2018 Legislative & Policy Watch                       Weekly E-Update
Issue No. # 7, February 16, 2018

In This Issue
Revenue Revisions: Federal Tax Law Impact
KS Rushes to Meet Demands of Poultry Corporations
County Election Commissioner Selection
Rehab of Abandoned Housing
CEP Live Facebook Interviews
About Policy Watch

About Policy Watch E-Updates


The Legislative and Policy Watch Weekly E-Update is a project of the Kansas Rural Center.

Editor: Mary Fund
Paul Johnson, Policy Analyst



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Kansas U.S. Congress
 Contact Information

Sen. Jerry Moran
DC Ofc 202-224-6521

Sen. Pat Roberts
DC Ofc  202-224-4774

Rep. Roger Marshall, 
1st Dist. 
DC Ofc: 202-225-2715

Rep. Lynn Jenkins
  2nd Dist.
DC Ofc: 202-225-6601

Rep. Kevin Yoder
 3rd Dist.
DC Ofc: 202-225-2865

Rep. Ron Estes
  4th Dist.
DC Ofc.: 202-225-6216
REVENUE REVISIONS
       by Paul Johnson 
 
The impact of the new federal tax law on Kansas revenues is slowly coming into focus. There is still some clarification from the Federal government to come so exact, final figures will not be known for several weeks at a minimum. But for now the increased revenue to Kansas is forecast to be $137.8 million in 2019, $179.9 million in 2020 and $187.7 million in 2021.

Two-thirds of this revenue increase comes from individuals and one-third from corporations. The largest impact for individuals comes from accepting the increased standard deduction at the federal level which results in higher State income taxes. At present time if an individual takes the federal standard deduction that individual cannot itemize expenses at the State level. There may be a debate over changing this policy in Kansas or increasing the Kansas standard deduction.

The federal tax law lowers the medical expense deduction floor of Adjusted Gross Income from 10% to 7.5% that could reduce Kansas taxable income for taxpayers with high medical expenses. New federal law limits the mortgage interest deduction and eliminates the interest deduction of home equity loans so Kansas taxpayers who take the federal standard deduction will have a higher taxable state income. For 'passthroughs' (LLC's, subchapter S's, etc.), new federal tax law limits business interest expense deductions, so this limitation will result in an increase in the taxpayer's Kansas taxable income. One last corporate tax issue is the mandatory repatriation of foreign earnings and how these earnings will be taxed in Kansas.

As Kansas continues to scramble to find more funding for public schools without another tax increase, this extra revenue from the federal tax law changes may be seen as a blessing. If Kansas makes no changes to existing tax law and taxpayers see a State income tax increase, is that considered a new tax increase in Kansas? What will be the net impact of lower federal income taxes but somewhat higher Kansas income taxes?

HB 2740 has been introduced to increase the statewide 20 mills for public schools up to 26 mills. Each mill increases revenue by $33 million for public schools. While State lawmakers may increase the 20 mills, it is local officials who would take most of the blame for the property tax increase. 

In the end, lawmakers are hoping that the new federal tax revenue for Kansas and increasing economic growth revenues will bring in enough money to satisfy the Kansas Supreme Court and push the tougher decisions on raising revenues for 2020 and beyond to the 2019 Kansas Legislature.

KS. RUSHES TO MEET DEMANDDS OF POULTRY  CORPORATIONS
 
Kansas lawmakers are rushing to meet the demands of Corporate Chicken and threaten the environment of counties across the state, as well as the quality of life for rural Kansans. Counties have no say or control over the siting of 'Confined Animal Feeding Operations' which includes massive chicken houses. The State has preempted this local control and sets the distance between CAFO's of various sizes and habitable structures. 

Current law requires a 4,000 feet setback from habitable structures (residences) for broiler chicken production operations that confine 100,000 or more birds. SB 405 would change current law and allow 333,333 chickens within 1,320 feet (1/4 mile) of a residence. In fact, SB 405 would now allow up to 120,000 birds to be placed virtually anywhere with no setback to residences. The only applicable setback in that case is 100 feet from the non-owned property line nearest the chicken houses.

Animal conversion units are the basis for comparing animals and the environmental impact of waste. Beef cattle are one animal unit while a broiler chicken is calculated at 1/10th of an animal unit. SB 405 reduces that animal unit conversion by a factor of three to 0.003 from today's 0.100. Chickens produce twice as much manure that contains twice as much nitrogen and six times as much phosphorous as cow manure.

 Nitrogen and phosphorous are the greatest threat to streams from waste application runoff. With SB 405's greatly reduced animal unit conversion factor, most production barn sites (under 125,000 chickens) will not be required to prepare a nutrient management plan set to federal requirements. The chicken grower is responsible for the dead birds and on-farm composting is a standard practice.

