Voice For Liberty

Tag: Kansas legislature

Articles about the Kansas legislature, both the House of Representatives and the Senate.

  • Rep. Steve Brunk on Kansas taxes and spending

    Speaking to the Wichita Pachyderm Club on Friday, Kansas Representative Steve Brunk (Republican from Bel Aire) addressed taxation and spending in Kansas government.

    Brunk said “We need more taxpayers, not more and higher taxes.” In evaluating legislation, he said he asks these questions: Does this help the state of Kansas bring companies to the state, and does it offer encouragement to companies already here?

    Kansas is usually just about in the middle of all states in ability to attract companies to the state. We should be able to better than that, and a way to do better is to reform our taxing environment.

    Some of our taxes should go away. The franchise tax is in the process of being phased out. That money is now available to make capital investment and create more jobs.

    The corporate income tax should be eliminated, he said. The death tax or inheritance tax is inherently unfair, as people should be able to pass their estates to heirs without being tax.

    Also, the capital gains tax is punitive, he said. It should be reduced or eliminated.

    “We need a low and predictable tax base, so that we can attract businesses to Kansas to provide jobs without having to offer special and unique incentives.”

    When revenues have increased in Kansas, we spent it rather than setting some aside in a rainy day fund. When revenues have not increased as quickly, it causes problems with the budget. Today, we’re probably facing a period of slow growth.

    Brunk showed a chart of Kansas spending as compared to the inflation rate. Spending increased much faster, almost four times faster, he said, adding that this is unsustainable.

    So Brunk has proposed what he termed a “speed limit.”

    The spending problem is due to Republicans and Democrats alike, although Brunk said Republicans are amateurs at spending compared to Democrats. Without Republican help, budgets could be passed. There is a core of about 55 or so conservatives in the Kansas House of Representatives. The rest of the House Republicans are willing to spend along with the Democrats.

    To this end, Brunk has proposed a constitutional amendment that he calls the REAL Act: Revenue and Expenditure and Assessment Limitations.

    One thing this act does, he says, is to limit the rate of growth of spending to the rate of inflation. This would force the state to prioritize what it spends on, and to take a look at finding excess spending. Existing programs would be reviewed.

    The REAL act would also limit the ability to increase taxes or start new taxes by requiring a two-thirds majority in the legislature.

    The REAL act also provides for a rainy day fund, sometimes called a budget stabilization fund. The money in this fund could be used only to stabilize the budget when revenue drops below the rate of inflation growth. After this fund is full, an emergency fund would be created and funded for dealing with disasters such as the Greensburg tornado or the southeast Kansas floods.

    We also need to avoid download state spending to counties, he said. There could be no mandates with accompanying funding.

    Turning to property taxes, Brunk mentioned Proposition K, an effort to stabilize property taxes. Introduced in this year’s legislative session, the measure was referred to a tax subcommittee that didn’t do much to advance the proposal. Based on feedback and concerns, he’s going to adjust Proposition K and introduce it again.

    Responding to a question from the audience, Brunk said that he conceptually likes the idea of a Fair Tax, a tax based on consumption rather than income or property ownership. Later, someone else asked, in jest, if an exemption for cigars could be part of a consumption tax law.

    Answering another question, Brunk said that a problem with Kansas budgeting is that we have “add-on” budgeting instead of zero-based budgeting. Each year agencies must justify not their entire budget, but only the additional amount that they’re asking for this year.

    Analysis

    The REAL Act, as described on The Kansas Real Act page, is much like the Taxpayer Bill of Rights proposals, in that it limits spending to inflation plus population growth. These measures are universally and vigorously attacked by government spending advocates such as teachers unions and public employee unions, as they, amongst others, live off of ever-increasing government spending.

    In my opinion, the components of the REAL act — limits on tax increases, the requirement of a supermajority to increase taxes, and a rainy day fund — are eminently sensible. Whether these measures can be passed as a package as a constitutional amendment is difficult to answer. In Kansas, such amendments require passage by two-thirds of the Kansas House and Senate, and then by a majority vote of the people. Action by the governor is not required, not can the governor block an amendment, except through persuasion of the legislature or the people.

