April 2008

April 24, 2008
(Distributed to Kansas newspapers April 21, 2008)

Turning the hose on ‘em?

Sometimes it makes sense to pare away the complicated, detailed explanation of the state’s budget and take a long-range view of just what’s going on with the taxes that you pay.

Last week, the Consensus Revenue Estimating group—that’s a handful of  budget and economics experts who meet in secret and project revenues to the state that become the basis for the governor’s budget and the Legislature’s handling of it—met and issued its projection for the remaining few months in this fiscal year and the upcoming fiscal year.

Because this can be a dab complicated, please note that the current fiscal year, FY08, ends on June 30, and the upcoming fiscal year, FY09, starts this July 1 and continues until June 30, 2009. Now, here’s the news: The state has less money to spend this year than last. And for the next fiscal year—that’s FY09—for which most of the budget has already been approved, there is at least $150 million less than the consensus group estimated last November.

Hmmm…The governor and Legislature have already approved much of the FY09 spending based on having $150 million more than is likely to be in the bank. That can’t be good, can it?

No…it’s not good…

Now, some of the shortfall is caused by the national economy slide…for example, when the Federal Reserve lowers interest rates to encourage the economy to keep moving, it means the state is likely to earn $40 million less in interest on idle funds it invests for brief periods before the money gets spent on things ranging from aid to education to salaries to Medicaid.

And, some of that shortfall is caused by spending or tax cuts approved right here in Topeka.

But the real deal, of course, is that the amount of spending by the governor and Legislature is probably—except to the people the money is being spent on—a little high, and the taxes that support that spending are a little low—except if you are the one paying them, in which case they are too high, too.

In fact, the experts are predicting now that the state through June 30—remember, that’s the last day of FY08—will have spent $382 million more than it took in, and next fiscal year, based on spending already approved, the state will spend about $380 million more than it is going to receive in taxes.

Kansas can’t keep that up for long…in fact, it can’t keep it up in Fiscal Year 2010, which will be the first budget that the freshly elected or re-elected Legislature will consider next winter, just after being sworn in.

No…again, it’s not good…

There are, of course, two solutions. One is to spend less money—and that’s not as easy as it sounds because every agency and program and recipient of a tax cut (yes, tax cuts are spending, too, because it means less money coming into the state) is very serious about that spending or tax-cutting.

The other solution is to raise taxes or fees and nobody is very excited about that option, either.

It’s not had to recall any legislative candidate campaigning on the issue of cutting spending…they all do it, they just don’t often get the spending actually cut.  But who’s going to campaign on the possibility of raising taxes?

If a candidate came to your door and said he/she is hoping to raise your taxes, you’d just turn the hose on ‘em and run him or her off your land, wouldn’t you?
Interesting little campaign season setting up here…if the Legislature can just figure a way to close down this session…

 

April 17, 2008
(Distributed to Kansas newspapers April 14, 2008)

It’s money this time

There’s an interesting little showdown coming between Gov. Kathleen Sebelius and a small section of the 173-page Mega appropriations bill that finances most of state government for the remainder of this fiscal year and next fiscal year.

If it is controversy, and it takes place in the Statehouse, the topic this year is either coal plant legislation or money. This time, its money combined with executive authority, plus the political plum of proposing to spend money on things that make a governor popular.

Here’s the lowdown and what you may want to watch for.

Last year, remember, the Legislature fought over expanded gambling in Kansas, passing over the strong objection of socially conservative lawmakers—who don’t believe in gambling—a bill that will allow up to four new state-owned-and-operated resort-casinos and at least three “racinos” or race tracks with slot machines.

Sebelius signed the bill into law, and if the Kansas Supreme Court after a May 15 hearing determines that the law is constitutional, that opens the spigot of millions of dollars in new revenue for the state.

We’re talking at best maybe $15 million for the current state fiscal year which ends June 30 and maybe another $60 million or more the next year. And, given a couple years during which casinos are built and put into operation, it could be $200 million or more a year flowing into the state.

