November 16, 2009 Volume 1, Number 11
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Appointment to House Appropriations Committee
In August I received word that I had been appointed to the Appropriations Committee. This mid-term move is rather unusual, and maybe it is the result of a freshman legislator asking a few too many questions! In the press release announcing the appointment, Speaker of the House Mike O’Neal stated “I appreciate Don's desire to work for consensus under difficult fiscal circumstances. We are all going to have to come together to pass a sound budget in 2010.” The House Appropriations Committee and the Senate Ways and Means Committee are the two legislative committees that perform the difficult task of preparing a state budget. This summer, due to the fiscal difficulties the state is facing, Appropriations Committee Chairman Kevin Yoder took the unusual step of scheduling a series of interim meetings for the committee, starting in August. We also met in October and are scheduled to meet again on November 23 and 24. This series of meetings allows us to take testimony from agency heads regarding steps they have taken to date to manage the budget cuts, and the steps they will be forced to take if a new round of cuts is imposed on them. We have also had conversations with a panel of five school superintendents, examined ending cash balances of the various state funds, and received updates on the status of the Unemployment Insurance Trust Fund and KPERS. Additional testimony has dealt with suggestions on cost saving opportunities for the state and how best to navigate our way out of the recession. These meetings have been invaluable, and I applaud Chairman Yoder for being proactive and enabling us to get a head start on the budget-building process. I believe this will result in more informed and appropriate decisions, and a better final product. The need for these early meetings was underscored last week when the Kansas Consensus Revenue Estimating Group reported their current estimates for Fiscal Years 2010 and 2011. They are forecasting a $459 million shortfall in the State General Fund for 2010, and an additional $263 million projected deficit for 2011.
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Why Property Tax?
In the process of getting familiar with state finances, I came across some intriguing information. In Fiscal Year 2008, tax revenues generated to fund all levels of government in the state of Kansas were:
Property tax - $3.766 billion
Income and privilege tax - $3.41 billion
Sales tax - $3.126 billion
It is interesting and surprising to me that property tax is the largest of the three. Why do we rely so heavily on property tax? I can think of a number of reasons:
1. It is a more stable tax base than sales or income.
2. In the case of real property, we know exactly where it is, how much of it there is, who owns it, and approximately how much it is worth.
3. Some functions of local government (police and fire protection, streets, road and bridge) provide tangible value to real property, and so some level of taxation of property is appropriate.
4. It is easy. Changing income tax or sales tax rates is always a very contentious process, with great political risk. How much easier it is to let the locals raise taxes a little at a time in counties, cities, and school districts across the state. And the state legislature has even found ways to accelerate this process by doing such things as reneging on promised Local Ad Valorem Tax Reduction Fund payments, capturing a portion of liquor revenues promised to local governments, and taking actions that force school districts to raise their LOB.
But I think it is time to ask ourselves if this is the best tax policy for the state of Kansas. Is ownership of property the best measure of who can and who should pay? In the early days of England it probably made sense, because property was primarily owned by an elite landed gentry. But I seriously question whether that is true of 21st century America, where a beginning young farmer who purchases a quarter of land with 30% down gets the privilege of paying property taxes on both his equity and his debt. The same goes for the young newly married couple who purchase their first home. The fact is that ownership of property is no longer an accurate measure of wealth or ability to pay. And it produces very uneven burdens for different sectors of the economy. Why should property intensive industries like agriculture and natural resources shoulder a much greater portion of the burden of educating Kansas’ youth than service industries like legal, medical, or accounting, where property ownership is typically limited to a storefront?
The legislature is indirectly recognizing the inequity inherent in property tax when it grants property tax exemptions to selected industries or even individual businesses. Problem is, each time we grant an exemption we force the remaining nonexempt property owners to bear the burden of increased responsibility for financing local government. And each time we grant an exemption, we are unbalancing the playing field. Do we really believe that government can accurately and fairly pick winners and losers? Are equal opportunity and personal responsibility not important anymore?
There are communities in this state, including several in the 118th District, where the total property tax mill levy is now over 200 mills. That is a tremendous disincentive to any kind of expansion of economic activity, and it is very difficult to overcome. And the entities that might be seriously interested in starting or expanding their business in such communities are rarely large enough or sexy enough to warrant much consideration for any kind of tax breaks.
The current fiscal crisis gives us opportunity to critically examine every governmental function and every expense, and the Appropriations Committee is already working on it. I believe the crisis is also an appropriate time for us to step back and take a look at what we are doing revenue-wise. What is the best long-term tax policy, that would be most citizen- and business-friendly, that spreads the burden of financing governmental operations fairly, evenly, and broadly across all citizens and all industries of the state? I know this is a very philosophical question, but I believe that small incremental changes to tax policy can have the cumulative effect of seriously distorting the overall tax picture, and I fear that is exactly where we find ourselves today. It is now time to begin the process of looking for a better, fairer, more progressive way of financing state and local government in Kansas.
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We Want a Divorce!
Recently there have been various proposals circulating that would in some way reassert state sovereignty. A related resolution would attempt to exempt the state of Kansas from the requirements of national health care insurance reform, if and when it is passed. The stimulus for these proposals is certainly understandable, as all of us can recite multiple instances where federal intervention and control of our personal and professional lives is unwanted, unnecessary and greatly resented. And it certainly appears to us that the current administration and majority party in Congress are hell-bent on aggressively expanding the federal government’s reach even farther. But can we realistically tell the federal government at this point to butt out and leave us alone… in effect announce to the feds that we want a divorce? It is important to remember that most of the federal “coercions” have used the “carrot” approach… they have encouraged states to take certain actions with the promise of substantial cash incentives. Federal highway funds come with strings attached regarding speed limits and other traffic regulations. State expenditures for Medicaid are more than matched by federal dollars (40-60 match). These are just two examples, but federal dollars find their way into essentially every aspect of state government, and have a major impact on social services, public safety, transportation, and education programs. In most, if not all instances, if we tell the feds that we reject their regulations and requirements, the dollars disappear. We would be left to fund state operations completely on our own. How serious would this be? Federal funds in the fiscal year 2010 budget total $3.748 billion – roughly 29% of the total all funds budget. Or, to put it another way, that $3.748 billion is about $300 million greater than all income tax revenues paid in to the state. So if we were to really get serious about severing ties with the feds it is likely that we would need to double income tax rates, or increase property or sales tax rates by an equivalent amount. Would any of us be willing to pay that price? And even if we were, could Kansas stay competitive with neighboring states that refuse to cut the umbilical cord to the federal government?
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Interesting Websites
In Defense of Agriculture Those of us who are involved in production agriculture have grown quite weary of the shallow, uninformed criticisms that are frequently heaped upon our industry by those who think they know better than us how we should conduct our business. A recent article in Time magazine is a good case in point. This link is to a very eloquent rebuttal to those misguided arguments, written by a Missouri farmer.
Invent, Invent, Invent An op-ed piece by New York Times columnist Thomas L. Friedman about the recession and the steps America should take during these tough times. It is his opinion that “We might be able to stimulate our way back to stability, but we can only invent our way back to prosperity.”
The Jason Project In August the oceanographer Robert Ballard, the man who found and explored the wreckage of the Titanic, gave a very interesting talk at the Council of State Governments’ Midwest Legislative Conference in Overland Park. The Jason Project is his brainchild, and it exists to connect students with great explorers and great events to inspire and motivate them to learn science. Ballard, who has gained international fame for his top-notch work as an oceanographer, is a native of Wichita.
How the States Compare In the “misery loves company” category, this interactive graphic from CNN-Money illustrates unemployment and foreclosure numbers for all fifty states.
Worldwide Commercial Flight Patterns No useful information here, but fun to watch anyway. It is a computer simulation of every commercial flight in the world during a 24-hour period. You can also scroll down to see air patterns for U.S. air travel, flights into and out of Atlanta, and FedEx flights.
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Cowboy Logic: "If people concentrated on the really important things in life, there'd be a shortage of fishing poles."
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Quote of the Week: “An opinion should be the result of thought, not a substitute for it.” - Jef Mallett
FROM THE CAPITOL
News for the 118th District
By Representative Don Hineman
July 23, 2009 Volume 1, Number 10
________________________________________
National Health Care Reform?
The number one national topic these days is the debate over health care reform. But it seems to me that even the title of the issue is misleading, because it really isn’t about health care reform; it is about expansion of health insurance to include tens of millions of Americans currently uninsured or underinsured. Obviously having everyone insured would on some level be a good thing, as there are social and moral benefits in having everyone adequately insured. Problem is, the cost of such a program is controversial and hard to nail down. I suspect that all of the current predictions are much too low. As the uninsured are enrolled in the program, demand for health care services will skyrocket. You can’t add tens of millions of newly-insured “consumers” to the system and expect anything else. And yet there is little if any discussion about expanding the supply of health care services and health care providers in response. Incredibly, the supply appears to be shrinking, as the folks in Larned, who are about to lose their hospital, can attest. Those in Congress and the present administration have not yet found a way to repeal the law of supply and demand, so the net impact of adding new consumers and new demand to the system will be increasing costs for services, declining quality of care as the present health care system struggles to keep up with the new demand, and potential delays in access to service.
