Monthly Archives: February 2005

A measure to limit premium rate increases on self-insured Kansans and small businesses is one step closer to becoming law after its passage by the Kansas House Friday morning.  I was successful in amending this legislation into HB 2366 during debate Thursday.  My proposal now advances to the Kansas Senate for consideration.
My amendment requires health insurance carriers to freeze the premium amount, deductibles and benefits for individual health coverage policyholders during their coverage period.  I introduced this legislation after receiving complaints from constituents about how insurance companies had raised their premiums numerous times during the coverage period, particularly after they had filed a claim.  I believe that this legislation would give consumers a much better chance at planning for and managing their health care costs. This measure should also help to provide stability in premium rates and is an important step toward ensuring affordable health coverage in Kansas.
The Legislature is continuing to work on new plans to fix the school finance problem in Kansas. Both the House Select Committee on School Finance and the Senate Education Committee are working on different plans.  These plans should be heard on their respective floors next week. The Senate Education Committee passed a plan that would increase funding to schools by $165 million the first year and over $400 million over three years if funded.  The plan adds $150 to the BSAPP (Base State Aid Per Pupil) and also increases bilingual and at-risk funding.  The plan originally had removed weighting for vocational education, but this was added back into the bill.
This plan also lowers the threshold for correlation weighting, adding money for larger school districts.  However, no source of funding is provided for the plan. The House Select Committee on School Finance’s plan adds $80 of new money per pupil to the BSAPP at a cost of $40 million.  The plan also folds $19.5 million from career and vocational education weighting as well as money from correlation weighting into the base.  Please keep in mind that this is not new money, however, as the plan is simply shuffling existing monies around in the formula.  The plan would add about $11 million for bilingual students and would expand the definition of “at risk” children to include those who qualify for a reduced lunch, thus adding another $18.6 million.  The plan increases funding for excess costs of special education for FY 2006 to 85%, FY 2007 to 88%, and thereafter at 90%  ($17.7 million for FY 2006) and equalizes the first four mills of capital outlay ($15 million).
The plan would also include a 5% increase in the LOB (Local Option Budget) for all districts and allow an additional 5% increase in the LOB for those 16 school districts with the highest cost of living in the state.  This would allow the richest districts to lure away teachers from poorer Kansas districts.  Neither of these LOB increases would be equalized by the state.  This plan does not identify where the state-provided monies would come from.  It also relies heavily on local property taxes to fund education.  The plan would also add a provision that would require education spending to increase with the consumer price index and to be funded before the rest of the budget.
While I believe that the House Select Committee’s plan misses the mark in addressing the Supreme Court’s concerns regarding education funding, I also believe that the Senate’s education plan is a good start.  When crafting a school finance plan, we must ensure funding for this plan in future years without robbing ending balances or the transportation fund. Otherwise, actions like that could threaten our state’s financial stability and credit rating.  We must also create a financing plan that will work in the years to come and not simply create a one-year “stop-gap” fix.
Kansas is currently participating in a multi-state program that helps seniors import drugs through an online service.  Many seniors without prescription drug coverage are able to save hundreds of dollars by purchasing drugs from Canada.  Opponents of drug importation fear that imported drugs may be susceptible to tampering and be harmful to seniors.  Proponents of drug importation say that drugs from Canada are as safe as drugs purchased in the US at lower costs.
The House Health and Human Services Committee passed out favorably for full House consideration a bill that would ban importation of prescription drugs from Canada and other countries to Kansas.  Although drug importation is not a permanent solution to the rising costs of prescription drugs, it does provide an affordable and competitive alternative until a solution can be found.  As a member of the House HHS committee, I voted against this bill.  I support Kansas seniors being able to save their precious hard-earned money by purchasing prescription drugs from foreign countries.
In December 2004, the Kansas Supreme Court ruled the current Kansas death penalty statute unconstitutional.  The court has stayed the decision while the Attorney General is appealing to the US Supreme Court to hear the case. Two bills are currently in the Senate regarding the death penalty.  One bill ends the death penalty completely in Kansas and the other fixes the constitutional problem cited in the Supreme Court decision.  Both bills were passed out of committee, and both were referred back to committee when heard by the whole Senate. The Senate did pass a resolution urging the US Supreme Court to hear the Kansas case.  Both of the other bills will go back to the committee for further review.
