Activity at the capitol got started on Tuesday after the legislature took Monday off to honor the legacy of Martin Luther King, Jr. Dr. King said in his famous Letter from A Birmingham Jail that “Injustice anywhere is a threat to justice everywhere.” Fitting words for citizens across the globe and legislative bodies at all levels of government.
House GOP Unveils Growth Plan. On Thursday, Speaker
Ron Ryckman and others in the GOP caucus unveiled a package of bills they believe will enhance rural health care and provide Kansans with innovative ways to build a solid financial footing for themselves. Details are limited at this time, but reportedly the package would:
- Create a first-time home buyer savings plan via tax-deductible contributions to a specialized account;
- Create a tax credit for businesses who hire anyone with a disability;
- Create a fund to support innovative healthcare delivery through rural hospitals;
- Increase the current $75,000 tax exemption for seniors to $100,000.
Judiciary. Recent history between the legislature and the judicial branch has been frosty based on rulings that some believe have infringed on the legislature’s authority. However, legislators this week applauded the Supreme Court for tossing out a lawsuit that would have forced lawmakers to fully fund judicial branch budget requests for 2020 and 2021. Judges who filed the suit contend that Kansas judicial branch salaries are below market level and among the lowest in the nation. Look for continued discussion on this topic as budget discussions take place over the next few weeks.
Medicaid Expansion. Hearings on SB 252, the latest Medicaid expansion proposal co-sponsored by 22 members of the Kansas Senate, began on Thursday. The Overland Park Chamber was among the conferees speaking in support of the proposal and outlining the business case for expanding KanCare. A second day of hearings, also devoted exclusively to proponents of expansion, was held Friday. Opponents will have the chance to make their case when the hearings resume this week.
Economic Development. Following a busy week last week, Secretary of Commerce
David Toland and his staff continued to make the rounds with numerous legislative committees again this week. Toland and his team provided overviews of the state’s various economic development programs and insights into the Department’s new strategic plan: Kansas Framework for Growth.
Toland made a detailed presentation to the Legislative Post Audit Committee, chaired by Senator
Julia Lynn, providing information on each incentive program currently available in Kansas. The Post Audit Committee has taken the lead on commissioning performance audits on the various programs to ensure transparency, efficacy and a positive return on the investment by Kansas taxpayers.
For more information on the Framework for Growth and an opportunity to provide your thoughts on the state’s strategic direction,
click here.
Labor Report. The Kansas Department of Labor on Friday released the latest available job numbers. “Kansas maintained a low unemployment rate in December, edging up to 3.2 percent following the 40 year low of 3.1 percent in October and November, said Labor Secretary
Delia Garcia. The release further stated that Kansas has gained 20,100 seasonally adjusted total nonfarm jobs and 15,300 private sector jobs since December 2018.
Taxation. The Senate Assessment and Taxation Committee held hearings on several bills addressing tax estimates, eligibility of appraisers and the State Board of Tax Appeals (BOTA). Among the bills were the following:
- SB 263 would require a current year property tax estimate on the annual notice of valuation.
- SB 264 would provide for the removal of a person from the county appraiser eligibility list due to a previous termination from a similar role.
- SB 266 would require appraisal courses for county appraisers and BOTA members be approved by the Kansas Real Estate Appraisal Board.
Electric Rate Study. In 2019 lawmakers passed legislation commissioning a third-party rate study after concerns were voiced that Kansas electric rates were higher than neighboring states, creating a competitive disadvantage for the state. The recently released detailed study highlighted three key areas for improvement:
- “the current IOU [investor-owned utilities] ratemaking practices reflect some degree of imbalance between utility incentives and public interest objectives (such as achieving regionally competitive rates or other public policy objectives). For instance, retail rates for Kansas consumers have generally increased in the last decade to become higher than the regional average;
- while the KCC’s primary objective standards and vetting process for ensuring the prudence of utility investments are sound, they are limited in terms of protecting ratepayers from paying for investments that are underutilized. For instance, declining capacity factors of currently operating rate-based Kansas coal plants (two of which have capacity factors significantly below the regional average) suggest a need to periodically review their usefulness; and
- finally, there is potential for improvement in the processes for review of recovery of surcharges and riders. The Environmental Cost Recovery Rider (“ECRR”) has contributed, on average, to 35.9% for Westar Energy’s total bill from 2009 to 2018. The Energy Cost Adjustment (“ECA”) has contributed on average to 15.2% and 33.6% of KCP&L’s (2009-2018) and Empire District’s (2010-2019) total bills, respectively. In recent years, the Transmission Delivery Charge (“TDC”) has also been a key driver of increasing retail electric rates in Kansas, contributing to higher costs to consumers. While the current ratemaking process involves a review of the TDC to ensure consistency with Southwest Power Pool’s (“SPP”) revenue requirements and rates, this review has a limited impact on the TDC values and authorized returns on the transmission-related revenue requirements for IOUs in Kansas. The base rate still comprises more than 50% of the total bill for all the IOUs.”
Banks and Credit Unions. The Senate Financial Institution and Insurance Committee, Chaired by Senator
Rob Olson, held a multi-day discussion on SB 259 which focused on providing banks the opportunity to deduct interest income from certain loans they offer. Proponents believe the legislation levels the playing field between banks and credit unions and paves the way for lower interest rates for consumers. Opponents believe the change will unfairly put banks in a more favorable position without being subject to the regulations that impact credit unions.
The Week Ahead. Medicaid expansion discussions will continue this next week as will continued presentations by the Kansas Department of Transportation as they work toward a comprehensive, long-term transportation funding program. The House and Senate Commerce Committees will conduct multiple days of informational hearings on barriers to economic growth in Kansas.
Upcoming Events:
Legislative Policy Series.
Breakfast #2 in our series held in conjunction with the Johnson County Public Policy Council begins at 7:30 a.m. on Saturday,
February 8. Panelists will be: Senator
Dinah Sykes and Representatives
Chris Croft,
Susan Ruiz,
Sean Tarwater and
Brandon Woodard. For more information or to make reservations,
click here.
Public Policy Committee Meeting. The next meeting of the Public Policy and Advocacy Committee will be noon-1:30 p.m. on Friday,
February 14 at the Chamber. Our guest is Director of the Budget
Larry Campbell.
