FROM THE CAPITOL
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