June 2007

June 28, 2007
(Distributed to Kansas newspapers June 25, 2007)

Grassroots democracy?

There’s this presumption that “big government” in Kansas, government that really affects Kansans’ lives, comes from the Statehouse.

It’s the concept that state government is the one that sets the rules, that is the 800-pound gorilla that determines what Kansans can and can’t do.

And that is probably a comfortable perception for those of us who virtually live in the Statehouse—those who make laws and those who report the nuances of those laws. There’s a nice living in the political back-and-forth and maneuvering to get those bills passed through committees, to have debates on the House and Senate floor, and to besiege the governor to sign the bills into law or veto them.

That action seems centralized in Topeka but has ramifications stretching from border to border.
Well, the Kansas Supreme Court with a highly publicized decision last week virtually shattered that presumption.

That, of course, was the unanimous decision by the Supreme Court that the city of Lawrence can, based on relatively simple and basic state law, regulate smoking in places where the public does business. A bar owner challenged the city of Lawrence’s smoking ban in bars and restaurants, and the high court decided that based on current state law the city could indeed ban indoor smoking in those bars and restaurants.

Last winter the Legislature’s consideration of a more expansive smoking ban—basically banning smoking in any public place, not homes—raised determined opposition and was finally amended to allow a county-option provision. That would have allowed county commissioners to opt out of the ban, subject to a protest petition and a voter referendum in that county.

The opt-out provision essentially killed the bill. No further discussion was held on it after the opt-out was added to its language.

But, the Supreme Court decision pretty clearly hands almost the same smoking ban authority to local units of government—a city in this case.

Very practically, the Kansas Supreme Court has empowered local units of government to ban smoking in most places, and for all the caterwauling in Topeka and all the hours of testimony for and against the failed bill, the court moved the battle to city councils and county commissions where it probably belonged in the first place.

That’s called local control by conservatives. It’s also called grassroots democracy by many folks—just not those who find it easier to blunt state law in Topeka rather than fighting their battle, over smoking or whatever else comes up, in city halls and courthouses across the state.

It also moves the battle to the place where citizens, generally, don’t pay much attention. There was a lot of press about the proposed statewide law but the real deal there was that it made the ban seem like something that an individual citizen couldn’t really do much about without taking time off work, traipsing to Topeka, and lobbying people they don’t know.

At the city or county level, the fight is more personal. Smaller numbers of voters can determine who is in charge and what they want those in charge to do or not do about an issue, and with relatively small numbers of votes, have their will done.

It would take a lot of legwork, a lot of neighborhood coffees and skull sessions, and ginning up interest in small issues that affect people’s lives, but it can be done.

The Supreme Court probably taught Kansans a lesson in government last week. We’ll just have to see whether many Kansans were listening…

June 21, 2007
(Distributed to Kansas newspapers June 18, 2007)

Grab your wallets

Get ready for the most expensive legislative campaign season Kansas has ever seen.

Last fall’s elections saw the 125 seats in the Kansas House of Representatives up for grabs, with candidates raising $5.057 million and spending $4.4 million on those races.

It’s been since 2004 that the Kansas Senate has stood for reelection, and in that year, $4.9 million was raised and $4.46 million was spent.

The long division?

In the House, it comes to a dab more than $35,000 per seat, but that’s instantly misleading because there were candidates who spent twice that amount, candidates who didn’t have opposition at all, and candidates who spent little but managed to beat opponents who spent more. Oh, and of course, there are only 125 seats in the House but there were 268 candidates for those seats, some who spent virtually nothing.

Remember, it’s been three years since the Senate was up for reelection and the long division shows $111,500 per seat, but again, some were higher, some were lower, and that figure includes the total 119 candidates for those 40 seats, many of whom were sidelined at the primary election.

