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Elliott Jackson, CPA, Treasurer
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Capitol Updates

Report from the State Capitol
by Steve Abrams

Kansas, like the rest of the country, is feeling the real consequences of an economic recession. The most difficult task Kansas faces today is reforming a state budget that is losing more and more money every month. On January 12, 2009, Governor Kathleen Sebelius delivered her State of the State address. In her speech, the Governor recognized the importance of a balanced budget, but unfortunately, her recommendations failed to address the problem.

THE BUDGET - When discussing the budget, the governor focused on the two biggest and most expensive programs in the Kansas budget (K-12 education and social service). The Governor reiterated the sentiments of every Kansan when she detailed the importance of those programs. Her rhetoric, however, was irresponsible and is likely to create unrealistic hopes among Kansans who rely on those services.

If a family consistently spends more than it brings in, it is irresponsible. Kansas has been engaging in irresponsible spending. For several years, the Kansas legislature and Governor have spent more than they have brought in. Consequently, our reserves (savings accounts) are down to zero and below, and obviously, this creates a very real budget problem.

Reasonable people can have a difference of opinion about how to balance the budget, but the fact is, with the information available on January 12th and 13th, the Governor's proposed budget failed to balance the budget. It was $45 million short. And that doesn't take into account any possible shortfalls over the next 3 months. The total budget deficit is expected to be close to $300 million by the close of the budget year. It is not a pretty picture.

Further, her proposal to push some of the state spending down to the county & city level may help balance the state budget, but it sure seems like it doesn't solve the overspending problem. It just pushes the problem down to another level of government.

I agreed with the Governor's statement about not raising taxes in the FY 2010 budget. It is too bad that her budget actually contained $33 million in tax increases. Keep in mind that she called them "tax policy changes", but the facts are that these "tax policy changes" really take $33 million from taxpayers that they otherwise would keep in their own pocket.

ENERGY - On January 13, the joint committee on energy and environmental policy met to discuss the Carbon Cap-and-Trade policy options. The legislature probably will not take any action this session on this issue, but since it will likely have an effect on every manufacturing facility and every farm in this district, it is something that bears watching. Further, if something does occur, it is much more likely to happen at the federal level now that President Obama has taken office.

IN THE OFFICE - A couple weeks ago, I was able to visit with some of the members of the Kansas Association of CPA's, and then, I visited with some members of the Kansas Association of Realtors and on Thursday, I visited with members of the Kansas Cooperative Association. I have also visited with members of Association of Water Districts, and members of Feed Grain Dealers. If you plan on coming to Topeka during the session and would like to visit with me, call ahead of time (785.296.7381) and I will make every effort to get together with you.

Latest update...
The House has passed the Rescission Bill, but they took more from schools than the Senate Bill did. It is going to conference committee. I have been talking to members about the Winfield Correctional Facility as well as all the schools in my district.

Other issues... the Statewide smoking ban and the hike in cigarette tax will be coming up in a couple weeks.

I will send another column after it gets out of conference committee and gets back to the floor of the Senate.

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