News

The Adult Continuum of Care Committee Report puts a finer point on the issue that many Kansas families already know – the Kansas mental health system is scrambling to meet the needs of Kansans with mental illness and substance use disorders.  The Kansas Mental Health Coalition endorses the report, and hopes the strategies suggested in the report will help the Department on Aging and Disability Services to build on its recent work  – bringing together Kansas City area stakeholders to form Rainbow Services Inc. and providing grant funds to Sedgwick County to create crisis services there.  There is more to be done.

This summer, the further reduction of state mental health hospital beds has made the gaps in our continuum of care obvious.  The State and the community mental health centers have partnered to respond to the growing need, but financial and staff resources are in short supply.  The lack of appropriate, more intensive treatment options at the community level for people needing a higher level of treatment or a step down from hospitalization has been a barrier.  Where you live determines your opportunities for recovery, and even in the Kansas City region it is uncertain whether the model crisis and referral program at Rainbow is sustainable.  As stated in the report:  “An underfunded system is challenged to meet the basic needs of people with severe mental illness, let alone develop evidenced based practices, enhance existing services, or create needed alternatives of care.”

We hope the Report will stimulate broader support for further community level investments and strategies targeted to improving the continuum.  The Report advocates expanding access to crisis services, residential programs, housing and peer programs, in addition to boosting community based outpatient programs.  The Committee also encourages improved transitions between facilities and communities, with treatment provided while people await admissions and after discharge. 

In the short term, Kansas should apply for federal resources such as the Excellence in Mental Health Act, endorse change to the federal IMD Exclusion that prevents Medicaid reimbursement for some residential psychiatric treatment, and re-open the 60 beds at Osawatomie State Hospital as soon as practically possible.  (The beds are currently unavailable while safety repairs are made.)

The Kansas Mental Health Coalition will review the report at its August meeting and is prepared to advocate for action to expand access to quality treatment for more Kansans.   One thing is certain, when we do not treat persons with mental illness, communities pay the price.  Individuals pay the price. People are all too often caught in an unending cycle of repeated hospitalizations or incarceration and the costs are more than fiscal, they include broken families, broken people and the loss of life itself.  

The Adult Continuum of Care Committee met for 9 weeks this summer to develop a report advising Secretary Kari Bruffett, Kansas Department on Aging and Disability Services, of recommended strategies to improve the behavioral health continuum.  The Committee was created by the Secretary as the agency faced a remodeling project ordered by CMS at the Osawatomie State Hospital that takes 60 hospital beds out of operation for the summer.

Read the Report.

Read the Adult Continuum of Care Committee Charter.

June 12 2015 – Friday – marked the end of the 2015 Legislative Session.  It was the longest legislative session in Kansas history at 113 days. The Legislature will return on Friday, June 26 for sine die – the procedural “last day”.  Legislators will have to take a vote on Friday, to correct an inconsistency in the final tax legislation.

Most of those who live and work daily with the Legislature would mark this session as a painful one.  The choices that were left on the table at the end were not what anyone would have wanted – passing the largest tax increase in Kansas history, when measured in terms of overall revenue at $385 million.   And, although Governor Brownback is painting the final tax legislation as consistent with the objectives of the “path to zero” income tax experiment, the Republicans who dominate the Kansas Legislature’s majority are hoping mightily that their efforts will have been enough to balance the budget for at least two years.  Some advisors have indicated that a least two elements of the revenue package are not reliable, and if the taxation of LLC guaranteed payments does not raise $23.7 m and the tax amnesty plan does not raise $30 m, legislators may have to raise taxes again next year.  That is something they will need to avoid, and hope that the voters won’t remember this session when they cast their votes in November 2016.

THE BUDGET

SB 112 is the mega-budget bill that had been agreed – for the most part – early in May by the conference committee and was ultimately adopted.  Read the conference committee report description here.  It was further amended by the budget conference committee to include most of the Governor’s Budget Amendments and a few omnibus adjustments.   

For behavioral health, the Governor’s budget cuts to state general funds stand – resulting in reduced contracts for a variety of programs including Keys for Networking, NAMI, Kansas Family Partnership, CROs, CAC and others.  On the other hand, there is the revolving loan fund – investing the income from the sale of Rainbow Hospital building into crisis/hospital diversion services, a $500,000 addition to OSH, $3.4 m supplement to care for people diverted from OSH during the renovations this summer, and the continuation of the Governor’s mental health initiative grants from last year.

