Session Ends

The Veto Session concluded at about 2AM Saturday morning after five days of intense debate over veto overrides and conference committee reports. At the start of the week, the House and the Senate quickly overrode a number of vetoes including the veto of HB 2058 which lowers the conceal and carry age to 18 with a permit. This law was passed in response to the same bill allowing reciprocity of other state’s citizens to conceal and carry in Kansas including if that citizen is younger than 21.

SB 50, the tax bill, was also successfully overrode and will become law. For the short-term, it’s doubtful the tax cuts that are part of that legislation will have any meaningful impact on Kansas’ revenue given the high ending balances this year.

SB 55, the Fairness in Women’s Sports Act, failed to gain the 2/3 majority in both chambers of the legislature and its veto will be sustained. While the House was able to gain the numbers necessary to override the Governor’s veto, the Senate fell one vote short.

Line-item veto of HB 2007, the budget bill, included vetoing of the $10M for deferred maintenance that KBOR had requested to replace the $10M going to employee pay. In her veto address, the Governor said that money was to be used for pay increases and deferred maintenance should be addressed with federal dollars. The House successfully overrided the Governor’s veto; however, the Senate never took up the veto override. Those funds will now not be spent.

The rest of the week was spent on a number of conference committee reports (remember conference committees are when the House and Senate committees of a specific topic come together to bundle bills or work through their differences on legislation) dealing with budget, tax, and judicial items. Included in these was the legislature’s passing of a bill that bans the use of Vaccine Passports in Kansas.

Budget

The conference committee for the budget took nearly the entire week and was one of the last bills to be voted on. Employee pay for all agencies minus some strategically picked agencies that have ongoing compensation issues was removed citing an unwillingness to increase public sector pay in a year when the Government shutdown the private sector and sent those employees to a Department of Labor that couldn’t process unemployment claims.

Maintenance of Effort (MOE) was addressed early in the conference committee process. Most members acknowledged it needed to be dealt with now or the State risked losing nearly $2B in federal funds. The Governor recommended spending nearly $53M in additional State General Fund dollars on higher education in the FY22 which represents half of what they think is necessary to meet the federal MOE requirements. The money is to be spent accordingly:

  • $15.0 million, all SGF, in the Post-Secondary Education Operating Grant, with language that the funding is to be used by the universities as reimbursement for 2021 utility payments, staff buy-outs, economic development, and scholarships for FY 2022;
  • $10.0 million, all SGF, and reappropriation language for the passage of HB 2064, the Kansas Promise Scholarship Act, for FY 2022;
  • $10.0 million, all SGF, to the Board of Regents new Need-based Aid Scholarship and Recruitment account to be distributed to state universities and Washburn University
  • $8.0 million, all SGF, for the Comprehensive Grant program for FY 2022;
  • $5.0 million all, SGF, for the Community College Maintenance of Effort account for expenditures that meet with the federal maintenance of effort requirements for FY 2022; and
  • $4.3 million, all SGF, for capital outlay within the technical colleges to be disbursed equally to be used for equipment only and not requiring a match for FY 2022.

The major concern with this plan is that it might not be approved by the federal government. Under the federal law attached to all the stimulus money that has come to the State, if a State does not plan to meet its MOE requirement (remember Kansas is planning on only meeting half of it in the first year) then it may apply for a waiver to the federal Department of Education. Another provision of the federal law says that federal stimulus may not supplant a tax cut which Kansas just implemented. If the Secretary of Educations finds Kansas did not meet the MOE requirement, the State would have to send back some or all of the federal funds or bring the MOE amount up to $106M in FY22 and FY23. This is in addition to the $25M that was already put back into the budget in the original budget bill for this year.