January 2004
Jan. 29, 2004
(Distributed to Kansas newspapers Jan. 26, 2004)A harmless bait & switch
The Kansas Legislature is just now unscrambling a Kansas Supreme Court decision dealing with elections that probably sounded pretty good to a bunch of folks who wear black robes to work and who don’t raise money for, or campaign, to retain some of the best jobs in Kansas government.
The Supreme Court, in a case last year that probably shouldn’t have gotten to the court anyway, decided that if a politician raises campaign money for a race for office, that politician really shouldn’t use that money in seeking another office.
Now, that probably sounds pretty good on the surface, because you really shouldn’t do a bait-and-switch campaign. But in practice, there has been a harmless bait-and-switch going on in Kansas government for decades and nobody thought a thing about it. Say you are a member of the Kansas House of Representatives, and have done well and look to move to the Kansas Senate, say at the upcoming 2004 elections.
The Supreme Court held last year that you shouldn’t use the money people contributed to your House campaign to run for a different office, like Senate. The idea as the Supreme Court sees it is that you shouldn’t be able to roll over that House campaign money for a Senate campaign without checking with contributors. That checking? Probably either sending them back their money and asking them if they will give it to you again for a Senate campaign, or getting some formal authorization from the contributor before switching the money from one race to another.
The issue came up when former State Rep. Carlos Mayans, R-Wichita, wanted to use $50,000 that he had in his Mayans for House campaign to run for mayor of Wichita. Mayans, by the way, is now Mayor of Wichita Carlos Mayans. Mayans checked with the Kansas Governmental Ethics Commission and the lawyers for the city of Wichita and both said it was OK to use his legislative campaign money for the race for mayor. We understand he was about to get the final OK from the United Nations and the College of Cardinals when an opponent cried foul and finally got the case to the Kansas Supreme Court where they said Mayans couldn’t use that legislative campaign money in his race for mayor.
Now, that’s one guy and we’re betting that he isn’t brown-bagging lunch to work in Wichita’s City Hall while he makes good on the money that he wanted to use, but was enjoined from using to pay mayoral race campaign bills.
But the issue got serious in the Kansas Statehouse because there are at least half a dozen, maybe more, members of the House of Representatives who would like to run for the State Senate and now can’t use their House money for a Senate campaign without either getting in big trouble or asking everyone who contributed to their House races if it’s OK to use the money for a Senate. That could involve sending back to contributors their checks and asking them to write new checks for "Joe for Senate."
Besides the paperwork, it’s going to be embarrassing. Now, if you are making contributions from the fence-tighteners political action committee, do you care if a candidate runs for the House or Senate as long as he or she supports your legislative program? Probably not. But do you want to tell a candidate whom you supported in the House that you don’t want him or her in the Senate? Especially when there is big fence-tightening legislation still to be voted on by the candidate? Probably not.
This is a big deal to legislators who want to run for some other office. Last election, two senators ran for statewide office and won, Sen. Sandy Praeger, R-Lawrence (Insurance Commissioner Praeger now) and Sen. Lynn Jenkins, R-Topeka (who is now known as State Treasurer Lynn Jenkins).
Look–maybe–for the Legislature to do something to allow those funds switches. Why maybe? Well, the bill will start in the Senate, and we’re wondering whether senators really want to make it easy for House members to use their House campaign funds to run against them.
We’ll watch this one for you...
Jan. 22, 2004
(Distributed to Kansas newspapers Jan. 19, 2004)Changing 'business as usual'
While the Kansas legislators are getting their bearings, figuring out what doors to the Statehouse are open and meeting new lobbyists, there’s something nice happening in what may be the backwaters of state government.
Now, we’re not sure that Insurance Commissioner Sandy Praeger considers her little shop the "backwaters," but she did something appropriate, and, well, nice, for two, maybe three Kansans.
Here’s what happened: A life insurance company called Monumental Life Insurance Co., of Maryland, had bought other insurance companies that for years had committed "race-based pricing" of some life insurance policies sold to African-Americans.
