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Under The Dome May 16, 2011


KPERS

Resolved for the time being in the conference committee report on HB 2194                        

The Kansas Public Employees Retirement System (KPERS) was one of the big topics of the 2011 legislature. With the election of a new House in 2010, much of their attention was turned to dismantling the system. The argument goes like this: “Most people in the private sector don’t have a secure retirement so we need to take it away from those that do.”

One particularly anti-public employee advocate — Dave Trabert of the Kansas Policy Institute — even went so far as to sort-of boast that his 75 year old mother still worked in a bank because she doesn’t have a retirement plan. So instead of finding ways to ensure a stable retirement for folks like his mother, Trabert was advocating for doing away with the stable system in place for public employees.

KPERS has a significant unfunded liability. This was caused by chronic underfunding on the part of the Kansas legislature. Year after year the legislature failed to fund the system to the level called for by actuaries and when the great recession hit in 2008, the market losses exacerbated the impact of the underfunding.

The actuaries have been begging the legislature for several years to make one simple change: raise the cap on employer contribution increases from 0.6% to 1.0%. Legislators have steadfastly refused to make this change.

This year, with Americans for Prosperity (apparently the prosperity of anyone except teachers and other public employees), the Kansas Policy Institute, and a new breed of anti-government zealots in the House demanding the elimination of KPERS as we know it, the more rational minds of the Kansas Senate stepped in.

The House passed a KPERS “reform” bill that would have dramatically reduced benefits for current active KPERS members by slashing their benefit calculation multiplier from 1.75 to 1.4. Additionally, the bill would have completely eliminated the defined benefit system for all new employees replacing it with a defined contribution and what could only be described as miserly funding. On the employer side, the House bill raised the employer contribution to 0.8% - less than the amount determined by the actuaries to be necessary.

Over in the Senate, a bill was passed on the basis of shared sacrifice. The Senate bill raised the employer contribution to 1% as requested but also raised employee contributions. In exchange for the increased employee contributions, the Senate increased the benefit multiplier to 1.85. The Senate bill also established a commission to make further legislative recommendations.

The two bills were put into a conference committee charged with coming up with a legislative solution for this year. The following are the provisions contained in the conference committee report as adopted:

The bill establishes a 13-member KPERS Study Commission to consider alternative retirement plans, including defined contribution plans, hybrid plans that could include a defined contribution component, and other possible plans. The Commission would be required to report no later than January 6, 2012 on its recommendations, which then would be introduced as two identical bills in each chamber of the Legislature.

For other provisions in the bill to become effective, the 2012 Legislature would have to vote on each of the bills. This vote by both chambers is the trigger of the effective date for other provisions in the bill. If the votes take place, the following items would be implemented:

The employer contribution annual rate cap of 0.6 percent would increase to new annual limits as follows:

·         0.9 percent in FY 2014;

·         1.0 percent in FY 2015;

·         1.1 percent in FY 2016; and

·         1.2 percent in FY 2017.

Employee contribution adjustments include adding two options that would apply to all active KPERS Tier 1 members:

·         Tier 1 members as the default option would have an employee contribution increase from 4.0 to 6.0 percent and also would be given for future years of service an increase in multiplier from 1.75 to 1.85 percent; or if an election is permitted by the IRS, then the alternative option could be chosen:

·         Tier 1 members would be able to elect freezing the employee contribution rate at 4.0 percent and reducing their future multiplier from 1.75 to 1.4 percent.

Employee contribution adjustments include adding two options that would apply to all active KPERS Tier 2 members:

·         Tier 2 members as the default option would have the employee contribution rate frozen at 6.0 percent and the cost-of-living adjustment (COLA) would be eliminated; or if an election is permitted by the IRS, then the alternative option could be chosen:

·         Tier 2 members would be able to elect freezing the employee contribution rate at 6.0 percent and reducing their multiplier from 1.75 to 1.4 percent in order to retain their COLA.