My wife Betsy underwent treatment last December for a serious medical condition, and she was in the hospital for a total of seventeen days. She is fine now, and we will be forever grateful for the excellent care she received. But we learned firsthand how health care costs are spiraling out of control. And yet before and during Betsy’s hospitalization neither of us asked the hospital administration or any of the specialists who treated her what anything was going to cost. That’s in stark contrast to my farming operation, where I know the cost of fertilizer, herbicide, seed or diesel fuel before I buy. The difference of course is that Betsy and I weren’t personally responsible for her mounting medical bills because we were insured. And because someone else (the insurance company) was picking up the tab, we didn’t do a lot of shopping around for health care providers, asking about costs, or double checking the bills to make sure they were accurate. That’s the way our health care system works these days, and adding tens of millions of new “consumers” to the system will amplify the problem.
As a state legislator I am watching the ongoing debate with great interest, partly because I fear that the astronomical cost of the proposed system could eventually come to be “shared” with the states, in the same manner that Medicaid is now financed. In Kansas, the state’s responsibility for Medicaid costs has risen from 0% of the State General Fund in 1974 to 15% of the State General Fund today. How does a state that is facing a $500 million to $1 billion shortfall next year take on the responsibility for an expanded health insurance system?
It is unfortunate that the current focus isn’t on true health care reform, because the need is acute. The solution to the problem will be multifaceted, but here are a few ideas I believe have merit:
1. Develop a system in which the users of health care services become smarter consumers. This will only happen when the consumer has a personal stake in the costs. I applaud Congress for enacting legislation several years ago authorizing Health Savings Accounts. Unfortunately this good idea is going largely unnoticed and unused. However there are private businesses that have reacted to escalating health insurance plan premiums by going to a much higher deductible plan and putting the money saved into Health Savings Accounts for their employees. The results are very encouraging. As the employees see that they can benefit financially they have begun to adopt healthier lifestyles and ask many more questions about cost when they do need health care.
2. Enact meaningful tort reform and caps on medical malpractice claims. Our health care system currently forces hospitals and doctors to order every test and procedure imaginable, to minimize their risk of being hauled before a review board or being sued. The health care providers can’t be blamed for acting that way; they are merely responding rationally to what they perceive as a substantial risk. But the added cost to the health care system from countless unnecessary tests and procedures has to be huge, and in the end we all pay for it.
3. Examine the process whereby the Federal Drug Administration approves new drugs, with a view toward streamlining and simplifying the process. FDA approval is extremely costly, and is a direct component in the cost of prescription drugs in America today.
4. Advance the concepts of “medical home” and sharing of electronic medical records among health care providers to insure adequate care while avoiding unnecessary duplication and dangerous drug interactions.
These suggestions are just the beginning, and those more involved in the health care field could undoubtedly add many more. The need for true health care reform is undeniable, so how is it that we are currently faced with a “reform” concept that seemingly focuses on the mistaken idea that everything will be OK once we get everyone insured?
________________________________________
Citizen Legislature and Sine Die
On Thursday, June 4 the 2009 session of the Kansas Legislature came to a close. Referred to by the Latin term “Sine Die”, final adjournment means that the legislature is officially adjourned for the rest of the year. Legislators will continue to work on individual initiatives, standing committees, and special interim committees, but no official meeting of the entire legislature is now scheduled until the 2010 session convenes in early January. Each year the Kansas legislature is authorized to meet for ninety days, and the session is broken into two parts: a roughly eighty day session from mid-January until early April and a shorter “veto” or wrap-up session in late April-early May. The ceremonial final adjournment then occurs in late May or early June. The legislature is called a citizen legislature because it only meets for a portion of the year, as opposed to a professional legislature that is in session year-round. Only a few states have professional legislatures. Many would see it as a good thing that Kansas legislators finish their work and go home in the spring, rather than hanging around the state capitol all year. And many of us legislators take solace in the fact that even though we are politicians, at least we aren’t professionals…
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Stay Right!
In a move intended to enhance the orderly flow of traffic and reduce incidents of road rage, the legislature has enacted a law restricting the use of the left-most lane on multi-lane highways. The new law, which took effect July 1, restricts drivers on multi-lane highways to use of the left-most lane only when overtaking or passing another vehicle or preparing to make a proper left turn. The provisions do not apply to authorized emergency, law enforcement, or Kansas Turnpike Authority vehicles, or KDOT vehicles used for construction or maintenance work. The law also does not apply to that portion of multi-lane highways or streets within city limits. Law enforcement officials will issue warning citations during the first year the law is in effect, from July 1, 2009 until June 30, 2010. Thereafter, violators will be charged a $60 fine.
________________________________________
Issues of Individual Rights
Governmental oversight and individual liberty were major themes of the 2009 session. There was lively debate on issues such as a statewide smoking ban and mandatory seatbelt laws. In both instances the principles of individual liberty and responsibility were at issue, counterbalanced by well-documented health costs to the state and society. On both subjects no new laws were enacted, but I expect a vigorous challenge on each topic and perhaps a few others next year. The continual struggle between personal rights and government intervention is one of our most basic and fundamental points of contention in government. I believe debate on these topics is healthy, and hope you’ll keep me informed of your perspective so I may accurately represent our district.
________________________________________
Cowboy Logic: "Only a few will learn from other people’s mistakes; most of us have to be the other people.”
________________________________________
Quote of the Week: “Bad habits are formed in good times, and good habits are formed in bad times” –Representative H. David Cotta, Maine
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And finally, a thought to ponder: “I used to eat a lot of natural foods until I learned that most people die of natural causes”
News for the 118th District
By Representative Don Hineman
July 23, 2009 Volume 1, Number 10
________________________________________
National Health Care Reform?
The number one national topic these days is the debate over health care reform. But it seems to me that even the title of the issue is misleading, because it really isn’t about health care reform; it is about expansion of health insurance to include tens of millions of Americans currently uninsured or underinsured. Obviously having everyone insured would on some level be a good thing, as there are social and moral benefits in having everyone adequately insured. Problem is, the cost of such a program is controversial and hard to nail down. I suspect that all of the current predictions are much too low. As the uninsured are enrolled in the program, demand for health care services will skyrocket. You can’t add tens of millions of newly-insured “consumers” to the system and expect anything else. And yet there is little if any discussion about expanding the supply of health care services and health care providers in response. Incredibly, the supply appears to be shrinking, as the folks in Larned, who are about to lose their hospital, can attest. Those in Congress and the present administration have not yet found a way to repeal the law of supply and demand, so the net impact of adding new consumers and new demand to the system will be increasing costs for services, declining quality of care as the present health care system struggles to keep up with the new demand, and potential delays in access to service.
My wife Betsy underwent treatment last December for a serious medical condition, and she was in the hospital for a total of seventeen days. She is fine now, and we will be forever grateful for the excellent care she received. But we learned firsthand how health care costs are spiraling out of control. And yet before and during Betsy’s hospitalization neither of us asked the hospital administration or any of the specialists who treated her what anything was going to cost. That’s in stark contrast to my farming operation, where I know the cost of fertilizer, herbicide, seed or diesel fuel before I buy. The difference of course is that Betsy and I weren’t personally responsible for her mounting medical bills because we were insured. And because someone else (the insurance company) was picking up the tab, we didn’t do a lot of shopping around for health care providers, asking about costs, or double checking the bills to make sure they were accurate. That’s the way our health care system works these days, and adding tens of millions of new “consumers” to the system will amplify the problem.
As a state legislator I am watching the ongoing debate with great interest, partly because I fear that the astronomical cost of the proposed system could eventually come to be “shared” with the states, in the same manner that Medicaid is now financed. In Kansas, the state’s responsibility for Medicaid costs has risen from 0% of the State General Fund in 1974 to 15% of the State General Fund today. How does a state that is facing a $500 million to $1 billion shortfall next year take on the responsibility for an expanded health insurance system?
It is unfortunate that the current focus isn’t on true health care reform, because the need is acute. The solution to the problem will be multifaceted, but here are a few ideas I believe have merit:
1. Develop a system in which the users of health care services become smarter consumers. This will only happen when the consumer has a personal stake in the costs. I applaud Congress for enacting legislation several years ago authorizing Health Savings Accounts. Unfortunately this good idea is going largely unnoticed and unused. However there are private businesses that have reacted to escalating health insurance plan premiums by going to a much higher deductible plan and putting the money saved into Health Savings Accounts for their employees. The results are very encouraging. As the employees see that they can benefit financially they have begun to adopt healthier lifestyles and ask many more questions about cost when they do need health care.
2. Enact meaningful tort reform and caps on medical malpractice claims. Our health care system currently forces hospitals and doctors to order every test and procedure imaginable, to minimize their risk of being hauled before a review board or being sued. The health care providers can’t be blamed for acting that way; they are merely responding rationally to what they perceive as a substantial risk. But the added cost to the health care system from countless unnecessary tests and procedures has to be huge, and in the end we all pay for it.
3. Examine the process whereby the Federal Drug Administration approves new drugs, with a view toward streamlining and simplifying the process. FDA approval is extremely costly, and is a direct component in the cost of prescription drugs in America today.
4. Advance the concepts of “medical home” and sharing of electronic medical records among health care providers to insure adequate care while avoiding unnecessary duplication and dangerous drug interactions.
These suggestions are just the beginning, and those more involved in the health care field could undoubtedly add many more. The need for true health care reform is undeniable, so how is it that we are currently faced with a “reform” concept that seemingly focuses on the mistaken idea that everything will be OK once we get everyone insured?
