The Rahjes Report (February 14, 2022)

Published 02/15/2022

Linkedin

Hello from Topeka. We are getting closer to the first half of the 2022 legislative session. The next week will be full of committee hearings, debating bills on the floor and seeing what bills survive to go to the Senate.

Legislature Overrides Governor’s Veto of Redistricting Legislation

Last week, the Governor vetoed SB 355, the Congressional map, known as Ad Astra 2. This week, the Legislature overrode the veto with the House voting 85-37 making the override successful. The next step is for the Congressional map to undergo court review, providing a check and balance for Kansans that the map is drawn fairly and that it does not disenfranchise minority or other voting populations.

Major Economic Development Legislation Becomes Law

This week, the House approved SB 347, known as the Attracting Powerful Economic Expansion (APEX) Act. APEX would ensure that companies make a minimum investment in Kansas of $1 billion over a five-year-period and, in exchange, would grant tax incentives to those companies. The Department of Commerce has announced that Kansas is one of two finalists for a $4 billion, 3-million square foot advanced manufacturing facility that would employ 4,000 people and create 16,000 temporary jobs during construction. SB 347 retools the current Kansas tax incentives in an effort to win this megaproject, as well as attract other projects in the future.

Republicans worked to incorporate accountability and safeguards into the bill, so that this economic development initiative is not designed solely for one company but is instead designed to drive economic development across the board. The incentives to attract APEX projects should help all Kansas companies – not just one - with a measured corporate tax reduction. Finally, the property tax component of the bill must be addressed to ensure local control so that economic development incentives offered by the state do not place an added tax burden on local residents and local business owners.

During the House’s debate, an amendment providing for oversight by the State Finance Council was adopted. The House approved SB 347, with a vote of 80-41. The Senate concurred with the House amendments, sending the bill to the Governor. On Thursday, prior to the Governor signing SB 347, House Republican leadership reiterated their intent to require budget accountability from the Governor when an APEX plan is executed.

“The Governor cannot escape economic reality,” said House Republican leadership. “She’s made a long list of costly election-year promises to Kansans – promises she cannot deliver while at the same time paying out economic development incentives before the money is there to back it up.”

Condemning Price Gouging in Kansas

On Wednesday, the House passed HCR 5023, with a vote of 114-2. HCR 5023 denounces the price gouging and market manipulation that occurred following the February 2021 cold snap. The resolution states the intent of the Legislature to support both state and federal investigations into the extraordinary price increases that resulted and hit Kansans and their communities hard. The resolution acknowledges the work of Attorney General Derek Schmidt for his efforts at investigating profiteering. A key component of the resolution is advocating for the protection of ratepayers should any corrective action be assigned. The adopted resolution will be sent to the chairperson of the Federal Energy Commission and the Attorney General.

The 2021 Legislature passed the Utility Financing and Securitization Act, 2021 HB 2072, which gives utilities the opportunity to use securitized bonds at more favorable terms than traditional financing in order to mitigate the impact on Kansans’ utility bills. The agreement includes provisions to provide refunds to Kansans should money be recovered from on-going investigations and lawsuits regarding market manipulation and price gouging.

KPERS Legislation Moving Through the Process

The House Insurance and Pensions Committee has begun its work on HB 2561, which utilizes some of the state’s budget surplus to stabilize the KPERS retirement fund, ensuring it will be there for our teachers, our firefighters, and other public employees when they need it. The plan would appropriate $1 billion to the KPERS Trust Fund, which would:

• Bring KPERS above the 80 percent funded level, a goal in ensuring the stability of retirement systems.

• Lower future costs for taxpayers by reducing the amount needed for the state’s share of employer contributions, saving the taxpayers $82 million in Fiscal Year 2023 and $429 million over the next five years.

• Fully fund 2017 and 2019 payments, paying off layering payments, and eliminating the annual $25.8 million payments on delayed employer contributions.

Proponent testimony was provided by Attorney General Derek Schmidt and the Committee’s Chairman, Rep. Steven Johnson. The Attorney General noted that HB 2561 is a fiscally responsible approach in contrast to the Governor’s previous reamortizing proposals, which would have left taxpayers burdened with more than $4 billion in added debt service. HB 2561 reduces debt and the unfunded liability and frees up more than $70 million annually to sustain funding for core services or make future tax relief possible.

Neutral testimony from Budget Director Adam Proffitt showed that the Governor only wants to fund $253.8 million to make up for Fiscal Year 2017 and Fiscal Year 2019 layering payments.

if you would like to contact me: my office is still located in Room: 149-S. My phone number is (785) 296- 7463 and email is: kenn.rahje@house.ks.gov and you can always try my cell number at (785) 302-8416.

It is my honor to serve you.