March 31 Legislative update

This posting has three important updates:

• The Kansas Legislature budget proposals and timeline
•  A change in dates in the continuing contract law
•  Polling information on budget cuts and taxes

If you have any questions about these topics, please contact me.

KANSAS BUDGET WORK DELAYED

Here is a news article from the Topeka Daily Capital on March 31, 2010.

Kansas Legislature adjourns regular session; budget work put off until April 28

Budget work, other issues left for wrap-up session next month

March 31, 2010, 12:52 a.m.

Topeka — Despite a looming budget crisis, the Kansas Legislature early today adjourned the major part of the 2010 session without having approved a spending plan for the next fiscal year.

The final gavel came down on the regular session at 12:50 a.m.

After having used up 75 days of a 90-day session, legislative leaders decided it would be best to wait until they have more up-to-date revenue projections before attempting to fashion a spending plan.

On April 16, state fiscal experts will put together a revised revenue estimate. Legislators will return for the wrap-up session on April 28 and try to write a budget with the new estimate.

Legislators face a nearly $500 million revenue shortfall on top of budget cuts over the past year of nearly $1 billion from a $6.4 billion budget.

At the start of the session in January, Gov. Mark Parkinson proposed a three-year, 1 cent increase in the state sales tax and 55-cent per pack increase in the cigarette tax to help close the budget gap.

But tax increase proposals have not gained much traction.

On the other side of the ledger, more budget cuts have also been rejected. House Republican leaders proposed a budget that would cut school funding $172 million, but that has gotten little support from other legislators.

CONTINUING CONTRACT LAW CHANGES

Here is a summary of Senate Bill 362 from Dale Dennis, Associate Commissioner of Education/School Finance on March 31.

The Kansas Legislature approved the conference committee report on Senate Bill 362 last night. This bill changed the date when local boards of education must notify teachers and administrators that they do not plan to renew their contract for the next school year. This date changed from May 1 to the third Friday in May. That date will be May 21 this year.

Teachers and administrators that do not receive a nonrenewal notice must notify the local board of education 14 days following the third Friday in May of their intentions to not renew their contract. That date will be June 4 this year.

POLLING RESULTS ON BUDGET ISSUES

A recent poll conducted on March 17 and 18 by the polling/research firm of Public Opinion Strategies found that only 12% of the 500 respondents favored deeper cuts to K-12 education. However, they also found that there is not much support to raise taxes.

Pollsters told respondents the state faces a $400 million budget shortfall. Listed are their responses by percentage.

• Increase cigarette taxes by $1 a pack: 69% yes, 31% no

• Increase liquor taxes: 70% yes, 29% no.

• Sugary drink tax: 43% yes, 54% no.

• Increase sales tax: 43% yes, 56% no.

• Furlough state employees: 33% yes, 55% no.

• Sales tax on churches, nonprofits: 29% yes, 68% no.

• Reduce highway maintenance: 26% yes, 72% no.

• Increase income tax: 26% yes, 71% no.

• Reduce college funding: 22% yes, 76% no.

• Reduce health/Medicaid programs: 16% yes, 81% no.

• Sales tax on residential utilities: 14% yes, 86% no.

• Reduce social service funding: 13% yes, 85% no.

• Reduce K-12 funding: 12% yes, 87% no.

The polling had a 4.38% margin of error.

NEXT STEPS

When the legislature returns it will be very important that we quickly contact legislators about favorable and unfavorable legislation. Bills will move at a much faster pace and we must be ready to respond.

Thanks go to all of you who have contacted our legislators and the Governor on K-12 budget issues. I believe that we are making a difference with many legislators.

I hope each of you have a Joyous Easter!

Devastating effects of House Bill 2739

The Kansas House is considering House Bill 2739 that would greatly harm schools and significantly raise property taxes.  It would have dire consequences for Buhler USD 313 and all of the Reno County schools. The bottom line for Buhler USD 313, is that this bill would further reduce funding in the General Fund and LOB by $882,454 for next fiscal year! In addition, it would raise our local mill rate by 7.23 mills!  Here is a summary of the bill as described by the Kansas Association of School Boards.

March 22, 2010

Information Released on School Finance Impact; Contact Your Legislators!


The Kansas State Department of Education has released a summary of HB 2739 , the school finance bill recommended by the House Education Budget committee, and computer print-outs showing the impact of that bill and the $172 million reduction in the school finance bill approved by the House Appropriations Committee.