    An amendment to the constitution is required for any laws of this type to be truly effective. Kansas law already requires that the state hold ending balances of 7.5% in its funds. But each year the legislature decides to waive or ignore this law. That can’t be done, to my knowledge, to measures that exist in the constitution. Similarly, the Kansas Supreme Court can’t overrule the constitution and order the legislature to take action, as it has done with K-12 school spending.

    The difficulty in passing clear and coherent laws was illustrated by the question about the exemption for cigars. Although proposed in jest, there will be constituencies that will be quite serious about exemptions to nearly any law that is passed.

  • Rep. Steve Brunk to address Pachyderms

    Please note: Effective October 2, 2009, the location of Wichita Pachyderm Club meetings has changed. The new location is the Wichita Petroleum Club.

    This Friday, the Wichita Pachyderm Club presents Kansas State Representative Steve Brunk, Republican from Bel Aire, as the speaker. His topics will include proposed House Concurrent Resolution 5019, the REAL (Revenue Expenditure and Assessment Limitations) Act — a state constitutional amendment dealing with revenue, expenditures, assessment, and limited government, the need to restructure the budget, and property tax reform.

    All are welcome to attend Pachyderm club meetings. Lunch is $10. It’s a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive five or ten minutes early to get your lunch before the program starts.

    The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

  • Clarifications to Kansas unencumbered fund balances report

    Last week the Flint Hills Center for Public Policy released a groundbreaking research report detailing the several billion dollars hidden away in Kansas state government funds. My reporting on this, along with links to the study document, is at Kansas funds have large, unneeded balances.

    There’s been a bit of pushback. Some officials have said they simply don’t believe the research. Others quibble over definitions of terms and have said — perhaps mistakenly — that there are more restrictions on specific fund balances than are actually in effect.

    Dave Trabert, president of the Flint Hills Center, has released the following response and clarification regarding some of these issues.

    It’s not all in special revenue funds. Only $241 million of the $1.955 billion in unencumbered cash is in fee funds (from licensing fees paid by barbers, chiropractors, CPAs, etc., student fees paid to universities, certification fees paid by farmers, oil & gas well owners, etc. etc.); somehow, people have been led to believe that all of the money has built up in fee funds. That clearly is not true. Some of the cash is in other types of funds but the source of a great deal of the money is from tax collections. (It’s difficult to say with certainty in the case of some funds based simply on the name of the fund, so the exact amount coming from taxes is not known … much more investigation is needed).

    “Special” can be very misleading. To some, it means that the revenue source is something other than taxes; others use it to refer to money in a fund created to track a particular type of expenditures. In both cases, the “special” designation has been used to at least imply that the money can’t be used for anything else, which may be true in a few cases but most often is not. “Special” means different things to different people and is not a legal definition.

    “Spoken for” is a meaningless phrase. This is another label that has no accounting or legal basis. The sheer fact that agencies have plans to use the leftover money has no legal bearing, and in fact the current and previous governors have swept carryover money out of funds for other purposes. The Government Accounting Standards Board says that unless a specific statute prevents money in a particular fund from being redeployed, it can be. Anyone who says this leftover cash can’t be used for any other purpose should be forced to cite the pertinent statute.

    Even unencumbered cash in bond funds may legitimately be available for other uses — it is not uncommon for bond funds to take in more money than needed to meet obligations. Even at the local level where, for example, schools levy a specific tax to pay off construction bonds, there is a legal mechanism for returning excess collections to taxpayers. Whether that actually takes places is another matter, but mechanisms for returning excess money to taxpayers exist.

    Unencumbered defined. The accounting definition of unencumbered funds is funds that are not subject to any mortgage, lien, charge and/or encumbrance (whether equitable or otherwise) or any other creditor claims whatsoever. This is the definition used in our analysis and we must presume that state agencies and their accountants properly differentiate between encumbered and unencumbered.

    The fact that money is in a designated fund is, in itself, meaningless — there is a perhaps natural assumption that once money is put into a fund, it can’t be used for any other purpose. However, unless restricted by statute, the money is otherwise available to be used for other purposes.

    Federal funds are listed separately. Some agencies have argued that their federal funds are restricted and not available for other purposes; they are right; that’s why we provided a separate list. Ironically, most agencies’ federal funds balances are negative, which means their total balances from state funds are even higher. For example, the Department of Health & Environment has a total unencumbered balance of $188 million, including federal funds with a negative balance of $13 million; their state unencumbered balance is therefore $201 million.