________________________________________
Citizen Legislature and Sine Die
On Thursday, June 4 the 2009 session of the Kansas Legislature came to a close. Referred to by the Latin term “Sine Die”, final adjournment means that the legislature is officially adjourned for the rest of the year. Legislators will continue to work on individual initiatives, standing committees, and special interim committees, but no official meeting of the entire legislature is now scheduled until the 2010 session convenes in early January. Each year the Kansas legislature is authorized to meet for ninety days, and the session is broken into two parts: a roughly eighty day session from mid-January until early April and a shorter “veto” or wrap-up session in late April-early May. The ceremonial final adjournment then occurs in late May or early June. The legislature is called a citizen legislature because it only meets for a portion of the year, as opposed to a professional legislature that is in session year-round. Only a few states have professional legislatures. Many would see it as a good thing that Kansas legislators finish their work and go home in the spring, rather than hanging around the state capitol all year. And many of us legislators take solace in the fact that even though we are politicians, at least we aren’t professionals…
________________________________________
Stay Right!
In a move intended to enhance the orderly flow of traffic and reduce incidents of road rage, the legislature has enacted a law restricting the use of the left-most lane on multi-lane highways. The new law, which took effect July 1, restricts drivers on multi-lane highways to use of the left-most lane only when overtaking or passing another vehicle or preparing to make a proper left turn. The provisions do not apply to authorized emergency, law enforcement, or Kansas Turnpike Authority vehicles, or KDOT vehicles used for construction or maintenance work. The law also does not apply to that portion of multi-lane highways or streets within city limits. Law enforcement officials will issue warning citations during the first year the law is in effect, from July 1, 2009 until June 30, 2010. Thereafter, violators will be charged a $60 fine.
________________________________________
Issues of Individual Rights
Governmental oversight and individual liberty were major themes of the 2009 session. There was lively debate on issues such as a statewide smoking ban and mandatory seatbelt laws. In both instances the principles of individual liberty and responsibility were at issue, counterbalanced by well-documented health costs to the state and society. On both subjects no new laws were enacted, but I expect a vigorous challenge on each topic and perhaps a few others next year. The continual struggle between personal rights and government intervention is one of our most basic and fundamental points of contention in government. I believe debate on these topics is healthy, and hope you’ll keep me informed of your perspective so I may accurately represent our district.
________________________________________
Cowboy Logic: "Only a few will learn from other people’s mistakes; most of us have to be the other people.”
________________________________________
Quote of the Week: “Bad habits are formed in good times, and good habits are formed in bad times” –Representative H. David Cotta, Maine
________________________________________
And finally, a thought to ponder: “I used to eat a lot of natural foods until I learned that most people die of natural causes”
FROM THE CAPITOL
News for the 118th District
By Representative Don Hineman
May 4, 2009 Volume 1, Number 9
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House fails to pass Omnibus Budget
On Friday, May 1, the Kansas House of Representatives defeated the proposed Omnibus budget bill by a vote of 53 Yea, 62 Nay, with ten members absent. I was one of those voting no. I have several serious reservations about the content of the budget and the approach used to fill the significant hole in the budget caused by revenue shortfalls. As we look for ways to make the budget balance we must cut expenditures wherever possible, but avoid moves that cripple the ability of state agencies to deliver essential services. We must also look for ways to enhance revenue while causing the least possible burden to the citizens of the state. In addition, it is critical that we not take steps that would hinder the ability of commerce and industry, the economic engine of the state, to grow, expand, and pull all of us out of this economic crisis. I addressed the members of the House Friday afternoon to express my dislike of the budget proposal. The following is a transcript of my remarks.
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Remarks to the Kansas House of Representatives, May 1, 2009
Remarks to the Kansas House of Representatives, May 1, 2009
First off, I want to thank the members of the Appropriations committee for their long hours and hard work in putting this budget together. You were charged with crafting a balanced budget by concentrating on expenditure cuts to achieve that objective. You tried, and made cuts where possible. But when you learned what an additional 5% cut would mean to the public safety and corrections portion of the budget you restored most of that funding because you understood that a 5% cut would have serious consequences and would cripple the ability of those departments to deliver essential governmental services. Cuts in other areas of the budget will have similar consequences. Did you notice all of the people in the statehouse Thursday who were wearing blue T-shirts, or have they really become invisible? (These were folks representing Kansans with developmental disabilities, who have been conducting lobbying efforts focusing on the notion that they have become “Invisible Kansans”) This document says they are. How can we feel good about that? Talk to folks from the mental health community, and comprehend how the cuts we would impose will prevent them from carrying out their responsibilities and produce greater cost to the state and society in future years. How is that responsible government?
I want to talk about K-12 education for a moment, but let’s not focus on urban schools, because they are not the norm in Kansas public education, they are the exception. The schools out in District 118 will never hassle about the contract for laying turf on the football field because they don’t lay turf on the football field. Instead they throw out some grass seed and unroll the sprinkler hose. Some folks say the schools can get along just fine with larger cuts; they just need to cut out the fat. But when the Information technology person is let go and the custodian takes over IT duties, you’ve moved well beyond cutting out the fat. When the school board adds 25 minutes to every school day starting in February and dismisses school for the summer on May 1, you’ve moved well beyond cutting out the fat. In fact, you’re in survival mode. Those are just two examples of how the fourteen school districts in District 118 are trying to cope with the cuts we are imposing. These small rural school districts have long ago cut out the fat and are looking for ways to hang on.
How did we get in this fix? How did the hole in the budget get so large? Obviously it’s the economy. State revenues are down. Right? We all know that’s only part of the answer. We all know that in recent years the state has been spending more than it has been taking in. We’ve been living beyond our means and have been unwilling or unable to correct that systemic problem. So once again the “revenue enhancements” in this budget are all one-time money. It amounts to financing state government by turning our pockets inside out and checking under the cushions of the couch for loose change. And each time we scrounge around for sources of one-time money so we can kick the can a little farther down the road, the use of that one-time money becomes harder and harder to justify ethically or from a governmental policy standpoint.
When we break our promises to local government and retain funds that were meant for them we force them to raise property taxes. The same thing happens when we must expand school districts’ local option budget authority because we cut the state funding. In both instances the net result is a shift in governmental funding in Kansas from sales and income tax to property tax. Problem is, the three-legged stool of funding Kansas government with sales, income, and property tax is already seriously unbalanced. In FY 2008 total property tax receipts in Kansas were 20% greater than total income tax receipts and 31% more than total sales tax receipts. That is a significant burden for many Kansans, and is a powerful disincentive to economic growth. It is simply not good tax policy to continue to shift tax burden from other sources onto the backs of property owners.
When we try to finance state government by gathering up loose change in agency accounts we are training those agencies to never carry an ending balance in their funds because we will come along and take it from them. We are training them to spend every dollar they take in. Is that responsible government?
When we tell school districts they can survive if they will just use up their reserve funds we are telling them it is OK to operate without a rainy day fund, at the same time that we have constructed our own rainy day fund that is years away from ever getting funded. Is that responsible government?
I like to construct my own budget profiles and run “what if” scenarios to gain an understanding of the budget. I’ve done that with the current proposal we have before us. I have extrapolated it out to 2011 and 2012, retaining all the budget cuts made in the current proposal. The one-time money sources are all used up as we enter 2011, so I look at what level of revenue growth would be necessary to leave us with minimal positive ending balances in those years. It would take revenue growth rates of 8% in 2011 and 7% in 2012 to keep us in the black. This means an expanding economy is not going to bail us out, because no one expects the economy to recover that quickly and that strongly.
It’s time to quit kidding ourselves and address the systemic problem of spending more than we take in. It’s time to have a serious discussion with all of Kansas about how much state government we collectively believe is appropriate, and then set about financing that government adequately and appropriately with well thought out tax policy instead of gimmickry.
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Interesting Websites
Kansas Unclaimed Property Website for unclaimed property in Kansas. I have been notifying some residents of the 118th District of unclaimed funds that are held in their name. However the total list of claims from the 118th is over 3400, and most of the addresses are no longer valid. I would encourage each of you to check this site, not only for your own name, but for the names of family members who may have moved or passed on. In some instances there is really significant money waiting to be claimed.
Kansas Works This website exists to serve as the best source for posting and finding jobs in Kansas. As more folks are laid off I expect traffic to this site should pick up. Check it out.
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You May be a Western Kansas Farmer if:
You sometimes rinse off in the backyard with a garden hose before your wife lets you in the house.
You remember the fertilizer rate, seed population, and yields for 10 years back, but not your kid's birthdays.
You have used a tractor front-end loader as scaffolding for roof repairs.
You May be a Western Kansas Farmer if:
You sometimes rinse off in the backyard with a garden hose before your wife lets you in the house.
You remember the fertilizer rate, seed population, and yields for 10 years back, but not your kid's birthdays.
You have used a tractor front-end loader as scaffolding for roof repairs.
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Quote of the Week: A wise man does not need advice and a fool won't take it.
Representative Don Hineman's Newsletter
March 30, 2009 Volume 1, Number 8
2010 Budget Bill Passes House and Senate
This past week both the House and the Senate passed a budget bill for FY 2010, and the conference committee has merged those two into a compromise budget that will be voted on by both houses this week. From the first day I arrived in Topeka back in early January it has been evident that the passage of a workable budget would be the most time consuming and difficult issue of this legislative session. Indeed, as the economy continues to slip, state revenues decline with each succeeding monthly report. When will we hit bottom? No one knows. In spite of that fact we must adopt a balanced budget. With declining revenues it was necessary to make very painful cuts to every area of state government. Here are some of the cuts imposed by HB 2373:
· General Government funding reduced by 9.9%
· Funding for Disabled reduced by 4.2%
· Public Safety funding reduced by 9.4%
· Agriculture and Natural Resources funding reduced by 22.7%
· K-12 Education funding reduced by 0.7%
I am a strong proponent of public education in Kansas, and I realize the cuts to education will present serious challenges to the school districts of Northwest Kansas. But these are extraordinary times, and extraordinary steps must be taken. I not only represent the education community and the students of District 118. I also represent those served by Community Mental Health Associations, individuals who are presently frozen out of physically disabled or developmentally disabled waivers, and citizens who would be gravely concerned if prisoners were released from prison prematurely without probation. These are hard choices, and like many other members of the House, I concluded that a reduction in appropriation to K-12 Education was necessary as part of the balancing act. I am pleased that we succeeded in limiting the cut to only 0.7%.
