It has been a couple of weeks since my last newsletter. I can’t say that there is too much real progress thus far to report on. There are lots of good discussions that are being had - but no decisions of how to proceed. However, I will give you an update on where things stand.
Current year’s budget top concern
The first item that the legislature must address is the current year’s budget. The state is facing a $300 million-plus budget hole in the final few months of the fiscal year. Historically, allotments, or across-the-board cuts, would have been imposed last Fall to spread a smaller-percent budget cut over more of the year instead of waiting and now forcing larger-percent cuts spread over just a few months.
The Senate Leadership came up with the first concrete approach of sizable cuts to programs, most notably $120 million cut to K-12 education, along with a proposal to put taxes back on LLCs and increase everyone’s income tax rates. The debate stalled, however, when senators began hearing from their constituents. Your phone calls, emails and other communications do not go un-heard in Topeka anymore! A House committee has now passed forward a plan for consideration that puts taxes back on LLCs and adds a 3rd and higher income tax bracket. We will see where that goes next week.
The so-called “LLC loophole” definitely gets most of the attention from the public due to the question of fairness and the $280 million hit the budget takes each year. However, keep in mind that income tax rates on W-2 and other income were cut in 2012 as well - and some estimates put that hit to the budget at upwards of 3/4 of a BILLION each year. Hence, fixing the “LLC loophole” may not be the only answer to the budget problems.
Could get worse before they get better
As I look at the potential solutions to our budget shortfalls, I am coming to realize that at the end of the day, things might have to get worse before they get better. The legislature has been left with almost no ability to address the issue without more debt or draconian cuts - any tax law changes can’t take effect fast enough to fill the budget hole yet this fiscal year. That may not sound like good news - but one bright spot in this whole mess is the fact that with so many new legislators elected last Fall, we have a lot better chance of digging ourselves out of this mess going forward instead of digging the hole even deeper, adding to our debt! I remain hopeful.
There are a few spending cuts (and as has become habit, budget loopholes and increased debt) being discussed that may help us out in the long term. One idea is putting all school district employees on the state health plan. On the surface, there could be some merit to consider such a proposal - but I worry about taking local control and local solutions away from our schools. But the bigger issue I have with what is proposed, is the notion of increasing the insurance premiums on our teachers. Our teachers are already bearing the brunt of our budget woes - and an increase in their cost is as good as a pay cut in my mind. (see related story, USD 428 teachers express concern over HB 2142.)
Guns on campus driving communication
I have received probably the most communications from constituents on the topic of guns on college campuses. Recall that a few years ago, the legislature voted to allow concealed-carry on campuses unless the building had certain procedures in place such as metal detectors. However, implementation was delayed until this coming year. Some in our state have asked for the ban on guns on campus to be extended. This has turned out to be one of the more hot-button issues thus far. A Senate committee held hearings but did not send the bill to the Senate. A House committee is considering similar legislation. We will have to wait to see what happens on this topic. I don’t know at this point if the full House will debate the issue.
Everything else seems to be on the back burner with the budget and taxes on the front of everyone’s radar. I will say, the Water Committee has been holding hearings on water issues in the state and how to fund the State Water Plan. These issues are critical to our area of the state, particularly agriculture, and I am glad have a seat at the table.