May
2002
May 30, 2002
(Distributed to Kansas newspapers May 27, 2002)
How about a bake sale?Well, it looks like the special session of the Legislature that the governor threatened, that lawmakers feared, and that makes normal Kansans cringe, is all-but officially off. We think.
Remember, of course, that this is bad news for Railsters who hang around the Statehouse picking up shards of state agency activity and political tips and misinformation during the summer and fall. But for normal folks, it is probably good news.
Topekans enjoy telling legislators that there's nothing quite as touching as a gift of tires or washing machines bought here (and on which the local option sales tax is collected) to take home for gifts to friends and family.
When the Kansas Legislature adjourns sine die (that's a Latin phrase that means "without a day" and which sounds nicer than "get out of here!") on Friday, it will have done all the good and bad that it can until next winter. For most Kansans, there is comfort in the Legislature being broken up so there isn't a majority of a quorum of them that can do anything permanent.
But for us who are hoping that lawmakers will be called back for an emergency session, there are a couple of prospects.
One is, of course, continued deterioration of the amount of revenues that the state is expected to pick up this summer. The best-case plans being made now at high levels of government predict that it will be possible to skate from the current fiscal year with less than $5 million in the cash drawer. And those planners believe that if most things go right, the fiscal year that starts July 1, and which the Legislature spent almost five months planning, will wind up maybe $25 million short of enough money to do what the budget says the state will do.
And while $25 million would be missed in most households in Kansas, on a state level, where the budget is about $4.4 billion, it is possible to scooch money around, delay paying bills, borrow from reserves and such and actually live to see the start of the next fiscal year.
Now, that's just if everything goes right. And in the Statehouse, things do go right, but rarely consecutively.
What's the possibility of things going wrong? Better than you'd expect.
There is the economy in general, which pumped income taxes into the State General Fund at an astounding pace in the last decade, fueled largely by income taxes paid on capital gains. Well, the capital gains are about played out, and even estimates that showed a sharp reduction in income tax receipts are probably too rosy for real life.
Legislators also included some pretty fanciful stuff in the budget for next year that was added to make it nearly balance.
Example: A near fire sale of excess state property. There is supposed to be about $15 million in land and buildings that the state really doesn't need, and agencies are supposed to sell them off quickly to bring in $15 million. Chances? Slim to none. The state would probably bring in more money with a legislative bake sale.
Oh, and the state is supposed to save $6 million by not buying new office furniture from anyone but prison industries, and another $1 million by ordering all state agencies to produce annual reports and such in black and white. No color pictures of Cabinet secretaries standing next to the governor. This is supposed to produce a $1 million savings somewhere.
There is enough un-likely revenue coming in and enough un-likely savings in revenue going out that de-watering the budget alone could toss the state into a second-round fiscal crisis.
Bad enough to require the governor to haul the Legislature back? Probably not, but let's not count it out yet.
Some of us like the Legislature being in Topeka.
May 23, 2002
(Distributed to Kansas newspapers May 20, 2002)Weapons-grade whining & more
After five months of nearly weapons-grade whining and finger-pointing, the Kansas Legislature has adjourned the 2002 session and guess what? Almost nobody was very seriously injured.
We saw grandstand plays. We saw gnashing of teeth. We saw commentators who got no closer to the Statehouse than the Interstate highway nearby point out the dire consequences of whatever press release they received that week.
Practically, the Legislature cut some spending and nobody really likes that and we saw some tax increases and nobody really likes that, and Gov. Bill Graves and his soon-to-be-jobless crew will figure out how to keep the state of Kansas alive for another year.
This isn't one of those situations where the doctor reaches for the paddles to shock a heart back into operation. It's more like a situation where mom makes the earth-shattering announcement that there's nothing for dessert.
What happened is that a Legislature that is used to relentless good news about tax receipts continuing to increase no matter how sharply taxes were cut found that receipts were going the other way. So, they cut spending sharply. Pretty sharply, but no state agencies were eliminated, no highway projects were rewritten to specify gravel instead of either asphalt or concrete, and no school districts were forced to order up T-shirts and baseball caps for the band instead of those nifty pseudomilitary uniforms like in a Gilbert and Sullivan comic operetta.