It was a risky plan – to hold over the mega-budget agreement until the veto session and attempt to push it through without further major adjustments.  The Governor and administration officials wanted to keep the budget as agreed during the regular session and avoid deeper cuts into the agencies.  The Governor had promised K-12 and Regents Universities that no further reductions would be made. But for many legislators, the 4% state general fund cuts, the transfers of fee fund balances and reductions to existing programs already contained in the budget were forgotten in the months since the regular session.  Many were pushing for deeper reductions to state spending rather than voting for any kind of tax increases.   Estimates varied, but an additional 6.2% across the board state general fund cut was promoted as a way to close the $406 million gap and avoid tax increases altogether.  “Kansas doesn’t have a revenue problem, we have a spending problem,” was the quote often heard as the House and Senate each debated and rejected multiple variations of HB 2109 and SB 270 – the tax bills.

The threat level was increased in the first week of June, as Shawn Sullivan, Budget Director, warned legislators that the state might have to lay off thousands of state employees if the budget bill was not adopted soon.  The House moved forward and adopted H Sub for SB 112 with no debate on June 3.   The Senate, however, would not debate the budget bill until it had approved a revenue package.  Saturday, June 6, the House and Senate quickly adopted a brief change to Kansas statute to prevent state employee furloughs.  The temporary fix in SB 11 classifies all state employees as “essential” for the balance of the month of June.  This prevents the furlough of 24,000 state employees deemed “nonessential” who received notices on Friday.  Read KHI article.

Sunday, June 7, after passing the conference committee report on S Sub for HB 2109, the revenue package – raising $406 million revenue in this version – the Senate adopted H Sub for SB 112, the major budget bill of the 2015 legislative session.  Although many hoped the Senate action would lead to House approval the next day – and adjournment, it would be five more days (and two more very late nights) before the veto session would end.

To form the state budget for FY 15, FY 16 and FY 17, in addition to H Sub for SB 112, the Legislature passed a rescission bill (further reducing the FY 15 budget early in the session), a Judiciary budget bill, and the K-12 block grant funding bill. 

THE REVENUE PACKAGE

The final tax package is a combination of S Sub for HB 2109 as adopted by the Senate on June 7 and the tax trailer bill H Sub for SB 270 – which was written to amend HB 2109 in order to gain passage in the House.   A third piece of the puzzle is the modified fee plan for managed care organizations proposed by the Governor’s original budget, which brings in $47.8 million by drawing federal funds into the Medicaid program.

Multiple combinations of revenue ideas were put forward, debated and ultimately voted up or down in the last 23 days of the session.  In some ways, the development of the revenue package was one of the most democratic processes we have seen in the Legislature for some time.  The Senate debated its tax bill for several days, with multiple amendments considered, before putting HB 2109 into conference committee.  Once in conference, it took five conference committee reports to find a plan that was not rejected by one chamber or the other.  This meant multiple floor debates in each chamber discussing the options.

The final tax package includes:

• -          State Sales Tax Increase from 6.15% to 6.5%  ($164 m)  (H 2109 as passed by the Senate increased to 6.55%)
• -          Increases cigarette taxes 50 cents per pack ($40 m)
• -          Amends the 2012 tax exemption for LLCs to tax “guaranteed payments” ($23.7 m)
• -          Reduces itemized income tax deductions ($97 m)
• -          Creates tax amnesty program for delinquent tax payments ($30 m)
• -          Freezes income tax rates that are scheduled to decrease ($26.4 m)
• -          Raises $384.7 million for FY 16 (H 2109 as passed by the Senate would have raised $406 m)
• -          Requires the Governor to cut an additional $50 million to reach an ending balance of $86 million for FY 16   (We do not know where these cuts will occur, although a significant portion is likely to come from IT.)
• -          Eliminates income taxes for the state’s 388,000 lowest income tax paying citizens in FY 17
• -          Sets a 2.5% limit for revenue growth – triggering income tax rate reductions whenever revenue exceeds the limit (H 2109 as passed by the Senate included 3% limit)
• -          Maintains the current food sales tax rebate (H 2109 as passed by the Senate repealed the rebate, but reduced the sales tax rate on food to 4.95%.   Legislators hope that reducing food sales tax rates can be achieved in a future session.)

When the Senate approved S Sub for HB 2109 on June 7, it included two very controversial sections.  First, the sunset of numerous sales tax exemption statutes by 2018 – with a committee created to review and recommend whether or not those exemptions should remain in law.   This provision caused great concern for hospitals, non-profits and others.   The section was dropped from the final package, but the Legislature plans to spend time next session reviewing sales tax exemptions for possible repeal.  This exercise has been done in the past, without successfully reforming the exemption statutes in the way that proponents would like to see.

