Week 8 (March 1 -5, 2010) Issue 9

Another week consumed by committee meetings and very little work in the House. On Tuesday, I ended my day wondering if the democratic process is working. Let me explain. In Tax Committee we were working the Tax Exemption bill (HB2549). Moves made by Rep. Arlen Siegfried puzzled me. He moved an amendment to keep the non-profit charitable organizations exempt from sales taxes. After a brief discussion the amendment passed. Rep. Siegfried then moved that HB2549 be reported to the House adversarially (that kills the bill). That action was immediately followed by the Vice Chairman offering a substitute motion to pass the bill without recommendation. Why amend a bill (to remove a component) if you intended to kill the entire bill (keeping everything tax exempt)? What was the role of the Chairman Carlson in what appeared to me as orchestrated moves by these members? In the afternoon in the Health & Human Services Committee meeting, the working of HCR5032 to amend the Kansas Constitution to protect Kansans from having to buy health insurance started oddly. Within 10 minutes into the meeting, Rep. Scott Schwab moved to report the bill to the House as passed favorably. The Chairman’s pensive response: the Committee should discuss the bill and she asks the motion maker to withdraw the motion. After a lengthy discussion HCR5032 passed favorably on a 12-10 vote.

I hear talk about transparency and accountability in government; people complain about their government and people speak negatively about the politicians. I submit orchestrated moves, such as happened last Tuesday, invite cynicism about the governing process. However, as one person said to me in an effort to alleviate my concerns, democracy may be messy but consider the alternatives!

In the House

This past week the House passed 4 bills that now go to the Senate:

HB2538 concerning the promotion of employment across Kansas act; relating to qualifications for benefits under the act passed (87-34). I voted YES to keep jobs coming to Overland Park and Johnson County, however, the cost to the state is significant (estimated $ 93 million over 5 years). The benefit to the employer is to retain 95% of income taxes withheld from each new or retained employee’s salary for up to 10 years. This act creates a class of jobs: government subsidized private jobs. Look up bill for additional details to appreciate the extent of this new benefit.

HB2544 concerning the state public trust for certain communities within superfund sites. Passed. I voted YES to deal with the disposal of properties within a superfund site.

HB2649 designating little blue stem (Schizachyrium scoparium) as the state grass of Kansas. Passed. I voted YES for the recommendation based on research by middle and high school students from Johnson County.

HB2698 authorizing the Secretary of State to grant an easement to the city of Ogden in Riley County. Passed unanimously.

My Committee Activities

Taxation We started the week with an informational meeting on Insurance companies Taxes and Tax Credits. Bob Tomlinson, Deputy Insurance Commissioner, provided a history of how premiums are taxed (over the years between 1 and 2 percent) and awarding insurance companies tax credits (up to 15% of the salaries of employees based in Kansas. Imposing caps or limits on both of these allows for companies to balance the salary levels that serve the company’s best interest. The tax credits can be shifted to more profitable subsidiaries outside of the state thereby reducing their tax liability to the state. It is complex and hard to follow. The bottom line is that in 2008, tax credits amounted to $52 million. He emphasized the nearly 10,000 Kansas jobs. We were not t old how much the 1.25% tax on premiums yields, however, the revenue stays with the Insurance Commissioner and does not go into the state general fund.

HB2549 regarding sales tax exemptions includes the exemption of residential utilities, Lottery tickets (multistate compact excludes charging sales tax), admissions, non-profit organizations, churches and the list goes on. You often hear that we lose $ 4.2 billion in sales tax, however, that number reflects taxing raw materials, labor services etc (these account for $ 3.0 billion). The revenues lost by retail sales tax exemptions amount to $ 1.2 billion. Amendment #1 dealt with exempting labor services on tangible personal property (about $2.3 million); amendment #2 removed non-profits from the bill ($10 million)passed and then was followed immediately by the motion to report the bill adversarially. This was followed immediately by a substitute motion to pass the bill without recommendation. The substitute motion was passed on a voice vote.

HB2496: related to tax credits for historical restoration introduced by Rep. Siegfreid. This bill proposes tax credits of 25% for-profit projects and 30% for non-profit projects. The emphasis was on jobs requiring skills, not out-sourced, generate other revenues (sales tax and income tax). Opponents described large projects accessing a variety of government supports in addition to tax credits.

HB2689 authorizes Kingman County to place on the November ballot a 1% sales tax proposal for jail and infrastructure improvements. Passed by voice vote.

HB2725 authorizes Pottawotamie County to place on the November ballot a 0.5% sales tax proposal for infrastructure improvements. Passed by voice vote.

HB2682 regarding small business employer health insurance benefits for employees. This bill proposes that small businesses (20 or fewer employees) have the option to offer a group plan or to provide cash (same percentage or same cash amount) to employees who purchase an individual insurance plan. The employer contribution either way is tax deductable (deduction worth $ 27 million). Interjected into the presentations were Cafeteria plans, High deductibles, Health Savings Accounts and Health Reimbursement Arrangements. In Kansas about 175,000 people buy low cost individual plans. In these situations, the risk is not shared (as in group plans) leading to increased premiums as you age or become ill. Since salaries are likely to increase less than premiums, the employer contribution declines as the premium goes up which pushes the employees into HSAs, high deductible catastrophic coverage.

Health & Human Services

HCR5032 would amend the Kansas Constitution by adding Article 16 which would preserve the freedom of Kansans to provide for their health care. The main points being no law or rule to compel participation in any health care system or to purchase health insurance; paying cash for lawful health care services would be without penalties and fines. Attempts to amend the resolution failed on 12-10 votes ending with the motion to pass favorably (12-9). I voted NO because I take amending the Constitution very seriously. I believe government cannot achieve compliance through mandates and also believe this bill is about state sovereignty, federalism and freedom not about health care insurance.

SB449 concerning requiring a doctoral degree with 1800 clinical hours for licensure as audiologists.

SB489 makes language changes in existing statue regarding delivery of contact lens to include mail, FedEx, UPS etc.

HB2118 concerning the inclusion of 6 hrs of safety awareness training as part of the mandated Continuing Education Units for licensed social workers.

HB2650 expands categories of Physical Therapists to include Federal Active, Exempt in addition to the existing Active and Inactive categories. This expansion is to accommodate malpractice coverage provided through the Federal or State Tort Claims acts. The Active status requires that the licenised individual purchase individual malpractice insurance while the Inactive status is licensed without malpractice insurance.

Aging & Long Term Care

HB2118 is the same bill heard in Health & Human Services. This is another example of politics dominating the process.

A presentation made by Loren Snell from the Attorney General’s office on abuse of the Durable Power of Attorney. Hearings have been scheduled in the Senate (SB45) introducing procedural changes that can make violations a criminal prosecution rather than a civil one.

Economic Development & Tourism

SB54 concerns the creation of a Capitol Preservation Committee for the purpose of approving art (permanent or revolving) within the capitol building and surrounding grounds beginning January, 2013.

Presentations by Secretary Hayden (Parks and Wildlife) and by the Tourism Director of Geary County indicate that Tourism, involving outdoor activities in Kansas, is increasing in popularity.

Reminder:

My March chat over coffee will be held on Saturday, March 13 from 1 to 2:30 p.m. at the HyVee Grocery Store coffee/lunch area on 91st Street just east of Metcalf. Hope you will come to talk about issues and to give me your reactions to some of the bills we are covering.