The House passed a resolution urging the US Department of Agriculture to reconsider lifting the current ban on Canadian cattle imports.  This ban was instated in response to an imported cow infected with BSE. The resolution calls for a number of criteria to be met before the ban is lifted, including allowing no products from cattle older that 30 months, assurances that Canada’s firewalls against BSE are functioning, including their feed ban, no USDA labels are to be put on imported beef, and that we receive reassurances from our trade partners that re-opening importation will not affect our trade status.  I voted in support of this resolution.
The House passed out favorably on Final Action a bill to make “fleeing or attempting to elude a police officer” an inherently dangerous felony. House Bill 2180 allows prosecutors to charge a person involved in fleeing and eluding a police officer where a person is killed with felony murder.  This occurs when a person drives recklessly to avoid the police and causes an accident where someone is killed. Proponents of this bill included the Attorney General’s Office, the Kansas Bureau of Investigation, and the Kansas County and District Attorneys Association.  I voted in support of this legislation.
The full House passed out favorably on Final Action a bill that would make it public policy to support breastfeeding by allowing women to breastfeed infants any place women are permitted. Proponents of this measure say that prohibiting breastfeeding may keep women from breast-feeding their children, which many believe to be beneficial for both mothers and babies.  By making it legal to breastfeed in public places, it could help decrease the stigma some associate with breastfeeding.  I voted in support of this legislation.
On Monday this week I presented testimony in support of House Bill 2372, a bill I introduced earlier this session in the Kansas House.  This legislation seeks to address “1099 misclassification” issues.
1099 (or independent contractor) misclassification occurs when an employer treats a worker as an independent contractor instead of an employee.  This allows the employer to avoid paying social security, workers compensation, unemployment insurance, liability insurance, and both overtime and time-off wages.  It also often results in the so-called independent contractor failing to properly withhold and report his / her personal federal and state income tax withholdings.
1099 misclassification is rampant throughout the nation and our own state of Kansas, particularly in the commercial and residential construction industries.  PriceWaterhouse Coopers, in a report titled “Projection of the Loss of Federal Tax Revenue due to Misclassification of Workers”, projected annual losses of between $2.5 billion and $4.7 billion in federal revenues between 1996 and 2004 due to the misclassification of workers.  Estimates for the Commonwealth of Massachussetts in 1997 alone indicate that $68.3 million was lost in state income tax revenue due to 32,000 workers being misclassified in the construction industry.
There are certain legitimate work situations where an employer may not know how to classify a laborer.  In response, the IRS has for several years provided a twenty-question test to assist employers in determining whether a laborer should be treated as an employee or independent contractor.  In the case of the residential and commercial construction industries, however, the simple fact is that if a construction worker takes direction from an employer’s representative and is installing employer-supplied material, then that worker should be treated as an employee.  The only reason that the worker is misclassified is to realize substantial savings for the employer.
These employer benefits have a direct and negative impact on the worker.  Misclassification results in no social security benefits, no workers compensation coverage, no health insurance, no unemployment insurance, no overtime wages, and very often substandard wages and health and safety on the job.  Unfortunately, misclassification has helped to promote an underground economy in many parts of the construction industry.  Compounding the problem is the fact that many workers, once classified as independent contractors, are typically reluctant to demand legal employee status because of tax obligations they have incurred.  This reluctancy only helps to perpetuate the practice.
House Bill 2372 provides the Kansas Department of Revenue with a number of tools for investigating and prosecuting those employers who knowingly violate the law under this act. The bill, if enacted, would:
a) establish criminal penalties fort those employers who misclassify an employee (class A non-person misdemeanor);
b) establish a toll free 800 number and website for the Kansas Department of Revenue and Kansas Department of Labor to jointly receive communications concerning information on persons and businesses misclassifying workers;
c) assign an assistant attorney general to the Kansas Department of Revenue to investigate and prosecute cases; and
d) allow the KDOR to share income tax information with the KDOL.
My intentions in introducing this legislation are three-fold: 1) to protect honest Kansas small businesses who are having to compete on an unlevel playing field, 2) to protect Kansas workers from suffering continued wage erosion and exploitation, and 3) to stop the resulting loss of state income tax collections to the state of Kansas.  I sincerely hope that through passage of HB 2372 we can implement this “responsible employer” statute and begin to honestly confront this incredibly destructive practice.
