The Kansas Senate on Wednesday failed to override Gov. Sam Brownback’s veto of a tax bill that supporters said provided the best path toward avoiding cuts to public schools.
That put the fate of the bill in the Senate, which had approved the bill last week on a 22-18 vote. The Senate on Wednesday voted 24-16to override, but that was three votes short of the two-thirds majority, or 27 votes, needed. That means the tax bill is dead.
KASB had urged legislators to override the governor’s veto, saying the bill made the tax code more fair by repealing the so-called LLC loophole, adding a third state income tax bracket and restoring medical deductions.
The bill also would have provided a dependable revenue stream and removed the ratchet down provisions of current law, which would phase out the state income tax without replacement.
During debate, supporters of the legislation said the bill would have averted cuts to public schools while structurally fixing the state’s revenue problems. But opponents said it would have hurt taxpayers and that there was more time to work on the state budget as the 2017 legislative session neared the midway point.
Legislators face an approximately $1 billion revenue shortfall over the next 18 months. The tax bill would have provided that amount over the next two fiscal years.
Gov. Sam Brownback introduced his budget to kick off the 2017 legislative session, and while his plan didn’t gain much support, it did show what a mess the state’s finances are in.
The state faces a nearly $350 million revenue shortfall in the current fiscal year, which ends June 30, and a nearly $600 million shortfall in the next fiscal year.
Revenue collections aren’t expected to improve much in subsequent years because forecasts call for a continued weak state economy that will trail the rest of the nation.
Brownback’s plan to balance the budget relies on tax increases on cigarettes and alcohol, selling off a long-term investment fund and the tobacco settlement, sweeping highway funds, cutting school funds based on unproven savings, delays in K-12 payments, undoing years of progress in shoring up the state pension system, including the non-payment of an earlier delayed payment and other stopgap measures.
Specifically on public school spending, Brownback has called for reductions in state funding in the next two fiscal years based on two recommended proposals from last year’s Alvarez & Marsal efficiency report.
A&M recommended consolidating all K-12 health insurance plans and requiring school districts join the Kansas Department of Administration to collaboratively source select on a statewide basis various categories, including fuel, food, maintenance and information technology. A report from the Legislative Division of Post Audit will be released in February on the issue of consolidating K-12 health insurance plans.
Brownback said his efficiency recommendations should be part of any new school finance formula that the Legislature approves.
In addition, Brownback says in his budget recommendation that he “would like to work with the Legislature and school districts to explore ways in which school districts can help share some of the retirement costs of for their employees.
The various legislative education committees held meetings this week to review school funding and the Gannon litigation which is pending before the Kansas Supreme Court.
The reconfigured House K-12 Education Budget Committee, chaired by state Rep. Larry Campbell, R-Olathe, will take the lead in the House on putting together a new school funding plan to replace the block grant system.
Yesterday, our organization released its school finance recommendation. KASB released its proposal earlier in the week. Next week, the various budget and tax committees will dive into the details of the state budget and start work on a spending plan.
The Shawnee County District Court panel described the block grant as “pernicious” but its decision allows the block grant to go forward — at least for now — if two important changes are made. Those changes are increasing funds for local option budgets and capital outlay equalization, which, if implemented would add approximately $32 million in LOB and $16 million in capital outlay assistance.
The three-judge panel, in an 87-page opinion released just hours after the Legislature officially adjourned the 2015 Legislative Session, agreed with the plaintiff school districts. The panel said the new law, which eventually became Senate Bill 7, was unconstitutional in equity to low wealth districts and overall adequacy.
"This method of state aid distribution adopted by House Substitute for SB7, as just described, can find no accepted factual basis or any principle that has ever been approved by any court or supported by any expert or educator for determining the appropriate financing of Kansas K-12 schools," the panel said.
Schools for Fair Funding, which represents the plaintiff districts, said the court decision was a victory for public school students.
But Senate President Susan Wagle, R-Wichita, said, “Topeka judges aren’t legislators, and it’s time they stopped auditioning for the role in their rulings. I’m hopeful the Supreme Court justices will show more restraint.”
Brownback still has some budget cutting to do; schools appear safe from knife
Gov. Sam Brownback signed into law the state budget, but he still has work to do — specifically cut $50 million from the spending plan.
That was included in the final deal approved last week by the Legislature after a record 113-day session.
