The House Taxation Committee finished its second day of hearings on a bill which would eliminate the income tax exemption for pass-through business entities. Removing the pass-through exemption would bring in something in the neighborhood of $180 – $200 million in revenues. Opponents of the bill argued the tax exemption has helped small business in Kansas and has led to job growth. Those arguing to eliminate the exemption disputed those claims and contended job growth has actually shrunk in the years since the exemption took effect. Others conceded the time may have come to remove the exemption, but expressed concern that the House bill would take effect as of January 1, 2017. They contend this retroactive change in the tax law would be disruptive to the tens of thousands of Kansas businesses which have planned their tax year around the exemption.
An increasing number of legislators acknowledge they think the LLC exemption will be going away. It’s just a matter of handling it in the least disruptive way and of packaging this change in the tax law with a comprehensive long-term set of solutions to the state’s revenue problem.
The Senate is said to be building just such a package. Leadership in that chamber is floating a number of ideas across the Republican caucus in hopes of identifying those ideas which are least objectionable and could form the basis for a passable tax reform package.
Balancing the Budget
The House Appropriations Committee held hearings on the Governor’s plan to borrow about $317 million from the state’s idle funds. They have not yet decided they think that is a good idea; it may be among their only palatable options for obtaining the quick cash needed by June 30. Various budget subcommittees also set to work dissecting the Governor’s budget plan and collecting their own ideas as to which agency budgets can withstand further reductions between now and the end of the fiscal year. On Wednesday, the state will issue its January revenue report and that will give lawmakers a clue as to whether the $350 million shortfall projected for the end of this fiscal year is close to accurate or whether they may be looking at even deeper cuts.
KanCare Expansion
A bill to finally expand the state’s Medicaid program, called Kancare, and take advantage of the federal government’s commitment under the Affordable Care Act to foot 90% of the bill will come on for hearings next week. The Topeka Chamber plans to submit testimony in favor the bill, the Kansas Bridge to a Healthy Kansas Program. Granted, the ACA is headed for major change, if not repeal, now that Republicans dominate both houses of Congress and President Trump is in the White House. Even if “Obamacare” as such is dismantled, most observers agree Congress will develop some type of program for helping states insure the underprivileged. It makes sense to get in the program now to ensure Kansas’ share of that new program is as high as possible. The Bridge to a Healthy Kansas is good for Kansans, good for Kansas’ healthcare providers and good for the state’s economy.
Concealed Carry
A good candidate for Most Dramatic Moment of the Session So Far was the hearing last week before the Senate Federal and State Affairs Committee of a bill regarding concealed carry on college campuses. The hearing room was full to overflowing last week, with more than one hundred concerned citizens pouring into the hallway outside.
Under the current Personal and Family Protection Act, public buildings cannot bar people from coming inside with concealed weapons unless the building has been set-up with security to ensure that NOBODY can come in with a gun. That law has a section which allows colleges and mental health clinics, among others, to apply for an exemption. But they can only be exempt until July 1, 2017, after which date even colleges and mental health clinics will have to allow people to bring in concealed guns. The Senate bill being considered this year takes that section about colleges and mental health clinics and deletes the line, “until July 1, 2017.” If it passes, those kinds of institutions will have an ongoing ability to exempt themselves from the Personal and Family Protection Act and bar concealed guns from their premises permanently.
Those arguing for the bill contend college campuses are meant to be learning environments. College is stressful enough without the added worry that a fellow student might be armed. Others held the decision whether to allow concealed weapons on a campus or elsewhere is a matter for local government officials, not the state to decide. Finally, the argument was made that the original Personal and Family Protection Act was passed in a time when Kansas still required individuals to obtain training and permits before they could carry a hidden gun. As that is no longer the case, simply allowing anyone who wishes to take arms and roam our campuses is antithetical to the vision of college as a safe place where young adults can be explore a multitude of new ideas and experiences.
Those opposing the bill defended gunowners’ Second Amendment rights. They also argued that guns already pervade our nation’s college campuses. Laws banning them only have the effect of preventing law-abiding students and faculty from preparing to defend themselves. They recall that the original Personal and Family Protection Act was something of a compromise. Any public building which undertook to install enough security apparatus to ensure that all guns were kept out can lawfully ban concealed guns. The compromise was that colleges and universities were given four years to secure themselves. The Senate committee will presumably work on the bill this week. It is difficult to judge whether it has enough supporters to a pass out of committee.
To see past legislative updates, click here.