    The existence of this leftover cash hasn’t been shared with most legislators and the public. Can anyone think of a good reason for this to be a closely held secret?

    Trabert says he’s available anytime to answer questions on the study but he prefers that specific accounting questions be directed to Steve Anderson, the CPA who wrote the analysis or another CPA who works with government accounting. Steve can be reached at stevea@aracpas.com or 405-923-8875. Contact Trabert at dave.trabert@flinthills.org or 316-634-0218.

  • Kansas funds have large, unneeded balances

    Yesterday the Flint Hills Center for Public Policy released research that shows that the state of Kansas has large unencumbered balances, representing excess funds needlessly collected from Kansans in the form of taxes and fees.

    The numbers are staggering, with over 1,600 state funds holding between $2 billion and $3 billion in excess balances, depending on the method used to determine reasonable balances.

    The report, titled “Analysis of State Unencumbered Fund Balances in Kansas” was prepared by the accounting firm Anderson, Reichert & Anderson. The author, Steven J. Anderson, has extensive experience in government and its accounting. The report may be read by clicking on Analysis of State Unencumbered Fund Balances in Kansas.

    Investigative journalist Paul Soutar’s reporting on this report may be read at Buried Treasure.

    I spoke with Dave Trabert, president of the Flint Hills Center a few days ago about this research. He said that many state agencies have collected more fees than they have spent. These funds are considered “unencumbered.” That is, there is no claim on them. This doesn’t mean, however, that the state or agency can transfer or spend these funds in any way they want.

    Trabert said that often money is held in funds that, by law, can’t be transferred into other funds and used, perhaps resulting in lower taxes for Kansans. But, he said “the same result can be accomplished by simply reducing the amount going into the fund and forcing the agency to spend down their surplus.”

    The effect of this would be a reduction in taxes and fees that Kansans must pay. The amount of money involved is huge.

    The Flint Hills Center used two methods to calculate how much money could have been returned to taxpayers since fiscal year 2003, a period of six years. One method estimated about $2 billion in excess funds that could have been returned. The other estimated about $3 billion. Both methods leave sufficient balances in these funds for the state to conduct its business.

    In context, for a state that has a population of 2.8 million, these balances that could have been returned over this period amount to $1,071 per person, using the $3 billion figures. Or, for every household in Kansas, $2,890.

    Where is this money, I asked Trabert. It’s in bank accounts, he said. Who is aware of this? Trabert said that some legislators have been stunned to learn of these balances.

    There are people who know this money exists, Trabert said. But not everyone believes. In a KAKE television news story, Kansas senator Jean Schodorf, who is considering a run for the U.S. Congress, said she didn’t believe these numbers.

    In the same report an official from Wichita State University gave the example of a student housing fund. Fees collected for that fund, she said, can be used only for student housing.

    But if funds are accumulating in this fund and not being spent, this is strong evidence that too much money is being collected. The fees are too high.

    What are the implications of this report, I asked Trabert. “As shocking as it is, it’s really good news. … We can get away from this either/or situation: Either we raise taxes, or we have to give up a lot of services. … We just need to figure out how to make better use of what we have. We can have lower taxes and good services.”

    This analysis doesn’t include school districts, counties, or municipalities, except for a handful of cities that participate in a state-administered investment fund.

    Kansas lawmakers and the governor, as well as the press, primarily focus on the state’s general fund. There’s a reason for that, as it is the single largest fund, and the fund over which the legislature and governor have the most immediate control. In contrast, the “All funds” budget — that’s where the funds that are the subject of this research are held — is often treated as something over which we have no control.

    The general fund is about half the state’s total spending. This analysis by the Flint Hills Center shows that we need to pay more attention to the other half, and to the balances that are accumulating there.

  • Schodorf introduced bill to reduce notice of some bond sales

    Kansas Senator Jean Schodorf, who is considering a run for the United States Congress, doesn’t have much regard for citizens’ right to know of impending sales of municipal bonds.