Second, a property tax lid provision that would require a public vote whenever local governments raised property taxes beyond a certain rate.   The final package loosens the restrictions, allowing for increases based on rate of inflation, infrastructure, road construction, bonds and interest, state and federal mandates, etc.

At the end, there was a joint meeting of House and Senate Republicans where the Governor’s staff threatened terrible budget cuts within 3 days.  Legislative leaders urged the caucus to make the very difficult votes needed to end the session.   Democrats and moderate Republicans held firm, unwilling to go on the record voting for any tax increases – most stating that they would not help to solve the budget problems they believe were caused by the income tax cuts of 2012 and 2013.  This meant that the Republican conservatives were then fragmented into smaller contingents, mostly including what could be called the center right and the ultra-conservatives.  It was these groups that had to forge a compromise to adopt a revenue plan in order to balance the budget.  But for some to move away from their anti-taxation principles was extremely difficult, and there were rifts created and relationships marred.   The lessons of the 2010 and 2012 elections were quite clear – with groups such as the Kansas Chamber, Americans for Prosperity, and the Kansas Policy Institute raining postcards into legislative races against those deemed as “tax and spend” politicians.  It will be interesting to see how many conservative Republicans will have to pay a similar price in 2016 for voting for the 2015 tax increases – being touted as the largest tax increase in Kansas history.

Read KHI Article: Why the Legislature is Struggling to Pass a Tax Plan.

The Kansas Dept. of Health and Environment will soon convene an advisory committee to create recommendations for managing behavioral health medications in Medicaid.  The committee is created by HB 2149, signed by Governor Brownback on May 15.  The conference committee report also includes other Medicaid policy provisions.  Read a description of the bill here.  

 HB 2149 was originally a bill to provide for Medicaid coverage of donor breast milk.  The Senate added the provisions of SB 181 - creating an expedited process for newly introduced prescription medications.  The Senate also inserted a new plan for instituting management of mental health medications in Medicaid through a specialized advisory committee.  This advisory committee was proposed after SB 123 was defeated by the Senate.  Senators agreed with advocates that SB 123 went too far by deleting the statutes that exempt mental health medications from prior authorizations or other drug management restrictions.  

The bill allows prior authorization or other restrictions on medications used to treat mental illness to be imposed on Medicaid recipients for medications subject to guidelines developed by the Board in accordance with provisions of the bill; establishes instances not to be construed as restrictions; provides for the development of guidelines; establishes requirements for Board review of medications used to treat mental illness available for use before and after July 1, 2015; and creates a Mental Health Medication Advisory Committee (Committee), outlining Committee membership and appointments, meeting frequency, and member compensation.   

Advocates view the new provisions as a better option than SB 123 - which would have simply deleted the statutory exemption from Medicaid management for MH drugs.  SB 123 was defeated by the Senate.   Read more about this issue.

The section of the bill regarding approval of new prescription medications (SB 181) amends the procedures regarding restrictions of patients’ access to any new prescription-only drug under the Kansas Medicaid Program and would establish meeting requirements for the Medicaid Drug Utilization Review Board (Board). 

As posted at www.kshouserepublicans.com Friday, June 5th, 2015 @ 9:08AM

TOPEKA–House leaders and House Republican legislators on Friday implored the Kansas Senate to pass the conference committee report on the state budget without delay to prevent state government furloughs.

The House passed the budget on Wednesday. Without Senate approval and a signature from Governor Brownback, non-essential state government workers in the executive branch will be furloughed beginning Monday.

“There is no time to waste. Kansans expect state government to be there for them when they need it, and state workers who provide valuable services should not have to endure furloughs because the Senate stalled on taking up the budget,” said House Speaker Ray Merrick (R-Stilwell). “While some parts of this process were unavoidably delayed, this budget plan was constructed over the course of months and the time to act is now.”

Meanwhile, tax negotiations in order to fill the roughly $348 million hole in the budget the House approved are ongoing.

“The unfortunate reality is that revenues will be raised this year because we made a commitment to K-12 schools not to cut their funding and we kept that promise with the budget we passed,” said House Majority Leader Jene Vickrey (R-Louisburg). “We scoured the other half of the budget for savings and we implemented them. Now we are going to find a tax compromise and get it passed.”

The budget passed by the House represents a 2.3 percent increase in FY 16 over the current fiscal year, and a .47 percent increase in FY 17. The slight increases represent funding for K-12 education, KPERS, and social services caseloads. The budget keeps Regents’ funding steady, and also includes a tuition freeze limited to the 2 percent over the rate of inflation. It also includes $3 million to fund an efficiency study that will identify further savings in state government to ensure the most effective use of taxpayer dollars. It imposes a 25 percent reduction on executive branch travel, as well as reduced subscriptions and advertising expenditures for agencies, in addition to other efficiencies.