The idea is floating around that by imposing a cut on K-12 Education, Kansas would become ineligible for federal stimulus funds for education. The most current information and interpretation of ARRA indicates that is not so. But one undeniable fact needs to be stated: there is zero interest on the part of the members of the House for leaving stimulus money on the table The amount of money involved is simply too large and the hole in the state budget demands that we put it to use. If we learn between now and the veto session in early May that we must indeed leave education funding at the 2009 level, then we will do so. Please understand, however, that doing so would mean even more severe cuts to other functions of government. I don’t believe any of us can be happy about that. And as I mentioned, the budget we just adopted already shows a deficit, and it is very likely that by the time we return in early May we will be looking at even lower revenue receipts and searching for more places to cut.
The state of Kansas has come to be in this predicament for two reasons. The first, obviously, is the sick economy, which is leading to shrinking tax receipts for the state. But another part of the equation is that for the past few years the state general fund budget has been out of balance. Those of you who have received earlier newsletters may remember my pointing this out a few weeks back. You know how it works with your personal budget; for a short while you can live beyond your means, but eventually it catches up with you. That’s the fix the state is in. Even with the federal stimulus money added in, budget projections looking forward into 2011 and 2012 show an even greater deficit looming ahead. What many of us consider the most likely future scenario shows a deficit of $527 million in 2011 and $1.23 billion in 2012. And yet, as we debated the budget bill last week we saw amendment after amendment offered to increase funding for various functions of government. Each addressed a legitimate and pressing need, and yet each amendment was proposed without providing for a source of funding. That is not responsible government, and it cannot continue indefinitely. I have constructed my own state budget profiles, and even when I plug in very optimistic estimates for future revenue growth the deficit does not go away. The simple fact that few want to accept at this point is that if we collectively want state government that functions at something approximating the current level, then some form of “revenue enhancement” will be necessary very soon. There is absolutely no talk about that subject in the capitol this year, and very few believe a tax increase would be a good idea during the depths of a recession. But the time is coming when some really hard choices must be made. We should not let that moment sneak up on us, and we should engage in meaningful dialogue about those hard choices now.
I recognize that what the Kansas legislature has done this week will mean real hardship for many school districts, cities, counties, community mental health associations, community developmental disabilities organizations, institutions of higher education, and every citizen of the State of Kansas. I regret that, and I wish it could be different. It simply cannot be. I only hope the situation is not bleaker when we come back for the veto session in May.
_________________________________________________________
Community Carnival Bill Advances
The Kansas House of Representatives has now passed out a bill that that would simplify regulations regarding community owned and operated carnivals. The 2008 Kansas Legislature had passed a law requiring stricter training and inspection protocols for all carnivals. It was later learned that these regulations would be completely unworkable for community owned carnivals, and would effectively shut them down. This is a very important issue in the 118th District. Over time it has become increasingly difficult for local communities to hire a commercial carnival to come to their county fairs. The local solution has been to develop their own carnivals by buying or building rides and attractions over time. The rides are typically operated by local volunteers… the parents, grandparents, and neighbors of the children riding the rides. During last summer’s campaign season I discovered how important they are in the 118th District. Of the eight county fairs I attended, six of them have a community carnival in operation. It is very impressive what these communities have done, and it is a source of great local pride. The bill passed by this year’s legislature would reverse the crippling effects of the 2008 bill and allow community carnivals to continue to operate. The measure has passed both houses and now awaits the governor’s signature.
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Interesting Websites
The Future An interesting look at the progression of technology, put together by Karl Fisch, a teacher at Arapahoe High School in Littleton, Colorado. The times they are a’changin…
Kansas Geology A site with maps of the geology of most counties in Kansas. This is one section of the website of the Kansas Geological Survey. By exploring the site you will also uncover a wealth of information about the water, energy, and geophysics of Kansas.
Kansas Wildscape Website of a private, nonprofit organization dedicated to conserving and perpetuating the land, the wild species, and the rich beauty of Kansas for the use and enjoyment of all. Take special note of their Cabins Project, a very successful private/public collaborative effort to construct public cabins at Kansas State Parks and public lands.
_________________________________________
You May be a Western Kansas Farmer if:
An overnight, out-of-state trip for equipment parts is a vacation.
You wear specific hats to farm sales, livestock auctions, customer appreciation suppers, and vacations.
You drive off the road while examining your neighbor's crops.
You have buried a dog and cried like a baby.
________________________________________
Quote of the Week: “Income tax returns are the most imaginative fiction being written today.” --Herman Wouk
March 30, 2009 Volume 1, Number 8
2010 Budget Bill Passes House and Senate
This past week both the House and the Senate passed a budget bill for FY 2010, and the conference committee has merged those two into a compromise budget that will be voted on by both houses this week. From the first day I arrived in Topeka back in early January it has been evident that the passage of a workable budget would be the most time consuming and difficult issue of this legislative session. Indeed, as the economy continues to slip, state revenues decline with each succeeding monthly report. When will we hit bottom? No one knows. In spite of that fact we must adopt a balanced budget. With declining revenues it was necessary to make very painful cuts to every area of state government. Here are some of the cuts imposed by HB 2373:
· General Government funding reduced by 9.9%
· Funding for Disabled reduced by 4.2%
· Public Safety funding reduced by 9.4%
· Agriculture and Natural Resources funding reduced by 22.7%
· K-12 Education funding reduced by 0.7%
I am a strong proponent of public education in Kansas, and I realize the cuts to education will present serious challenges to the school districts of Northwest Kansas. But these are extraordinary times, and extraordinary steps must be taken. I not only represent the education community and the students of District 118. I also represent those served by Community Mental Health Associations, individuals who are presently frozen out of physically disabled or developmentally disabled waivers, and citizens who would be gravely concerned if prisoners were released from prison prematurely without probation. These are hard choices, and like many other members of the House, I concluded that a reduction in appropriation to K-12 Education was necessary as part of the balancing act. I am pleased that we succeeded in limiting the cut to only 0.7%.
The idea is floating around that by imposing a cut on K-12 Education, Kansas would become ineligible for federal stimulus funds for education. The most current information and interpretation of ARRA indicates that is not so. But one undeniable fact needs to be stated: there is zero interest on the part of the members of the House for leaving stimulus money on the table The amount of money involved is simply too large and the hole in the state budget demands that we put it to use. If we learn between now and the veto session in early May that we must indeed leave education funding at the 2009 level, then we will do so. Please understand, however, that doing so would mean even more severe cuts to other functions of government. I don’t believe any of us can be happy about that. And as I mentioned, the budget we just adopted already shows a deficit, and it is very likely that by the time we return in early May we will be looking at even lower revenue receipts and searching for more places to cut.
The state of Kansas has come to be in this predicament for two reasons. The first, obviously, is the sick economy, which is leading to shrinking tax receipts for the state. But another part of the equation is that for the past few years the state general fund budget has been out of balance. Those of you who have received earlier newsletters may remember my pointing this out a few weeks back. You know how it works with your personal budget; for a short while you can live beyond your means, but eventually it catches up with you. That’s the fix the state is in. Even with the federal stimulus money added in, budget projections looking forward into 2011 and 2012 show an even greater deficit looming ahead. What many of us consider the most likely future scenario shows a deficit of $527 million in 2011 and $1.23 billion in 2012. And yet, as we debated the budget bill last week we saw amendment after amendment offered to increase funding for various functions of government. Each addressed a legitimate and pressing need, and yet each amendment was proposed without providing for a source of funding. That is not responsible government, and it cannot continue indefinitely. I have constructed my own state budget profiles, and even when I plug in very optimistic estimates for future revenue growth the deficit does not go away. The simple fact that few want to accept at this point is that if we collectively want state government that functions at something approximating the current level, then some form of “revenue enhancement” will be necessary very soon. There is absolutely no talk about that subject in the capitol this year, and very few believe a tax increase would be a good idea during the depths of a recession. But the time is coming when some really hard choices must be made. We should not let that moment sneak up on us, and we should engage in meaningful dialogue about those hard choices now.
I recognize that what the Kansas legislature has done this week will mean real hardship for many school districts, cities, counties, community mental health associations, community developmental disabilities organizations, institutions of higher education, and every citizen of the State of Kansas. I regret that, and I wish it could be different. It simply cannot be. I only hope the situation is not bleaker when we come back for the veto session in May.
_________________________________________________________
Community Carnival Bill Advances
The Kansas House of Representatives has now passed out a bill that that would simplify regulations regarding community owned and operated carnivals. The 2008 Kansas Legislature had passed a law requiring stricter training and inspection protocols for all carnivals. It was later learned that these regulations would be completely unworkable for community owned carnivals, and would effectively shut them down. This is a very important issue in the 118th District. Over time it has become increasingly difficult for local communities to hire a commercial carnival to come to their county fairs. The local solution has been to develop their own carnivals by buying or building rides and attractions over time. The rides are typically operated by local volunteers… the parents, grandparents, and neighbors of the children riding the rides. During last summer’s campaign season I discovered how important they are in the 118th District. Of the eight county fairs I attended, six of them have a community carnival in operation. It is very impressive what these communities have done, and it is a source of great local pride. The bill passed by this year’s legislature would reverse the crippling effects of the 2008 bill and allow community carnivals to continue to operate. The measure has passed both houses and now awaits the governor’s signature.