Best guess of how much next year’s House and Senate elections are going to cost? Figure $6 million for the Senate, the same for the House. Though those are big numbers, of course, raising it might be easier than you’d think because there aren’t any statewide offices on the ballot in 2008. It’s not widely known, of course, because most of this campaign finance stuff is complicated and inside-the-dome talk, but the campaigns for statewide office—governor, attorney general, treasurer, insurance commissioner, and secretary of state—raised $13.1 million and spent almost all of that.

Without a slew of statewide races fighting for campaign contributions (Kansas House of Representatives candidates managed to raise $5 million for their campaigns), it ought to be relatively easy for candidates and their committees to raise $6 million per legislative chamber…very unevenly distributed, the candidates will hope…

There are going to be candidates who don’t have an opponent from either party next year, count on it. In the House, especially, dozens of incumbents won’t have opposition.

It’s called a “walk” and while it’s logical that those candidates would pay their filing fee and just wait for the votes to roll in, smart ones maintain at least some level of campaign, spend some time at public events, send out some mail and do some radio, newspaper and maybe TV advertising. They don’t want voters to think they’re taking them for granted. They’ll be building goodwill so that a future opponent can’t say that the legislator ignored his/her constituency. Plus, there’s always the chance that the next cycle’s opponent might be a local hero, maybe having pulled a child out of a burning barn, like Lassie used to do every Sunday evening, and the incumbent is going to need goodwill, now or later.

But, that’s still a lot of money for 125 House and 40 Senate races.

Candidates have learned over the years that they raise more money for their campaigns when they have an opponent—hopefully, a lazy, politically inept, un-electable opponent that the candidate can tout as “competitive” to raise more money.

Ideally, of course, every candidate would like a spirited fund-raising effort, lots of money to spend on ads and mail and bumper stickers and signs.

Oh, what’s the other thing that every candidate for the House or Senate would really like in the days leading up to the election? That’s simple. Big headlines about the opponent doing something foolish…like getting caught urinating in public…

June 14, 2007
(Distributed to Kansas newspapers June 11, 2007)

The gift that keeps on giving

When Kansas legislators left the Statehouse this spring, they’d approved what sounds like a pretty modest $30.4 million in tax reductions. From a $6 billion state-funds budget, that doesn’t sound like a whole lot, does it?

Chances are good if you went to your local restaurant, spent $6 billion on the meal and left just a $30.4 million tip, well, next time back you’d be sitting next to the hot kitchen’s swinging door.
It’s small change…this year…

But that small-change tax break agenda may have a surprising effect on the amount of money that the state will have to spend—or save, but don’t count on it—over the next five years.

By the time 2012 rolls around, the tax cuts will have cost the state a total of $296 million.

One widely hated tax for Kansas businesses, the franchise tax—essentially a tax on the privilege of doing business in the state—will evaporate entirely, costing the state what has been a relatively reliable $45 million or so a year. It’s good for businesses, of course, but it represents money that just won’t be there in the state’s general fund spending account in 2012.

The first-year cost of its phase-out is a relatively insubstantial $7 million, but the five-year elimination of the tax will incrementally cost the state $135 million, a little more each year until 2012 when there just won’t be a franchise tax out there anymore for Kansas businesses.

The state also boosted the Homestead Property Tax Exemption, essentially a program that helps the relatively poor of the state afford their property taxes. It’s a roughly $12 million a year program that ought to keep that money in the pockets of the elderly. Over the next five years, it’s going to amount to $58 million more for those people, and it means that the state will pay those refunds to the poor and old as a matter of law, an expense that will be built into the state’s budget on the spending side. It will be money, like the light bill, that automatically is figured into the state budget.

A similar “just won’t be there” expense is the state’s increase in the Earned Income Tax Credit, a program under which the poor get credits against their income tax liabilities, and in most cases, a check in the mail to supplement their incomes. It encourages people to keep their jobs, and all-around, helps them support themselves. It’s a good program, and it will cost about $10 million a year.

Social Security recipients similarly get a break on their tax bills, as long as their federal adjusted gross income is less than $50,000 this year, $75,000 next year and into the future. It costs the state about $15 million a year in lost income tax receipts, again, money that’s just not going to be coming in.

