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Greetings to you from back home in the 59th District.  This week saw the end of the veto session in the wee hours of Monday morning when both the House and Senate passed SB 249, the omnibus budget bill. Barring any unforeseen events, the session is all but over for this year.

 

 

 

The budget passed by the narrowest of margins receiving the bare minimum of votes in both the House and Senate.  Both chambers were forced to use a procedural move called the “Call of the House” or “Call of the Senate” to round up absent members and give time for leadership to convince “no” votes to switch to “yes” votes. 

 

 

 

I was a no on the budget for many reasons.  First, it simply doesn’t balance and continues the shell games of the past several years that include sweeps from KDOT and borrowing against other state funds.  Second, it relies on deferring the state’s payment into KPERS, the state’s pension system. Third, it gives the governor more power to make cuts to state services with no legislative oversight. Finally, it fails to leave the state with any type of reserve to deal with natural disasters or other unexpected problems. 

 

 

 

This year’s budget continues the bad policies of the past several years that kick the can down the road and fail to really fix our state’s unbalanced budget.  Speaking of fixes, one of the other bills you may have heard of is SB 63, the so-called LLC fix. 

 

 

 

I voted no on this bill.  First, let me say that we do need to bring fairness to our tax code. Giving anyone a free ride is not fair. However, I have spent four years in the legislature and each year we have been presented with a tax increase.  Each year I’ve been told that this is the “fix” to the disastrous 2012 tax bill. Each year, those saying they have the “fix” have been wrong.  This year’s effort was no different.

 

 

 

SB 63 would have raised $0 this year. And only scratched the surface of what was needed to fill the budget hole in 2017. Because of the hurried nature in which the bill was written and voted on, it also contained serious flaws that would have created more unintended consequences for the state budget; such as keeping trigger mechanisms from the 2012 tax plan in place, which would have ultimately created even more tax breaks and unbalanced budgets.

 

 

 

The bottom line is that SB 63 would not have fixed the structural imbalance in our budget. It would have worked the same way those other three tax increases did, providing just enough revenue to make the borrowing from KDOT and KPERS seem not quite so bad, but not enough to really fix the problem. Meanwhile, our families would still be paying higher sales taxes and seniors would still be paying higher income taxes – from last year’s tax increase bill - to help fill the budget shortfall.

 

 

 

The Governor’s 2012 tax plan caused revenues to decline nearly one billion dollars. Of that only 29% was caused by the pass through or LLC exemption. The remaining 71% of the revenue reduction was caused by changes to individual income tax rates and the elimination of the top tax bracket for higher-income earners. To say that addressing 29% of the problem—not this year but next--as SB 63 did, and telling taxpayers that it is a fix is disingenuous and flat out wrong.

 

 

 

The real fix to our state’s fiscal woes will require much more than a bill constructed in a back room at 10:00 in the morning on the day of the vote.  It will require a real effort to bring diverse groups together to find ways to improve efficiency — remember that $3 million efficiency study we barely used – to cut spending in nonessential areas, and make sure we have adequate revenue to cover essential services. And it will require the Governor to commit to the process and not threaten to veto the bill, as he did with bills like SB 63.

 

 

 

That kind of real revenue reform takes courage and work.  It isn’t the result of a hurried process in a back room with only six legislators around the table. It isn’t part of a self-serving election year strategy to get distance between an incumbent and an unpopular governor. It isn’t accomplished by doing the popular thing that only appears to fix the problem instead of really fixing it. I remain committed to doing that hard work and being part of any discussion that has as its goal getting this state back on track to a truly balanced budget.

 

 

 

Thank you for the honor of serving you in the Kansas House.  I welcome your calls or emails at 785-296-7655 or blaine.finch@house.ks.gov.





 

05/11/16