“I applaud Senate President Susan Wagle in her efforts to push this process forward, and ask Senate Majority Leader Bruce to join her in the movement to debate and pass the budget we sent them,” said House Speaker Pro Tem Peggy Mast (R-Emporia).

Representatives who voted yes on the budget conference committee report and join with leadership in calling on the Senate to pass it as soon as possible include:

Rep. Bud Estes (R-Dodge City); Rep. Mike Houser (R-Columbus); Rep. James Todd (R-Overland Park); Rep. Jack Thimesch (R-Cunningham); Rep Gene Suellentrop (R-Wichita); Rep. Keith Esau (R-Olathe); Rep Lane Hemsley (R-Topeka); Rep. Becky Hutchins (R-Holton); Rep. Steven Johnson (R-Assaria); John Ewy (R-Jetmore); Rep. Sharon Schwartz (R-Washington); Rep. Kyle Hoffman (R-Coldwater); Rep. Mark Hutton (R-Wichita); Rep. Dan Hawkins (R-Wichita); Rep. Ron Highland (R-Wamego); Rep. Kent Thompson (R-Iola); Rep. Randy Powell (R-Olathe); Rep. Steve Alford (R-Ulysses); Rep. Steve Anthimides (R-Wichita); Rep. John Barker (R-Abilene); Rep. Tony Barton (R-Leavenworth); Rep. Rick Billinger (R-Goodland); Rep. Troy Waymaster (R-Bunker Hill); Rep. Sue Boldra (R-Hays); Rep. Kristey Williams (R-Augusta); Rep. John Whitmer (R-Wichita); Rep. Chuck Smith (R-Pittsburg); Rep. Joe Seiwert (R-Pretty Prairie); Rep. Scott Schwab (R-Olathe); Rep. Steve Brunk (R-Wichita); Rep. Travis Couture-Lovelady (R-Palco); Rep. Larry Campbell (R-Olathe); Rep. Blake Carpenter (R-Derby); Rep. Will Carpenter (R-El Dorado); Rep. Susan Concannon(R-Beloit); Rep. Ken Corbet (R-Topeka); Rep. Erin Davis (R-Olathe); Rep. Willie Dove (R-Bonner Springs); Rep. Dick Jones (R-Topeka); Rep. Jim Kelly (R-Independence); Rep. Jerry Lunn (R-Overland Park); Rep. Charles Macheers (R-Shawnee); Rep. Les Mason (R-McPherson); Rep. Les Osterman (R-Wichita); Rep. Jan Pauls (R-Hutchinson); Rep. Richard Proehl (R-Parsons); Rep. Marty Read (R-Mound City); Rep. Marc Rhoades (Newton); Rep. Ron Ryckman Sr. (R-Meade); Don Schroeder (R-Inman); Dennis Hedke (R-Wichita).

 

The proposal was as follows:

CONFERENCE COMMITTEE REPORT BRIEF SENATE SUBSTITUTE FOR SENATE BILL NO. 270

As Agreed to June 4, 2015 Brief – excerpt from www.kslegislature.org  

Senate Sub. for SB 270 would make a number of changes in law regarding individual income tax, sales and compensating use tax provisions, motor vehicle registration and taxes, fire district taxation, and taxes on cigarettes, and would enact a tax amnesty for a number of tax sources. Amnesty Provisions The bill would authorize a tax amnesty for penalties and interest relative to certain delinquent taxes provided such taxes are paid in full from September 1, 2015, to October 15, 2015. The amnesty would apply to privilege, income, estate, cigarette, tobacco products, liquor enforcement, liquor drink, severance, state sales, state use, local sales, and local use taxes. The amnesty would be limited to penalties and interest applied to liabilities associated with tax periods ending on or before December 31, 2013. The amnesty would not apply to any matter for which, on or after September 1, 2015, taxpayers have received notices of assessment or for which an audit had previously been initiated. Any fraud or intentional misrepresentation in connection with an amnesty application would void the application and waiver of any penalties and interest.

Individual Income Tax Provisions Guaranteed Payments - The bill would revise an income tax subtraction modification for certain pass-through non-wage business income to require that guaranteed payments from businesses are counted as income in determining Kansas adjusted gross income. Rate Freeze Individual income tax rate reductions scheduled for future years would be decelerated. The tax year 2015 rates of 2.7 percent for the bottom tax bracket and 4.6 percent for the top tax bracket would become the tax rates through tax year 2018. The tax year 2019 rates would be 2.4 percent and 4.5 percent. The tax rates for tax year 2020 and all tax years thereafter would be 2.3 percent and 4.3 percent. A provision that could provide future formulaic income tax rate relief under certain circumstances, based on the extent to which revenue from a specified group of State General Fund (SGF) tax sources has increased over the previous fiscal year, would be repealed.