Well, that’s always a good thing. If you gamble, part of what might be your winnings wind up with the state, but you don’t mind if you’ve won, and if you don’t gamble, you can consider the revenue a tax on libertines who gamble.

Even legislators who fought gambling legislation can get comfortable with spending the money it brings in, and in this year’s Mega appropriations bill, those anti-gamblers inserted provisions that essentially take the money and spend it on things they want even ill-gotten state gains spent on.
So, the Mega bill merely says that all the gambling money goes into three funds: One for property tax relief, another to buy down the state’s debt, and yet another for state infrastructure—that’s basically fixing up state property or building new state buildings.

All are laudable ways to spend gambling money. But the key is that it essentially takes away that revenue from the governor’s budget. Millions coming into the state and the governor can’t even propose spending it on something that appeals to a majority of voters, say, health care for the poor, elementary and secondary education, nice things like that.

Well, the showdown is likely coming soon. Will the governor line-item veto that provision that will deny her…and her successors…what could be hundreds of millions of dollars a year that the governor could propose to spend on nice things…or watch that money flow into untouchable—and politically un-sexy—accounts?

Have you ever heard a governor crow about reducing the state’s debt? How about repairing the utility tunnels under the Statehouse or replacing a roof on a state office building? Would either of those make a persuasive TV ad or maybe a political brochure?

Creation of those three funds is one of those little under-the-radar issues that rolls around the Statehouse that most people don’t hear about, but in the unrelenting governor vs. legislature scrap over who’s really in charge here, it is an important one.

It takes a line-item veto for the governor to win, and an extraordinary two-thirds majority vote of the House and Senate to defeat her.  

We’re waiting to see what happens…

April 10, 2008
(Distributed to Kansas newspapers April 7, 2008)

When politics met policy

Somewhere at the intersection of sound public policy and getting reelected there are choices to be made. This legislative session, two very different choices have been made and it’s a puzzlement which is right.

The issue is health care. Everyone in the Legislature and the governor and probably a lot of Kansans are interested in Kansans getting good health care. It’s not just about a warm feeling in your heart knowing no Kansans are needlessly sick or not getting the health care they need to work, play and enjoy life. It’s also about making sure people are healthy enough to work, to take care of their families, and to get that early pre-emptive care to make sure that illnesses don’t get more serious—and more expensive to treat.

But the problem for this legislature is that there is probably enough money available to take care of part of the Kansas population which needs health insurance. The nice thing is that Kansas would have to spend just a fraction of the cost of health insurance, because the federal government through Medicaid pays the lion’s share of the cost for those who qualify.

The tricky question is: On whom does the Kansas Legislature spend its taxpayers’ money? The Senate has decided to spend money on the state’s HealthWave program, for children from birth to age 18.

The House has decided to assist very poor Kansas grown-ups through a premium assistance program in which the poor pay a little money and the state helps them pay the rest of their insurance premiums.

Neither of those programs sounds like a bad idea. But the question is if you can afford just one, which one?

That’s where politics intersects with sound public policy.

Politics, of course, comes down to getting reelected in November, when both the 40-member Senate and the 125-member House are on the ballot.

Does the Legislature spend money on children or on adults?

Help adults, and maybe they can take care of themselves and their children. Help children, and, well, you help children, but it feels better in your heart, doesn’t it?

Politically, you never go wrong being seen by voters pulling a baby buggy off the railroad tracks. We all grew up on the “it’s for the children” tag line.

The Senate is pretty confident it is doing a good thing and a politically attractive thing by helping the children.

The House doesn’t want to ignore the children but it sees expanding health care to adults as very important, and so far the House and Senate negotiators on the heath-care bill haven’t been able to hammer out a deal. Nobody’s backing off.