When asked on Tuesday what he would cut, and whether that would include school funding, which makes up about half the budget, Brownback declined to provide details.
Later, Brownback’s budget director Shawn Sullivan noted in a tweet the Legislature’s final act during the session was approval of a bill that allows the governor to exclude K-12 funding, KPERS and debt service from budget allotments.
Under current law, the governor would have to make across the board cuts if the state’s ending balance was between zero and $100 million. The new bill will give him authority to make more specific cuts, and during debate of the measure, supporters of the legislation said it was designed to shield K-12 from any across the board cuts.
May 28, 2015
A few Words from Don Hineman:
At this point, two days after Memorial Day, it appears the legislature and the governor are at an impasse, and the search for reasonable solutions is being hindered by the belligerence of outside groups. Kansas Chamber of Commerce, Americans for Prosperity, Club for Growth, and National Federation of Independent Businesses are all aggressively calling for no change in the income tax code, which is what got us in such a dilemma to begin with. That is not at all helpful to finding a workable solution, and in my opinion is largely responsible for the current governmental paralysis.
There are 36 House members (out of 125) who have signed a no-tax pledge with Grover Norquist’s group. Eleven of forty Senators have also signed the pledge. If those legislators (many of whom voted for the overly-aggressive tax cut in 2012) meant what they signed, then finding enough votes to pass any tax increase will be extremely difficult.
But as the legislature struggles to find a solution there are some problematic deadlines fast approaching. If a budget is not passed very soon, then state workers may be furloughed, pay checks may be delayed, and state aid payments to schools may go out late. I find it extremely unfortunate that those consequences are now imminent. We knew that a revenue shortage existed as early as last November, and to delay facing that reality until late May is absurd. I believe it to be an injustice to state employees and the citizens of Kansas.
May 15, 2015
Besides working to balance our reduced budget for next year, USD #400 has a couple of major concerns. The first of which is counting on our legislators to pass a legitimate tax plan or revenue stream that will provide enough revenue to fund the Block Grant. Even if the legislature feels they can pass an adequate bill, another fear is that there are no guarantees that the plan will produce enough money - which means we may very well be cut during the 2015-16 school year once again.
Smoky Valley made a concerted effort to avoid cuts for next year, which is certainly forcing tighter and tighter budgets. We cannot afford a cut in the middle of the school year.
We are still waiting to hear from the three-judge panel. The hearing ended May 8. The primary focus is that SB 7 and block grants violate last year’s Gannon decision on equity. Decision expected shortly, will likely be appealed.
There are two major issues which have not been resolved by the 2015 Kansas Legislature that are of concern to school administrators. We are currently writing our legislators in hopes they will give serious consideration to these issues when returning to Topeka on April 29.
Issue No. 1
We are very concerned that the Kansas Legislature may not extend the working after retirement law. Currently, a board of education may choose to hire a retiree and pay a surcharge of approximately 23 percent to KPERS. In many cases, the retiree fills a position for which the school district is not able to find qualified candidates. If this law is not extended, it will result in over 2,000 teachers being released on June 30, 2015. Many of these teachers specialize in areas such as special education, math, science, career & technical education, counseling, etc., where there exists a shortage. It appears this year we will have more teachers retiring than teachers graduating from our colleges and universities. In addition, surrounding states are successfully recruiting Kansas teachers.
We need the legislature to extend the working after retirement bill for at least three more years.
Issue No. 2
The Legislature has approved issuing bonds for $1 Billion to improve KPERS financial stability. As a result, the KPERS employer rate is being reduced in both 2015-16 and 2016-17. Since the higher rate was used to compute state aid for school districts under House Substitute for Senate Bill 7, we encourage our representatives to apply the savings/reductions in KPERS contributions to general state aid for Kansas schools. This supports the flexibility and total amount of funding articulated as essential components of the Block Grant.
January 28, 2015
Schools across the state of Kansas know that our budgets will absolutely be cut this spring for the 2015-16 school year - but we have been told over and over again that we could finish this school year by being held harmless. In other words, they would not cut money out of our current operating budget. NOW, THAT MAY NOT BE TRUE!
A three-judge panel ruled Tuesday that Kansas public school funding is not adequate, in an opinion that faults the Legislature for linking funding to local sources.
...... the Shawnee County District Court stood by its 2013 ruling that school funding is unconstitutionally low..... FULL STORY
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