Low Income Tax Exclusion - The bill would provide that individual taxpayers with taxable income of $5,000 or less and married taxpayers filing jointly with taxable income of $12,500 or less would have no income tax liability beginning in tax year 2017. Itemized Deductions

Modification Acceleration - A number of changes would be enacted for Kansas itemized deductions retroactive to January 1 (the start of tax year 2015). With the exception of charitable contributions, mortgage interest, and property taxes paid, all Kansas itemized deductions would be repealed. The current changes in the percentage that could be deducted (“haircuts”) being phased in for mortgage interest and property taxes paid relative to the amount that otherwise is allowed for federal income tax purposes would be accelerated such that the final 50 percent haircut currently scheduled for tax year 2017 would be effective immediately. (Charitable contributions would remain fully deductible for Kansas taxpayers able to itemize at the state level, as under current law.)

Individual Development Account Tax Credit - The bill would restore, effective for tax year 2015, a tax credit that previously had been available for certain individual development account (IDA) contributions. That credit had been discontinued beginning in tax year 2013, pursuant to repeal in 2012 legislation.

ROZ Program - The Rural Opportunity Zone (ROZ) program, which provides an income tax exemption for certain individuals who establish residency in selected counties, would be extended. The program, which is currently scheduled to sunset in tax year 2017, would be extended for two years and be scheduled to sunset in tax year 2019. (The ROZ program also authorizes the repayment of student loans by participating counties and the state under specific circumstances.)

Christmas Tree Net Gain - The bill would create a subtraction modification from federal adjusted gross income in calculating Kansas adjusted gross income for the net gain from the sale of Christmas trees.

Social Security Number Requirement - The bill would require an individual claiming a tax credit to have a valid Social Security number for the entire taxable year for which the tax credit is claimed.

Sales and Use Tax Provisions Sales and Use Tax Rates - The statewide sales tax and use tax rate would be increased from 6.15 percent to 6.65 percent on July 1, 2015. A second rate for purchases of food and food ingredients of 5.95 percent would become effective January 1, 2016.

Local Sales Tax Provisions - Additional provisions would authorize additional local sales tax authority for three counties—Thomas, Douglas, and Bourbon—for purposes of financing construction or remodeling of a courthouse, jail, law enforcement facility, or other county administrative facility. Thomas County would be granted an additional 0.5 percent authority, Douglas County would be granted an additional 0.5 percent authority, and Bourbon County would be granted additional authority of up to 1.0 percent.

   Relative to this new authority, all counties also would have an exception to the normal countywide sales tax distribution formula, which otherwise requires that funds be shared with cities. Voter approval would be required prior to the implementation of the new tax authority for Thomas County and Douglas County. For Bourbon County, the result of a previously held election would be declared valid for the implementation of the new tax authority.

Cigarette Tax Provisions - The bill would increase the state’s cigarette tax by $0.50 per pack to $1.29 per pack beginning July 1, 2015. The bill also would establish an inventory tax for all cigarettes on hand as of July 1, 2015. The inventory tax would be $0.50 per pack for cigarettes on hand as of July 1, 2015. The inventory tax would be due on October 31, 2015.

Motor Vehicle Registration and Tax Provisions - The bill would require the Department of Revenue to mail a copy of the motor vehicle registration application to the owner of a motor vehicle, including all information required to enable the owner to register the vehicle and pay the tax by return mail.

Fire Districts - A final section of the bill would clarify the property tax levying authority of consolidated fire districts with respect to their authority to levy more than 15 mills.

Conference Committee Action

The second Conference Committee on June 4 agreed to amend the contents of House Substitute for SB 270, as amended by the House on Final Action, by changing the repeal of the ROZ program sunset to a two-year extension of the program and retaining its other tax provisions. The Conference Committee also agreed to add provisions related to individual income tax and guaranteed payments, rates, exclusions, itemized deductions, treatment of Christmas tree sale income, and Social Security number requirements for credits; statewide sales and use tax rates; cigarette taxes; and motor vehicle registration and tax provisions.

Background

The original bill would have made several changes to the Tax Credit for Low Income Students Scholarship Program Act. The House Taxation Committee, on May 13, struck the bill’s original provisions; recommended a substitute bill be created; inserted various new provisions, including the tax amnesty provisions; and advanced the new substitute bill for further consideration without recommendation. The House Committee of the Whole, on May 15, adopted a minor technical amendment. On May 29, the House amended the bill on final action to remove the contents of the substitute bill, other than the amnesty provisions, and add the other provisions described above as being in the House Committee of the Whole version of the bill.

