2015 Legislative Wrap Up, 0815 KSBJ, 84 J. Kan. Bar Assn 7, 27 (2015)
| Author | Joseph N. Molina III, J. |
July, 2015
Joseph N. Molina III, J.
The 2015 Kansas legislative session ended on Friday, June 26 as both chambers embraced Sine Die. Normally Sine Die is a ceremonial process devoid of any real work; however, 2015 was not a normal session. The sheer length of the session, a record 113 days, was only outpaced by the breadth of discussion. In 2015 the Kansas Legislature introduced 311 Senate bills, seven concurrent resolutions, and 54 resolutions. The Kansas House proposed 435 bills, 19 concurrent resolutions, and 28 resolutions. This Legislature introduced 285 more proposals than its predecessor did in 2014. For our part, the KBA monitored or engaged on 114 bills and provided expert testimony on more than 40 bills.
We are all firmly aware that taxation was the reason for such a long and expensive (nearly $1 million of Veto Session) session. Coming into the year the state was running a significant shortfall. Some estimated it around $300 million and other saw the hole as even larger. The first course of action was a combination of cuts, bonding and efficiency legislation. Those initial solutions called for $1 billion in Kansas Public Employees Retirement System (KPERS) bonding, school finance changes, and Kansas Department of Transportation (KDOT) transfers. However, the changes did not close the entire gap, and further monthly revenue shortfalls required an increase in some type of tax.
After a grueling three-plus week Veto Session, the Kansas Legislature passed a tax plan. The plan, which received the bare minimum of votes in the House (63) and Senate (21), did not garner a single Democrat vote. The bullet points for the tax plan are as follows: • Increase the state sales tax to 6.5 percent that generates an estimated $164 million.
• Raise tobacco taxes by 50 cents per pack to generate $40 million.
• Protects the exemption passed in 2012 for 330,000 businesses which shields income for these LLCs from taxation, including owner's salary and draws.
• Wipe out itemized deductions, yielding $97 million.
• Retain the Food Sales Tax Credit program but drop plans to LOWER the sales tax on food to 4.95 percent.
• Continue the governor's "March to Zero" on income taxes by accelerating the triggering mechanism that will force even further income tax rate reductions in 2019.
• Offer a tax amnesty plan worth $30 million.
This plan will raise $384 million in new taxes along with an addition $47 million from managed care organizations for the privilege of offering health care plans in Kansas. This is a record amount of new taxes for the state of Kansas. Unfortunately these new taxes fail to cover the entire shortfall. The budget remains $50 million underwater, requiring the governor to make additional cuts. Thus far, only $1.8 million from the Board of Regents budget has been cut. The rest of the cuts have yet to be named.
Complicating matters is the recent three-judge panel decision concerning school finance. That ruling found key parts of the school block grant bill unconstitutional and ordered the immediate payment for capital outlay and local option budget. This amounts to over $50 million. This appropriation was not considered in the FY 16 budget. The state has successfully stayed this ruling which means that the amount due is pushed back till the Kansas Supreme Court makes a determination. However, should this ruling be upheld, the budget shortfall for FY 16 would have doubled and many would blame the judicial branch for the budget problems.
Judicial Branch
Besides working to balance the state budget, the Kansas Legislature has taken serious interest...
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