Session Has Reached The Halfway Point

Lawmakers are now on a five-day break having spent last week working through numerous bills and trying to beat the Turnaround deadline; Thursday was the last day for the House and Senate to pass their own bills and send them over to the other side of the Statehouse. They will be back in business this Wednesday.

 

K-12 Cost Study

Last Friday, lawmakers received an early sense of what to expect from the K-12 school finance study being conducted by Professor Lori Taylor of Texas A&M University. Taylor and her team have been commissioned by the state to review previous school finance studies, which are the primary evidence the supreme court has relied upon for years in concluding schools are underfunded and provide an updated perspective on what it should cost to equip Kansas students with an adequate education. The researchers did not provide specifics about their conclusions but, rather, told the group of approximately 50 legislators which issues they plan to cover in the final report. For example, Base State Aid Per Pupil is the starting point for the school finance formula. The researchers intend to develop a number for BSAPP which is based solely on classroom costs. Such non-classroom expenses as transportation and food service will be analyzed separately because they can vary so greatly from one school district to another. All eyes will be on the new cost study when it is released in mid-March. School finance has more or less eclipsed any other material discussion about the state’s budget this year. Legislators will have to work fast to develop their new school finance plan based on the study in time to beat the supreme court’s April 30 deadline.

 

Economic Development Data

Last Monday, the House Taxation Committee held a hearing on a bill which would require public disclosure of certain economic development incentive data. A joint legislative committee would be created to meet at least twice a year to study economic development incentives. The bill would create an internet portal where the public, including legislators, could access the data. A key supporter of the bill, a legislator from Augusta, told the committee the bill is intended to shed more light on the state’s main economic development incentive programs:  HPIP, PEAK and STAR bonds.  She decried the current lack of clear and timely data to help legislators assess the real value of the programs. The committee did not take action on the bill.

 

Medicaid Expansion

This session’s Medicaid Expansion bill was passed out of committee last Monday and sent to the full Senate. The bill would establish the KanCare Bridge to a Healthy Kansas Program. Almost 140 supporters, including the Greater Topeka Chamber of Commerce and METL, testified in support of the bill.  Senate Leadership, however, is ill-inclined to take the bill up until the school finance issue has been moved off the runaway. Even if the Bridge to a Healthy Kansas passes the legislature, though, Governor Colyer’s disposition on it remains obscure; most indications are that he would veto it just as his predecessor did last year.

 

Senate Passes Expensing bill

The Senate last week passed a bill which allows small businesses to deduct as an expense their costs in placing machinery, equipment and computer software into service. The deduction was already available to sub-chapter C corporations, which typically implies bigger companies, but not small businesses. Until last year, deductions were not relevant for pass-through business entities which were exempt from state income tax anyway. Now that those businesses are again subject to Kansas income tax, most senators agreed it is only fair that all business should be able to take the deduction. The main reason the bill did not pass unanimously was that some of the senators thought it premature to pass any legislation with budgetary impact until they understand how the school finance issue is going to play-out.

 

HPIP

Senate Bill 334 would have allowed companies to carry forward 75% of any unused tax credits they’ve earned under the HPIP economic development incentive. That bill was referred back to committee last week and its prospects are unclear. However, a new bill was introduced last Wednesday to do basically the same thing except that the credits could only be carried-forward until the 25th year after the HPIP credits were first claimed. Lawmakers have complained over the years that predicting when and whether HPIP credits would be used has been all but impossible and that impacts how much money can be used in the state general fund. These bills give companies extra time to utilize the credits but would also enable the state to draw the line on outstanding credits.

 

Broadband Task Force passes House

Last Thursday, the House unanimously passed a bill creating a Statewide Broadband Expansion Task Force to evaluate the broadband needs of Kansas citizens, business, industries, institutions, and organizations. The Task Force would identify opportunities and possible funding to increase statewide access to broadband services and prioritize the expansion of broadband to unserved and underserved areas of the state. The Task Force would report on its progress to the Legislature next year.