Monthly Archives: June 2013

Regents approve big tuition increases; blame Legislature for cutting university funding

TOPEKA — Complaining that the Legislature forced their hand, the Kansas Board of Regents on Wednesday approved a sweeping package of tuition increases for the state’s public universities.

The tuition increases include:

Pittsburg State — 7.4 percent increase overall, 4.4 percent of which is to cover the reduction in state support.

University of Kansas — 4.9 percent overall, 2.5 percent to offset lost state support; For KU Medical School, 7.3 overall, which does not cover the 12 percent state cut.

Fort Hays State — 3.4 percent overall, 2.5 percent due to state cut.

Emporia State University — 6.5 percent overall, 6.4 percent to offset state cut.

Wichita State University — 8 percent overall, 3.5 percent to offset state cuts.

The votes on all the increases were unanimous and regents one after another lashed the state Legislature for a package of cuts passed in the budget in the after-midnight hours on June 2.

The regents noted that Kansas’ main competitors, Missouri, Oklahoma, Colorado, Iowa and Nebraska, all increased funding for their university systems this year.

“The only state in the area that was decreased is our state,” said Regent Dan Lykins

Tax plan headed to governor with provision to help south Wichita tornado victims

TOPEKA – In one of the final acts of the 2013 legislative session, the House of Representatives and the Senate on Sunday sent a long-awaited tax bill to the governor, who is expected to sign it.

The bill, which walks back some of the tax relief from last year’s tax bill, is projected to increase state tax revenue by $777 million over the next five years, compared to current law.

It does that by setting the state sales tax at 6.15 percent – lower than the current 6.3 percent but higher than the 5.7 percent that the rate would have reverted to under a 2010 law that established a three-year emergency sales tax increase to help the state through the recession.

The bill also cuts income tax rates, but simultaneously phases down the value of most tax deductions, which nearly offsets the tax relief gained from the lower rates.

Supporters largely acknowledged that they had gone too far with last year’s tax cuts, leaving the state unable to pay for vital services without revisions this year.

The final version of the tax bill also contains a provision, inserted at the last minute, to allow county commissions to abate taxes on homes and mobile homes destroyed in natural disasters.

That was added in response to a situation that arose last year when tornado victims in south Wichita were charged a full year of property taxes for houses and mobile homes destroyed in April.

The bill is retroactive to the beginning of 2012, so Sedgwick County commissioners can now abate the disaster victims’ taxes if they choose to do so.

The fight over the tax bill had been the hangup that forced an expected 80-day session to run 99 days.

Although the bill passed the House early Sunday, which would have been the 100th day, the session will go in the books as 99 because the Legislature worked straight through and technically didn’t adjourn its Saturday deliberations.

In the end, the tax battle became less a financial issue than a clash of governing philosophies.

Democrats railed that the bill represented a shift in the tax burden from wealthier taxpayers and businesses to the bottom 60 percent of state taxpayers.

Minority Leader Paul Davis, D-Lawrence, urged his Republican colleagues to listen to their ordinary working-class constituents.

“How many of them said ‘You know what? I want you to go to Topeka. I am sending you to Topeka because I want you to raise my taxes. I want that $777 million tax increase.’”

Republicans were adamant that the state needed to protect the zero-income tax rate granted to certain types of businesses last year and keep cutting income tax rates – even if it means higher sales taxes – to spur business growth.

The tax plan doesn’t touch the centerpiece of last year’s plan, the complete elimination of income taxes on owners of limited liability companies, farms, sole proprietor businesses and corporations organized under Subchapter S of the federal tax code.

“I think we’ll have a very positive impact with new companies moving to the state of Kansas near Lawrence and KU and Wichita, near K-State, near Pittsburgh and near Hays, with businesses that provide very well-paying jobs that they (workers) can afford to send their children on to higher education,” said Rep. Richard Carlson, R-St. Marys, chairman of the House Taxation Committee and the driving force behind the tax bill. “I think this will grow the state and bring those jobs to the state.”

Among the key provisions of the tax plan:

– The top income tax rate for those earning more than $30,000 a year would be reduced from 4.9 percent to 3.9 percent over five years. Rates for the under-$30,000 bracket will drop from 3 to 2.3 percent.

– As rates drop, the plan also phases down the value of tax deductions. While charity giving would still be fully deductible, the value of other deductions will be gradually be cut down to 50 percent by 2018. Gambling losses would no longer be deductible.

– Standard deductions used by lower-income taxpayers who don’t itemize would be set at $5,500 for single-parent families and $7,500 for married couples filing jointly. That’s a smaller deduction than the $9,000 level that was part of the 2012 tax plan.

