Legislative Update No. 2

Legislative Update: State of the State

The Legislature was busy this week considering a number of bills. First, the Senate and the House introduced and then immediately held hearings on their redistricting maps. This is the culmination of work that has been occurring over the last year since the census data was received. The Legislature has the responsibility to evenly distribute congressional districts, state senate and state house districts based on population. There has been a lot of scrutiny applied to this process with many people accusing the Legislature of politicizing this process to influence elections. The Senate was the first to have debate on their maps, and they passed on a party-line vote Friday. The House is expected to debate their maps next week, and you can expect a bill to be sent to the Governor late next week or early the week after. It’s worth noting that many individuals have stated they expect litigation over these maps likely creating delays in their implantation.

There was also an information hearing held in Senate Education regarding Maintenance of Effort (MOE). MOE was one of the requirements handed down by the federal government as a condition of receiving stimulus dollars. It places minimum requirements for funding of higher education by the State, and the State in FY22 and FY23 was originally short of that requirement by $106M. The State funded half of that difference in FY22 and applied for waiver to the federal Department of Education. That waiver is still under consideration and if it is not granted, the State will have to spend an additional $53M on higher education this fiscal year. In FY23, the Governor’s budget funds in excess of what the requirement states.

The House and Senate also introduced and quickly held hearings on a massive economic incentive for a private company that is considering moving to Kansas and bringing 4,000 jobs. The total for the incentives could reach more than a billion dollars, but there is very little know about the company outside of the number of jobs. This bill will likely be a priority for the next week or two and will receive a great deal of attention given the potential economic impact and size of the inducement.

Summary

It is still early in the legislative session, but they are aggressively moving on large items like redistricting. Once that issue is resolved, they will likely turn their focus towards a tax bill. The Governor in her budget proposed a tax bill that would eliminate the food sales tax and provide a $250 tax rebate ($500 for joint filers). The Legislature will likely have a different proposal possibly focusing on altering tax brackets, and that will likely have an impact on the budget process as it will consume at least some of the excess revenue.

Legislative Update No. 1

Legislative Update: State of the State

The 2022 Legislative Session kicked off Tuesday evening with the ceremonial State of the State address given by the Governor. In Governor Kelly’s address, there was optimism about the State’s budget, and that optimism allows the State to invest in Kansas in a number of ways. First, she is asking the legislature to end the sales tax on food. That was expected to be in her address as it was publicly announced earlier in the Fall. Kansas is one of a handful of states that has such a tax and both she and Attorney General Schmidt, who is also running for Governor, have stated their support for that tax being eliminated. The Governor also highlighted another previous announcement of hers that the legislature should pass a $250 tax rebate ($500 for joint filers) for any Kansan who filed taxes last year. This is very similar to what the federal government did with stimulus checks during the pandemic and is very popular. It’s unclear how the Republican-dominated legislature will respond to that proposal. They tend to favor tax cuts over tax rebates and a rebate in an election year would be a big political win for the Governor. She also touted that her budget will continue to fund K-12 education at constitutionally appropriate levels and will invest in broadband that was an issue for kids who had to learn remotely. For higher education, there wasn’t a large segment of her speech addressed except that she intends for no tuition increases. The Kansas Board of Regents did submit a proposed request for funding base aid to higher education that would essentially buy down an otherwise needed tuition increase.

The next day was when the real work began. At 10AM on Wednesday, the Senate Ways and Means Committee held a joint meeting with the House Appropriations Committee and received revised revenue numbers for this fiscal year and next as well as a detailed overview of the Governor’s Budget. Within her budget is approximately $47M for the four-year sector to eliminate the need for a tuition increase. There was also an allocation made to the Department of Commerce for institutions of higher education to apply for grants for economic development. The Governor also made allocations for need-based aid to grow access for higher education and money for deferred maintenance. For all State employees, there was a proposed 5% pay increase. Below is a detailed table of what is in the budget that pertains to higher education.

Next, the budget committees will begin holding informational hearings on each State agency. WSU has been notified that our presentation for the House Higher Education Budget Committee will be on February 11. The Senate has yet to announce its schedule.

Board of Regents’ Request Compared to Governor’s Recommendations

Sector	Amount	Board of Regents’ Request	Governor’s Proposed Budget
State Universities	$45,700,000	Restore state investment to prior levels, recognizing inflationary cost increases to operate and freeze student tuition	$45,700,000
State Universities	$25,000,000	Financial Aid: Kansas Access Partnership with $1:$1 private match	$25,000,000
State Universities	$5,000,000	Enhance student supports to improve retention and graduation of all students	$0
State Universities	$25,000,000	Engage the state as a partner with the Board’s capital renewal initiative as a boost to improvements to facilities	$25,000,000
State Universities	$10,000,000	Competitive grants for economic development initiatives that incorporate private partners	$10,000,000 in Commerce Department Budget
State Universities	$20,000,000	Invest in information technology infrastructure and bolster cybersecurity efforts	$20,000,000
Washburn University	$2,130,000	Fund programs at Washburn University (Business Resources for Innovation and Ensuring Pathways to Student Success)	$1,554,013 to reach $14.0 million total state grant
Two-Year Colleges	$2,500,000	Fully Fund the Excel in CTE program	$2,500,000
Two-Year Colleges	$6,000,000	Fund a portion of the state’s share of the cost model for tiered courses and non-tiered courses	$6,000,000
Two-Year Colleges	$4,000,000	Address State Aid for Career Technical Education Capital Outlay	$1,000,000
Two-Year Colleges	$15,000,000	One-Time Projects	$15,000,000
Board Office/Adjutant General	$1,000,000	Fully Fund the National Guard Tuition Assistance Benefit to meet greater demand	$1,000,000
Board Office	$305,454	Restore state funding of the Board Office for operations; provide staff to administer the Promise Scholarship Act and the capital renewal initiative	$305,454
State Employee Pay		5% Salary adjustment for state employees (there has been no general pay adjustment since FY 2020)	$24,100,000
Subtotal	$161,635,454		$177,159,467
Related Items in Other Budgets
Competitive One-Time University Grants in Commerce Department		Universities will work with donors to develop proposals for state funding initiatives that have significant long-term economic benefit to the state; to be matched dollar for dollar by the universities with non-state money.	$195,000,000
Advantage Kansas		Staff in Department of Commerce to support Advantage Kansas Coordinating Council	$125,000
CTE Transportation Aid Restored		Assists with offering postsecondary CTE courses to high school students by transporting 11th and 12th graders to the college (was previously in place, but stopped in FY 2020)	$1,500,000