The tone here in Topeka remains optimistic as we move deeper into the 2017 session. However, the reality of the job ahead is settling in as seasoned and new members of the Legislature are grappling with the job of fixing the large current year budget imbalance and look ahead to the 2018 and 2019 budget imbalances as well.
At this point, the Appropriations committee is working on fixing the 2017 budget first. The 2017 fiscal year ends June 30, so closing the approximately $350 million gap is a big challenge. The hope is to have the current year rescission bill finished by turnaround date, which is Feb. 23. It would be good to take care of business earlier, as the closer we get to the last day of the fiscal year the harder it is to reach the $350 million number.
Budget subcommittees are taking a quick look at departments and agencies that receive SGF money for part of their budget. The intent is to see if there have been any unfilled personnel positions or contracts so some of the money could be pulled back in and reappropriated for the balance of FY 2017. I would not expect there to be a large amount, but there will be some.
The taxation committee, under the leadership of Rep. Steven Johnson (Assyria), finished hearings on HB 2023, which is the repeal of the so-called LLC exemption. Hearings on the bill were spread out over two days with the committee going into overtime to hear everyone’s thoughts. The calendar does not include if, or when, the committee will work the bill or when they may vote on the proposal.
The Agriculture committee heard some interesting, but depressing, projections from the Kansas Department of Agriculture. The first is that farm commodity prices are projected to be even lower for 2017 than they were in 2016. The second part was information that for every one percent reduction in farm commodity prices a $7.8 million reduction in State sales tax receipts is expected. Anyone engaged in farming knows what commodity prices have done in the last two years and the effect on purchasing.
A critical report of Kancare was printed in the Topeka paper about a week ago, detailing some of the issues relating to care. Much of what was included is not news to legislators, but the idea that the federal government will not allow an extension of Kancare without modifications was news to us. Some are saying this is a political move before the federal administration changed, but that does not change the thought that much of the criticism is based on fact. Health and Human Services Chair Rep. Dan Hawkins (Wichita) is quickly picking up the issue to investigate.
Another issue that has been simmering for several years is the possibility of Medicaid expansion. Some are thinking the State should quickly do the expansion now before any Federal changes. With the changing of the administration in Washington, it seems the best course of action for now is to wait and see, at least until later in the legislative session.
A couple of side notes are that the tax committee is also taking a look at sales tax exemptions to see if there are some that don’t make good business sense. Also, some are looking at ways to make the current year KPERS payment to continue bringing that program into actuarial compliance, even though that would make the current year even further out of balance.
As is always the case, there are so many moving parts with all the committees meeting, that it is impossible to follow everything. Because of that, please be sure to stay in touch if you hear about issues of interest that may come along. Contact information for all legislators can be found on the Kansas Legislature website.