Actually, lots of insurance companies across the nation, and especially in the South, did the same thing for decades. That’s part of what used to be the culture in America. It wasn’t right, it wasn’t fair, but like a lot of things, well, it just happened. Insurance companies sent agents to sell policies, most African-Americans didn’t have life insurance but they wanted it just like everyone else wants it, but they didn’t really know the business. Does that sound familiar to nearly everyone who has a little life insurance policy in his/her safety deposit box?
Well, four states–Pennsylvania, Virginia, Maryland and Florida–prosecuted Monumental Life, and proved their case. Regulators for the four states entered an agreement to settle the infraction. As a result, Monumental Life agreed to pay $32 million in damages, mostly by increasing coverage–by as much as one-third–to its African-Americans policyholders the company could find. This being a paper-driven business, there are some policyholders and their heirs whom Monumental Life just couldn’t find. That happens. Once a company makes a final payment or issues a death benefit check, the time and effort spent on record-keeping tends to trail off.
After locating all the cheated policyholders it could and making things right for them there was money left over, and that’s where Praeger comes into the picture.
The Kansas Insurance Department will receive almost $13,000 from Monumental Life as part of its consent decree settlement for years of race-based pricing–generally on the basis that there are Kansans whom Monumental Life can’t find and some restitution has to be made to someone.
Praeger could easily have just cashed the check, put it in her agency’s budget, and just continued to monitor the insurance industry in Kansas and make sure that no race-based pricing is going on here. The money could have essentially just disappeared within the budget of the Insurance Department, we’d never have heard anything about it and once the check cleared, it would have been business as usual again. Or, the decree offers up the option that Praeger could make a charitable contribution of the nearly $13,000 to nearly any charitable organization which deals specifically with African-Americans. That would have been a nice thing, too.
Praeger had another idea. Sure, there are charitable organizations that specialize in assisting African-Americans in Kansas. She could probably have divvied up the money amongst them in some pretty insignificant amount and gotten the Kansas Insurance Department listed on annual reports of those charities. But what Praeger decided to do is a little different.
She’s going to use the money to finance scholarships–at the University of Kansas and at Washburn University of Topeka– for African-Americans who are studying the actuarial sciences in Kansas.
The scholarship money might yield Kansas some African-American actuaries who go into the insurance business or the insurance regulatory business and who we can pretty well assume are going to make sure that no minority group members buying insurance here are tricked or cheated by insurance companies based on policy offerings, premiums or benefits.
That’s the way you stop race-based underwriting, That’s how you make sure that nothing returns to "the old days" or that companies don’t just overlook practices that went on for too long and that "business as usual" doesn’t stay business as usual.
A nice way to use the money, we’re thinking...
Jan. 15, 2004
(Distributed to Kansas newspapers Jan. 12, 2004)Ready for sales-tax collection change?
Remember that summer-long flap over destination-based sales-tax sourcing? That was the new wrinkle in sales-tax collection that requires retailers to collect the sales tax applicable at the place that a newly purchased item is delivered.
It was such a change for about 25,000 of the state’s retailers that they figured it was just impossible to do.
The Legislature got upset, or at least some members of the Legislature got upset about it, and the governor, figuring that retailers didn’t have the tools to do the job yet, put it on a derail track, telling retailers to do their best to figure out the distant, or destination, sales tax while the state ginned up some products to help the retailers out.
Turns out, this month, the state has that help. It’s now possible to go to the Kansas Department of Revenue’s website and type in the address where you are delivering items and the retail price of the items, and it will compute the sales tax. That’s street address-by-street address. So if you know where, for example, you’re dropping off lumber or a big-screen TV to your customer, you know the sales tax rate in effect there and it is already calculated for you.
Some other helps are coming for retailers including a computer program that they can download that will mean they don’t have to get onto the Internet to have their calculations made.
So, what’s happened to the flap?
