THE PHILLIPS FILES: Rescission & Education Cuts

During my three years in Topeka, I cannot recall a more tumultuous first four weeks into a session. It is befitting the enormous budget and revenue challenges, which lay ahead, and while I am certainly up to the test, none of this is going to be pretty or easy. There are a lot of private conversations going on in the halls and offices of the statehouse about how to deal with the $430 million shortfall in the 2016 budget.

Some legislators believe continuing cutting the size of government is the right policy, others are showing signs of “buyer's remorse” over the 2012 tax cuts, and others want to continue on the glide path to zero income taxes. If there is any hope in changing our tax policies, it going to require individuals with these viewpoints (which are closely tied to the Governor’s views and policies) to be willing to change course. Buckle up for a rough and tumble ride!

Around the District

Please join me for the Speak Up for Fort Riley event:

• Monday, February 9, 3:30 pm
• Geary County Convention Center (Courtyard by Marriott – 310 Hammons Drive, Junction City)
• Department of the Army leaders will be on hand to hear our community’s concerns about potential force structure and stationing decisions. This will be your chance to make your voice heard in support of our troops and what they mean to our communities.

As has been said before, but worth repeating—the decision about Ft. Riley is the biggest economic decision facing our region and the State, as well as the safety and security of our nation and the world.

Supporting K-State, its faculty, staff, and students is a big part of my work in Topeka, and I found revealing a graph from the KS Board of Regents showing our state universities have $15 million less in state funds than they did in 2007 (graph below, click to enlarge). Our state universities have clearly been doing their part to accommodate state budget cuts. It is worth noting, during the time of receiving fewer state dollars; KSU has experienced a growing enrollment with increased demand for services.

There has been good news for two-year colleges, including the Manhattan Area Technical College. Governor Brownback’s initiative to promote technical training programs by offering Kansas high school juniors and seniors free, college-credit technical training has resulted in increasing funding by $29 million since 2012. 

Of course, many of you have already heard, but the Governor cut KSU and MATC by another two-percent late last week effective March 2015. The continued revenue shortfall is forcing these cuts in order to balance state expenditures with revenues by July 1, 2015. More to come on this in the weeks ahead.

IN THE HOUSE

Rescission bill: H Sub SB 4 makes significant current-year cuts to most non-education or corrections functions of government, and most significantly from KDOT and delayed payments to KPERS. I want to be part of the solution and wanted to avoid K-12 and higher education cuts, which were sure to come, without the rescission bill. However, those ended up coming anyway (read on):

• Rescission is from the word “rescind” and means to revoke, cancel, or repeal the current budget which is in state law.
• I offered an amendment to speed up the issuance of bonds KDOT was authorized to issue in the coming months. This would help reduce the need for emergency KDOT cuts and help continue road maintenance through the summer. The amendment failed, but was highlighted by the Wichita Eagle this week.
• This is my Explanation of Vote on the bill:
  • MR. SPEAKER: I vote yes for H Sub SB 4 with the primary reason being the serious concerns over the State paying its bills. I am deeply concerned about the transfers from KDOT and the impact it has on road maintenance and future improvement projects. In addition, I am very concerned about the impacts that will be felt in other important services provided to the citizens of Kansas. Our options were limited with today's vote. Now that work begins on the preparation of 2016-17 budget, we must focus on creating a long-term, sustainable solution to correct the shortfall in tax revenue.--TOM PHILLIPS 

Last Wednesday’s rescission bill turned out to be only a small part of a bigger plan to cut schools anyway, unbeknownst to me and most legislators. Governor Brownback announced last Thursday that he will unilaterally cut K-12 public schools 1.5% and higher education institutions 2% across the board. This will cover $54 million of the state’s shortfall for this fiscal year ending June 30.

• Wichita Eagle article

COMMITTEE WORK: 
Next week’s committee hearings

Taxation
Our conversation this week about sales tax and revenue (STAR) bonds was old hat for me (when I was Mayor, we used them to create the Flint Hills Discovery Center and conference facility), but it was fascinating to learn about the projects across our state now using this creative financing for tourism projects.

The Kansas Department of Revenue provided an overview of the sales tax and compensating use tax. This document shows the various sales tax exemptions the State has granted to various types of business activities, uses, and exempt buyers. 

We are in the midst of the greatest budget crisis our state has ever seen, and we’re considering creating more tax exemptions. HB 2076 would create a Back-to-School sales tax holiday on one weekend in August. 

Children & Seniors
Last week I mentioned the ABLE Act, which would allow Kansans to save tax-deferred funds for the medical, educational, transportation, and living expenses of disabled loved ones. HB 2100 passed the committee and I am confident it will receive broad support in the House.

We hosted a presentation on quality of life for elderly Kansans with LeadingAge Kansas, the Kansas Health Care Association and Kansas Advocates for Better Care. Having lost my mother this past fall, I am intimately familiar with end-of-life care and the challenges loved ones and families face in caring for their elderly parents. How we care for our elderly in Kansas is a growing concern and one I hope to play a vital role.

Energy & Environment
It was “Clean Power Week” in E&E Committee. We heard presentations from the Regional Southwest Power Pool and had a fascinating discussion of the impact of EPA regulations on power in Kansas. The clean power plant rules written by EPA to reduce carbon pollution by 30% are going to significantly impact utilities and consumers across Kansas.

Thanks to Carl Monroe and Mike Ross with the Southwest Power Pool and to Commissioner Anthony Clark of the National Federal Energy Regulatory Commission for presenting this week.

Local Government
I’m working with Riley County Commissioner Robert Boyd, County Counselor Clancy Holeman, and Director of Public Works Leon Hobson on HB 2164, on a bill to help with repair projects in small sewer districts. Currently, sewer districts must collect bids on work exceeding $1,000, which, anymore, barely covers excavation work at the site! The bill would raise that limit to $15,000, which is still a small amount for sewer projects, but will allow the sewer district to conduct minor repairs without a bid process.

Please do not hesitate to reply with questions or comments. It is an honor to serve you in Topeka. 

Sincerely,

Tom Phillips
State Representative, District 67
Kansas House of Representatives