June 3, 2015

Observers and many Representatives were stunned when the House of Representatives adopted House Sub for SB 112 with no debate with a vote of 64 to 48.  The three minute action left some members wondering if there had been an intentional rush to avoid public debate.  The House Majority Leader indicated that there were no lights on to indicate that members wanted to speak on the proposal.

This is truly surprising because the House never debated a mega-budget or omnibus budget on the floor this year.  While the Appropriations Committee did develop a budget position in committee and did adopt many of the included positions (including adopting most of the Governor's Budget Amendments) - the committee bill was never brought above the line for debate in the House.  Instead, the Senate adopted a mega-budget bill (crafted by the Senate Ways and Means Committee) prior to the April break and every adjustment since then has been simply inserted into the conference committee, including all post-April items that normally would take shape as an omnibus bill.

Many legislators believe that this was “as good as the budget would get” at this late date.  The conference committee has also created another option – Senate Sub for HB 2135 would cut an additional 5.7% from all agencies.  While there are some conservatives who would like a chance to vote for that proposal, it would create many problems if passed.  For one thing, our Medicaid program (KanCare) is required to provide “maintenance of effort” according to federal requirements or incur penalties, meaning equal and/or more services and equal and/or expanded eligibility.  A 5.7% cut would have to include provider reimbursement cuts and would reduce the federal funds for the program.  The cut to K-12 Education would almost certainly draw the attention of the Kansas Supreme Court.

Read the conference committee report and a full explanation of the bill at

http://www.kslegislature.org/li/b2015_16/measures/sb112/

Scroll below to the chart of “Bill History”.  The bill copy and supplemental note at the top of the page describe the bill as originally passed – and NOT the mega-budget as agreed by the conference committee.

Date:               June 3, 2015

 

From:              Aubrey Waters, Procurement Officer

 

Subject:           Request for Information #EVT0003819

                        Closing July 10, 2015 2:00pm CST

                        Adult Continuum of Care Project      

For Kansas Department for Aging and Disability Services

                       

The State of Kansas, Office of Procurements and Contracts posted the above referenced event. Your company was recommended as a potential interested party. You may download the RFI document and specifications from the following website. It is your responsibility to monitor this site for modifications to the event.

 

http://admin.ks.gov/offices/procurement-and-contracts/bid-solicitations

                                    

NOTE: Receipt of this notice should not be considered an official “invitation” to bid.

If you are interested in bidding on this transaction you MUST BE OFFICIALLY INVITED to

the event. Contact the person named above at least 24 HOURS BEFORE the official finish date and time to request the official invitation. Due to State of Kansas SMART Strategic Sourcing System requirements, any bidder with an interest in bidding on any State of Kansas SOURCING EVENT must officially request an invitation from the Procurement Officer (Event Contact) at least 24 hours before the Bid Event official finish date and time. If you fail to request such in a timely fashion, your response may be rejected in its entirety.

EXCEPTION: If you have received a Bid Event Document with your company’s name in the upper right hand corner of the document, your company has already been invited to the bid event. If you are not a registered bidder/vendor with the state of Kansas you must register as a bidder AND request official invitation at least 24 hours before the Bid Event official finish date and time. To register as a bidder visit our website:http://www.admin.ks.gov/offices/procurement-and-contracts

 

Thank you,

 

Aubrey Waters

Procurement Officer | Procurement & Contracts

 

Kansas Department of Administration

900 SW Jackson, Suite 451 South | Topeka, KS 66612

Phone: 785-296-2401 | Fax: 785-296-7240

aubrey.waters@da.ks.gov | www.admin.ks.gov/offices/procurement-and-contacts

 

On June 2, the Senate voted 25-13 to pass a basic tax bill to get it into conference with the hope that the conference committee could bring out some tax packages that might get 21 Senate votes and 63 House votes.  The House had already adopted House Sub for SB 270 - containing only "tax amnesty" - the prior week.

Senate Sub for HB 2109 does not raise enough revenue to solve the $406 million predicted budget deficit for FY 2016.  It is worth noting that the budget bill as proposed by the Conference Committee Report on House Sub for SB 112 has around $400 million of one-time transfers and "fixes" in it.  So, unless revenues increase, a bill raising $406 million may not protect current legislators from having to make difficult tax votes again next session - months before November 2016 elections.