________________________________________
Interesting Websites
The Future An interesting look at the progression of technology, put together by Karl Fisch, a teacher at Arapahoe High School in Littleton, Colorado. The times they are a’changin…
Kansas Geology A site with maps of the geology of most counties in Kansas. This is one section of the website of the Kansas Geological Survey. By exploring the site you will also uncover a wealth of information about the water, energy, and geophysics of Kansas.
Kansas Wildscape Website of a private, nonprofit organization dedicated to conserving and perpetuating the land, the wild species, and the rich beauty of Kansas for the use and enjoyment of all. Take special note of their Cabins Project, a very successful private/public collaborative effort to construct public cabins at Kansas State Parks and public lands.
_________________________________________
You May be a Western Kansas Farmer if:
An overnight, out-of-state trip for equipment parts is a vacation.
You wear specific hats to farm sales, livestock auctions, customer appreciation suppers, and vacations.
You drive off the road while examining your neighbor's crops.
You have buried a dog and cried like a baby.
________________________________________
Quote of the Week: “Income tax returns are the most imaginative fiction being written today.” --Herman Wouk
FROM THE CAPITOL
News for the 118th District
By Representative Don Hineman
March 13, 2009 Volume 1, Number 7
News for the 118th District
By Representative Don Hineman
March 13, 2009 Volume 1, Number 7
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Proposition K
One of the hot topics in Topeka these days is Proposition K. It is contained in HB 2150, which is now under consideration by the House Tax Committee. It would change how homes are valued in Kansas. Instead of using our current fair market valuation method, the state would set January 1, 2010 property values as the baseline value and then increase all property values 2% each year from then on. Proponents claim that dramatically increasing property values currently allow local elected officials to expand budgets without having to raise the mill levy. They promote Proposition K as a way to achieve predictability in tax bills and gain transparency in local government budgets.
One of the hot topics in Topeka these days is Proposition K. It is contained in HB 2150, which is now under consideration by the House Tax Committee. It would change how homes are valued in Kansas. Instead of using our current fair market valuation method, the state would set January 1, 2010 property values as the baseline value and then increase all property values 2% each year from then on. Proponents claim that dramatically increasing property values currently allow local elected officials to expand budgets without having to raise the mill levy. They promote Proposition K as a way to achieve predictability in tax bills and gain transparency in local government budgets.
The problem is that properties do not all change value at the same rate. Properties in upscale, rapidly growing neighborhoods typically gain value at a faster rate than properties in depressed inner-city areas or rural communities. That is why the present system of periodically reappraising property is in place…to insure fairness in property taxation. To institute an artificial rate of increase, as Proposition K would do, leads to a subtle shift in tax burden from upscale properties to depressed neighborhoods and the surrounding countryside. Not only is there a serious constitutional question, but the idea is simply wrong. The artificial factor of a 2% increase for everyone changes the notion of "fair".
There would be a similar effect in regard to school finance. Because a substantial portion of K-12 education in Kansas is financed by a statewide mill levy, an artificial 2% growth rate would shift tax burden over time from fast growing school districts to districts with stable or declining valuations. Additionally, the high growth districts would appear artificially less wealthy over time, and thereby receive a larger share of state aid for schools. This would have major negative effects for Northwest Kansas and the 118th District.
Prop K proponents are spending a great deal of money on advertising to push their agenda. One has to wonder why, and who is financing the campaign. The problem is the valuation method won't change the taxes raised, it only affects who pays the taxes and in what proportion. Governmental units set the amount of taxes raised, and that should be the focus for lower taxes, not the way we value property.
I understand our present system is not perfect; that is why our appraisers constantly aim to maintain fairness of property valuation, and their performance is monitored by the Property Valuation Division of the Kansas Department of Revenue. The 2% artificial method may make determining home "values" easy, but over time it will create vast disparity in who pays the tax. The little guy will lose; the areas of Kansas that are not prosperous will lose. It appears the proponents of Proposition K are buying in to the old adage about taxes: “the fairest tax is the one the other guy pays.” I believe Proposition K is a bad idea, dangerous for Kansans, and unfair. If the measure reaches the floor of the house I will be voting no.
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Annexation Bill Advances
The Kansas House of Representatives has now passed out a bill, HB 2029, which would place more restrictions on cities wishing to annex surrounding rural property. The need for the bill was triggered by a recent move by Overland Park to annex fifteen square miles of property in southern Johnson County. Many representatives of Johnson County, Topeka, and Wichita joined with rural legislators to pass the bill and rein in the expansionist “manifest destiny” ambitions of a few municipalities. I was happy to vote yes.
The Kansas House of Representatives has now passed out a bill, HB 2029, which would place more restrictions on cities wishing to annex surrounding rural property. The need for the bill was triggered by a recent move by Overland Park to annex fifteen square miles of property in southern Johnson County. Many representatives of Johnson County, Topeka, and Wichita joined with rural legislators to pass the bill and rein in the expansionist “manifest destiny” ambitions of a few municipalities. I was happy to vote yes.
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Progress is Slow
Seasoned legislators are telling us freshmen that this year’s session is the slowest paced they can ever recall. Very little legislation has moved through either house, and only one bill, the FY 2009 budget recission bill, has cleared both houses and been presented to the governor for signature. Many folks would view this as a good thing… less action by government means less imposition in our personal lives. But of course there is much activity at the committee level, and this year much of that activity is related to constructing a budget for fiscal year 2010. The economic crisis makes that very difficult, and the slow pace of activity this year is directly related to the fact that any proposed legislation that would increase governmental expenditure is greeted with a great deal of resistance.
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Seasoned legislators are telling us freshmen that this year’s session is the slowest paced they can ever recall. Very little legislation has moved through either house, and only one bill, the FY 2009 budget recission bill, has cleared both houses and been presented to the governor for signature. Many folks would view this as a good thing… less action by government means less imposition in our personal lives. But of course there is much activity at the committee level, and this year much of that activity is related to constructing a budget for fiscal year 2010. The economic crisis makes that very difficult, and the slow pace of activity this year is directly related to the fact that any proposed legislation that would increase governmental expenditure is greeted with a great deal of resistance.
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Websites of Interest
Kansas Legislature Official website of the Kansas Legislature
Geography of a Recession A map of the counties in the U.S. showing unemployment rates. A rate of 4% is typically considered to be full employment. This map is a graphic illustration of how the economic crisis has hit the coasts harder than the heartland.
1100 Torches A call to community action in memory of a young Hays native who lost her life much too soon.
Kansas Legislature Official website of the Kansas Legislature
Geography of a Recession A map of the counties in the U.S. showing unemployment rates. A rate of 4% is typically considered to be full employment. This map is a graphic illustration of how the economic crisis has hit the coasts harder than the heartland.
1100 Torches A call to community action in memory of a young Hays native who lost her life much too soon.
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Cowboy Logic: "A wise man does not test the depth of a river with both feet.”
Quote of the Week: “Happiness is in the heart, not in the circumstances” --Unknown
Quote of the Week: “Happiness is in the heart, not in the circumstances” --Unknown
FROM THE CAPITOL
News for the 118th District
By Representative Don Hineman
News for the 118th District
By Representative Don Hineman
February 27, 2009 Volume 1, Number 6
Energy Bill passes the House
This week the Kansas House of Representatives passed HB 2014, our comprehensive energy bill. It represents months of work by our energy and utilities committee and is one of the more advanced policies in the nation. The bill encourages renewable energy technology, includes true “net metering”, and most importantly establishes reasonable permitting guidelines which will encourage economic development throughout the state. It insures that Kansas will have a dependable source of energy in the years ahead, and will keep energy rates reasonable for all Kansans.
The bill would remove the bureaucratic roadblock that has stymied the proposed expansion of the coal-fired power plant owned and operated by Sunflower Electric in Holcomb. This is critical to the future of Western Kansas. I have provided more detail in the email I sent a few days ago, and that information is also on my blog. The actual bill can be viewed here. The Senate will now consider the bill and the next steps would be conference committee, final consideration by both houses, then presentation to the governor for signature.
Other Interesting Websites
The main website for the Kansas legislature is http://www.kslegislature.org/ From there you can access any number of items, including the text of bills, House and Senate calendars, legislator contact information, and much more.
During committee hearings we hear presentations from many different groups, and occasionally they present information that is available via the internet. Here are a few that caught my attention:
Applied Science and Technology for Reservoir Assessment. Click on the data link or pin for information on Cedar Bluff reservoir.
Kansas Graphic Information Systems for a wealth of map-based information about the state and its resources.
Ventria about a company that is growing genetically modified rice in Junction City, Kansas and using the product to produce human pharmaceuticals.
Kansas DOT - American Recovery and Investment Act, information about the Kansas road projects to be built this year with stimulus money. See page seven for information on the upgrade of Highway K23 in Gove County.
Kansas Bioscience Authority, home page of the authority, which grew out of the visionary Kansas Economic Growth Act of 2004. One of its many success stories has been acting as lead agency and catalyst for attracting the National Bio and Agro-Defense Facility (NBAF) to Manhattan, Kansas.
NBAF, information (obviously) about this $650 million project.