The House may be debating these two measures tomorrow or Wednesday. It is vital for school leaders to understand the impact of these proposals on their district and contact their Representatives immediately.

The KSDE information is available as follows. Computer printout SF0145 provides detailed effects of this bill and computer printout SF0146 is a summary of SF0145. The detailed summary and the two printouts can be accessed on the School Finance Web site under “Recent Updates.” The Web site is: www.ksde.org/default.aspx?tabid=119

While the final version of HB 2739 was being drafted this weekend, KASB opposes the following provisions of the bill.

It cuts all districts by $85.9 million, equal to approximately $131 base budget per pupil, or 3.2 percent. This will lead to further reductions in staff and services to students at a time when educational standards and expectations continue to increase.

It cuts a further $85.9 million from local option budget state aid, which will impact some districts far more severely than others, based solely on the property wealth of the districts. Districts will either have to cut their budgets MORE than the $131, or raise local property taxes.

Although House leaders say taxes should not be increased, this bill would result in an $85.9 million property tax increase if districts seek to replace lost state LOB aid, with local increases varying from under one mill to nearly 50 districts with double-digit mill levy increases.

Although school districts have been criticized for not directing more dollars to the classroom, the bill creates a new fund to allow districts to spend more on local activities and sports, while cutting the general fund that supports instruction.


The bill authorizes two new property tax-based funds, the Local Activities Budget and the Equity Budget, neither of which receives state equalization aid. The result will likely be both higher property taxes in certain districts and further disparity in mill levies for districts seeking to use them.

The bill eliminates high enrollment weighting and reduces other school finance weightings.

HB 2739 will require all districts have at least a 10 percent local option budget as a “local foundation budget,” in addition to the 20-mill statewide levy and general state aid. The result will be different mill levies to fund the “foundation” requirement of the state.

KASB will continue to provide information on the impact of these measures.

Mark Tallman
Assistant Executive Director/Advocacy
mtallman@kasb.org

Governor Parkinson calls on Legislative leaders to join in the solution

Here are comments from the Governor last week after he took actions to balance this year's fiscal budget.  He is asking the legislature to step up and find ways to raise revenue for next year's budget that starts July 1.

“In the meantime, we cannot balance the next budget or protect our schools, public safety and safety net services without new revenue. I look forward to the Legislature to coming to the table, putting politics aside, and raising the revenue we need to get Kansas back on track.”

It will be a fragile coalition, but I think the legislature will find ways to raise revenue.  A sales tax increase, an alcohol tax, a cigarette tax, a soda pop tax have been introduced.  Also, there is talk about closing tax exemptions.  What do you believe will be in the mix for revenue enhancements?

Senate Bill 516

The legislature is beginning to consider revenue enhancements to stop the cutting for schools.  Senate Bill 516 would increase the state sales tax by 1%.  Here is a summary of the bill and its status.

SB 516 would increase the statewide sales tax rate by one-percent, taking it from 5.3 percent to 6.3 percent, and decreasing it to 5.5 percent after three years. This is part of a revenue package proposed by the governor at the beginning of the session, which he recommended to bridge the FY 2011 budget shortfall and provide a modest BSAPP of $50 for K-12 education.
Seaman USD 345 Superintendent Mike Mathes presented direct and compelling testimony to the Senate Assessment and Taxation Committee hearing the bill. He outlined the efficiencies and budget-cutting measures enacted in his district, noting most districts were acting similarly, but said meetings with district patrons have made it clear that they’re calling on the Legislature to make no more cuts. Special thanks to Mike for his willingness to stand before both this committee and the House Taxation Committee, earlier in the year, and call for the legislature to provide adequate revenue, so budgets wouldn’t have to be cut even more in the next school year.

Status: The Senate Assessment and Taxation Committee acted earlier in the week to remove the cigarette and tobacco tax portion out of this bill and put it into a separate bill, HB 2388.

I think it is a very fair way to raise revenue.  What are your thoughts?

Hutch News Guest Editorial

Here is an editorial in the March 15 Hutchinson News by Tom Arnhold.  Great article on taxes and tax exemptions.  The only area where I disagree is when he mentions sports in Buhler and Hutchinson.  We have cut over $80,000 in sports programing in Buhler.

