May 6, 2018
This week was the last week of the 2018 legislative session. Sine Die, the ceremonial end to the legislative session was Friday, May 4th.
We celebrated the National Day of Prayer at the statehouse on Thursday. State officials led prayers for those in Kansas government, military and National Guard, first responders, family, agriculture, health care, schools, businesses, and others.
On Friday, the annual Law Enforcement Memorial was held at the Statehouse. Thankfully no Kansas law enforcement officers lost their lives in the line of duty over the past year but four officers from previous years were inducted into the memorial. National Law Enforcement Memorial Week is May 13-19.
Budget: After 3 full days of negotiation the Senate conference committee agreed to a final budget for fiscal year 2018 & 2019. The Kansas Legislature voted on the budget bill, late Thursday night. The bill would appropriate $380 million more in the current fiscal year, $700 million more than was expended in the previous fiscal year. The legislation includes a 5% raise for employees who were not included in the 2017 pay adjustment law and a 2.5% raise for employees who received a pay increase last year. The budget also includes a 5% adjustment for correctional staff and a 2% raise for judges. The bill excludes state university staff, Kansas Highway Patrol, Kansas Bureau of Investigation, and the Kansas Legislature. Below are highlights included within the budget: FY 2018-the conference committee recommends expenditures of $16.3 billion, including $6.7 billion from the State General Fund. House Sub for SB109 also includes $15 million to replace funds cut from state universities and other priorities that have been neglected such as water projects and state hospitals. Add $31.1 million, including $40.5 million from the State General Fund, to fund the spring human services consensus caseload estimate. Department of Health and Environment-Add $3 million for the Medicaid regular medical program for the teaching hospitals associated with the Wichita Center for Graduate Medical Education program. Add $1 million for the tiny-k program. Add $1.4 million for information technology modernization. Add $1 million from the Problem Gambling and Addictions Grant Fund for additional substance abuse treatment services. FY 2019-The Conference Committee Recommends expenditures of $16.8 billion, including $7 billion from the State General Fund. Add $68.6 million, including $76.9 million from the State General Fund to fund human services consensus caseload estimate. Board of Regents and Institutions-Add $15 million to restore approximately 64% of the 4% remaining FY 2017 allotment. Department of Education-Add $7 million, including $8.4 million from the State General fund to adopt the spring 2018 education consensus estimate. Add $5.2 million from the Children’s Initiatives Fund for early childhood programs. This includes Pre-K Pilot ($4.2 million) and Parents as Teachers ($1 million). Add $1.4 million for disaster relief. Add $2.7 million for information technology modernization. Add $22.1 million for an increase in nursing facility reimbursement rates. Add $1 million from the Problem Gambling and Addictions Grant Fund for additional substance abuse treatment services.
Senate Sub for HB 2028 would establish the Kansas Telemedicine Act. The bill also provides for coverage of speech-language pathologist and audiologist services via telehealth under the Kansas Medical Assistance Program, if such services would be covered under KMAP when delivered via in-person contact.
S Sub for 2228-This is our mega tax bill for the year not only changes to itemized deductions and language regarding the tax treatment of repatriation, global intangible low-taxed income (GILTI). This tax bill would decouple Kansas from the Federal tax code. Currently Kansas taxpayers that itemize at the Federal level may also itemize on their Kansas tax return. With the changes at the Federal level and standard deductions being increased many Kansans who currently itemize will choose to use the standard deduction. Without changes to Kansas law they will no longer be able to itemize on their Kansas return. This will be devastating to the middle class and to small businesses in Kansas. They will not be able to expense or depreciate on their Kansas tax return, including deduction of mortgage interest, charitable contributions and medical expenses. We must look at decoupling from the Federal tax return and might need a special session or a retroactive bill next year. If changes are not made this will be a large tax increase to the middle class and small businesses.
Local Sales Tax Provision: Unfortunately, the Thomas County local sales tax provision was included in S Sub 2228 which would increase the maximum local sales tax rate that could be imposed by Thomas County from 1.5% to 1.75%, provided that all taxes levied more than 1% remain earmarked for financing a courthouse, jail, law enforcement center or other county administrative facility. An election would be required to increase the current Thomas County sales tax. This bill failed to pass in the House 59 to 59.
KPERS-one of the items we were successful in negotiating in the budget was a partial payment on a missed KPERs payment. We added $82 million all from state general fund in FY 2019 and an additional $56 million from receipt estimates over $56 million in the months of April, May and June, 2018 and an additional payment of $56 million in fiscal year 2020 if receipts come in $56 million over in April, May and June fiscal year 2019.