The budget cuts were by and large survivable.
The tax increases, similarly, probably won't be noticed by many Kansans with productive work other than whining about tax increases. Sales taxes will go up .4 percent. From 4.9 percent to 5.3 percent. On a $100 basket of groceries that will be, let's see, 40 cents. Not enough for a candy bar to munch on the way home.
Smokers probably got hit hardest, at an initial 46-cents-a-pack increase on July 1 and then another 9 cents on Jan. 1. That initial 46 cents a pack is the biggest increase since, well, since the tobacco industry itself committed to about a 49-cent increase to pay for the tobacco settlement a few years ago that was one of the best deals that tobacco ever got in terms of price per lawsuit avoided. If the new taxes convince anyone to not start smoking or to quit smoking, that's a bonus. Ever hear a mother proudly tell her friends that her children are smokers?
And, if anyone out there notices the 2-cents-a-gallon increase in gasoline and diesel fuel taxes that were approved by the Legislature, well, those people truly need to get a real lifestyle.
So, what are we left with? Democrats decrying unfair taxes on poor people and Republicans decrying Democrats refusing to vote for taxes that Democrats believe generally hit the working class.
In real-life in the Statehouse, or as close as we come to real-life here, two things happen with tax votes. Either the party with enough members to pass tax increases alone do it, or try to avoid doing it. The Republicans tried to avoid raising taxes all by themselves. So they complained that Democrats weren't voting for tax increases. Are we supposed to get upset about that?
Nope. Most of us have more important things to do...like looking for the cat.
Now, there's probably some small amount of discussion needed about why the session took a record number of days to complete. It seems to come down to bigger problems for a citizen legislature to first understand, then decide whether those problems really needed fixing, then figuring out how to fix.
The decision, basically, to cut some spending and to raise some new revenue seems like it was probably the right decision. It took some time to make the cuts in spending and then it took a little more time to figure out how to raise the money. And, remember, all the time the Legislature was trying to figure out how to raise more money, it was also looking over its collective shoulders to figure out whether it cut enough money out of the spending side of the equation. People do tend to look over their shoulders.
It took quite a while. Maybe too long, maybe not long enough. But it got done eventually.
And the best thing for us folks who hang out at the Statehouse year-around is that in less than eight short months, we get to do it some more.
May 16, 2002
(Distributed to Kansas newspapers May 13, 2002)The Statehouse sideshow
The Kansas Legislature may--or may not--be adjourned for the year by the time you read this, but there is an interesting little sideshow at the Statehouse that has been playing out for a couple weeks that is worth remembering.
What's been happening is that Kansas Democrats--and those in the House, especially--have been waiting for the right pitch before swinging on a tax increase package.
There have been packages offered with increases in sales taxes, with increases in cigarette taxes, with increases in estate taxes on distant relatives, and Democrats have consistently said no with their votes.
The governor and legislative leaders who are Republicans are battering away at Democrats for not passing a tax package that would allow the Legislature to balance its budget and adjourn and send the lawmakers and the lobbyists home for the year.
It would be so simple for Democrats to vote for whatever the next tax package is, and just go home. People around Topeka tend to cheer when after five months, they see the red tail lights of legislators' cars headed toward home.
But on a very serious basis, there is probably some reason to encourage Democrats in the House to continue to vote no on tax packages that they believe will be hard on their constituents. And there is probably some reason to encourage Democrats to continue to vote no on tax packages that leave other Kansans relatively unscathed.
Sure, there is that "$50,000 a day" chant we hear in the background, about how much it costs the Legislature to remain on duty, but there is a big difference between $50,000 a day and a tax package that is supposed to raise nearly $300 million in new taxes from Kansans over the next year.
What's the real holdup?
It is income taxes. Democrats sincerely believe that if some people spend every dollar they make on things that are subject to sales taxes then people who don't have to spend all their money probably ought to pay a tax of some sort on every dollar they make. That means income taxes.
And so far, there hasn't been a serious income tax proposal sent to the House as part of the multi-tax mix that Democrats are being asked to vote on.