It hasn’t gone away. There are still legislators who believe that the destination-based sourcing is too cumbersome for their retailers, or that it is just a change that they don’t want to put anyone through.
The next few weeks should tell Kansans whether retailers will use the information that is available to them to compute sales tax correctly. The other option is to just decide that doable or not, retailers are still going to press their legislators to repeal the destination-based sourcing law.
Nobody’s really asking whether it makes any sense to not destination-base sales taxes.
Seems to some that if we go to Kansas City, for example, and buy a sofa and have it delivered to our home, our home city or county probably ought to get its share of the local option sales tax on that sofa.
If it catches fire, it will be the local fire department–not a flying squad sent from Kansas City–that puts it out. And that local fire department will be partly funded by sales taxes where the sofa is delivered. So it seems like, yes, there is a link between where an item is delivered and the need for local units of government to have staff and equipment to protect it. Say the sofa is stolen, not burned in a fire. You figure that Kansas City sofa detectives are going to come out, investigate the crime and find out who stole your sofa? Nope, it’s the locals who benefit from the destination-based sales tax.
Seems to others, though, that it’s the fire department where the sofa is purchased that keeps the furniture store from burning down so that the merchandise can be for sale in the first place, and that it’s the store’s local cops who would track down robbers after a hold-up at the store–detectives from outlying cities won’t come in to help out. In this line of reasoning, sales tax belongs to the locality where the merchandise is sold.
Watch for the governor to announce in a couple of weeks that the sales tax is now up and running, ready to be fully enforced just like any other tax law. It took awhile, but the governor didn’t penalize anyone during the start-up period while the state was getting ready for full enforcement of the law. Now we’ll see if she can convince retailers and legislators that once retailers have the tools to figure out how to collect and report the destination-based sales taxes, there really doesn’t seem to be any reason to repeal it.
Jan. 8, 2004
(Distributed to Kansas newspapers Jan. 5, 2004)A change in politics?
There’s an exceedingly good chance that by the end of the 2004 legislative session which kicks off Monday, no matter what occurs, that Kansas is still going to be a sovereign state, taking care of its young, its old, its sick, its well.
Beyond that, well, it’s up in the air.
The session may produce a sharp change in the politics of Kansas, a steady "red" on those national TV maps that show which states vote Republican in red and the ones which vote Democratic in blue. Kansas in 2000 voted for George W. Bush for president and likely will again, but on a state level may see some dramatic change in closer-to-home governance in the Kansas Legislature.
The factors at play:
• A pretty conservative Democratic governor in Kathleen Sebelius, with Democrats who will line up solidly behind her on virtually every policy and tax issue that she raises in the State of the State address and over the early weeks of the session.
• A Republican legislative majority that given the opportunity is likely to vote more conservatively than many Kansas Republicans feel comfortable with.
• And a state Republican Party at war with itself over social issues like guns and abortion in which conservative Republicans would like to take over, or, if that doesn’t work, make the mainstream Republican Party a toothless dog, a social group with letterhead and a mailing permit and no political clout.
Now, Sebelius’ conservatism is relative of course, but she’s a no-nonsense, tight-budget governor who wants to make sure that the state general fund is healthy so there is money for emergencies and the solid operation of state government. Not many Republicans find fault with that fiscal conservatism; they’ll argue over where to spend money, but they like a state government nest egg, too.
She is likely to propose a state budget Monday that is tight, will cover all the bases, but which will require tax increases to tackle major policy changes like evening up the state’s school finance system. Like those price fixe restaurants where the dessert and drinks are extra...
Look for the Republican Legislature to yelp that it wants all the extras included in the basic budget, and that the governor is a spendthrift that is planning to gouge taxpayers for more money. Legislators want their dessert and drinks included in the cost of the meal.
And sometime, maybe late March, Kansans who read the papers or catch a little TV will start making up their own minds about whether there is enough money on hand without tax increases to do what they think their state ought to be able to do for Kansans. It’s not a sure deal, but there’s a chance that once things get spread out before them, Kansans are going to decide that the state needs a little more money. Or not.