    A bill, Senate bill 154 from the 2007 session and introduced by Schodorf, is cast in the usual legislative language, and therefore is difficult to understand. So I will quote from the Supplemental Note for Senate Bill 154 as follows:

    “SB 154, as amended, would amend a provision of the general bond law governing the sale of municipal bonds by providing that a city would be allowed to issue up to $2.0 million in certain municipal bond sales before a published notice of sale would be required. … Under current law, a public notice of sale is required for municipal bond sales greater than $100,000.”

    The effect of this proposed legislation introduced by Schodorf would be to let more bonds be sold without publication of notice. The bill died in the Kansas House of Representatives and did not become law.

    The rationale given for allowing bonds to be sold without publication is that publication increases the cost of the bonds.

    Publication also increases the ability of citizens to know what’s going on, too. I think that’s more important.

    In the end, this legislation, if it had become law, might not have made much of a difference. The quaint practice of publishing legal notices in newspapers is likely to come to an end someday, replaced by email and websites.

    On Facebook, the City of Wichita’s Government Relations Director Dale Goter left this comment to this article:

    Bob, allow me to offer some corrections to your report. The bill, as earlier noted, was requested by the City of Wichita. As enacted, it provides for public notice. The purpose of the legislation was to LOWER special assessment costs, saving property owners money by creating a more competitve environment for certain bond issues. It was ultimately passed with overwhelming support in both houses. The final version also had the blessing of the Kansas Press Association. It is a great example of how cities work with the legislature to SAVE money for taxpayers and property owners.

  • In Anaheim, I am the press

    In Kansas, alternative media outlets like this blog can’t get the same level of access that traditional media has in the Kansas statehouse. My post Kansas alternative media shut out of legislative access gives details.

    This week I in was in Anaheim, California on a fact-finding trip. As part of this, I asked to meet with a planner for the City of Anaheim. Shortly after we started our meeting, he asked to leave the room for a moment. When he came back, a media relations person for the city was with him, and stayed with us during our meeting.

    This is not unusual, as many companies and governmental bodies have policies about their employees talking to the media.

    But that’s it … in California — Anaheim, anyway — bloggers are treated as press. Not so in Kansas, though.

  • Jean Schodorf a candidate for Congress?

    I just received a tweet from Jean Schodorf, a Republican member of the Kansas Senate from northwest Wichita:

    “JeanSchodorf Special announcement regarding 4th Congressional District, 2day from 12-1 @ the Midtown Resource Center. 1150 N. Broadway. Lunch Provided”

    Schodorf’s record in the senate is one of taxing and spending. In 2008, her rating by the Kansas Taxpayers Network was 29%. Several senate Democrats did better.

    She’s also voted against legislation allowing the coal plant, although she did vote for the compromise bill.

    So a question I have — seriously, sort of — is in which party she’ll choose to run.

    What’s interesting to me is this question: Does this foreshadow an entrance by television newsman and producer Bill Kurtis (her brother) into the race for Kansas governor? He’s said no, he’s not interested.

    Update: Wichita Eagle coverage is at Schodorf explores Congress run.

  • Audit report reveals important questions

    By John LaPlante, Flint Hills Center for Public Policy.

    Do some school districts spend your dollars more efficiently than others, and if so, how can the others catch up? An auditing office in Kansas state government started to look at these questions. But what it did not ask — and in some cases, was not allowed to ask — is just as interesting, if not troubling.

    After being ordered by the Kansas Supreme Court to send more state aid to schools, the Legislature started ramping it up. It started with $145 million for the 2005-06 school year. It also created the 2010 Commission and directed it to work with the Legislative Division of Post Audit, to “monitor school district funding” and to “ensure that the Kansas system is efficient and effective.”

    The Legislature suggested 11 topics that the Commission might review. For example, how accurate are the financial reports that districts submit to the state? Do district managers spend money efficiently? Since Kansas schools spend over $5 billion each year, these are reasonable questions.

    A few weeks ago the office released a report describing the spending habits of five different types of districts. It lumped the state’s 296 districts into clusters with similar characteristics. One cluster, for example, consisted of small, rural districts with little poverty, few bilingual students, and moderate property values.

    The audit team decided to look at seven different kinds of spending that are not directly related to classroom learning. These included administrators in the central office and in school offices. These are the people you think of when you say “school administrators.” It also looked at spending on instructional support (curriculum directors, training staff, and librarians), student support (counselors, social workers, and nurses), operations and maintenance (the physical plant), student transportation and food service.

