2019 Legislative Session Recap
The 2019 legislative session concluded in early May with the legislature having tackled many large issues, while still leaving plenty of work to be done in the second year of the biennium starting on January 13, 2020. Given that Governor Laura Kelly's first budget survived mostly intact, and that no substantial tax reform package was signed into law, the state accounting ledger is on relatively firm footing heading into 2020. The Legislature was able to put together a school finance package to satisfy the Supreme Court, but Medicaid Expansion still remains elusive to advocates looking to expand access to health insurance.
Current Economic Environment
The Consensus Group consisting of Legislative Research, Division of the Budget, Department of Revenue, and economists from state universities meet twice a year, in April and November to provide an estimate of revenue and expenses for the Governor and Legislature to build the annual budget. The most recent meeting of this group produced some interesting and mostly positive data forecasts for the Kansas economy. It is anticipated that we will continue to see modest economic growth through FY 2021. Real Kansas Gross State Product is expected to grow by 1.7% in 2020. This lags the national economy as measured by U.S. Gross Domestic Product which is expected to grow by 1.9%.
Employment continues to be strong in Kansas and the data shows that wages have been growing. The labor market is relatively tight with unemployment at 3.4%. In terms of agriculture, there has been modest growth in net farm income over the last couple years attributable in large part to the federal market facilitation payment program. However, the energy sector continues to experience declines in production and price for both oil and natural gas. Inflation continues to be moderate and the 2020 and 2021 forecasts both call for a 2.1% inflation rate.
Given the moderate growth expected by the Consensus Group, and the favorable economic indicators, overall revenue estimates for FY 2020 and FY 2021 were increased by a combined $525.5 million. The profile for the State General Fund, taking the recent consensus estimates into account, shows that the State will have a positive ending balance through FY 2023. The State ended FY 2019 with over $1.1 billion in the bank. Even with the additional anticipated revenues, the State continues to have higher expenditures than revenues. The State General Fund profile assumes consistent and reasonable growth and does not consider any potential additional revenue (e.g. Internet or digital sales tax) or reductions in revenue from potential tax cuts.
Medicaid Expansion - One of the biggest policy issues from the 2019 Legislative Session was expanding Medicaid, which would provide health insurance coverage to approximately 150,000 Kansans. Last session, the Kansas House passed Medicaid Expansion through HB 2066 by a vote of 69-54, however, progress on sending a bill to Governor Kelly stalled out in the Senate. It has been over nine years since the Affordable Care Act (ACA) passed, and Medicaid Expansion has been an option for states to pursue since 2014. To date, Kansas, along with 13 other states have not expanded their programs. There was a commitment by Senate leadership that the issue would be studied in the interim by two different committees - the Senate Select Committee on Health Care Access and the Special Joint Committee on Medicaid Expansion. Both Committees have met, and we now have a Senate proposal that should be debated when the legislature convenes in January.
Tax Policy - In addition to Medicaid Expansion, another large policy item leftover from the 2019 Legislative Session revolves around state tax policy. SB 22, which was one of the original large-scale tax bill from last session was vetoed by Governor Kelly in late March. After the legislature reconvened in early May, they passed another tax bill in the form of HB 2033, which contained nearly all of the same provisions as SB 22, but at half the cost because it did not allow for the changes to be retroactive. Governor Kelly ultimately vetoed both bills and the legislature was unable to override her veto on either bill. Governor Kelly issued an Executive Order in September creating the Governor's Council on Tax Reform, which had the charge of studying how Kansas can create a fair and efficient tax policy. Governor Kelly's Council made a series of recommendations including taxing digital products and implementing a refundable food sales tax credit. It is anticipated that legislators and lobbyists will again push this year to address the issues around decoupling and taxation of international income, which will set the stage for another year of fighting on tax policy.
Constitutional Amendment on Abortion - With the Supreme Court decision in April ruling that the state constitution protects the right to an abortion, many legislators have been strategizing on how they can address this in the 2020 Legislative Session. One part of the debate is settled, and that is to put a constitutional amendment on the ballot for the voters of Kansas to decide. While all the details around the potential language have yet to be worked out, it can be reasonably assumed that there will be a robust debate in both chambers. Perhaps the biggest unknown at this point, should the amendment be approved by the legislature, is whether the constitutional amendment appears on the August or November ballot.
Supreme Court Nominating Process - The process by which justices are nominated to serve on the state Supreme Court been questioned by legislators, especially in terms of transparency. The current process involves a nine-member Nominating Commission, including five lawyers and four nonlawyers. There are feelings that the current process leads to justices that don't represent the political makeup of Kansas, and many in the legislature would like Kansas to follow the Federal model, allowing the Governor to make appointments subject to Senate confirmation. It is anticipated that we will continue to hear from legislators that this process should be amended.
