Rep. Williams touches on timely topics
KPERS, Taxes & K-12
Turnaround is here -- the halfway point in which all passed House bills are sent to the Senate and vice versa. Here are a few of the key topics taking our time in the Capitol:
KPERS Obligation Funded and Sent to the Governor—SB 9: http://kslegislature.org/li/b2019_20/measures/sb9/
On Friday last week, the House unanimously approved the bill, 117-0.
Republicans in the Kansas Legislature led the charge to pay off $115 million of KPERS debt. Republicans believe in keeping our promises at home and this week and we were proud to vote to have our state keep its promises public retirees. SB 9invests $115 million into our public pension system and makes good on a payment that was deferred in 2016. Because Governor Kelly wants to maintain large ending balances and increase spending, so she was opposed to the KPERS payment.
However, with every Republican, Democrat, and Independent voting in favor of this legislation, we doubt that she will veto this kept promise. The Governor has 10 days to act on this legislation.
Highlights of SB 9:
Meet the actuarial required payment (ARC). This will be the first time this has occurred in 25 years.
Increase the school group’s funding ratio, which is hovering too near critical status. The school group has the lowest funded ratio currently at 61.6%, which is close to the critical code red status of funded ratio of 60% or lower.
The overall funded ratio of 70%, a milestone accomplishment.
KPERS states that postponing the payment costs $630K monthly or approximately $20K a day. Good news: we will not realize this added debt.
TAXES: Federal Windfall Money, SB 22
On February 19th, the House Taxation Committee heard testimony on SB 22, http://kslegislature.org/li/b2019_20/measures/sb22/, a bill that would make several changes to Kansas income tax provisions in response to changes to the federal tax code in 2017. The bill would decouple state and federal tax codes from changes made in the 2017 tax cuts and allow Kansans to itemize deductions on their state returns when using the standard deduction on their federal returns. Ultimately, this week, the House passed out SB 22 from the tax committee with two amendments: lower food sales tax by one penny and include the internet sales tax provision (see below).
Internet Sales Tax
On February 21st, the House Committee on Tax heard testimony on HB 2352, http://kslegislature.org/li/b2019_20/measures/hb2352/ ,which would require internet retailers to collect and remit sales tax who have at least $100,00 in total gross sales in Kansas annually. The bill would also require sales tax to be collected from all sales of digital property and subscription services, starting on July 1 of this year. According to the Department of Revenue, this bill would increase state revenues by $41.1 million in FY 2020 (all funds). The State General Fund would increase by $34.4 million, and the State Highway Fund would increase by $6.7 million. I believe in fairness, so I am a big supporter of the Internet Sales Tax, or e-fairness. Why would we require in-state retail owners to collect and remit sales tax when we don't require out-of-state vendors/retailers to do the same? It's a matter of fairness.
As K-12 Budget chair, I'm working daily with committee members to prepare a comprehensive spending bill that meets our obligations and also increases accountability and targets funding to evidence-based programs designed for at-risk students. This takes time.
Educating Kansas kids is one of our highest priorities. We are working toward a solution that helps put money where it can do the most good to educate Kansas children, close achievement gaps, and be affordable no matter what economic storms may come. Kansans must have sustainable, stable, and sound funding for schools that will not jeopardize other services or make promises our State cannot keep. It's time to put to rest decades of school finance litigation meant to determine 'how much is enough.'