    For each cluster, the team calculated averages and determined patterns for the seven different types of spending. It found some interesting patterns. In some cases, the most efficient districts contracted out services. In other cases, they did the work in house. Larger districts were often, though not always, more efficient than smaller ones. (Districts can grow so large that they become monuments to inefficient bureaucracy, but the report did not look at the 15 or so largest districts in the state.) The report also suggested ways for districts to economize in each category of spending.

    The report identified several outliers, or districts that spent disproportionately more than their peers. You might wonder whether these out-of-the-ordinary expenses were justified. Good question. But we can’t tell, for it’s here where the report begins to falls short.

    Don’t blame the Legislative Division of Post Audit, whose people call things as they see them. Their work was limited by what the 2010 Commission allowed. The commission is an 11-person study group whose members include people appointed by legislative leaders, as well as the leaders of the legislative committees on education. All but one person is either employed by or retired from public schools or state government.

    The audit team had designed the report to have two phases. The first involved everything I’ve mentioned above, which involved taking official reports and then crunching some numbers. The second phase required going out to districts to ask questions. In the words of the report, the team planned to analyze the outliers “to determine if there were ways they could reduce costs.”

    But to quote the report, “Several members of the 2010 Commission indicated they had received complaints from school superintendents about having an efficiency audit conducted at a time when they were trying to address funding cuts from the State.”

    The 2010 commissioners then directed the LPA to “suspend the second phase of the audit,” since “it wasn’t their intention to create stress among school districts.”

    Do you think that would work with the IRS? “Sorry, but the thought of filing my return this year causes me stress, and I’m being furloughed for 14 days this year. Do you think we could … just forget about that 1040 business?”

    I don’t think so.

    It’s inexcusable that the 2010 Commission has stonewalled the people’s auditors. Taxpayers have increased K-12 funding by $1.3 billion over the last five years and they have a right to know if their money is being spent efficiently.

    John R. LaPlante is an Education Policy Fellow with the Flint Hills Center for Public Policy. He has a Masters of Art in Political Science from The Ohio State University, where he studied the politics of economic development, social movements, and international relations. Mr. LaPlante has worked in the field of public policy since 1998, assisting lawmakers across the country in promoting consumer-driven, cost-effective solutions to the public issues of the day, particularly in regards to education. His commentaries have been widely published online and in publications such as the The Wichita Eagle, the Minneapolis Star-Tribune, the Detroit News, the Hutchinson News, and the Salina Journal.

  • Faust-Goudeau’s concern selective

    In today’s Wichita Eagle, Oletha Faust-Goudeau, a Democratic member of the Kansas Senate representing parts of north-central and northeast Wichita, writes this in a letter to the editor:

    I would like to commend Mayor Carl Brewer and the Wichita City Council for having the courage to vote down a rate increase for water and sewer charges for customers in our city (“Water rates to hold steady,” June 17 Local & State). As we continue to face economic down times, I am very concerned about our senior citizens and people with disabilities who are on fixed incomes and struggling to make ends meet. This increase would have certainly added an additional financial burden for them in paying utility bills.

    The proposed rate increase Faust-Goudeau refers to was in the amount of $2.00 per month.

    I suppose it’s admirable that she’s looking out for the interests of her constituents in this matter. But her concern is selective.

    The problem is that Faust-Goudeau voted against the expansion of the Holcomb Station coal-fired electricity generating plant. Her votes mean that Kansas would have to rely on wind power backed by natural gas, which is much more expensive than relying on electricity generated by coal.

    Wind power is very expensive, despite being heavily subsidized by the federal government through the production tax credit.

    It’s so expensive that Westar, the electrical utility that serves Wichita and Faust-Goudeau’s constituents, has had to ask for several rate increases recently. The cost of wind power was cited in some of the requests.

    One of these rate increases was estimated to add $10 per month to the cost of electricity for the average house.

    Part of the reason for the water department’s rate increase request is to fund capital improvements the department needs to make sure it can continue to deliver water now and well into the future.

    Paying much higher electric bills just so we can build more windmills to solve a problem that doesn’t exist, and even if it did exist, can’t be solved with windmills in Kansas: that’s a burden that no one should have to pay.

    Not even Faust-Goudeau herself, no matter how she votes in the Kansas Senate.