THE TRUTH REPORT

A Weekly Rundown of Important Activity in Topeka, from a Principled Perspective

The Facts of the Matter is a feature in The Truth Report each week, highlighting important information, some of which is not always reported or emphasized in the mainstream press:

Have you heard our Kansas Truth Minute spots yet on airing on more than 30 radio stations across Kansas? We have six playing right now with more in the works. These are one-minute spots highlighting unique facts about our state – as well as facts about what’s happening in state government.

You can listen to the three playing now on our website: https://www.kansastruthcaucus.org/kansas-truth-minute

News & Views is a weekly collection of relevant news items and editorials regarding what's going on in Topeka and around the State of Kansas.

Transparency Center: Follow the Kansas Legislature

Both the House and Senate have taken historic steps towards the promotion of open government. For the first time, you can view video streaming of both chambers via the Kansas Legislature YouTube page. In addition, many committees are now audio streamed. Finally, the Kansas Legislature website remains a great resource. Here are the relevant links:

Website: http://www.kslegislature.org

YouTube Streaming: http://bit.ly/2CZj9O0

Committee Hearings: http://sg001-harmony.sliq.net/00287/Harmony/en/View/Calendar/

After a long and winding road through the legislative process, the Adoption Protection Act was adopted by the Kansas House and Senate this past week in the form of SB 284. The Kansas Truth Caucus prioritized the Adoption Protection Act many weeks ago, provided testimony, and had many of our members speak in favor of the bill in both chambers. The final product is the result of the hard work and tireless efforts of many important organizations and individuals, who would simply not give up in the face of improbable odds.

Here is a summary of events leading up to the passage of SB 284:

For detailed information on the Adoption Protection Act, visit our resource center on our website by clicking here.

For a replay of the initial House debate, you can click here. The debate on the original motion to “Agree to Disagree” begins at “3:15:00” and “4:42:00.” 

For a replay of the second House debate, you can click here. The debate begins at “22:43:00” and ends at “2:22:00,” when the bill is adopted.

For a replay of the Senate debate, you can click here. The debate begins at “3:53:30” and ends at “5:17:00.”  

When the federal tax cut was passed late in 2017, Kansas taxpayers expected they would receive all the benefits of the most significant tax reform adopted in a generation. However, due to differences between the federal tax law and current state tax law, some of those benefits would not be achieved unless the Kansas Legislature took action. Without action, the money meant to be returned to the people in the form of a tax cut would flow to the state government instead. The failure of the House to adopt the reforms in HB 2228 means a tax increase on the people of Kansas.

On the last day of the regular session, the Senate adopted HB 2228, which included a number of important reforms. After conference committees met during the veto session, a bill was forwarded to both chambers that among other items, would have allowed Kansas tax filers to itemize deductions for state income tax purposes, even if they do not itemize deductions for federal income tax purposes. It would have also accelerated the restoration of federal itemized deductions for state income purposes to 100 percent for deductions for medical expenses, mortgage interest and property taxes paid. However, the bill did not include a raise in the standard deduction, which many had sought, nor did it include the other reforms that would have helped the average Kansan. Though not an ideal solution, it nonetheless prevented a tax increase and returned taxpayer money to Kansans, rather than the government.

The compromise bill passed the Senate by a vote of 21-19. However, it failed in the House by a vote of 59-59 – it needed 63 to pass. The result was a third tax increase in four sessions, and a message from the House to the people of Kansas that their money is better off with the government.

The windfall was estimated to have given taxpayers back $137 million of their money in the next fiscal year, $179 million in the subsequent fiscal year, and $187 million the following fiscal year. Instead, that will now be spent on government.

Several conservative legislators offered the following Explanation of Vote:

We have waited all session to return money to Kansas taxpayers due them under the federal tax law. While there are good parts of this bill, there are also questionable parts, and there are items that should have been included but aren't. It does not raise the standard deduction and does too little for average Kansans who are working hard just to make ends meet. However, in the end, this bill does prevent a tax INCREASE that would harm our economy and hurt Kansans, so Mr. Speaker, we reluctantly vote yes on S Sub for HB 2228.

By votes of 98-23 and 26-14, the Kansas Senate and Kansas House adopted H Sub for SB 109, the Omnibus Appropriations Bill. The bill allocates $450 million more in spending for FY 2019 than FY 2018, and spends a total of $16.8 billion.

For a detailed accounting of all the spending in H Sub for SB 109, you can read the bill, supplemental notes, and explainers by clicking here. For the detailed explanation PDF, you can click here.

On the same bill, Sub for HB 2365, a successful proviso was added by Rep. Chuck Weber – identical to the proviso that was brought by Sen. Steve Fitzgerald a month before in the Senate. The proviso simply said:

"Sec. 119. During the fiscal years ending June 30, 2018, and June 30, 2019, no state agency named in chapter 104 of the 2017 Session Laws of Kansas, this or any other appropriation act of the 2018 regular session of the legislature shall expend any moneys appropriated from the state general fund or from any special revenue fund or funds for fiscal years 2018 and 2019 by chapter 104 of the 2017 Session Laws of Kansas, this or any other appropriation act of the 2018 regular session of the legislature to conduct research using tissue from any aborted fetus or to conduct any destructive embryonic research."