But by maybe late March, there will be a feeling, a fairly quiet but generalized feeling about what the Legislature ought to do with the governor’s budget and whether she’s taking the state the right way or the wrong way.
That’s where things get interesting. Do majority Republicans shred her budget or make minor changes that they can legitimately call–and voters will understand as–improvements, shaping it to mirror whatever the general feeling across the state is? And, can Republicans get unanimity among themselves about what they are doing or will GOP legislators split, some marrying up with Sebelius’ Democrats for a majority?
All that carries into the fall elections.
If Sebelius gets most of what she wants, look for minor changes in the Republican/Democratic split in the Legislature at the fall elections. If her budget is shredded–and if Kansans decide that she was largely OK–then watch Democrats pick up seats.
Jan. 1, 2003
(Distributed to Kansas newspapers Dec. 29, 2003)What's the Rail?
Us old-timers at the Rail, the brass hoop that circles the Statehouse’s atrium on the third floor, are looking forward to a complicated 2004 Legislature.
Expect a session that is politics-charged in this year in which the House and Senate members stand for reelection and those who aren’t going to run again try to not only maintain their legislative influence and horsepower, but probably try to take a role in determining whom their successors will be.
Expect a session that is going to try to do workmanlike legislating for Kansans while under the cloud of a district court judge’s opinion that the state’s biggest expenditure, the $2.6 billion spent annually on elementary and secondary education, is not only not enough, but misspent.
And expect a session when the dozens of special interest groups–and that’s not a derogatory term no matter how you see it used in common speech–not only protect and attempt to expand their interests, but also keep an eye cocked toward who might be in the Legislature after the election in the fall when there will still be special interests to shepherd.
That’s where Railsters hope to be of help to you in figuring out what appears to be happening, what is actually happening and why some issues that appear picayune in the great scheme of things are actually important if you know the lay of the land.
This Railster will be covering his 28th legislative session this year and with a little luck will be able to help you figure out what’s going on, what it means and why it is important–or not.
There’s a lot of pomp and circumstance in the Legislature, a lot of history and a lot of "that’s the way we do things here" that don’t immediately make sense to Kansans who are used to getting things done and not spending much time on procedure. There are news conferences that don’t yield any news, and there are chance encounters in the hallways or in committee rooms that are big news.
There is a lot of making points and stretching points, and much of that will start with the governor’s State of the State address, the first one in which Kathleen Sebelius will have a budget that is entirely hers, short on money, of course, but which supports her take on what the state ought to be doing. As a whole, you’ll probably get a feel for whether she wants to encourage or discourage things, highlight programs or find some that she doesn’t believe the state needs.
We’ll help you read the signs in the budget.
And we’ll also assess the inevitable criticism of her budget. The nature of the Legislature is that it has members with diverse viewpoints and interests and while the budget as a whole covers a lot of ground, some legislators will be looking for just that piece of ground they’re here to defend or expand.
We’ll try to help you sort out criticisms, figure out whether they represent serious oversights or problems, or whether they are relatively small caliber.
While legislators talk about a short session, the usual 90 days or so, there are amazingly large gaps between actions. There will be bills introduced the first day of the session that aren’t heard by committees for weeks...there’s no rule about first-come, first-served in the Statehouse, and tracking the progress of bills, or more generally issues, is sometimes confusing. Some ideas that people are talking about before the session opens won’t emerge as deal-breakers for the budget or individual bills until spring...late spring...
Keeping track of it all is what Railsters do, the people who get here early and stay late, talk to everyone in the building, assess their interests and motives and try to gauge whether there is a public policy issue in there somewhere and whether the culture of the Statehouse and the traditions of the Legislature are likely to give it some daylight
With a little luck, over the next several months you’ll find out more about the Legislature than most Kansans, and maybe think about topics that might not come up in casual conversation.
That’s the aim of this column.