It's time to consider repealing tax cuts, exemptions


By Tom Arnhold - Community columnist
Political courage is sadly lacking in our elected officials these days. It took guts for President Eisenhower to send federal troops to Arkansas to enforce laws allowing blacks to attend public schools. President Kennedy showed fortitude when forcing the former Soviet Union to remove missiles from Cuba.

Now our politicians want to accomplish only three goals: 1. Get elected, 2. Get re-elected, 3. Gain power and/or wealth. Members of Congress such as John Murtha and Ted Kennedy died in office. Kansas' own Sen. Pat Roberts seems intent to do the same. Unfortunately, current election laws tend to keep incumbents in office indefinitely.

Kansas schools are suffering because our Legislature caters to anti-tax groups and the Kansas Chamber of Commerce. It began with the faulty thinking of President Reagan that if the government gave tax breaks to large corporations and the wealthy, they would use the tax savings to create more jobs that would benefit the rest of us peons. This is commonly known as the "trickle-down effect."

Instead, we have seen what wealthy companies do with their money. The top executives of large companies have paid their executives disgustingly large wages. Our Kansas legislators have passed laws that give tens of millions of dollars worth of tax breaks to companies who want to relocate to Kansas. Eaton threatened to leave Hutchinson and got tax breaks to stay.

A few years back, the Kansas Chamber of Commerce convinced legislators to phase out personal property taxes in equipment. Just four years ago, I paid $400 a year in personal property taxes on my equipment, but now pay nothing. I have not hired any new employees or reinvested the money in my business. Instead, I saved the money.

Think about all the businesses across Kansas who no longer pays personal property taxes. That money has been taken out of the Kansas budget. Our legislators would rather see our schools become second rate instead of having the political courage to do away with tax exemptions. Over the past 20 years, our elected officials have granted numerous exemptions to aid various groups. Those exemptions should be repealed now that our schools are in need.

Rep. Jan Pauls won't increase cigarette taxes. Rep. Joe Seiwert wants to cut all state agencies in an equal amount across the board. Rep. Mike O'Neal will not restore previous tax cuts granted to corporations. Sen. Terry Bruce recently noted school districts should be consolidated, but it was likely not politically doable. Have some courage, Sen. Bruce, and introduce a bill to consolidate small school districts. And when we consolidate them, reduce the number of administrators and not the number of teachers.

Either our legislators do not comprehend the damage they are doing to Kansas students or they do but feel they have to kowtow to those calling for no tax increase. Underfunding our schools is shortsighted and will damage tax revenues in the long run. Those teachers who are laid off because of budget cuts will never go back to teaching. Students won't become teachers if they face the possibility of losing their jobs or having their salaries cut every time Kansas has a budget crisis.

Firing teachers and other education personnel is only going to lead to more jobless Kansans. These folks will be on unemployment, costing the government more tax dollars. Many of those laid off won't afford health insurance, causing more stress on them and the system. The Kansas Legislature should cut back to four days a week like some school districts are doing. We can consolidate the number of legislative districts to cut back on the number of legislators we have to pay. Also, the Legislature should cut legislator salaries and staff by 10 percent.

Kansas politicians cut taxes for a wide variety of persons and businesses when the economy was good. Now that our tax revenues have decreased dramatically, those taxes need to be reinstated for the greater good of all Kansans. I am not asking for new taxes, just that the taxes we reduced in the last 10 years and the exemptions that were passed be repealed.

Our schools need to do a better job of budgeting. Since I moved to here, Hutchinson and Buhler high schools have added boys and girls bowling, girls softball, and boys baseball and soccer. It's time to reduce some of the sports programs or redesign them to impact more students at a lower cost. My niece's junior high school girls basketball team recently hosted Emporia. At the same time, her junior high boys basketball team traveled to Emporia to play. That makes no sense whatsoever.

There is no doubt that Kansas is facing a shortfall of tax revenue and some programs will have to be cut. However, we should not cut the budget of all state agencies equally. If my income is down, I do not cut my food budget and my discretionary spending equally. The Kansas Legislature should cut programs that are not essential and leave education and other vital services intact.

Sen. Bruce, Rep. O'Neal, Rep. Pauls and Rep. Seiwert: Do the right thing and fund education properly, even if it means repealing the tax exemptions you passed a few years ago.

Tom Arnhold is a longtime Hutchinson resident and attorney. E-mail: TArnhold@kslawyer.net.

I believe that the momentum for revenue enhancements instead of deeper cuts by the legislature is gaining momentum.  Your thought or observations?