The proviso was adopted on a vote of 80-41.

Earlier in the Veto Session, both the Kansas House and Senate adopted SB 61, the so-called “fix” resulting from the passage of SB 423 in the waning hours of the regular session. SB 423 included a massive $500+ million spending increase for K-12 schools that is phased in over five years. The need for a “fix” arose after it was discovered there was an unintended calculation error in the bill.

SB 61 was labeled by proponents and the media as a “fix,” even though the legislation was a complete reversal of LOB policy that had been contained in SB 423 and passed less than 30 days prior. The original LOB reform provision in SB 423 was seen as important because it allowed a percentage of those local dollars (LOB) to be included in the Total Foundation Aid for schools. This provision would have allowed a more accurate total spending amount to be reflected in the school finance formula.

SB 61 eliminated the provision created by SB 423 that required the proceeds of the district’s 15 percent LOB to be reflected as Local Foundation Aid and replaced it with a “statement of public policy” to require an LOB of at least 15 percent of the school district’s Total Foundation Aid. 

It is important to note that the school finance “fix” that was rushed out of House Appropriations Committee late at night. The committee held no hearings on the legislation and it was passed without members having any notice to prepare for the debate or offer amendments. The Kansas Truth Caucus released the following statement opposing SB 61:

We stand in strong opposition to SB 61. This bill is anything but a fix. A fix implies a mere technical correction of an unintentional error in drafting. Instead, proponents of SB 61 have undermined the integrity of the process by attempting to pass off a complete reversal of clear legislative intent in SB 423, passed less than one month ago by this very legislature, as a “fix.”

Senator Ty Masterson, Chairman of the Kansas Truth Caucus said, “These shell game tactics compromise the credibility of the institution and have no place in the Kansas Legislature. If it is the intention of the proponents to change the underlying policy of the school finance law passed by the Legislature, then call it what it is – a complete gut of the LOB provision included in SB 423 that happens to also add in the $80 million that was inadvertently omitted originally.”

Masterson continued, “the House Appropriations Committee inserted the contents into a Senate bill, which presumably is to push through a motion to concur on the Senate side. This would remove the Senate’s ability to offer amendments to the bill, and is the exact same tactic used to ram the flawed bill through the process earlier this month. The Senate should have the opportunity to fully debate SB 61, offer amendments and “fix the fix.”

Lost in the Veto Session was any attempt to pass a Constitutional Amendment that would provide Kansans the opportunity to weigh in on the decades-long debate over the definition of the word “suitable,” which is contained in the Kansas Constitution, as well as the role of the legislature in determining the appropriate level of funding for well over half the state budget.

After months of promises and changing language, there was no vote on any language at all. Instead, Kansans await to see if the Kansas Supreme Court will accept the legislature’s actions in SB 423 and SB 61, or whether it will again declare it unconstitutional.

The school finance package the Kansas Legislature adopted calls for education spending to skyrocket in the next several years – with a boost of more than $500 million in education spending over the end of a five-year period. The estimated cost in the first year (as intended – more on that below) was $191.1 million with the out-years costing anywhere from $105.5 to $115.5 million per year. When you take in account the cumulative effect of increased spending over the next five years, Sub SB 423 will cost Kansas taxpayers over $2.0 billion. 

An underreported fact is that not calculated in the cost of Sub SB 423 is the nearly $300 million of new spending the 2017 Legislature appropriated for K-12 finance in school years 2017-18 and 2018-19.   The total approved amount is a staggering increase in education spending.

Over the course of the plan, the BASE would increase to $4,713. In addition, the plan would make other changes, including adding a $10 million mental health pilot program in almost 80 schools; increasing special education funding by $44.5 million in 2018-19 and $7.5 million every year after; increasing early childhood funding by $2 million for four-year old at-risk kids and expands the program to include three-year olds; and requiring every school district to adopt a minimum 15.0 percent LOB.

As a result of this plan, it is inevitable that a tax increase will be required in future years absent the use of accounting gimmicks – such as transferring money from KDOT or not having the required ending balance – that many have derided for years as shell games that really don’t balance the budget. 

Incredibly, despite this dramatic increase in new funding, some are saying the amount is still not enough. Most Democrats in the House voted against the plan on those grounds, and plaintiffs in the Gannon case are already saying the same .

Every week, the Truth Report contains a “Wallet Watch," where we examine efforts to remove money from the wallets of hard-working Kansans.  

The Final Wallet Watch of the 2018 session is exactly why this section was created in the first place – to report on efforts to remove money from the wallets of hard-working Kansans. As noted above, that is exactly what happened on Friday, when the Kansas House failed to adopt the compromise on HB 2228, which would have returned the “windfall” stemming from the federal tax cuts to Kansans, where it belongs. Instead, it is now in the hands of the government.

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