We are getting close to finishing out the 2012 Legislative session. Problem is, we are all waiting around wondering why very little is actually happening, at least above the surface. It seems to be a matter of waiting to see who blinks first. That often happens as the session nears the end as we try to finish the last, usually the most difficult, policies through the legislative process. Conference committees continue to meet and reconcile House and Senate policies. We have had several conference committee reports to vote on at this point, and those we have voted on seem to include quite a few separate bills rolled together. When the reports include more policy positions, there is less ability to express disapproval for any one issue included within the reports. No one likes conference committee reports for two reasons. One is that a simple yes or no vote is the only option on the entire report, and the other is that there can be several needed laws and one really onerous part included. So far, nothing really bad has been put into those reports. Tax issues are of interest to me, so I have been following the tax conference the closest. The conferees came to agreement Thursday. One of the problems was determining exactly what the proposed changes will do to the future revenues. Some projections showed a large reduction in the future and some projections did not. It took a lot of refining of those numbers to determine what the likely effect will actually be. Making a fraction of a percent change in sales tax revenue, as an example, makes a big difference five years out because of compounding. The tax conference report includes eliminating some small business income taxes, ramping down, but not eliminating personal income taxes, and eliminating several exemptions. The income tax exemptions remaining are EITC, IDA, food sales tax, historic, angel investor and child day care. The twist is that the EITC credit will be reduced in 2014 and the taxpayer will have to choose to take either the EITC or food sales, but cannot receive both credits. The other twist is that itemized deductions can be claimed only if they are claimed on the Federal return. There are several others, but these affect the most people. More so this year than most, there is a very close connection between the tax bill and the budget. Of course, the budget is dependent on revenues, so what is done to adjust tax revenues plays a big part. It seems that just coming off a very difficult recessionary period, the concern is the fragile economy could again turn down and cause budget difficulties. No one knows the future, but the big questions are how much the State should carry over in reserves and how much should go into rebuilding programs that have seen significant cuts the last few years. Certainly we want to keep tax rates as low as possible to stimulate business investment, but the balance is that the state has certain obligations as well. Redistricting is another issue I am following closely. The redistricting issue is far from being settled at this time. The House has had a map finished since early February, but the Congressional and Senate maps have been difficult to finish. If things go badly the courts will eventually draw the district lines. The Senate on Tuesday passed a map over to the House. Western Kansas, as expected, is not happy about it as they are losing a Senate district because the population shifts toward the east. The Senate map was promptly killed in the House. The prospect of a court drawn map is greatly increased because of this. The drama continues! Several thoughts come to mind if the courts end up drawing the maps. The first is that the courts do not know where anyone lives, so may draw maps simply based on population and nothing else. Not necessarily all bad, but could leave legislative districts without anyone interested in filing for office. The other is if the requirement would be made for low or zero tolerance in population variances, there could be some bizarre looking districts and County Clerks would have a real challenge making sure the ballots are correct. The expectation is that the courts would consider maps that have been offered and not start from scratch. A budget was passed by the Senate before the weekend and the House passed a budget Wednesday. Now the two budgets will need to be reconciled. There seems to be quite a bit of negotiating fodder in both, so I plan to watch closely what stays and what gets bargained away. The week coming up will answer all these questions as session is expected to end on May 11, or possibly early on May 12. Friday was the last day we have assistants, so if you need to call in the hotline number is 800-432-3924. I typically get an e-mail that someone has called and what the question or issue is.