Contents and History

HB 2109, as further amended by the Senate Committee of the Whole, would make a number of changes in individual income tax laws, sales and compensating use tax provisions, motor vehicle registration and taxation laws, and property tax laws, and would enact a tax amnesty for a number of tax sources.

Amnesty Provisions

The bill would authorize a tax amnesty for penalties and interest relative to certain delinquent taxes provided such taxes are paid in full from September 1, 2015, to October 15, 2015. The amnesty would apply to privilege, income, estate, cigarette, tobacco products, liquor enforcement, liquor drink, severance, state sales, state use, local sales, and local use taxes. The amnesty would be limited to penalties and interest applied to liabilities associated with tax periods ending on or before December 31, 2013. The amnesty would not apply to any matter for which, on or after September 1, 2015, taxpayers have received notices of assessment or for which an audit had previously been initiated. Any fraud or intentional misrepresentation in connection with an amnesty application would void the application and waiver of any penalties and interest.

Property Tax Provisions

The bill would prohibit cities and counties from adopting appropriations or budgets with revenues from certain increases in property taxes that exceed the rate of inflation until such resolutions proposing the increases have been approved at a regularly scheduled election. The bill would eliminate a property tax exemption for property used exclusively by the alumni association of any public or nonprofit Kansas college or university.

Motor Vehicle Registration and Tax Provisions

The bill would require the Department of Revenue to mail a copy of the motor vehicle registration application to the owner of a motor vehicle, including all information required to enable the owner to register the vehicle and pay the tax by return mail.

Sales Tax Provisions

The statewide sales tax and use tax rate for purchases of food and food ingredients would be reduced from 6.15 percent to 5.70 percent on January 1, 2016. Additional provisions of the bill would disallow all sales tax exemptions from applying to purchases made on behalf of any entity benefiting from a sales tax exemption. Only purchases made by the entity benefiting from the sales tax exemption would continue to be exempt from sales tax.

Individual Income Tax Provisions

Christmas Tree Net Gain - The bill would create a subtraction modification from federal adjusted gross income in calculating Kansas adjusted gross income for the net gain from the sale of Christmas trees.

Social Security Number Requirement - An additional provision would require an individual claiming a tax credit to have a valid Social Security number for the entire taxable year for which the tax credit is claimed.

Background

The original bill would have amended the Kansas Probate Code concerning transfer-on-death deeds. In a series of meetings beginning May 12, the Senate Assessment and Taxation Committee struck the original provisions of HB 2109, recommended a substitute bill be created, inserted many of the other provisions described above and, on May 19, advanced the new substitute bill for further consideration, without recommendation.

Senate Committee of the Whole – May 27

The Senate Committee of the Whole, on May 27, amended the substitute bill to reduce the sales tax rate on food to 5.7 percent (the Senate Assessment and Taxation Committee version had set the food rate at 6.0 percent); to remove a number of proposed changes in the motor vehicle tax that had been included in the Senate Assessment and Taxation Committee version; to remove statutory disposition of revenue provisions that would have effectively produced an equivalent amount of receipts from the motor fuels tax increase for the State General Fund (SGF) at the expense of the State Highway Fund (SHF); to clarify that the payroll tax credit only applies relative to persons employed in Kansas; to reduce the proposed cigarette tax increase to 18 cents per pack (which had been 50 cents in the Senate Assessment and Taxation Committee version) while earmarking $10.0 million of cigarette tax receipts for the newly created Tobacco Cessation Fund; and to make a minor technical amendment.

Senate Committee on Assessment and Taxation – May 30

At a meeting at the rail on May 30, the Senate Committee on Assessment and Taxation amended the bill to remove provisions making changes to individual income tax laws, sales and compensating use tax provisions, motor fuel taxes, and taxes on cigarettes and tobacco products and recommended the bill favorably for passage containing only the tax amnesty provisions.

Senate Committee of the Whole – May 31

On May 31, the Senate Committee of the Whole further amended the bill to add the following: the requirement that a taxpayer have a valid Social Security number for the entire tax year in which an individual income tax is claimed; the provision related to sales tax treatment for purchases made on behalf of an entity that would otherwise benefit from a sales tax exemption; the subtraction modification for the net gain from the sale of Christmas trees; the provision requiring the Department of Revenue to mail motor vehicle registration and tax documents; and the reduction of the sales and compensating use tax rate.

Senate Committee of the Whole – June 1

On June 1, the Senate Committee of the Whole further amended the bill to add the provision providing the low income tax exclusion.