It is pretty easy to make the case that it is time for the Legislature to go home, that recalcitrant Democrats are extending the session, but whatever taxes are approved this session are going to last all year, maybe several years. It is worth the Legislature's time to take a long view of this tax business, and even Railsters aren't enthusiastic about legislators who will vote for something they believe will be harmful to their constituents just to get out of town and back home.
The real holdup, of course, is that Republicans in the House could pull the trigger on any sort of tax increase they can agree to because they have enough votes to pass bills while Democrats in the House are still finishing their morning coffee. But the Republicans are split between those who will raise taxes and those who won't raise taxes, and those who won't raise taxes are actually more problem than Democrats who won't raise what they believe are the wrong taxes.
It is the Republicans who won't vote for any taxes who are handing Democrats the real power to force a tax package that contains provisions that they want.
So, the Legislature is likely to be in Topeka for a time until the right package is put together. It will contain income taxes on the wealthiest of Kansans and it will contain new taxes on cigarettes, and it will contain new sales taxes. And as soon as it contains the right provisions for Democrats, it will pass quickly.
But until Democrats get the package adjusted so that they can tell their constituents that it is as close to right as possible, we're not going to levy all the blame on Democrats. They're doing their job. And it is a job that can't be done until the end of the legislative session, and Republicans who are jingling their car keys in their pockets, eager to drive home, know what they need to make that happen.
The Republicans are just hoping that they don't have to do what is necessary.
And that's how politics are played at the Statehouse. Whether legislators are home or not by now depends on who is playing the game the best.
May 9, 2002
(Distributed to Kansas newspapers May 6, 2002)Fixed how?
This is the week, possibly the last week, of the 2002 edition of the Kansas Legislature to learn whether this budget fuss we've been hearing about all year is going to be fixed permanently or fixed just well enough to limp into the next legislative session.
There is a difference between just getting out of town with a budget that appears on paper to balance, and a budget that fixes what appears to be a major problem of out-of-cycle tax receipts and payments.
One approach is to levy a large chunk of new taxes, $400 million or more, and closer to $500 million would be better. That would not only take care of the spending approved for the state's fiscal year that starts July 1, but provide an ongoing stream of taxes that would allow next session to be one in which, for example, investments could be made in education, social welfare programs, state employee health insurance and raises, and even in the state's financial future.
It would be a fix good enough that after a year or two, when prosperity returns to the plains, that legislators might even be able to do some real studying of the entire state tax system: whom we take from, in what amounts, and to what end. That wouldn't be all bad.
Another approach is to deal with what hopefully are short-term problems with short-term solutions.
Now, that's not all bad, either.
It's the reason that families with children give the area around the light switches a couple extra coats of paint, because they know they'll be scrubbing that area more frequently than the rest of the kitchen.
The idea there is to scrounge around for all the loose change in the state and use it to get through this budget year. The concept boils down to not taking any more money from Kansans than absolutely necessary, leaving enough in their pockets that they can take care of their families and other obligations and just maybe spend that money on things that generate more taxes for the state. Maybe Kansans can spend their way out of this financial mess.
This is the week we'll learn which tactic prevails.
Watch for the size of the tax package that the Legislature approves by week's end. Any less than about $300 million, and we're patching holes, using a short-term solution. When the Legislature gets into the $300 million-plus range, maybe to $400 million, then we're seeing a long-range solution being attempted.
Of course, neither figure works well if state revenues continue to fall below the estimates on which the budget is built.
And remember that all this talk you're hearing from legislators about holding any spending levels flat really means that we're doing the short-term fix. Everything eventually gets more expensive--whether it is food at the grocery store, new cars or even those lightly used cars coming off someone else's lease, and especially the ingredients in public education and health care for the old and poor.
Unfortunately for legislators, this financial fix falls in the same year that the House of Representatives stands for re-election. You will hear from some candidates for the House that they fixed the problem this year with the minimum tax increase possible, and times will get better and while they hated to inconvenience you, at least they didn't take a whole lot of your money. In some legislative districts, this approach is sound.
Alternatively, some will say that they tried to solve the problem for several years in the future, so they won't have to nickel-and-dime you over the next several years with a relentless succession of small tax increases. In some legislative districts, this approach is also sound.
