Kansas Legislative Report
For the week ending January 28
Senate Sub. for HB 2222- FY 2010 and FY 2011 Budget: Senate Sub. for HB 2222 amends the existing budget for fiscal year 2010 and fiscal year 2011. The bill enacts Governor Parkinson’s allotments which require legislative approval with the following provisions:
Reduce funds from the State General Fund (SGF) to the Legislative Coordinating Council (LCC) by $86,885;
Add $1.1 million in SGF to the LCC for distribution among legislative branch agencies. Governor Parkinson originally cut $2.75 million from the LCC budget by allocating for an 83 day session. The addition of $1.1 million reduces the LCC cut to $1.65 million to allocate for the possibility the 2010 session going over 83 days;
Add language for FY 2010 and FY 2011 that reduces the franking privileges of the Legislature by 50 percent below the current authorized amount for calendar year 2010. Language also dictates that if a member exceeds their postage allowance, no further expenditures could be made;
Cap the franking privileges for House and Senate leadership at $2,500 for the 2010 calendar year;
Reduce the Legislative Research Department’s operating expenditures for FY 2010 by $426,615;
Reduce the Revisor of Statutes operating expenditures for FY 2010 by $649,379;
Reduce the Legislature’s operating expenditures for FY 2010 by $1,366,648;
Reduce the Division of Post Audit’s operating expenditures for FY 2010 by $225,457;
Add $5 million to the Judicial Branch for Judicial operations for FY 2010. An unintentional oversight by the legislature during the 2009 session cut $8 million from the 2010 fiscal year judiciary budget and the addition of $5 million restores all but $3 million in funding for the judiciary;
Shift from the State Highway Fund to SGF two transfers from February and May totaling $80 million;
Transfer $5 million from the Investor Education Fund with the Office of the Securities Commissioner to the general fund;
Reduce the appropriation to the Department of Commerce Economic Development Initiative Fund (EDIF) by $800,000;
Reduce the appropriation to the Kansas, Inc. EDIF by $10,000;
Reduce the Kansas Technology Enterprise Corporation EDIF by $390,000;
Transfer $5.8 million from the EDIF to the State General Fund;
Shift $2 million from the State Housing Trust Fund to the general fund; and
Direct the Kansas Health Policy Authority to review short, mid and long term contracts and other potential cost savings methods and to report back to the Senate Public Health and Welfare Committee and the appropriate Senate Ways and Means Subcommittees by March 1, 2010.
Senate Sub. for HB 2222 passed 36 to 4 on Wednesday, January 27.
SB 360- Small Claims: SB 360 removes the cap on the number of small claims actions that can be filed during a calendar year. The bill also removes the provision that enforces the limit on the number of claims allowed to be filed. A precise fiscal note for SB 360 cannot be determined but the Office of Judicial Administration believes most cases would be accommodated within the existing court schedule and not require additional resources.
SB 360 passed 40 to 0 on Wednesday, January 27.
Unemployment Trust Fund: In February, for the first time in Kansas history, the State will begin receiving advances from the U.S. Department of Labor to ensure unemployment claims are paid to eligible Kansans. The Unemployment Insurance (UI) Trust Fund began 2009 with a balance of over $500 million and finished the year with an approximate balance of $90 million. Continued unemployment claims in 2009 totaled 2.36 million compared to 1.1 million in 2008.
Due to the rapid depletion of the UI Trust Fund Kansas employers will have to pay more into the fund to compensate for the increase in paid unemployment benefits. In September of 2009, employers in Kansas were notified the reduced tax rate experienced in the previous three years would not be in effect for 2010 and revised tax rate calculations were sent to employers detailing their tax rate for 2010 the following December. For 2010 total required employer contributions to the UI Trust Fund is $406.9 million, an increase of 105 percent from the 2009 contribution requirement of $198.4 million. The minimum taxable rate on the first $8,000 in wages paid for Kansas in 2010 is 0.16 percent while the maximum rate is 7.4 percent.
Currently, 30 of 53 unemployment trust funds are borrowing from the federal government totaling $29.7 billion in UI advances. The advances will be issued to the state on a daily basis for the amount of money needed to satisfy benefit payments for the day. The American Recovery and Reinvestment Act included a provision that allowed the advances to be paid out without interest for 2010 so the state will not have to pay interest until September 30, 2011. However, if the state has not repaid the loan on the UI advance by January 2013, a 0.3 percent reduction in the discount rate that the federal government allows will be put in place. For calendar year 2013 the FUTA rate for Kansas will go from 0.8 percent to 1.1 percent and will increase, each year, by 0.3 percent until the loan is repaid.
Budget Update: Next week, Ways and Means Subcommittees are scheduled to begin meeting to work on their respective portions of the FY 2011 budget.
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