Legislative Update: Veto Session Preview

Veto Session Preview

With the legislature set to return next, a number of issues lay ahead including K-12 funding, veto overrides, maintenance of effort issues for federal funds and creating checks on the Governor’s emergency powers to use federal funds when the legislature adjourns Sine Die.

Economy

Every year prior to Veto Session beginning, the Consensus Revenue Estimating Group (CREG) estimates how the economy is performing and what tax revenue will be for the remainder of the fiscal year and next year. This is critical to shaping the budget and dictating if there are additional funds to be spent or if cuts are necessary. This year, the CREG determined that the economy was recovering faster than what they had estimated back in November and concluded that there will likely be an additional $361M in the State General Fund between FY21 and FY22. This is obviously a positive for the State; however, it has fueled the Republican leadership’s calls for overriding the Governor’s veto of the tax bill.

Vetoes

Speaking of vetoes, the Governor not only vetoed the tax bill but also bills impacting conceal and carry, elections, transgender student athletes, mandating civics and financial literacy tests in K-12, creating the “Gadsden Flag” distinctive license plate and line-item vetoing parts of the budget. This is the most bills a Governor has vetoed in Kansas in 17 years. There are likely enough votes to override the Governor on many of these bills including the tax bill and gun legislation, and this will set the stage for a contentious and perhaps protracted Veto Session.

For higher education, the line-item veto of the deferred maintenance fund was likely the biggest financial  impact. Originally the Governor included $10.3M for the employee pay plan or Board priorities; however, the legislature; at KBOR’s request, moved that money to capital improvements. The Governor line-item vetoed this funding stating that the money was intended to help implement the State Employee Pay Plan and the $10.3M was calculated with that purpose in mind. She also stated that federal funds should be considered for deferred maintenance. The $25M for operations that the legislature added to restore part of the cut was not impacted by the line-item veto.

House Appropriations and Senate Ways and Means Meet

The appropriations committees did meet with the legislature in recess to discuss revenue estimates, federal stimulus and omnibus. This is routine in order to move Veto Session along; however, there were a couple of issues that came to light including one that impacts higher education. Legislative Research provided a brief overview on Maintenance of Effort (MOE) required to draw down federal stimulus dollars. In order to receive federal funds for K-12 and higher education, the State must provide State-funded support of those agencies at a certain level based on their respective proportions of the State’s budget over a period of time. Legislative Research is still reviewing federal guidance to provide an exact number, but they believe the State will likely be required to provide additional funds to higher education FY22 and FY23.

Next Week

The legislature will come back next week and consider veto overrides as well as K-12’s budget and an omnibus bill. Late in regular session, the Senate failed to pass K-12’s budget due to provisions that included expansion of scholarships for students that wanted to attend a private school as well as use federal funds to supplant State support. In addition to veto overrides, this will also likely be a pivotal issue to overcome for the legislature to reach adjournment. The omnibus bill will also need to be passed which is the legislature’s last opportunity to fix any technical mistakes made in earlier bills as well as consider additional appropriations for State agencies for next year.

Legislative Update No. 12

It was a busy week in the Capitol. While there was little floor work, there were numerous conference committees that met to discuss a variety of bills. Most importantly to higher education was the conference committee on the budget, HB 2007. The House and Senate started off with relatively fewer differences than in previous years; however, there were a couple of major distinctions.

First on Higher Education, the Sente had a position to add $25M to restore 3% of the original 5% cut while the House wanted to add $10M with a focus on those dollars going to need based aid and recruitment. The House and Senate agreed to take the Governor’s $10M set aside for KBOR priorities or the pay plan and use that for Deferred Maintenance but had differing positions on whether or not to delete the square footage formula for spending deferred maintenance funds. Currently there is a proviso in the budget that states a formula will be used that dictates where property tax revenue will be spent on maintaining buildings largely based on square footage. That formula was eventually deleted in conference allowing KBOR to create a policy to spend those funds. The actual funding for higher education was one of the last things to be agreed to with the House finally acceding to the Senate’s position late Wednesday night to restore $25M of funding to the system.

Second, the Senate had a position to cut nearly $1B of State General Fund (SGF) support for K-12 education with language authorizing school districts to draw down federal funds. This has been a point of contention between the school districts and the legislature with the school districts contending it may not be legal to use CARES funds for general operating expenses. The House has a similar position but puts the language in a separate appropriations bill signaling concern that this policy position may receive the Governor’s veto.

There was also an effort by the House to cut 2% across the board that would have undone the progress that was made in the conference committee. However, that effort was rejected by the Senate that signaled there were a handful of critical votes that depended on partial restoration of higher education funding.

The House and Senate agreed to the conference committee report Friday, and it will now go to the governor.

With the House running a second appropriations bill for K-12, this allowed for a number of other policy bills that have not passed both chambers to be added to a conference committee report. Included in the conference committee report is expansion of private school scholarship tax credit and creating education savings accounts for at risk student populations allowing them to take $4,500 private institution that is accredited. SB 175 became the shell for all these policy positions and narrowly passed the House but failed in the Senate late Thursday evening. It will have to be approved during Veto Session in order for the legislature to adjourn Sine Die.

Bills

There was movement on HB 2058 late Wednesday night on the Senate floor. The bill would provide conceal and carry reciprocity with other states and lower the conceal and carry age to 18 with a permit.

SB 55 became the shell for the Fairness in Women’s Sports Act or what was originally SB 208. While SB 208 never passed the House, the full House had to take an up or down vote Thursday evening on the bill which eventually passed 76-43 which is far less than what is needed for a veto override.

Election Laws

There was a late push by the Senate to pass an election law bill that primarily focuses on advance ballots that are delivered by a third party to an individual. The bill limits the number of advance ballots a third party can deliver to individuals to ten and makes it a misdemeanor if they violate that law.

• Bars a candidate for office from delivering an advance voting ballot on behalf of another voter unless it is on behalf of an immediate family member.

• Prohibits candidates from assisting any voter in marking an advance ballot or signing an advance ballot form. A violation of this provision would be a misdemeanor.

• Prohibits county election officers from accepting an advance voting ballot sent by mail unless they verify that the signature on an advance voting ballot envelope matches the signature on file in the county voter registration records.

The bill eventually passed both the House and the Senate and is headed to the Governor.

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Legislative Update No. 11

It was a very busy week with a lot of floor debate as the Senate and House try to begin the conference committee process which is often the final step for a bill to become law before going to the Governor for consideration. Next week, conference committees will meet to workout differences between House and Senate bills before going home for the April break.

Budget

The House also moved out its budget bill which has an additional $10M for higher education. However, before the budget could be passed a legislator made a motion to cut all spending by 2% in order to improve the fiscal health of the budget. This includes cutting K-12 and higher education spending. For WSU, this would be an additional $1.6M cut. The amendment was ultimately passed by a voice vote and then the budget passed shortly after. Given the cut would put the State out of compliance with the State Supreme Court’s Gannon decision, it is questionable whether the 2% cut will make it through the conference committee process.

Bills

SB 32 – Allows for school districts to pay for concurrent enrollment. Passed the Senate and House Education Committee and has been placed in House Appropriations to keep it alive for next week.

HB 2101 – Would reauthorize the University Engineering Initiative Act for another ten years providing $3.5M to WSU. The Senate passed HB 2101 Tuesday. It will now go to the Governor for signature.

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