Smoking Ban Advances
The Kansas Senate has passed SB 25, which would institute a statewide ban on smoking in public places. Though there are certain exceptions, this is a very aggressive bill. There can be no doubt that smoking is a detriment to public health, and second-hand smoke appears to negatively impact people who are not smokers themselves. However passage of SB 25 would represent a loss of local control, and there is widespread concern with the broad reach of this bill. The fact is that communities all across Kansas are proceeding to craft public smoking bans that truly fit circumstances in their local communities. I favor that approach, and I am skeptical that SB 25 is the best solution to this problem.
Cowboy Logic: When you drive through a gate, if you have plenty of time you can leave it down. If you’re in a hurry, take the time to shut it.
.
Quote of the Week: “If past history was all there was to the game, the richest people would be librarians" - Warren Buffett
The Energy Bill
The Kansas House of Representatives will take up debate this week on HB 2014, commonly referred to as the Energy Bill. The bill is a far-reaching initiative, and represents many hours of testimony, debate, and compromise in the House Energy Committee. The bill addresses issues surrounding development of renewable energy sources and expansion of energy conservation efforts. It also addresses the recurring issue of whether the Sunflower Holcomb power plant should be allowed to expand. I have some thoughts that I would like to share regarding the proposed Sunflower Holcomb expansion:
The coal vs. renewables debate. Although we all recognize the value in moving toward greater use of renewable energy sources, for the foreseeable future the only reliable and cost effective alternative for baseload (24/7) generation is coal. It has been estimated that a million wind generators would address only 1/7 of our nation's future energy needs, and would require completely covering an area larger than all of West Virginia, Pennsylvania and Ohio with wind generators. Wind is available less than 40% of the time, and is usually absent when it is really needed on hot summer days. No reliable methods of storing wind energy for later use have yet been commercialized. The feasibility of future development of wind energy in Kansas will depend on an expanded transmission network to move this energy output to the end user. Development of that network is dependent on the construction of the Holcomb expansion.
It would be incorrect to infer that Sunflower Electric Coop is not dedicated to the development of renewable energy. Sunflower receives a greater percentage of its total generation capacity from renewable sources than any other power company in Kansas. In addition, the bioenergy center which is proposed as a component of the Holcomb project would represent a far-reaching and innovative advance in bioenergy production. Please note that contrary to recent rumors, the bioenergy center is still planned as an integral part of the expansion, as confirmed to me today by a high ranking official at Sunflower.
Wouldn't allowing the Holcomb expansion set Kansas apart as unwilling to address the problem of global warming? China is building 71 power plants per year the size of the proposed Sunflower plants. Closer to home, our neighbors are proceeding with constructing the following coal-fired electric generating plants:
Texas, seven plants, 4165 MW total capacity
Missouri, two plants, 1150 MW total capacity
Nebraska, two plants, 883 MW total capacity
Colorado, one plant, 750 MW total capacity
Arkansas, one plant, 665 MW total capacity
Wyoming, two plants, 522 MW total capacity
Iowa, two plants, 167 MW total capacity, and finally
Illinois, home of President Barack Obama, one plant, 250 MW total capacity.
It is apparent that denying construction of the Holcomb expansion would set Kansas apart on a fool's errand of trying to solve the problem of global warming all by itself, to the detriment of Kansas residents and energy consumers.
Why not size the Holcomb expansion to only meet the needs of Kansas consumers? There are economies of scale, and in the construction of coal fired plants it is important to size the plant for optimum construction and operational efficiency. The immediate needs of Holcomb customers can be met with a 200 MW expansion, but that size plant could not be constructed as cost-effectively nor operated as efficiently as a 750 MW plant. In addition, the construction of additional transmission lines to access both the Eastern and Western grids would not be as feasible with smaller plants. The construction of two 750 MW plants meets the needs of all three partners in the construction, and the development fees paid by Golden Spread and Tri-State to Sunflower provides Sunflower the capital needed to finance its portion of the project.
In other industries the production of product for export is viewed as a good thing. Kansas regularly exports a substantial portion of many of the products it produces, including Garmin GPS, airplanes, beef, wheat, and milk. Why should export of energy be viewed any different?
Isn't the economic benefit only the short-term effect of the construction? The benefit of the power plant construction will indeed be substantial, representing more than 2400 jobs created, annual payroll of more than $78 million, and increased tax collections of more than $9.3 million. Certainly this should be important at a time when new construction housing permits in Overland Park have dropped from 120 in January 2008 to one in January 2009. But the real economic benefit from the expansion will be the long-term presence of the expanded plant, bringing with it more than 300 full-time jobs, an annual payroll of more than $16 million, and most importantly, assured competitive energy costs for Sunflower consumers for the foreseeable future. The economy of rural Kansas continues to struggle, and I ask you to reflect on the effect that dramatically higher energy costs would have on a region that presently struggles with property tax mill levies that are unheard of in Kansas' urban centers. Here are some examples: Leoti, 215.0 mills; LaCrosse, 202.1 mills; Dighton, 188.7 mills. Far too often, discussions about economic development for rural Kansas produce little more than rhetoric. The vote on HB 2014 represents an opportunity to get serious about addressing a portion of the problem. The Holcomb expansion is as important to the economy of Western Kansas as the National Bio Agro Defense Facility, Ft. Riley expansion, or Kansas Speedway/Legends are to Eastern Kansas. Western Kansas must not be denied its chance to prosper.
Economic benefit to Kansas will also be enhanced by addressing the problem of regulatory uncertainty created by Secretary Bremby's denial of Sunflower's permit. Kansas has already lost out on billions in new development over and above the Sunflower expansion as a result of his denial, and Bremby's recent pronouncement that his denial is only targeted at new energy plant construction only illustrates the arbitrary nature of his original decision. This makes the task of attracting new business to Kansas exceeding difficult and will only be resolved by enacting HB 2014.
We are embarking on a new path to meet Kansas' future energy needs, and HB 2014 represents a balanced, responsible approach to meet that need. HB 2014 recognizes that the solution cannot be one-dimensional, and that a headlong push to renewables too rapidly would be counter-productive by raising rates too high too fast, thereby disadvantaging Kansas electric consumers. I will be voting Yes on HB 2014, and encouraging my colleagues in the House to join me in that vote.
FROM THE CAPITOL
News for the 118th District
By Representative Don Hineman
News for the 118th District
By Representative Don Hineman
February 20, 2009 Volume 1, Number 5
Political Standoff
The state of Kansas made national news recently when an impasse developed between our Democrat governor and the Republican leadership of the House and Senate regarding the legality of issuing additional certificates of indebtedness without a balanced FY 2009 budget in place. Issuance was needed to allow the state to pay its bills during a temporary cash flow shortage. This was an unfortunate incident, and it created a great deal of anxiety among state employees who feared they might not get their paycheck as scheduled on Friday, February 20. The national news had a field day with the situation for a while. The truth is January and February are traditionally short months for the state from a cash-flow standpoint. It is common for the state to issue certificates of indebtedness during these months prior to the large tax-receipt months of March and April. However the number and amount of certificates issued this year is unprecedented, and the total now stands at $775 million. These are internal obligations between state agencies, but they are indicative of a larger problem. For the last few years expenditures from the State General Fund have been larger than receipts into the fund. The just-completed FY 2009 budget, although technically balanced, shows State General Fund expenditures exceeding receipts by $438.6 million. “Balance” has been achieved by depleting fund balances, juggling funds and delaying debt obligations. Clearly the state of Kansas is living beyond its means, as are some Kansas families. This cannot continue indefinitely, and the day of reckoning approaches. Constructing a structurally balanced budget for FY 2010 will be extremely difficult and will force all of us in the legislature to take an honest look at how we are financing state government. Can we do it all with cuts in expenditures? That will certainly be the first approach. Can we or the citizens of the state live with the final result? That remains to be seen.
Energy Bill
A “mega” energy bill is currently being crafted in the House Energy and Utilities Committee. Although many regard renewable energy sources such as wind and solar as contributors to our future energy needs, the fact is the immediate energy needs of the entire state must be met with affordable and reliable options . Wind and solar are simply not positioned to fill the void. For the foreseeable future there will be a need for dependable baseload generation capacity from sources that are available 24/7. The most affordable of those options is coal, and the plant proposed to be built in Holcomb would be the cleanest, most technologically advanced coal plant in the state. Rod Bremby, Secretary of Kansas Department of Health and Environment originally denied the permit to the Holcomb expansion in October 2007, citing concerns over greenhouse gas emissions even though Kansas statute does not give him authority to regulate them. Recently he issued a “clarification” stating that his denial of permits based on greenhouse gas emissions would extend only to new electric power plants and would not apply to re-permitting of existing plants or to other industries that emit greenhouse gases. To many of us, this clarification merely points out the arbitrary nature of his action. The issue will be addressed this year by the legislature, and it is the hope and intent of many that we pass a veto-proof bill that limits the powers of the secretary and provides regulatory certainty for all Kansans.
Federal Stimulus?
The federal stimulus bill has now been signed, and folks are scrambling to decipher what that $787 billion means for different sectors of the economy and society. It is reported that the amount of stimulus funds to come to Kansas state government will be $1.7 billion. Obviously that amount would be quite helpful in addressing the expected $1 billion shortfall in the FY 2010 budget. However it isn’t quite that simple. State Treasurer McKinney will not find a check for $1.7 billion in the mailbox next week with a note that reads “Spend it as you wish”. The funds will be earmarked for different purposes and will come with strings attached. It appears that about $400 million of the stimulus package will be available to help meet the state’s Medicaid obligations. There may be another $100 million going to public education. We must first learn the details, but $500 million of short-term budgetary help would be a tremendous boost to the state. Other funds will be earmarked for infrastructure projects, and the state may receive assistance for transportation projects and deferred maintenance projects on colleges and universities. Emphasis is being placed on “shovel-ready” projects with an objective of immediate stimulus to the economy. Several points need to be made with regard to the stimulus package:
1. The incredible amount of money the federal government is pumping into the economy represents a large increase in federal debt that must eventually be paid.
