January 11, 2010
Volume 2, Number 1

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Welcome Back!

This marks the return of my legislative newsletter, after an extended hiatus. Thank you to all who have given me positive feedback and wondered when the next issue would be available. For many more of you, this is the first issue you have received, as I have greatly expanded my email address list in the past few months. I hope you appreciate the newsletter and find it interesting. Email is by far the most effective way to reach my constituents. However I don’t want to be intrusive. If you wish to be removed from the list please let me know.

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Budget to Dominate 2010 Legislative Session

The 2010 Kansas Legislature is set to convene on Monday, January 11, 2010. The dominant theme this year will be the state’s ongoing fiscal crisis and the dilemma of trying to craft a responsible state budget in the face of declining state revenues. The state of Kansas is in the midst of unprecedented times. We are currently in the third year of declining state revenues, and it is expected that revenues will continue to decline for a fourth straight year. That has never happened before! Part of the problem is that governmental revenues typically recover from an economic downturn more slowly than does the general economy. Once incomes start recovering it takes a while before that shows up as increased income tax receipts. And it takes time for attitudes and bank accounts to recover enough that people start spending more and sales tax receipts rebound. Additionally, since 1956, the Kansas economy has exited every recession later than the nation as a whole.

In the past year, the State General Fund Budget has been reduced from $6.16 billion to $5.30 billion… a decrease of 14%. Here are some of the effects:

Education: Base State Aid per Pupil for K-12 education has declined from $4400 to $4012, a cut of 8.8%. Higher education has taken a similar hit.

Public safety: Prisons have been closed, supervision of released prisoners has decreased, and furloughs are likely in the state court system.

Human Services: Waiting lists for services for developmentally and physically disabled will grow, a facility for housing the developmentally disabled may close, and the Medicaid reimbursement rate to providers has been reduced 10%. This is putting a severe financial strain on rural health clinics, hospitals, and long term care facilities, and may lead to a loss of Medicaid providers.

Agriculture and Natural Resources: Department officials report that previous cuts have reduced their operations to the point that any further cuts would jeopardize the continuation of any program that is not statutorily mandated. The Department of Health and Environment will be taking a similar approach to further cuts.

Transportation: Funds have been transferred from Transportation to the State General Fund to backfill part of the hole in the budget. This will mean reduced operations at DOT, and a potential decline in the condition of Kansas roads and bridges as maintenance is reduced.

The one positive in all of this is that the state gains efficiency of operations as agencies and departments respond to smaller appropriations by looking for cost savings and efficiencies in the way they do business. Those savings are real, and should be ongoing even after the recession is only a memory. More savings and efficiencies can and will be uncovered as we move forward.

The numbers change with each new report, but there are substantial holes to fill in both fiscal year 2011 and fiscal year 2012 budgets. How will we go about it? It is becoming more apparent that the process has now moved beyond “cutting out the fat” and that any further cuts will cause real pain for many citizens of the state, and could even jeopardize our ability to recover from the recession when that time comes. The idea of unpaid furloughs for all state workers has resurfaced. Others believe education can take more cuts, though Governor Parkinson has vowed this will not happen. My conversations with the school districts in House District 118 make me suspect that deeper cuts could lead to dramatic and permanent structural change in public education in rural Kansas. Some legislators are tentatively looking at revenue enhancement measures, with the “sin taxes” of tobacco and liquor tax mentioned most often. Others are proposing eliminating sales and/or property tax exemptions and broadening the tax base. That is an admirable goal, but extremely difficult to achieve. Every exemption on the books (and there are many of them) was originally granted for a legitimate reason, and most of those reasons are still valid. The legislature looked at all the exemptions a few years back, and not a single one was repealed! And we must always keep in mind that the easiest way to discourage an activity is to tax it. Do we really want to discourage economic growth by increasing income taxes? Do we want to discourage spending by raising sales tax? Additionally, property tax already carries a much greater burden than either sales or income tax for financing all government in the state. In the months ahead we legislators will be grappling with the hard question of “What are the essential functions of state government?” Senator Derek Schmidt recently stated it well. In regard to both expenditures and taxes our primary goal in these difficult times should be “to do no harm”.

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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 past 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 throughout the fall. This series of meetings allowed us to take testimony from agency heads regarding steps they have taken 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 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.

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Hineman Files for Re-Election

When I first became a candidate for State Representative in 2008, I stated that I was running to provide a strong voice for rural Kansas and effective representation for the citizens of the 118th District. I believe I have accomplished that objective and I look forward to providing that representation in the future. Therefore I have already filed for re-election with the Kansas Secretary of State. It is common for a freshman legislator to be challenged in their first bid for re-election, so it was no great surprise to learn that I have already drawn an opponent for the August Republican primary election. I intend to campaign as vigorously this time as I did in my initial campaign in 2008. My campaign account must be replenished in order to campaign effectively in the widespread, 7 ½-county 118th District, and I would appreciate your help.

Contributions can be sent to Hineman for Kansas, 116 S. Longhorn Road, Dighton, 67839. If you prefer to contribute online, use the link on my website:

http://www.hinemanforkansas.org/contribute.htm