On Tuesday of this week I presented testimony in support of House Bill 2254, a bill I introduced two weeks ago in the Kansas House.  This legislation, if enacted, would require that all electronic voting machines deployed in Kansas be able to generate a voter verified paper audit trail (or “VVPAT”).  Under this scenario, the voter would actually be able to view his / her ballot choices on a paper document.  I believe that the ability of these voting devices to provide a VVPAT is crucial to 1) being able to recover vote totals cast by voters in the event of machine failure or vote recording / vote reporting errors, and 2) provide the voting public assurance that every vote made on these machines has been recorded and recorded properly.
The following incidents demonstrate why a voter verified paper audit trail is so crucial to ensuring the integrity of electronic voting machines:
1) Diebold Election Services, Inc.’s TSx system was used for electronic voting for the March 2, 2004 California presidential primary.  The president of Diebold Election Services, Inc. subsequently admitted to security flaws and disenfranchising voters.  On April 30 the Secretary of State decertified all touch-screen machines and recommended criminal prosecution of Diebold Election Services.  The California Attorney General has joined a lawsuit against Diebold for fraudulent claims made to officials.
2) During the November 2004 Presidential elections in Ohio, at least 25 electronic voting machines in Mahoning County transferred an unknown number of Kerry votes to Bush. These devices did not have a paper audit trail;
3) During the November 2004 Presidential elections in North Carolina, 4,438 votes for a state-wide agriculture commissioner’s race failed to be recorded on a single electronic voting machine in Carteret County when poll workers failed to exchange memory cartridges on the machine when it reached its storage capacity.  This device also did not have paper audit trail capabilities.
In the case of the North Carolina glitch, the significance of this malfunction proved to be extremely critical as the eventual winner of the agriculture commissioner race led by only 2,287 votes with over 3 million votes cast.  The outcome of this race was ultimately determined only after the candidate having the fewer votes finally conceded the race, with the concession occurring 3 months after the actual election.  Had the North Carolina machine been fitted with paper audit trail capabilities, this problem could have been resolved in a matter of hours.
Many electronic voting machines have not been designed to support a voter verified paper audit trail.  Without one, it is extremely difficult, if not impossible, to confirm the machine’s tabulated results.  In addition, computer scientists have stated that some of these machines are not tamper resistant.  Internal e-mails for one manufacturer even indicated that data files used in the machines were not password protected to prevent manual editing.  It is also known that at least one voting machine model began counting backwards after it reached 32,000 votes.  The manufacturer had supposedly known about this problem for two years but failed to correct the deficiency.
Five states currently have legislative statutes or administrative procedures that require their electronic voting machines produce a voter verified paper audit trail.  Those states include California, Alaska, Ohio, Wisconsin, and Nevada.  Colorado has passed a resolution indicating its desires to have its electronic voting machines fitted with VVPAT capabilities.  In addition, another 21 states (including Texas, Arizona, and Utah) are presently considering enactment of this type of legislation.
The U.S. Congress is also weighing in on this issue.  Senator John Ensign, R-Nevada, and a bipartisan group of legislators have introduced “The Voting Integrity and Verification Act”. This legislation would require printed ballots that voters could check after using an electronic voting machine.  Senator Ensign noted that his home state of Nevada required a voter verified paper audit trail for the 2004 election.  “Not only did our election go off without a hitch, but voters across Nevada left the polls with the knowledge that their vote would be counted and that their vote would be counted accurately.  Every American should have that confidence.”
Kansas will be purchasing several electronic voting machines in upcoming months as mandated by the federal “Help America Vote Act” of 2002.  If Kansans are to have confidence in the voting process, it is imperative that Kansas public officials implement prudent and reasonable measures to ensure that the will of the voters is properly recognized in each and every election. The outcome of every Kansas race or proposition must be above reproach.  If we are to deploy electronic voting machines in Kansas, then we simply must make the process transparent and auditable by implementing voter verified paper audit trail capabilities with these machines.

Paid for by Tom Holland for Kansas Senate
Kris Marsh, Treasurer