– The plan would partially restore a food-sales-tax rebate program for the working poor.

– After 2018, growth of government would be capped at 2 percent a year, with any additional revenue being diverted to buying down the income tax rate.

The Legislative Research Department estimates that the new tax plan would generate deficit spending of $95.8 million to $182 million a year from 2014 to 2018 – deficits that would be covered from state reserves.

Gov. Sam Brownback and other Republicans are confident that increased business, jobs and commerce spurred by income tax cuts will offset those projected revenue losses.

State budget finalized on Senate vote; universities and Wichita job-training facility take a hit

By Dion Lefler

Eagle Topeka Bureau

TOPEKA – Kansas universities and the National Center for Aviation Training in Wichita took a fiscal “haircut” in the final state budget that passed out of the Legislature on Sunday.

The $14.3 billion budget passed with a $56.1 million cut to public universities over the next two years and a $2 million cut in state support of NCAT, the aviation job training program at Col. James Jabara Airport.

The budget does protect several Wichita-area priorities, including $5 million a year each for low-cost airline service to Mid-Continent Airport and the National Institute for Aviation Research.

Those allocations are set for the next two years.

However, the budget trims state aid to regents universities by $23.3 million in 2014 and $32.8 million in 2015, including salary reductions and a 1.5 percent cut in general fund support.

In the Senate debate, Minority Leader Anthony Hensley, D-Topeka, said the cuts made a mockery of Gov. Sam Brownback’s university tour earlier this year.

While touring the state’s campuses, Brownback had said he would maintain current funding for higher education.

“Now we’re looking at a budget that I guess the governor’s going to sign, after he said he was going to hold higher education harmless,” Hensley said. “What are we to believe in this state when we have rhetoric that does not match the action?”

That drew a strong response from Ways and Means Chairman Ty Masterson, R-Andover, who said it’s incorrect to pan Brownback for statements he made on the college tour because he fully intended to keep university funding whole when he said that.

“I think anyone who knows the man knows he is sincere,” Masterson said.

The budget reduces NCAT’s state support from $5 million to $3 million.

Sen. Carolyn McGinn, R-Sedgwick, questioned whether that was a wise policy at a time when job creation is a high priority.

“It’s one of the very successful programs we have here in our state and across the nation,” McGinn said. “Lots of states come and look at this facility and try to figure out how to copy it … I just think it’s a bad time to be taking money from a facility that has a 98 percent placement rating.”

Masterson said it could have been worse.

“There was even discussion about taking it all at one point when they were looking for cuts, but we rejected that and we felt this would be more appropriate to hold them at three (million dollars),” he said.

Jason Watkins, the lobbyist for the Wichita Metro Chamber of Commerce and a former legislator, said it was disappointing that NCAT got cut, but that the appropriation was set for one year only and he thinks there’s a good chance the funding could go back up to $5 million next year.

He said the Chamber is pleased that NIAR and the affordable airfare program got full funding for two years.

In addition, the budget includes $750,000 in funding for the Judge James V. Riddel Boys Ranch, the juvenile correctional facility at Lake Afton that was threatened with closure last year during a Sedgwick County budget crunch.

It also includes a proviso prohibiting the University of Kansas from cutting back its medical resident program in Wichita.

Budget negotiators did drop a proviso that would have earmarked $87,000 to support two professional golf tournaments, the Air Capital Open in Wichita and the National Public Links Championship in Newton.

Budget negotiators removed that language after being criticized for supporting golf tournaments when priority state services were being cut.

However, that doesn’t mean the tournaments won’t get the money. It’s still in the budget and could be provided in the form of economic development grants because of the tournaments’ impact on community commerce.

The Senate vote was cliffhanger and the budget didn’t pass until about 2 a.m.

Initially, it came down at 19-16, two votes short of passage.

That triggered a “call” of the Senate, in which senators were required to stay in their seats and the doors to the chamber guarded while attempts were made to track down missing members.

Three of them were out of state, but Sen. Jim Denning, R-Overland Park, was located after about 20 minutes and cast the 20th “aye” vote.

Sen. Steve Fitzgerald, R-Leavenworth changed his vote, giving the measure the necessary majority and clearing the way to end the session.

The House passed the bill Saturday afternoon, also on a close vote that required a call.

After Fitzgerald voted, freshman Sen. Michael O’Donnell, R-Wichita, injected some levity into what had become a grueling process.

He told Senate President Susan Wagle he was going to switch his vote from yes to no, which would have prolonged the stalemate.

But then he added: “I wouldn’t do that to you. I just want out of here.”