Now, nobody doesn’t like tax cuts. The best ones, of course, are the ones that we get. But they all add up. It’s not just a one-time deal, it’s a continuing expense, or loss of income for the state.

Nope, there wasn’t one of those tax cuts that you can make a good argument against. You help businesses become more prosperous, you encourage people with low incomes to keep productive, you hand out a break to Social Security recipients who are out of the labor market and just living out their lives.

Not bad stuff, but it comes with a cost. And at some point, there is going to be something else nice that could be done with the money that either isn’t coming in anymore or is going out as a matter of law.

The juggling act for the Legislature just gets a little more complicated. Something to think about next time something comes up that citizens believe only state money can fix…

June 7, 2007
(Distributed to Kansas newspapers June 4, 2007)

Happy New (Fiscal) Year?

Chances are decent, and you never now until all the checks are in and all the bills are paid, that the enterprise known as the State of Kansas will have nearly $900 million in its bank account at midnight on June 30. That’s the official end of Fiscal Year 2007.

Ends of fiscal years are a milestone for the state but there aren’t fireworks, parties or even hats to commemorate them.

This fiscal year, that’s ’07, the best guesses are that the state will have that $900 million, or maybe a dab less, in the bank and it pencils out to an ending balance of more than 15 percent of the spending in this fiscal year. A key figure is that the state, which plans to spend $5.391 billion from its bank account, took in $110 million more in tax revenues than it plans to spend. If the state was a business, it means it would have turned a profit this year.

But the state has already approved a budget for the upcoming Fiscal Year 2008, and on Fiscal 2008 New Year’s Day, plans are already passed into law to spend $6.089 billion between July 1, 2007, and June 30, 2008. That projection forecasts that the state will spend $526 million more in the upcoming fiscal year than it is going to receive in taxes. Hmmm….That can’t be good, can it?

The somewhat surprising aspect of that spending-more-than-receipts is that the Kansas Legislature approved it.

Now, admittedly, the state is spending that money next year on some nice stuff. Schools, health care for the poor and elderly, disaster cleanup and the salaries of people who do that work, and, well, it doesn’t sound unreasonable.

That ending balance? It goes on a diet. Remember, about $900 million in the bank this July 1, and next July 1, it’s expected to drop to about $370 million. That’s a drop from July 1’s 15 percent cash on hand to just over 5 percent cash on hand.

It’s probably important to remember that all the spending, all that ending balance, all that cash on hand are based on laws already on the books. It’s done.

But next year, the Legislature returns—in a year, remember, when all 40 senators and 125 House members are up for reelection—and will be writing the budget for the fiscal year that starts on July 1, 2008. Election years, of course, are years that the Legislature likes to do nice things for the voters who may or may not reelect them.

As the projections stand now, if the Legislature returns in January and just keeps its promises on spending, increases the budget just to cover inflation and does absolutely nothing new or nice for Kansans, the ending balance will drop sharply, to less than 1 percent. It will have spent about $280 million more money than it takes in from taxes, and the state is as near to broke as it has been in five years.

The answers, of course, are either new revenues—and maybe that means some slots-at-tracks revenues—or astounding increases in prosperity which soups up the state’s tax take, or maybe new taxes…or  finding ways to cut the budget. Those are pretty unattractive election year initiatives to undertake.

Astounding prosperity is of course the best option, but it’s hard for the Legislature to cause that.
New taxes? That doesn’t sound like something that candidates for reelection to the Legislature next year are going to be eager to put on their campaign brochures or in their advertisements—but you can bet their opponents will.

Cutting the budget? That’s the simple way. Everyone wants his/her legislator to be tight-fisted, frugal but responsible. But what do you cut? Education funding, state employee pay, health care for the poor and their children? Do we just put a few less criminals in prison?

It’s essentially the question of what you want the state to stop doing. And not just for you, but for a majority of the people, or voters, of the state.

Tough decisions ahead.

Sounds like it’s going to be interesting to watch…