The whole picture gets fuzzier because there’s little doubt that the federal government is going to have money in the game with the health insurance expansion for adults, while President George Bush has twice vetoed appropriations to put more federal money into insurance for children. That’s a real issue among the supporters of the adult aid and a selling point that they’re making in the Statehouse. The children’s supporters in the Senate figure that there’s a new president on the way next year, and whoever it is, there is going to be money appropriated to assist the state in expanding health-care plans for children.

Who’s right? Both the House and Senate are right, of course, but this appears to be a budget year in which the state can’t afford for both to be right.

This is one that may be decided by the reelection campaign ahead and the lack of subtlety that makes a good campaign ad or brochure.

Let’s watch the Legislature’s wrap-up session that starts April 30 to see what happens.

April 3, 2008
(Distributed to Kansas newspapers March 31, 2008)

Looking ahead…

There’s nothing like an election year to get Republicans fretting about what would happen if some of their leaders got better jobs—like, maybe a vice presidency or a seat in Congress.

Now, besides the giddy GOP hope…the galvanizing fear is that if U.S. Sen. Sam Brownback, R-Kan., got tapped to become the runningmate of U.S. Sen. John McCain, R-Ariz.—and if he wound up getting elected vice-president—Democratic Gov. Kathleen Sebelius would appoint Brownback’s successor to represent Kansas in the U.S. Senate.

And, there’s a smaller but no less anxiety-causing concern among Republicans that should Republican State Treasurer Lynn Jenkins win the primary election against former U.S. Rep. Jim Ryun and in the general election battle for the 2nd District congressional seat defeat U.S. Rep. Nancy Boyda, D-Kan., Sebelius would choose Jenkins’ successor as state treasurer.

The Kansas Senate last week, at least from a Republican viewpoint, fixed that.

Now, remember that for the Democrats in the Kansas Senate, and probably Kansas Democrats in general, having their governor appoint a successor to Brownback, maybe, and Jenkins, maybe, isn’t a problem at all. The gubernatorial appointees would, by coincidence, each serve out the remaining two years of term of office that Brownback and Jenkins would resign to take their new jobs.

But succession in the post-9-11 era is an issue of national import and the bootstrap for the non-emergency tinkering with state law. Federal law requires in the event that at least 100 members of Congress are unable to serve—and the thought here is some sort of terrorist attack (the toll probably wouldn’t be that high if, say, the Rapture occurred)—Congress needs to be reconstituted quickly so government can continue unabated.

Before the national attention, Kansas governors just appointed a successor—recall, former Republican Gov. Bill Graves appointed his lieutenant governor, Sheila Frahm, to succeed former Sen. Bob Dole, R-Kan., when he resigned to seek the presidency.

The thought of a Democratic governor appointing a Democrat to succeed Brownback, who won election as a Republican fair and square in an election, well, that just didn’t seem fair to Republicans.

And, we’re certain that even if Sebelius tapped her lieutenant governor, Republican-turned-Democrat Mark Parkinson, for the Senate seat, that wouldn’t set well with Kansas Republicans, either.

There’s an element of, oh, quiet concern among some Republicans, mostly moderate Republicans, that the vacancy-filling plan they approved last week, which calls for quick statewide conventions by political parties to choose their candidates for a general election to elect a successor senator—or state treasurer—pretty much guarantees that the conservative wing of the GOP selects the nominees.

Practically, while Democrats seem pretty satisfied with their Democratic State Committee—the statewide leadership council of their party—the Republican State Committee is clearly dominated by members of the 10-year-old Kansas Republican Assembly, the well-right-of-center political group which has members who represent a daunting majority of the state GOP committee.

It means moderate Republicans have virtually no chance to win nomination as the candidate for the back-filling of vacant U.S. Senate or state treasurer offices at the hurry-up statewide elections to follow the conventions.

***

The final question? Whether a governor, should the bill pass the House and Senate, sign the bill into law. It would, in cases where there isn’t a national emergency, have the governor give up power to appoint a U.S. senator or a state treasurer.

For all the legislative plotting, it sort of becomes an intelligence test for the governor, doesn’t it? If you were governor, would you give up two key appointments?