2013 Kansas Legislative Agenda

A New Beginning

2013 Kansas Legislative Agenda

A New Beginning

BUDGET
Kansas spending and debt have skyrocketed over the past 60 years. Our state governments spending increased by 571% from 1960 to 2010 after adjusting for inflation. During the same time frame, state government debt increased by 335%. While increased population accounts for much of the need to increase spending, it has by far outpaced the 31% increase in population during the same time frame. From 1960 to 2010, per capita state government spending grew from $1,134 to $5,813 after adjusting for inflation. Thats $5,813 for each man, woman and child in Kansas. Fortunately, Kansas legislators are becoming aware of the damage overspending has caused our state and have hit reverse. Under Gov. Sam Brownbacks leadership, state expenditures have decreased by $2.2 billion over the last two years, with the latest $14.3 billion budget having been approved in June. Although these improvements should certainly be celebrated, Kansans should not mistake our states spending problems as being solved. We must continue to hold our elected officials accountable to a fiscally responsible rate of spending that is characteristic of any good government.

As if the cost of our state government isnt high enough, Kansans are also subject to the burdensome taxes and spending of the federal government. Federal expenditures have increased by 409% from 1960 to 2010 after adjusting for inflation, and debt HAS INCREASED by an incredible 532%. Like Topekas past spending addictions, these skyrocketing expenditures have dramatically

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outpaced the countrys 10% growth in population during the same time frame. From 1960 to 2010, per capita federal spending grew from $2,413 to $11,194 after adjusting for inflation. Topekas and Washingtons spending costs every man, woman, and child $17,007 a year. Unfortunately, this skyrocketing spending is about to get much worse. Federal taxes are expected to soar in 2013 thanks to the expiration of many tax relief measures and the implementation of the Presidents health care law. Clearly if Kansas wants a competitive edge in the global economy, both Topeka and Washington should lower taxes and spending to attract greater commerce and thus greater prosperity. For the Fiscal Year 2014 budget (begins July 1, 2013), AFP supports an 8% reduction in spending. Spending reductions should be implemented in order to reconcile the projected budget shortfall while also keeping adequate reserves in the state budget. Enact legislation limiting any future spending increases to the sum of inflation and population growth. The following excerpt from our FY 2011 Commonsense Budget Proposal, explains the impact spending constraints would have had if enacted in 2004. With the expectation of significant increases of revenues to the state government, this passage serves as a good reminder of what defines the path to prosperity: a surplus of $340 million existed in FY 2004, but the growth in expenditures erased that surplus and led to a shortfall of $890 million in FY 2010. If Kansas had instituted a controlled spending approach as AFP advocated, the difference would have been pronounced for state government finances Instead of a deficit of $890 million, Kansas would have experienced a surplus of $554 million in state coffers for FY 2010. It should be noted this estimate is very likely well below what actually could be expected. With just six years of spending controls the cumulative amount of funds that could have been returned to taxpayers would have been in excess of $3.7 billion. This infusion of cash into the economy would have generated additional tax revenues for the state coffers while strengthening Kansas private sector economy to weather the recession. It is obvious that putting government growth and special interests ahead of fiscal prudence has created a problem that was easily avoidable. The question now is: will Kansas legislators ignore this lesson of the past or move forward with self imposed spending controls? Require local governments (cities, counties and school districts) to participate in the states transparency Web site with uniform budget reporting. Require every state agency to implement zero-based budgeting practices. State agencies should mirror a common practice amongst the private sector that is building their budgets from scratch. At a minimum an agency should do it once every four years. It is difficult for anyone to make claim that all wasteful and inefficient spending has been eliminated without building a budget from the ground up.

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TAX POLICY
On May 22, 2012, Gov. Brownback signed HB 2117 into law, simplifying and reducing our state tax codes burden. The reform collapses its three income tax brackets into two and lowers their respective rates to 3.0% and 4.9%. A study by the Kansas Policy Institute projects that somewhere between 33,430 and 41,690 additional private sector jobs will be created because of the tax reforms through 2018, and annual gross wages will increase somewhere between $277 and $364. This anticipated increase in economic activity is expected to broaden Kansas tax base, as new residents and businesses set up shop in the Sunflower State. With such an increase in revenue, our state local governments will become less reliant on our high property, sales, and corporate taxes making room for future rate reductions. As of 2009, these three taxes combined cost every man, woman, and child in Kansas $2,533. In building on our states recent tax reform, AFP supports more rate reductions in the future, thus assuring that Kansas continues down the path to lower taxes and greater prosperity.

