Commerce, Labor & Economic Development - Livestream link
The committee received updates from the Kansas Lottery and the aviation section of the KS Department of Transportation. Regarding the Kansas Lottery, I am often asked where the money goes, so here is a breakdown.
Casino Revenue (based on state formula and FY 2016)
- 2% to Problem Gaming and Addictions Grant Fund $7.3M
- 3% to Local Governments $11M
- 73% to Casino Managers $265.9M
- 22% to State of Kansas $80.2M
Lottery Revenue (FY 2016 $273.6M total sales)
- $78.2M Transfers to the State
- $11.49M to Dept. of Commerce
- $4.55M to Board of Regents
- $561,000 to Dept. of Agriculture for marketing programs
- $5.2M to Dept. of Wildlife, Parks and Tourism
- $2M to State Housing Trust Fund
- $27.89M to State General Fund
- $2.49M to Juvenile Detention Facilities Fund
- $4.99M to Correctional Institutions Building Fund
- $1.66M to Veterans Programs
Our first hearings on bills included:
- The fee to create an LLC in Kansas is $165 or $20 for non-profit entities. The bill (HB 2038) would eliminate the fee for veterans creating LLCs. The bill would cost the state an estimated $207,000. The State of Missouri has already eliminated their filing fees for veterans.
- The legislature has a number of joint committees to focus on specific issues before the state which require year-round attention. With the loss of nearly 10,000 jobs in Kansas in the last 13 months, economic development and job creation should be a top priority. HB 2050 would create a joint committee comprised of eight Representatives and five Senators.
Taxation
The committee held informational briefings on sales tax as well as income tax changes and itemized deductions. We continue to have conversations about sales tax exemptions – both adding more and eliminating some existing exemptions to save money.
We held a hearing on reversing the much-publicized small business tax break enacted in 2012. As you may recall, this bill exempted most non-wage income from Kansas income tax for sole proprietorships, limited liability corporations and subchapter S corporations. HB 2023 would reinstate the income tax on non-wage income for tax year 2017. Thanks to the Salina Journal, Hutch News, and Northwest Times for covering the hearing and including my comments:
The governor does not support this bill, so when the Department of Revenue created the estimate for how much it would bring in, the number came in far below what experts estimate the state would bring in ($250 million vs. $180 million). After much hubbub, the department amended their estimates and added $50 million to their estimate. The bill does not include fixing the other parts of the 2012 tax legislation (the 3rd income tax tier and March to Zero revenue triggers), so it solves a very small part of the total loss in revenue.
One of the challenges facing the Tax Committee is understanding how much revenue needs to be raised to create a balanced budget for FY2018. The simple explanation is that the final tax package will most likely be somewhere near $500 to $700 million in order to stabilize the budget and to reduce the reliance on outside agency sweeps and non-recurring revenue sources. The key point is that raising $500 million stops making the hole from getting bigger, but doesn’t begin to fill the budget holes created in the past three years to the highway fund, higher education, KPERS, and our state rainy day fund.
Veterans & Military
We heard presentations from the Disabled American Veterans Commander and the Director of Motor Vehicles here in Topeka, and learned of an effort to bring military specific license plates to Kansas. We have a veteran and service member plate, but not one for each branch of the military. Soon, Kansas will be transitioning to laser-printed plates instead of metal stamped plates, so the process to personalize a plate with graphics will become easier.
Finally, the entire legislature was invited to a special tour at Fort Riley. I worked with the leadership at Fort Riley to arrange for Legislative Day and was pleased so many legislators were able to participate. We toured the Grey Eagle drone facility, drove through the historic district of the base, spent time in the computerized training facility where soldiers can experience simulated battle environments, received a briefing from General Pat Frank on the current deployments of various brigades around the world, an overview of the $1.4 billion upgrades in facilities on Ft. Riley since 2006, and the FY 2016 1.7 billion economic impact of Fort Riley in Kansas and our region. We also toured the new Irwin Army Community Hospital and saw first hand the medical care delivered to active duty, veterans, and their families. I received numerous compliments about having the opportunity to learn about the installation and to meet key members of the leadership team at Ft. Riley.
