Legislative Update No. 14, May 19, 2017

Taxes, School Finance and Budget


The three items of taxes, school finance, and budget are the puzzle pieces needing placement to end the 2017 session. Conversations have shifted from discussions on a tax plan to discussions on an education finance plan.  The House K-12 Education Committee passed out a bill earlier this week without any recommendation. The Senate Select Committee on Education is now taking up a bill to finance schools, and their version includes a fee on utility bills. Called a “school funding fee,” the monthly fee is $2.25 for each residential utility retail customer and $10 for each industrial utility retail customer starts September 1, 2017.  Some in the legislature believe the school finance formula must be finished before the tax plan can be drawn up; they need to know the cost of schools before calculating the necessary revenues in a tax plan.  The House and Senate Democrats have created their own school finance plan, which includes some of the highest per-pupil spending amounts from the 2008-09 year. 


The Senate Assessment and Taxation Committee held hearings on HB 2380, which passed the House last week. This is the bill that adds sales tax to service or items that are not currently taxed, such as towing services, self-storage, collection agencies, investigation services, security systems, cleaning services and pet care.  It also reduces the sales tax on food by $.01 in 2020.  Mostly opponents stood up at the hearing to argue against the new sales tax.  The bill is estimated to generate about $165 million in additional revenue.  The House and Senate Tax conference committee briefly discussed a proposal to roll back all the 2012 tax changes, but that proposal did not go any further.  It does not appear that the House or Senate will work this weekend, although the Senate Majority Leader announced that as his intention last week.  


If you’re like us and looking for entertainment as you wait on the Kansas legislature, this video is making its rounds in Topeka, and explains the Kansas budget and revenue shortfall. KAC has not verified the information and therefore we are not endorsing the video, but merely sharing it.  Also available for viewing is the Spring 2017 Kansas Speaks Survey produced by the Docking Institute of Public Affairs at Fort Hays State University.  The survey asks Kansans for their opinion on taxes, government, and general public policy. The Survey is available here.


Tax Lid


HB 2424 allows an exemption from the tax lid for increases in employee benefit costs.  The House Taxation Committee passed the bill out favorably last week, and the bill is sitting on General Orders. We are working with House leadership to determine the best time to run the bill on the House floor. 


Tax Abatements


SB 146 began as a bill to reauthorize the statewide 20-mill school finance levy for school years 2017-18 and 2018-19. The bill was amended by the Senate Tax Committee to preclude local government from granting property tax exemptions for industrial revenue bonds (IRBs) or for economic development purposes (EDX) on the statewide 20-mill levy. The House Taxation Committee heard the bill last week, and Representative Kristey Williams moved to remove the Senate committee amendment relating to EDX and IRB exemptions. The bill passed out of committee with the amendment. Thus, the bill now only contains the reauthorization of the 20 mills for school finance.  Meanwhile, back on the Senate side, the Senate Select Committee on Education has added to its school finance bill the same language preventing local governments from exempting the 20-mills in IRB and EDX tax abatements.


SB 86 - Amusement Rides


SB 86 is now a bill that delays the implementation of any new requirements and regulation of amusement rides (enacted in SB 70) for one year. The bill as introduced related to fees for records requested pursuant to the Kansas Open Records Act.  The delayed effective date was requested by Rep. Adam Smith, and intended to give the legislature more time to review its rushed work on SB 70 and possibly make corrections to it in the 2018 session.  Notably, SB 70 makes it difficult for counties and communities to use amusement rides in their carnivals and other festivals, and affects community pools, trains and carousels. 


KPERS Agreement on Working after Retirement


On Tuesday, legislators from House Financial Institutions & Pensions and Senate Financial Institutions & Insurance met to discuss working after retirement. The committees have been working on a number of provisions and reached an agreement. Alan Conroy, the Executive Director for KPERS, provided two summary documents that are helpful to analyze the updates. The first summarizes the Conference Committee Report (CCR) and the second looks at the impact on different member types. Conroy also offered the following comments on the CCR: "I think this legislation should move us all forward on making the working-after-retirement provisions easier to navigate for members, employers, and KPERS. We will be providing clarifying information in the near future to facilitate the transition from the current working-after-retirement rules to the new ones. Please do not hesitate to reach out to KPERS if there are any questions." Both chambers need to adopt the CCR, but this seems likely.


Also, if you are approaching retirement age, please consider attending one of the KPERS pre-retirement webinars. The topics include:

  • Choosing a date
  • How to calculate your benefit
  • Steps in the process
  • Payment options
  • Taxes
  • Life insurance
  • Working after you retire


To register, please click here. KPERS is hosting the webinars on June 6 at 2 p.m. and 6 p.m. or June 8 at 10 a.m. or 6 p.m. For more information, contact KPERS at kpers@kpers.org or 1-888-275-5737.


Deadline of June 1 Approaching for Local Elections


A reminder that the legislature changed up local elections back in 2015, and cities, school boards and other municipalities are now elected in the fall instead of the spring.  This year is the first odd year to see the new election cycle.  The filing deadline for local offices is June 1 at noon and filings are due at the county election office. 


The League of Kansas Municipalities offers a book called Guide for City Candidates for anyone who is considering running for city public office (online at www.lkm.org).  The primary will be held August 1 and the general election will be November 7.