2. Though it is hard to believe right now, there are many who expect that the infusion of so many dollars into the economy will eventually lead to tremendous inflationary pressure.
3. Whatever stimulus money that comes to Kansas represents one-time money. Though it may be helpful in the short run, it does nothing to address the continuing structural imbalance between receipts and expenditures in the State General Fund.
Flash: Stimulus Money for K23 Highway in Gove County
I composed the preceding article on Thursday afternoon, and have just now (Friday morning) received word that Kansas Secretary of Transportation Deb Miller has announced highway projects that will use $206 million of federal stimulus funds and could be under construction as early as June. Her statement included the following:
“$11 million for K-23 in Gove County to enhance safety on 16 miles of a narrow, 50-year-old road that lacks shoulders and has steep side slopes, which creates a hazard for trucks hauling agricultural commodities and implements.”
This is tremendously good news for many residents of District 118, where the unsafe nature of K23 through Gove and Sheridan counties is well known. I testified before a KDOT field hearing in September on this subject and I know that a number of you have voiced your concerns as well. I also followed up with personal communication to KDOT personnel. The feedback we received was the problem was recognized but any possible project was at least several years off. The announcement that a portion of this section of highway is now scheduled for rapid upgrade is very gratifying. It proves that we really can make a difference when we communicate our concerns effectively.
Old Farmer’s Advice: You only live once, but if you work it right, once is enough.
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Quote of the Week: “When we ask for advice, we are usually looking for an accomplice.”
--Marquis de la Grange
February 13, 2009 Volume 1, Number 4
News for the 118th District
By Representative Don Hineman
February 13, 2009 Volume 1, Number 4
By Representative Don Hineman
February 13, 2009 Volume 1, Number 4
Budget Agreement
On Thursday February 12 the House and Senate both passed a revised Fiscal Year 2009 budget. This was a painful and time consuming process, but the plan addresses the projected budgetary shortfall and insures that the state will end the year with a positive ending balance. The bill is a compromise in the truest sense of the word, as no member can be truly happy with every aspect of the accord. A real effort was made to distribute the painful cuts as evenly as possible. As you might expect, the bill contains victories and defeats for District 118. Funding for K-12 education was cut by $66 base state aid per pupil; however this is a less severe cut than the total 4.5% reduction imposed on most other recipients of state general fund monies. I am disappointed that the cities and counties in District 118 will not receive the scheduled payment from the Special City/County Highway fund. And the funds we allocated in the House to remove the Governor’s freeze on developmental disabilities waivers were removed in conference committee. However the bill does include additional funding for physical disabilities waivers and implements a rolling waiting list. And it is encouraging that the Children’s Initiative Fund, which funds early childhood education and intervention programs, was not cut. Ditto for the Local Environmental Protection Program and the Western Kansas Weather Modification program. And local units of government were shielded from even more draconian cuts to their funding that had been proposed in the Governor’s proposal and the original Senate bill. This was a difficult vote for me, but I sided with 69 other members in the House in voting yes. It is said that politics is the art of the possible, and this bill is an example of that. It is hard to vote for something that you know will impose real hardship on school districts, cities, counties, and the physically and developmentally disabled back home. But I believe this bill represents the best we could do, and to do nothing would be irresponsible. It is now up to the Governor to accept or reject the bill. It is my hope that she will sign it so we can quickly turn our attention to the even larger problem of crafting a FY 2010 budget.
Do We Have Too Many Units of Government?
Speaker of the House Mike O’Neal, who grew up in Scott City and now represents Hutchinson, in January pointed out that Kansas has many more units of local government than our neighboring states and he asserted this represents a degree of governmental inefficiency that should be examined closely. More recently Senator Chris Steineger of Kansas City made news when he circulated a map of Kansas with new county boundaries established. Here is a link to his editorial in the Wichita Eagle, http://www.kansas.com/781/v-print/story/688510.html and here is a look at the map: http://www.sunpublications.com/images/stories/Feb11Photos/consolidation.map.jpg His proposal would reduce the number of Kansas counties from 125 to 36. The proposal has generated a lot of talk and no small amount of scoffing and derision. A bill was introduced in the House Education Committee recently that would reduce state funding to school districts that are “small by choice” according to the bill’s author. He defined “small by choice” as those districts with fewer than 200 total enrollment and fewer than 200 square miles in the district. None of the districts in Northwest Kansas would be affected, though several would be perilously close. Odds are that neither Senator Steineger’s proposal nor the education bill will pass this year, but all of this commotion indicates one thing: people are taking a fresh look at how we govern in the state of Kansas and questioning whether there might be a better and more efficient way of delivering governmental services. Very few in Topeka would be in favor of forced consolidation of government, but there are many who would like to “assist” the process of voluntary consolidation or coordination. Out in the country this process is already happening on its own.
Here are a few examples:
1. Greely County and the cities of Tribune and Horace recently consolidated into a Unified Government structure.
2. Lane, Ness, and Rush counties merged their Extension districts several years ago.
3. Utica, Ransom, and Bazine school districts have consolidated into a single district.
4. Lane County and the City of Dighton have operated a joint police and sheriff’s department for years.
These examples indicate that folks in Western Kansas understand that there can be value in combining efforts to better provide services and reduce cost. I encourage this attitude, and I believe state government can put programs in place to assist this process while still leaving the decisions up to the local citizens. I believe there are three pertinent facts:
1. Local citizens know better than Topeka or Washington D.C. how their local government should function and what it should look like.
2. Achieving greater governmental efficiency should be the goal of us all.
3. The current economic crisis is an excellent time for everyone in government to take a fresh look at what we are doing and how we are doing it.
Old Farmer’s Advice: The best sermons are lived, not preached.
Quote of the Week: “Many attempts to communicate are nullified by saying too much”. –Robert Greenleaf
February 2, 2009 Volume 1, Number 3
News for the 118th District
By Representative Don Hineman
February 2, 2009 Volume 1, Number 3
How Does a Spending Cut Become a Tax Increase?
The deepening recession is making it difficult for state government to make ends meet, because sales and income tax receipts continue to decline. As I write this, Governor Sebelius, the Kansas Senate, and the Kansas House Appropriations Committee have all floated proposals to meet the fiscal year 2009 shortfall with a combination of spending cuts and “revenue enhancements”. The objective in all three proposals is to balance the budget without raising taxes. However several of the spending cuts would be direct reductions in scheduled payments to the cities, counties, and school districts of Kansas:
1. Reduce transfers to Special City-County Highway Fund
2. Suspend scheduled resumption of payments to Local Ad Valorum Tax Relief Fund
3. Divert all Liquor Tax receipts to State General Fund, instead of distributing to cities and counties
4. Reduce Base State Aid per Pupil payment to Kansas public school districts
5. Cut state contribution to school district bond and interest and capital improvement funds
6. Reduce or eliminate the business machinery and equipment “slider” payment to cities and counties
7. Cut appropriation to Western Kansas Weather Modification program
The ability of Kansas cities, counties and school districts to absorb these cuts will vary, but the cumulative effect of the state’s proposed actions could lead to tax increases for many, many local units of government. We are looking at a situation where a spending cut at the state level causes an increase in taxes at the local level. If those of us in state government feel we are forced to make such cuts, I would take issue with anyone who claims that we balanced the budget without raising taxes.
These cuts are proposed in reaction to a shortfall in state tax receipts (sales and income tax) and would produce an increase in another form of tax… local property tax. It has been said that governmental functions in the state of Kansas are primarily funded with the “three-legged stool” of sales, income, and property tax. To maintain a favorable business climate and to be fair to all taxpayers it is important that the “stool” remain balanced. Subtle shifts of the type being proposed this year lengthen the property tax “leg” of the stool while shortening the income and sale tax “legs”. In fact a case could be made that increasing reliance on property tax has long been a problem in overall Kansas tax philosophy. The use of property tax as a governmental funding source goes back centuries, to the days when real estate was owned exclusively by a wealthy landed gentry. However the ownership of real property is no longer an accurate measure of wealth or ability to pay. Real estate is typically purchased by taking out a mortgage. The new owner of a home or a quarter of farmland may only have equity equal to 25% or 30% of the value of the property. So a struggling young farmer must pay taxes on both his equity and the liability that goes with it. And then, when he reaches retirement age and sells the land and invests the proceeds in mutual funds, he no longer pays any property tax because intangibles are exempt.
Property tax burdens fall unequally throughout the state, and regions with a higher level of economic activity and/or mineral wealth have much lower mill levies than other areas. In the eight cities of the 118th District that provide the full range of municipal services, the average total mill levy in 2008 was 192.4. In Wichita the total mill levy was 120.2, in Olathe it was 122.4, in Lawrence it was 116.0, and in Overland Park it was 105.2. Clearly, the communities of the 118th District and much of Northwest Kansas are disadvantaged compared to the urban areas of the state, and total mill levies approaching or exceeding 200 mills are a burden on the taxpayer and a powerful disincentive to any kind of economic growth.