Senate Committee of the Whole – June 2

On June 2, the Senate Committee of the Whole further amended the bill to add the provision requiring a vote at a regularly scheduled election for cities and counties to adopt budgets including certain property tax increases. Additional amendments removed a provision which would have provided an income tax exclusion to certain taxpayers and lowered the statewide sales and use tax for food to 5.7 percent beginning January 1, 2015.

Senate Committee of the Whole – June 3

 On June 3, the Senate Committee of the Whole adopted a technical amendment to reconcile provisions contained in the bill. Fiscal Effect The Kansas Department of Revenue indicated the total amount of additional tax receipts collected as a result of the tax amnesty would be $36.088 million, $30.000 million of which would be deposited in the SGF, $2.471 million of which would be deposited in the SHF, and $3.618 million of which would be returned to local units levying sales and use taxes. Certain other provisions of the bill may have a small, but indeterminate, effect upon state and local receipts.

June 2 2015 – Tuesday

The day began with articles and social media quoting the Governor’s office regarding possible state employee furloughs and Senate leadership wanting to limit the day’s tax debate by voting to suspend the rules and not allow the Democrats to “divide the question” during the planned tax debate today. 

Ultimately, Leadership is attempting to push a Senate tax bill into conference committee, while the budget conference committee tee’d up the debate on the mega-budget, House Sub for SB 112, in the House for Wednesday.

At their 1:30 p.m. session today the House adopted agree to disagree on SB 112 – new bill brought into budget conference committee in order to provide a Senate based vehicle for the budget.  This is now the mega-budget bill.  Once the Senate adopts an agree to disagree motion on SB 112, the conference committee will be able to adopt a conference committee report on SB 112 and move it forward for action in the House of Representatives.  

Note that 112 was formerly a bill by Committee on Veterans, Military and Homeland Security - Expedited professional state credentialing for military service members and nonresident military spouses.  2048 moves from Corrections and Juvenile Justice CC to the Judiciary CC to replace 112.   

At noon on Tuesday, the Budget Conference Committee created three budget options:

SB 112 is now the mega-budget bill that had been agreed – for the most part – early in May by the conference committee.   There were also amendments made to a number of provisos relating to subscription cuts, reading program, regents, school block grant posting issue, pension obligation bonds, MCO insurer’s tax revenue, capturing unspent dollars in the education block grant extraordinary needs fund, and the fund for county reimbursements. 

HB 2135 – was the mega-budget bill that passed the Senate late March – amended to include the mega-budget as agreed early in May by the conference committee – PLUS additional 2% executive agency cuts, but exempts K-12, Regents, state hospitals, public safety agencies.

HB 2010 – the “nuclear option” – includes the mega-budget bill as agreed early in May by the conference committee – PLUS additional 6% across the board cuts – no exemptions.

By mid-afternoon, the conference committee altered the options, with Senate Chairman Masterson moving to remove the 2% option, instead making HB 2135 an across the board 5.7% budget cut on top of the cuts within the mega-budget as agreed earlier.  No agencies would be exempted from these cuts.  HB 2010 is apparently out of consideration for now.  The rumor is that Masterson wants to run the 5.7% option in the Senate, but others disagree.

The Senate adopted a tax bill Tuesday afternoon – Senate Sub for HB 2109. 

The Senate debated tax policy for four days – in full debate on the floor – with no success.  So, Senate Leadership brought forward a plan to move a base bill into conference.

Members adopted a controversial amendment from Senator Jacob LaTurner, establishing a property tax lid, requires public vote to increase property taxes by city or county.  It passed 30-10, but local governments will be very opposed. 

There was extended debate on the most consequential amendment (by Senator King).  It would not bring the fiscal note of the bill fully in line with the $400 million revenue needed to fully fund the mega-budget as currently described in House Sub for SB 112, but would help get a tax bill into conference.  The purpose is to put a conference-able bill into conference committee for three senators and three representatives to hash out. King’s comprehensive amendment includes taxpayer amnesty, Christmas tree, social security number requirement, Baumgardner Dept of Revenue amendment regarding letters to taxpayers, repeals the alumni association exemption and maintains LaTurner’s amendment.

The odd part of this discussion is that the House already passed House Sub for SB 270 last week – which only included the amnesty plan – anticipated to bring in $30 million.  So, technically, there is already a “conference-able” bill.  Either way, the conference committee would be creating a tax package that includes provisions, such as increasing sales tax or rolling back some of the income tax repeal for small businesses that are distasteful to numerous legislators.  When voting on a conference committee report, it is either a yes or no -  there is no longer an opportunity for amendments.  So, members of the Senate protested this direction. 

The final amendment – by Senator Francisco – reinserted the language to decrease the food sales tax rate to 5.7%. 

The bill passed 25-13.

See similar article with bill description.