Additional tax agenda items: AFP supports a legislative super-majority in order to raise taxes. Currently 16 states, including three of our four neighboring states, require a super-majority to approve tax increases. AFP supports the Property Tax Transparency Act. This legislation will require property tax mill levies to be automatically reduced in correspondence to increase in property valuations. Local units of government that want to utilize their local taxing authority by increasing property tax revenues can do so with a majority of the body approving it. For too

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long, local units of government have benefited from stealth-like tax increases due to property valuation increases. This legislation would provide government transparency and accountability by requiring a vote for approving tax increases.

TA X P A Y E R-F U N D E D L OB BY IN G R E FOR M
Currently, more than 100 lobbyists with more than 60 government entities/associations have been hired by your tax dollars, lobbying for more and more of your money. Taxpayer funded lobbying propagates the cycle of more spending and more programs that call for more spending. Serious reform will help curb the culture of more is never enough in Topeka.

Require governments that hire lobbyists simply to report how much they are spending on these services. Require those individuals who represent state level government entities to register as a lobbyist, just like those who represent city and county government.

JUDICIAL REFORM
Supreme Court justices are selected primarily by an insider group of Kansas lawyers, and Kansas is the only state with lawyers completely dominating the selection process. AFP supports reforms that will open up the system, allow public input, and allow the appropriate questions to be asked before a judge is appointed, rather than later.

ENERGY MANDATEs AND GOvERNMENT AssIsTANCE

There is nothing wrong with investing in newer energy technologies like windmills. In fact, such investment when done by private individuals and companies spur the free enterprise system that drives prosperity. However when such investment is made by governments in the form of massive subsidies, it unfairly takes money out of the wallets of private citizens and companies to wage as a bet that some company will be profitable. Quite often, as with Solyndra, it is not. Kansas energy companies should stand on their own two feet without help from government. Over the last few years, Kansas has developed the Kansas Renewable Portfolio Standards

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mandates in an effort to prop up alternative renewable energy sources. This is nothing but government picking winners and losers and according to a July 2012 report released by the Kansas Policy Institute and The Beacon Hill Institute, the losers are Kansas taxpayers. The July report The Economic Impact of the Kansas Renewable Portfolio Standard concludes that Kansas electricity ratepayers will pay higher rates and face fewer employment opportunities. The report states: In 2020 renewable energy mandates will cost families an average of $660 per year; commercial businesses will spend an extra $3,915 per year; and industrial businesses will spend an extra $25,516 per year. Between 2012 and 2020, the average residential consumer can expect to pay $2,471 more for electricity. A commercial ratepayer would pay $14,663 more during the period, and the typical industrial user would pay $95,560 more. Its easy to conclude these mandates will have an adverse effect on the Kansas economy. AFP supports the Electricity Freedom Act which would repeal the state standards.

OBAMACARE EXChANGEs
On principle, conservatives could support health insurance exchanges. They harness the power of free market competition, transparency and value comparison to drive innovation, increase choice, and reduce costs. However, when a health plans participation in the exchange is conditioned on page after page of federal mandates and restrictions, exchanges can also be used as a tool to expand bureaucratic control and micromanage the market. Thats exactly what President Obama and HHS Secretary Kathleen Sebelius are trying to do by inviting states to partner with the federal government in creating Obamacare exchanges. Fortunately Gov. Brownback has rejected the invitation from the federal government. However attempts may be made during the 2013 legislative session to seek legislative approval to partner with the federal government on this matter. AFP will oppose any state effort to create the Obamacare exchange in Kansas.

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Americans for Prosperity Kansas is a statewide organization of citizen leaders committed to advancing every individuals right to economic freedom and opportunity. AFP-KS educates and engages citizens in support of restraining state and federal government growth, and returning government to its constitutional limits.

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