Criminal Justice Reform - The 2019 Legislature passed HB 2290 with only one dissenting vote between both chambers. One of the provisions in the bill was to create the Kansas Criminal Justice Reform Commission. The Commission was charged with studying numerous aspects of the criminal justice system including sentencing guidelines, proportionality, diversion, supervision, specialty courts and other programs for offenders. Meetings of the Commission began this summer to meet a December deadline of producing an interim report (http://www.kslegresearch.org/KLRD-web/Publications/CommitteeReports/2019CommitteeReports/KS-CriminalJustRefmComm-cr.pdf). The Commission will continue to meet throughout the year and will issue their final report by December 1, 2020.
Marijuana - Legalization of marijuana has been a hot topic around the legislature for the past few years and there are now three states bordering Kansas that have legalized recreational or medical marijuana. The Special Committee on Federal and State Affairs met in October on the topic of medical marijuana. There were many proponents and opponents who testified. Ultimately the recommendation from the Special Committee was to take a look at the Ohio law, which allows for medical marijuana in some forms. The Committee was also interested in what could be done to provide individuals an affirmative defense if someone who can legally possess marijuana in other states is traveling through Kansas. These recommendations will head to the legislature and it seems likely that there will be legislation this session on this topic.
Transportation Plan - Transportation funding has been one of the annual budget issues facing legislators over the last decade. From FY 2011 - FY 2020, on average, $177 million has been swept from the state highway fund to the state general fund every year to fund core services of government. This does not include other extraordinary expenses that have come over time including Statehouse Debt Service, the Affordable Airfares program, and education transportation funding to name a few. Legislators have coined transportation funding as the "Bank of KDOT" (Kansas Department of Transportation) since it has been used so often to fund other government services. Governor Kelly would like to end the transfer of funds and keep more funding at KDOT to implement her new transportation plan. This new plan will focus on being nimble, stretching dollars, and community input to address the estimated $18 billion worth of needs statewide. As the Governor rolls out her new budget, this new plan, and funding for the plan will be one of the big budget issues this session.
Noneconomic Damages Cap - This summer the Kansas Supreme Court struck down the state's cap on noneconomic damages, citing that it violates the state constitution. The statute in question relates to damages for personal injury or death, which has been currently capped at $325,000. Striking down of the cap disrupts years of public policy and advocates claim that this will have far-reaching consequences for cases involving medical malpractice, workers compensation, and general tort litigation. The legislature held two interim committees this fall to discuss the topic with the only recommendations that they continue to study the issue and get updates from stakeholders on ramifications.
2020 Legislative Calendar
- Jan. 13 - First day of session.
- Feb. 3 -- Last day for individual members to request sponsored bill drafts.
- Feb 10 - Last day for non-exempt committees to request bill drafts.
- Feb. 12 - Last day for individual bill introductions.
- Feb. 14 - Last day for non-exempt committee bill introduction.
- Feb. 24 - Last day for committees to meet
- Feb. 25-26 - On floor all day.
- Feb. 27 - Turnaround Day, last day for non-exempt bills in house of origin.
- Feb. 28-March 3 - No session.
- March 20 - Last day for non-exempt committees to meet and consider bills.
- March 23-24 - On floor all day.
- March 25 - Last day for debate of non-exempt bills in either chamber.
- March 26-27 - No session.
- March 30-31 - Conference committees meet.
- April 1 - Last day for conference committees to agree.
- April 3 - Last day for conference committee agreements, First Adjournment.
- April 4-26 - Spring Break.
- April 27 - Veto session opens on Day 74 of the session.
- May 13 - Day 90, the traditional length of the session.
- Speaker - Ron Ryckman (R - Olathe)
- Speaker Pro Tem - Blaine Finch (R - Ottawa)
- Majority Leader - Daniel Hawkins (R - Wichita)
- Minority Leader - Tom Sawyer (D - Wichita)
- President - Susan Wagle (R - Wichita)
- Vice President - Jeff Longbine (R - Emporia)
- Majority Leader - Jim Denning (R - Overland Park)
- Minority Leader - Anthony Hensley (D - Topeka)
You can find a list of the 2020 Legislature here: http://kslegislature.org/li/b2019_20/members/, or in Excel which includes all contact information: http://kslegislature.org/li/b2019_20/members/csv/
All 165 legislators will be up for election this year. This will most certainly create an interesting dynamic as a number of legislators including Senate President Susan Wagle (running for US Senate) and House Appropriations Chairman Troy Waymaster (running in the 1st Congressional) will be running for new positions, as well as those legislators just trying to retain their seats. Positioning on issues will become paramount, in addition to trying to end the session in an expedient manner so the candidates can free up their time for campaigning and fundraising.
The Capitol will have a new snack bar ready for this session that will feature a grill and serve hot food. After about $150,000 worth of work, you will now be able to enjoy a new snack bar on the ground floor of the Capitol, just across from the vending area near the Visitor Center and entrance. Don't worry, if you're upstairs and need some refreshments, the snack bar on the third floor won't be closing.
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