I communicated with many of you during last year’s campaign that I would strive to prevent unfunded mandates being placed on local government by the actions of state government. I consider the proposed tax shifts to be another form of unfunded mandate, and I will be diligent in working to reduce or eliminate their impact.
District 118 Factoid: For the fourteen school districts in the 118th District, a one mill property tax increase would raise amounts varying from $7,100 (Weskan) to $41,150 (Dighton). Blue Valley School District would raise $2,400,462 with one mill; Wichita would raise $2,655,142, and Shawnee Mission would raise $3,224,445.
Old Farmer’s Advice: Sometimes silence is the best answer.
Quote of the Week: “If the human mind was simple enough to understand, we’d be too simple to understand it”. –Emerson Pugh
January 26, 2009 Volume 1, Number 2
News for the 118th District
By Representative Don Hineman
January 26, 2009 Volume 1, Number 2
By Representative Don Hineman
January 26, 2009 Volume 1, Number 2
Progress toward a Budget?
The week of January 19-23 was marked by intense meetings by Senate Ways and Means and House Appropriations Committees, as both groups searched for the best way to craft a revised budget for Fiscal Year 2009. These official meetings were only the tip of the iceberg, however, as nearly every conversation in and around the Capitol touched on the budget, whether it was party caucuses, informal conversations among legislators, communications with constituents, or input from stakeholders. Stay tuned…
The week of January 19-23 was marked by intense meetings by Senate Ways and Means and House Appropriations Committees, as both groups searched for the best way to craft a revised budget for Fiscal Year 2009. These official meetings were only the tip of the iceberg, however, as nearly every conversation in and around the Capitol touched on the budget, whether it was party caucuses, informal conversations among legislators, communications with constituents, or input from stakeholders. Stay tuned…
We Get What We Pay For… and Maybe More
Kansas public schools got an infusion of $1.5 billion in additional funding over the past three years, and a report recently released by the Legislative Division of Post Audit reveals that seventy percent of that funding was spent on instruction. “In general”, said Sen. Derek Schmidt, an Independence Republican, “the audit suggests the money is going where it was intended.” An earlier Post Audit report found “a strong association between the amounts districts spend and the outcomes they achieve”. What’s more, Director Alexa Posny, head of the Kansas Department of Education told the House Education Committee that student achievement has risen dramatically in recent years, even though Kansas teacher salaries rank 38th in the U.S.
Building Boom at Fort Riley
As a member of the House Committee on Veterans, Military, and Homeland Security I was recently privileged to take part in a legislator’s tour of Ft. Riley. This historic fort, first established in 1853, has been home to the First Infantry Division, better known as the Big Red One, since 1917. The Big Red One has had a long and distinguished combat history, playing key roles in World War I, World War II, the Vietnam War, Operation Desert Storm, and most recently in Operation Iraqi Freedom. All six of the Big Red One’s brigades, the First, Second, Third, and Fourth Brigade Combat Teams, the 1st Combat Aviation Brigade, and the 1st Sustainment Brigade, have all deployed to Iraq at various times from 2003 until the present. The 3rd Brigade is currently deployed to Afghanistan and the 2nd Brigade is serving in Iraq. At the present time there are 16,000 soldiers assigned to Ft. Riley, and the fort is currently home to approximately 8,000 soldiers and their family members. This number is expected to soon grow to 18,500, and an ambitious building program is underway at the fort to accommodate these personnel. Now under construction or recently completed are a new headquarters facility, a new airfield and support installation, a new $400 million hospital, and over $500 million in new soldier housing. By 2015 the U.S. government will have spent over $3.2 billion on new facilities at the fort. The expansion of activities at the fort has a major impact on the local economy and the economy of the state. In fiscal year 2007 total payroll at the fort was over $1 billion, and total economic impact to the region was $1.433 billion.
What’s Vision 2020?
One of the committees I serve on is titled Vision 2020, and it is a new committee this year. Its purpose is to examine issues that have a longer time horizon than legislative committees typically concern themselves with, and to make recommendations and possibly propose legislation regarding these issues. The issue we have focused on recently is the silting-in of Kansas reservoirs and the problems this causes. Most of the reservoirs in Kansas were constructed in the 1950’s or 1960’s and nearly of all of them were designed for a 100-year life. In other words, since a reservoir is an artificial structure, it was known and expected that these structures would fill with silt over time. We are now approaching the 50-year “half-life” of these reservoirs, and the bad news is that many of the reservoirs, especially those in the eastern half of the state, are silting in at a faster rate than originally calculated. Solutions are difficult and expensive, but the alternative of building new reservoirs is even more prohibitive. Current estimates are that construction of new reservoirs equivalent to our largest state reservoirs today would cost $1.5 billion each.
District 118 Factoid: Our district is the most rural of all 125 house districts in Kansas. It contains 7 ½ counties, 8% of the land area of the state, and is home to fourteen school districts.
Old Farmer’s Advice: Words that soak into your ears are whispered...not yelled.
Quote of the Week: Experience is a hard teacher because she gives the test first, the lesson afterwards. – Vernon Sanders Law
2009 Session Begins
News for the 118th District
By Representative Don Hineman
January 19, 2009 Volume 1, Number 1
Swearing-In, and another Kalo Hineman in the House
Don Hineman was sworn in as a member of the 2009 Kansas House of Representatives on Monday, January 12. Many family members were on hand for the ceremony, including his three-year-old grandson, Kalo Andrew Hineman. The photo shows Don and Kalo walking the halls of the Capitol building, where Don's father and Kalo's namesake, Kalo Albert Hineman, served as a member of the legislature from 1974 to 1981.
It’s all about the budget
When the 2009 Kansas Legislative Session began last Monday it was immediately apparent that the key issue and concern during this session will be the state’s budgetary shortfall and how to address the problem. Current projections are that if no action is taken, the state will have a deficit of $180 million by the end of the current 2009 fiscal year, which ends on June 30. And projections for the 2010 fiscal year are even more grim, indicating the state could be $1 billion in the red by June 30, 2010. In reality this cannot happen, as the state is statutorily prevented from running a deficit. Given the current difficult economic environment, there is little enthusiasm for raising taxes as a way to make up the shortfall. That means it will be up to the legislature and the governor to devise cuts in state spending that keep expenditures in line with expected revenues. To give you an idea of the magnitude of the problem, the projected 2010 deficit of $1 billion represents 15 % of the current state general fund budget.
By Representative Don Hineman
January 19, 2009 Volume 1, Number 1
Swearing-In, and another Kalo Hineman in the HouseDon Hineman was sworn in as a member of the 2009 Kansas House of Representatives on Monday, January 12. Many family members were on hand for the ceremony, including his three-year-old grandson, Kalo Andrew Hineman. The photo shows Don and Kalo walking the halls of the Capitol building, where Don's father and Kalo's namesake, Kalo Albert Hineman, served as a member of the legislature from 1974 to 1981.
It’s all about the budget
When the 2009 Kansas Legislative Session began last Monday it was immediately apparent that the key issue and concern during this session will be the state’s budgetary shortfall and how to address the problem. Current projections are that if no action is taken, the state will have a deficit of $180 million by the end of the current 2009 fiscal year, which ends on June 30. And projections for the 2010 fiscal year are even more grim, indicating the state could be $1 billion in the red by June 30, 2010. In reality this cannot happen, as the state is statutorily prevented from running a deficit. Given the current difficult economic environment, there is little enthusiasm for raising taxes as a way to make up the shortfall. That means it will be up to the legislature and the governor to devise cuts in state spending that keep expenditures in line with expected revenues. To give you an idea of the magnitude of the problem, the projected 2010 deficit of $1 billion represents 15 % of the current state general fund budget.
The Governor’s Proposed Budget
Governor Sebelius proposes making up the shortfall with selective cuts to certain programs while holding others harmless. There are a number of problems with her budget, including:
1. There is a basic inequity in selective cuts that lead to deep cuts in some areas, such as higher education and social services while not asking other governmental sectors to “share the pain”.
2. Her budget denies scheduled fund transfers to local government, which will increase the burden on our city and county budgets and would likely lead to higher property taxes.
3. She proposes sweeping existing excess balances out of special fee funds, leaving those entities with the very real possibility of needing increased fees as a result. This amounts to “breaking everyone’s piggy bank and checking under the cushions of the couch” in an attempt to finance state government. I would hope we could find a more responsible way to do our business.
4. State statutes require a State General Fund ending balance of 7.5 percent. The governor’s budget ignores this requirement and would basically leave the state with an ending balance of less than 0.1% on June 30, 2010.
5. She proposes transferring all expanded gaming revenues to the State General Fund instead of using them for the three areas required by law.
Crisis Equals Opportunity
The process of devising a balanced budget for the state will be a painful one, and I ask for your input, support, and prayers as we look for solutions. The economic downturn will not last forever, and this great state of Kansas can rebound quickly if we craft the budget correctly. It will require compassion for those who must look to the state for assistance, while keeping a keen eye toward not making damaging cuts that would undermine the ability of the Kansas economy to grow again as we come out of the downturn. A time of introspection and self-examination is always good for individuals and businesses, and the current situation will force a closer look at all areas of state government and how we conduct the business of the state. That can be and will be a healthy process in the long run.
Thank You
My wife Betsy’s recent surgery and difficult recovery reminded me of my many blessings, and I want to thank all who supported us during that time. Your calls, cards, support, and prayers meant the world to both of us. Thanks also to those who helped in my campaign last summer and fall, and to all who voted in the elections. I am proud to be your representative, and I want to hear from you with your questions or concerns.
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