Excellence (BASE) and the committee agreed to add $750 million over five years with increases tied to the Consumer Price Index after that:

o   $4,006 for 2017-18

o   $4,206 for 2018-19

o   $4,406 for 2019-20

o   $4,606 for 2020-21

o   $4,806 for 2021-22

If passed as written today, our districts will get the following in NEW state aid and our local districts will have authority to increase LFB by the following amounts:

Manhattan-Ogden School District

• BASE: $2,075,434
• LFB: $460,903

Riley County District

• BASE: $180,512
• LFB: $13,776

The committee worked very hard to pull together the various components of this package and make sure every district’s needs are recognized, as well as to address the concerns of the court and the requirements of the Kansas Constitution. The committee adjourned without passing this final product to the full House for consideration. The legislature hired an attorney to review the bill and the court decision to determine if the bill is constitutional before moving it out of committee. 

If the education policy wonk in you is craving more information, our state Department of Education is an amazing resource of brilliant industry experts: 

KSDE resource site

• Major Policy Provisions
• District-by-District State Funding data; SF17-168 - Column explanation
• District Local Funding data

ON THE FLOOR

Of the dozens of bills debated and voted on the floor these two weeks, I’ve included a handful of broad interest or local impact. For more information, the complete listing of bills debated is provided in the House Calendar. 

KPERS Working After Retirement
Currently, retirees may return to work for KPERS-participating employers if they have been separated from employment for at least 60 days with no pre-existing arrangement to return to work, and if they earn less than $25,000 per year. H Sub for SB 21 would exclude certain retirees who return to work under certain conditions (primarily university employees). It passed the House 114-9, I voted YES. The original contents of SB 21 on the Kansas Money Transmitter Act were added into SB 20 during House consideration. Differences between the House- and Senate-passed versions of the bill will be decided in conference committee. House Financial Institutions and Pensions committee hearing testimony.

Executors
If you are an executor, power of attorney, guardian, conservator, or trustee of a deceased persons effects, SB 63 would authorize access to digital assets as well. Some easy examples are shutting down a Facebook or Twitter account and closing online banking. The bill passed the House and Senate unanimously. Testimony: http://www.kslegislature.org/li/b2017_18/measures/SB63/testimony

Joey's Law
Sub SB 74 would enact Joey’s Law, to authorize placards for use in vehicles to individuals who need assistance with cognition, including those with autism spectrum disorder. The bill would authorize: 

1. A decal to be affixed to a license plate, 
2. A placard, as well as 
3. Placement on a driver’s license of an indicator that the person needs assistance with cognition.

The bill passed the House unanimously, and earlier passed the Senate, 28-11.

Uncork “Lite” 
SB 13 represents a compromise bill on the Uncork Kansas initiative to allow convenience stores, grocery stores, and big-box retailers to sell hard beer (not more than 6% alcohol by volume).  Here is some background:

Over the past six years the Uncork coalition has attempted to allow their members to sell wine and hard liquor (spirits). I have consistently stood against this change in law. This year there was a negotiated agreement between the Kansas Wine and Spirits Wholesalers Association, Kansas Association for Responsible Liquor Laws, and The Kansas Association of Beverage Retailers with the Uncork Kansas coalition. According to testimony provided at the committee hearing, there is a growing industry consensus that 3.2% alcohol by volume beer (some refer to as near-beer) is going to eventually be phased out or greatly reduced in the marketplace. Anticipating that change, the compromise allows:

• Grocery and convenience stores to sell “strong beer.”
• Liquor stores to sell other products up to 20% of their gross sales, excluding tobacco and fees from lottery ticket sales (think pop, mixers, lemons, limes, etc.). 
• Alcoholic beverages cannot be sold below acquisition cost.
• Grocery, convenience, and big-box stores will continue to be licensed and regulated by cities and counties.
• The members of the Uncork coalition support the intent to not seek changes to the liquor laws for ten years. 
• The implementation of the law begins on April 1, 2019. 

This is one of those hot button issues that has been confronting the legislature every year since 2011. The parties involved in this debate were finally able to reach a compromise and it was evident no one party was overwhelmed with the bill, but were willing to accept the outcome.  The House approved this bill, 80-45, I voted YES. The Senate agreed with changes made in the House and the bill is on its way to the governor.

Medicaid Reimbursement Rate Increase
The House also passed 103-21 a bill (HB 2180) that increases the fee paid by KanCare management companies and some insurance policies to 5.77% from the current 3.31%. That would raise money to leverage more federal Medicaid payments to the state which will allow lawmakers to restore last year's 4% payment cuts to health-care providers under the KanCare program. I voted YES. The bill will now move to the Senate for consideration, or it could be amended into a conference committee report. 

Schlitterbahn Tragedy
You’re likely familiar with the tragic death of my colleague, Rep. Scott Schwab’s son, Caleb, at the Schlitterbahn Water Park. As a result, H Sub for SB 70 would amend the Kansas Amusement Ride Act and the Amusement Ride Insurance Act to require additional registration, fees, and reporting for owners of rides, set standards for inspections, and requirements for ride inspectors. The House approved this legislation, 124-1. The Senate approved its version, 39-1. A conference committee will work out the differences between the bills. I voted YES. You can read committee testimony here.

No Call Changes
HB 2273 expands the Kansas No-Call Act by adding new requirements to telephone solicitors who use robocalls:

• Calls would be prohibited unless the recipient of call consents to being called or a live operator gets the person’s permission before beginning the recorded call.
• Calls before 9 a.m. and after 8 p.m. would not be allowed.
• Calls to hospitals, recuperation centers, ambulance services and other health, emergency and law enforcement services would be prohibited.
• The bill does not include calls from elected officials or candidates.

It passed 121-1, I voted YES. Committee testimony on the bill.

Commerce, Labor & Economic Development - Livestream link
The committee has completed its work for the session. 

Taxation
We have been swamped trying to get things resolved, and provide ample opportunities for various taxes to have hearings and be considered as part of the final solution. The Chairman has worked hard to find ways to lessen the impact of a new tax plan on low income households. For example the committee passed a 5% flat tax. I’m not in favor of it, but supported getting it out of committee so the House could have the conversation. However, it doesn’t generate enough money to solve the problem, so it may never be brought up for debate, especially since the Senate last week killed a 4.6% flat tax – it garnered just three votes.

Ultimately, IF we want to solve the underlying problem, and IF that solution does not involve retroactivity to January 1 of this year, we must find a few hundred million more some other way. I supported retroactivity when we passed our first tax bill HB 2178, but at this point, we are dealing with the least bad of very bad options and there are no good answers. To fill the gap, we’ve held hearings on a gas tax, cigarette tax, liquor tax, and removing the tax exemption from personal services (think haircuts, shaves, and pedicures).

The tradeoff would be to continue to delay payments to KPERS, schools, and roads. Those aren’t good alternatives either, and those shell games are part of what got us to where we are today. We’re to the point where we’ve run out of one-time budget Band-Aids.

Finally, we held a hearing and passed HB 2235 to the full House for review. It would require retailers to report the untaxed Kansas sales to the Kansas Department of Revenue (KDOR), and provide a notice in each untaxed purchase that the sales tax is due to KDOR, as well as an annual report to each purchaser of their previous year’s purchases on which sales tax was not collected. The bill is based on a Colorado measure passed in 2010 but not implemented until this year due to a court battle over interstate commerce concerns. Thanks to the Manhattan Chamber of Commerce for testifying in support. 

Veterans & Military
The committee has completed its work for the session.