What are the health impacts and quality of life effects of living only a ΒΌ mile from 333,000 chickens or maybe just 100 feet from 100,000 birds? The Kansas Department of Health & Environment (KDHE) doesn't know nor does Kansas State University. What happens to property values around these chicken sites? Tyson wanted to process 1.2 million birds a week at Tonganoxie. It would take 500 chicken barns within 30-40 miles of the plant to meet that need. Does KDHE have the staff and expertise to adequately monitor dead chickens and tons of poultry litter to ensure safe land application is being followed?

More and more consumers are turning away from mass produced meat products of questionable quality and safety. More consumers are opting for organic, local, antibiotic-free, and free-range meats. Kansas should steer toward the next generation of poultry production, which includes smaller, diversified family operations with cleaner, more humane features such as more space, access to out-of-doors for the animals, elimination of most chemical and antibiotic use, and more local, community-scale processing. The Kansas Senate Agriculture & Natural Resources committee has rushed SB 405 out of committee with Senate floor action next Tuesday or Wednesday.


COUNTY ELECTION COMMISSIONER SELECTION

In 101 counties, elections are managed by an elected County Clerk. In the four largest counties (Johnson, Sedgwick, Shawnee and Wyandotte), there is an Elections Commissioner that is appointed by the Secretary of State. Actually this selection process started in 1947 when the Governor made the appointment with State Senate confirmation. In 1968, this selection process was moved from the Governor to the Secretary of State with State Senate confirmation. The Secretary of State was deemed the State's top election official. 

This change was passed over the veto of Democratic Governor Robert Docking by a Republican controlled Legislature. Gov. Docking was in his final year and ready to appoint election commissioners to these four counties. In that same session Gov. Docking also vetoed 'right to work' and had his veto overridden.

In 1982, this selection process by the Secretary of State for these four counties was revisited and the provision of State Senate confirmation was removed. While the Secretary of State appoints these four election commissioners, the funding comes from the counties. In fact, this law states that the Election Commissioner has the authority to present an election's office budget to the County Commissioners and they must fund the request.

Recently, there have been budget battles between Election Commissioners and the counties with the Attorney General siding with the Election Commissioner's budget authority. SB 299 does not change the selection process but clarifies the budget authority by the County Commissions. In Sedgwick County, the county commissioners cut the budget making it more difficult to carry out the elections duties set by the Secretary of State.
SB 229 takes the selection process from the Secretary of State and gives the selection to the Board of County Commissioners. Another proposal is for the Election Commissioner to be elected as is done in the other 101 counties. Another idea is that if the Secretary of State appoints these four Election Commissioners than the State should fund those offices. The annual fiscal note would be $5-7 million. These four counties have populations over 130,000 which is the trigger point in the law. 

If Douglas County goes over 130,000 in the 2020 census, then existing law mandates that Douglas County would become the fifth county with an appointed Election Commissioner. The Senate Committee on Ethics, Elections and Local Government will appoint a subcommittee to discuss further action with SB 299 and SB 229 over the next month.

 REHABILITATION OF ABANDONED HOUSING

House Bill 2506 streamlines the process of cities working with non-profits to rehab abandoned property and quickly put that property back on the market. There are three standards that must be met for this process to start. The first is that property taxes have been delinquent for 2 years. The second is that the structure has been unoccupied for 15 months. The third is that the residential structure is a blighted influence on neighboring properties. District court will be involved in the whole process. At any point the owner can stop the process by paying the back taxes and developing a rehabilitation plan for the court.

The reality is that most of these structures have no identifiable owner or the owners have just walked away with no intent to keep up the property. Kansas City, Kansas is dealing with 5,000 such abandoned structures. This concept has been around the Kansas Legislature for a few years and once was vetoed by Governor Brownback over safeguarding 'property rights'. This new version has dealt with those concerns and built in more safeguards for property owners. HB 2506 applies only to cities and not counties. It has passed the House and will be debated over the next month in the Senate. The prospects look good for eventual enactment into law.

SCHEDULE WEEK OF FEB. 19

There will be a few hearings on Monday Feb. 19 but mostly floor action Tuesday through Thursday to meet the deadline of passing bills out of one house to another.

There  are still opportunities to provide input to your legislators on any of the bills we have discussed as they must go through the opposite house for committee discussion and passage.

Go to kslegislature.org/li for detailed calendar.

CEP LIVE Facebook Schedule

This week's CEP LIVE interview featured an interview with Kansas Health Foundation staff on their Integrated Voter Engagement work.  You can  view and hear it Here

See previous week interviews and the schedule below:
   
1/ 23/18  Zack Pistora, Sierra Club;
   
1/30/18 Scot Anglemeyer, Ks. Association of Community Action Agencies https://www.facebook.com/CEPheartland/videos/1581837078599483/ 

2/6/18 Paul Johnson, Kansas Rural Center

2/13/18 Spotlight on Integrated Voter Engagement

2/20/18 Jessica Lucas, Clean Energy Business Council
2/27/18 A Visit to the Statehouse 101
3/6/18 Mitzi McFatrich, Kansas Advocates for Better Care
3/13/18 Dawn Buehler, Friends of the KAW

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