And some will just remember the truism that legislators are going to get in the same trouble with constituents for raising taxes regardless of the amount...in for a penny, in for a pound.
So the Legislature is going to approve some taxes yet this week. Look for "sunsets" or provisions that take the taxes off on a specific date, usually two or three years into the future. Look for some of those taxes to start as early as June 1, so the state starts collecting them a little early so they will actually show up in the revenues in July.
But, mostly, look for the approach that the Legislature, by a vote of a majority of each chamber, takes in the financial crisis.
You'll be able to tell a lot about short-term and long-term thoughts, and pretty well measure how your representative government is working.
After all, you get the last vote.
May 2, 2002
(Distributed to Kansas newspapers April 29, 2002)Let the wrangling begin
The Kansas House of Representatives returns to the Statehouse this week to see if it can wrap up this session of the Legislature in some manner so that its members can stand a decent chance of getting re-elected.
Now, the Senate comes back to town, too, but senators aren't up for election until 2004, so the outcome of this session is important, but not election-year important for them.
In actual fact, it may take a couple of days for folks to remember that the Senate came back into session, too, because all the crucial votes are going to be in the House for several days. Unless the senators decide to do a "dress backwards" day or wear funny hats, nobody's going to notice them much.
But when the vast majority of House members return, they're going to find that their squad of budget negotiators spent $114 million during the break between the main session of the Legislature and the wrap-up. That spending was done in a House-Senate conference committee in which representatives of each chamber bargained their way to a spending agreement that they hope both chambers can pass.
This level of increased spending is different than what we've all experienced when, say, we send the spouse or a youngster to the store with a $10 bill to buy bread, and the messenger returns with cookies, magazines, candy bars...and, maybe, bread. This level of increased spending by the messengers is more like getting an anxious phone call from the store to bring more money.
In nearly four days of negotiations, the House negotiators acquiesced to the Senate in a big way, or at least, it's going to seem that way to a large number of House members. The House was before the break just a 65-cent a pack cigarette tax increase from, at least on paper, balancing their version of the budget. It wasn't a pretty budget, and it probably wasn't even a workable budget, but on paper, it looked like it might have penciled out.
If the House buys into the new spending plan, then it has to vote taxes to balance the budget--at least $222 million in taxes and maybe $292 million in taxes--just to get out of town.
Either number is significantly more than the House shows any interest in passing.
And if you're wondering about the difference between $222 million and $292 million, here it is. The Senate says if the House will pass a big tax increase to finance the state highway program, the Senate will back away from its plan to spend $70 million from general taxes on roads in the budget bill. If the House doesn't pass a big highway bill then the Senate will stick with its version of the spending bill that includes $70 million for highways, bringing the budget shortfall to $292 million.
But after the budget bill was settled by three House and three Senate members, the House clearly is going to have to do significantly more tax-raising than it wanted to do, and that may be a real problem. There are large numbers of House Republicans who just refuse to raise taxes on anything or anybody.
The House Republican no-taxers' reasons range from a belief that raising taxes will hamper a return to prosperity to a concern that imposition of higher taxes will make it more difficult to get re-elected to the outright fear that there is no way they will get re-elected if taxes are raised.
The House Republicans who don't mind raising taxes are going to be interested in raising taxes but there aren't enough of them to get the job done alone.
And House Democrats get to continue encouraging spending but asserting that the Republicans who want to raise taxes are raising the wrong taxes, and the House Republicans who don't want to raise taxes don't want to spend money on important programs for the state, like education and welfare and programs for the elderly.
Three things can happen here.
The House will raise roughly twice the amount of taxes that its original budget called for, plus another $70 million or more for highways, or it will face a $292 million tax bill from the Senate.
That's two. The third thing that can--and is likely to--happen is that the House just says no to everything and sends the budget bill back into negotiations to be pared down again.
And while Kansans go about their lives, Railsters get to watch another couple of weeks of wrangling over budgets and taxes.
So the good news from the return of the Kansas Legislature to Topeka is that at least for the first week, the general public doesn't have to worry much about any real progress, or damage, radiating outward from Topeka.