This Monday, the Kansas Legislature convened the 2005 legislative session.  Given that the Kansas Supreme Court has ruled that the current school finance formula is unconstitutional, education funding will be at the forefront of this year’s legislative agenda.  The next few weeks should be particularly interesting as bills are introduced and committees begin their work. Complete daily calendars are available at www.kslegislature.org along with other information on the legislature.
GOVERNOR SEBELIUS PRESENTS STATE OF THE STATE ADDRESS
At the end of the first day of the 2005 legislative session, Governor Kathleen Sebelius delivered her State of the State address. I was pleased with her vision for Kansas’ future and share in the belief that we must continue to bring Kansas “back to health”.  Here is a summary of the Governor’s comments:
Improvements
• Together we have driven down the cost of government, using each tax dollar efficiently.
• We have cut costs by turning off lights, renegotiating office supply contracts, and other common sense measures.
• We have sold unused, unnecessary cars from the state motor pool, raising millions and lowering maintenance costs.
Health Care
• The Healthy Kansas initiative aims to lower costs and make health care affordable again.
• The plan will extend health insurance to 70,000 uninsured children and working parents.
• Small businesses provide affordable health insurance for their employees.
• The I-Save Rx program to will import safe, low-cost prescriptions from carefully screened pharmacies in Canada, saving Kansans money on much-needed prescription drugs.
Education
• A long-term solution to school funding must be found, not a quick fix based on accounting measures.
• Maintaining high standards in our schools and ensuring accountability are an important aspect of any school finance plan.
• By initiating school audits, we can ensure that Kansas children receive the best value for their dollar and that the most money gets to the classroom.
Economy
• Strengthening schools in our knowledge based economy attracts new businesses and families to Kansas.
• We will continue to promote investment in new fields, such as biosciences.
• The implementation of last year’s Economic Growth Act will create jobs by supporting small businesses.
THE STATE OF EDUCATION IN KANSAS
On January 3, before the start of the 2005 legislative session, the Kansas Supreme Court issued its long awaited ruling on school finance.  In its ruling, the higher court stated that the Legislature must fix the school funding problem by April 12, or the court will take control.  The ruling does not prescribe a specific course of action for the legislature to take, but says that there are “literally hundreds of ways” the financing formula can be changed in order to be constitutional.
The decision upholds the district court ruling that “the legislature has failed to meet its burden as imposed by Art. 6, § 6 of the Kansas Constitution to ‘make suitable provision for finance’ of the public schools.”  According to the ruling, the current system does not meet suitability requirements based on  the legislature’s own standards as set out in the Augenblick & Myers study commissioned by the legislature.
The Court states that additional revenue is needed for our schools; however, increased funding alone would not make our school finance formula constitutional.  Additionally, the Court calls for a cost analysis to be factored into finance decisions.  The legislature must also examine “the equity with which funds are distributed and the actual costs of education, including appropriate levels of administrative costs.”
In this ruling, the Court has interpreted Art. 6, § 1 of the State Constitution to mean that educational  improvement must be an ongoing process.  This is a point that has not been prevalent in previous finance rulings.  The commitment to our children cannot be static or regressive.  The ruling affirms that inaction by the legislature only increases the burden on local property tax payers.
Because the legislature has failed to maintain suitable provision for our schools, local school boards have been forced to rely on increases in local option budgets to meet basic general education costs.  Financing of Kansas K-12 public schools will take center stage in the 2005 session.
HEALTHY KANSAS INITIATIVE
Last month, the governor introduced her plan to decrease the costs of healthcare for Kansans. The Healthy Kansas Plan will be an important issue up for discussion in the 2005 legislative session.  Over 300,000 Kansans are without health insurance. Over 80 percent of these are working Kansans who simply cannot afford health insurance. It is important to remember that when a person cannot pay a hospital bill, the cost does not go away. It is either reflected in higher charges for medical procedures or higher property taxes.  In addition, patients without health insurance typically wait to seek treatment until the situation is more acute and more expensive to treat. Therefore, it is an advantage to everyone, not just patients, if more people can afford health insurance coverage.
The state is involved in several programs which purchase health care goods and services. These include Medicaid (which is 40 percent state, 60 percent federal), Medikan, the state employees’ health insurance program, the Veterans Commission, the Department of Corrections and the Juvenile Justice Authority. Some estimate that the state spends over $2 billion per year on health care services.  The governor is looking to put these programs together to achieve economies of scale in bidding contracts and making purchases.
Another part of the proposal would pool purchases of prescriptions for some senior citizens. Other states have tried this and secured lower prescription drug costs.  Many small businesses have dropped health insurance in recent years. Therefore, the governor’s program would initiate assistance for certain small businesses to start up or resume health coverage. This is where a critical difference can be made. Again, the program would work through the private sector marketplace rather than the regulatory front.
Expanded coverage for children and parents in working families is also proposed through the HealthWave program. These are families where parents are working but make too much to qualify for Medicaid and not enough to afford health insurance. Premiums are charged on a scale which is based on the income of the parents. The HealthWave program is already in place and would not be new.  The funding for the governor’s proposal, an increase in the cigarette tax, will be controversial. Please let me know what you think about the governor’s proposal and how you think it should be funded.
LEGISLATURE TO REVIEW DEATH PENALTY
On December 18, 2004 the Kansas Supreme Court ruled that state’s death penalty is unconstitutional and held that all inmates currently sentenced to death have their sentences reduced to the next most severe sentencing level.  Specifically, the court ruled that the current death penalty law forces juries to weigh evidence unfairly when applying the death penalty.  As the legislature begins its busy session, it will review the Supreme Court’s decision.
Several legislators are looking into passing a bill that would allow the use of the death penalty to remain constitutional.  Advocates of the death penalty claim that the Supreme Court’s decision is so narrow that any appropriate change to the language of the law will keep the state’s use of the death penalty constitutional.  Those opposing the death penalty claim that the Supreme Court’s decision is a triumph for the state because the death penalty is not a successful deterrent against crime and that it costs taxpayers too much money.
USED CAR SALES TAX UP FOR DEBATE
During the 2004 session, a bill to change the way in which sales tax is figured on used automobiles purchased from individuals was approved.  The bill came about as a result of concern that some Kansans are intentionally under-reporting the value of used cars in order to avoid paying their fair share of our state’s sales tax.  Under the bill, which became law on July 1st, sales tax for a vehicle purchased from someone who is not a licensed auto dealer is determined by the higher value between the stated selling price, or the property tax value of the vehicle, as classified by the state.
The change in the used car sales tax law has created more uproar than any other piece of legislation passed last session.  The new law disregards good-faith price negotiations between buyer and seller based upon the actual condition of the vehicle.  Three members of the Kansas House have announced the introduction of a bill to repeal this new sales tax law for used automobiles.  If the bill passes during the 2005 session, sales tax would be determined by the actual price paid by the car buyer as has been past law.  I am hopeful that the legislature will take action quickly in the 2005 session to undo this bad public policy.
If this bill can be passed quickly, the House tax committee can work on legislation to refund those who have already been affected by the tax change and can work on a new remedy to deal with people who intentionally under-report the cost of their used car purchases without punishing Kansans who negotiate a fair price on their used cars.

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