When the legislature convenes for the veto session on April 27, 2016, it is uncertain just exactly how much of a workload lawmakers will face. They will learn if the school finance bill that was passed by the legislature will meet the satisfaction of the Kansas Supreme Court or if they will have to start over and pass a new school finance bill that will truly solve the issue of equity in school finance. Even though Governor Brownback has signed a budget for the next fiscal year, the states recurring revenue problems don’t seem to be going away. The Consensus Revenue Estimating group will gather for a meeting on April 20, 2016 to determine the new official revenue projections for the remainder of calendar year 2016. There is growing concern from a number of legislators who watch these numbers closely, that March revenue could be $30 million below estimates and that April revenues could be as much as $200 million below what is currently expected. If the consensus estimates are in fact substantially below current estimations the legislature may have to make some additional budget cuts that will be hard for everyone to accept.
House Bill 2486 creates the school district bond project review board. It establishes a new formula for state aid in regards to local school bond issuances after January 1, 2016 by requiring approval by this new oversight review board. The new formula provides 75% state aid for districts with the lowest valuation per pupil and drops 1% for each $1,000 in increased property valuation per student. This school district bond project review board is made up of chairs and ranking minority party members of House Appropriations & Senate Ways and Means committees along with two members of the State Board of Education. Determination will be made on the percentage of the bond that is utilized by the school district for direct instruction of students. So the construction of sport facilities would not be subsidized by the State.
House Bill 2457 amends the tax credit for the low income student scholarship program that was part of the school funding block grant act passed in 2015. Eligibility is changed from at-risk students (133% of federal poverty level) attending a public school to a child whose family income does not exceed 250% of the federal poverty level.
House Bill 2504 mandates the realignment of most school districts. HB 2504 requires the Kansas State Board of Education to oversee the redesign of districts by July 1, 2017 to take effect one year later.
Given the revenue declines and the pledge for no new taxes, the 2016 budget has to be balanced by June 30 and the 2017 budget – that passed in the 2015 session – must now be altered. For the 2016 budget, the Governor used his allotment authority to transfer unused funds from programs in several departments to the State General Fund as well as transferring $50 million from the Highway Fund. $9 million was swept from the Children’s Initiative Fund with a promise of no reduction in programs or services. Enhanced federal funding for the State Children’s Health Insurance Program (SCHIP) netted $17.7 million. That was swept instead of serving more children. $8 million is taken from the Higher Education Block Grant. 21 auditor positions are to be filled at the Kansas Department of Revenue with the expectation that tax collections will increase $7.5 million. Certain unused economic development funds in Commerce were swept while the public/private Kansas Bioscience Authority is completely privatized.
For 2017, the Governor starts with transferring an additional $25 million from the Highway Fund to the SGF. The Governor moves the entire $50.6 million Children’s Initiatives Fund (which is funded from tobacco settlements) to the SGF and spends $44 million on children’s programs. The $6.5 million Parents as Teachers program will be means tested so that welfare block grant funds (TANF) will pay for low income parents while other parents will have to pay for the services.
As the Kansas Bioscience Authority (KBA) is privatized, KBA’s assets will be sold to private investors with Kansas hoping to net $25 million. (Kansas’ total investment in KBA was $240 million.) Again the children’s health program (SCHIP) gets $25.5 million in enhance federal match but that is swept for 2017. Medicaid changes include ending KanCare Health Homes and adopting a ‘Step Therapy’ protocol where clients must be prescribed the cheapest drugs first. For the 39,938 state employees there is no salary increase for 2016 or 2017, which is now over six years with no salary increase. The 2017 Kansas budget will total $16.1 Billion with 46.8% going to education, 30.7% going to human services, 10.3% to transportation, 7.4% to general government and 4.7% for public safety and agriculture.
I value and need your input on the various issues facing state government. Feel free to contact me with your comments and questions. My office address is Room 451-S, 300 SW 10th, Topeka, KS 66612. You can reach me at (785) 296-7650 or call the legislative hotline at 1-800-432-3924 to leave a message for me. Additionally, you can email me at Jerry.Henry@house.ks.gov. You can also follow the legislative session online at www.kslegislature.org.
The Kansas Legislature paid the consulting firm Alvarez & Marsal (A & M) $2.6 million to do an efficiency study for Kansas. The first preliminary report was presented on January 12 and the final report will be on February 12. This six month study reported potential savings of $2 Billion over five years starting in 2017. There are many smaller items covering insurance, procurement, car pools and supplies.
For the state employee’s health insurance plan, the recommendation is to offer only ‘High Deductible Health Plans’ thus saving the State $123 million – in essence cutting the pay of state employees. Over five years all school districts will be forced to spend down $193 million in ending balances so the school districts can be as broke as State government.
Another recommendation is to consolidate all 286 school district employee’s health plans (covering 59,000) into the State’s Employee Health Plan with a projected savings of $360 million.