Inactive KPERS members, if returning to covered employment, would be offered an election for alternative options in their respective tier prior to July 1, 2013. After that date, or if there were no election approved, inactive members would be given the default option in their tier upon returning to covered employment.

Click here to read the full conference committee report on HB 2194.

Due Process

Resolved in the conference committee report on HB 2191

House Bill 2191, after failing in the House in the 2010 session, was reborn in 2011. As introduced the bill would have changed the probationary period for all teachers from three to five years. The bill was supported by United School Administrators and several individual superintendents.

The House Education Committee amended the bill to retain the three-year probationary period but to allow for an optional extension of said period. The House also amended the bill to require reports to be submitted by school districts on the number of extensions offered, the number agreed to, and the number of teachers in extensions who successfully earned due process rights at the end of the extension.

When the bill got to the Senate, the Senate Education Committee further amended the bill to require that a teacher offered such an extension would have to have been evaluated, that the evaluations would support the offer of an extension, the teacher would be given a plan of assistance, and that the teacher would have the opportunity to review the plan of assistance with his/her mentor or another teacher.

With these amendments, the bill passed the full Senate unanimously.

The two different versions put the bill in conference. During conference committee meetings, House Chairman Clay Aurand (R-Courtland) argued to delete the Senate provisions but Senate negotiators and the House Democratic negotiator held firm that teachers in such an extension should be given a plan of assistance that addresses identified needs and have an opportunity to consider the plan and offer before accepting.

Senator John Vratil (R-Leawood) wrote an amendment to that end which was ultimately adopted by the conference committee:

A school district offering a contract pursuant to this subsection shall prepare a written plan of assistance for the teacher being offered such contract and shall submit such plan of assistance to the teacher at the time such contract is offered. Prior to signing or rejecting a contract, the teacher shall have not less than 48 hours from the time the contract is offered to review and consider the contract and the plan of assistance. The plan of assistance shall be written to address those areas of teacher performance where the school district believes the teacher’s performance is less than satisfactory.

Click here to read HB 2191 as adopted by the conference committee and both chambers.

The Budget

School funding set back 20 years

It was bad news from day one when Governor Brownback announced he would hold schools harmless in his budget and then called for a dramatic reduction in school funding.

The new more conservative House consistently demanded even more cuts to vital state services as the session dragged on in an attempt to boost the state’s ending balance. The House sought to establish a budget for the future that is no larger than that of today — flat from one year to the next — and spent much of their time trying to cut more than even Governor Brownback.

The Senate, on the other hand, was more interested in struggling to preserve what they could of state services even if that meant smaller ending balances.

By the last day, the budget bill contained deeper cuts than the Senate wanted and a smaller ending balance than the House wanted. As for school funding, the base state aid per pupil figure ended up exactly where Governor Brownback wanted it back in January — at the 1999 level.

For 2012, base state aid per pupil will be $3,780; just $10 more than the $3,770 provided in 1999. And when adjusted for inflation, the spending power drops to the 1992 level. All progress made since the passage of the current school finance formula in 1992 — including the real progress made after the Montoy school finance lawsuit in 2006 — has been lost.

Additionally, the budget zeroed out a few more programs including the Mentor Teacher Program, the National Board Certification Program, and Agriculture in the Classroom. After school programs were cut in half.

While the House was demanding ever larger ending balances for the state, they were insisting on passing bills to reduce ending balances in school districts. Legislators continued to hammer away at unencumbered balances in school district budgets at the end of each year. While some of these funds could certainly be tapped such as contingency reserve, others are maintained as start-up costs for the next school year. For example, special education generally has a large unencumbered balance at the end of a school year as a cushion since aid payments for special education don’t start coming in until October.

The raw dollar changes in BSAPP since the passage of the school finance act in 1992 are reflected in the following chart:

School Year

BSAPP

School Year

BSAPP

1992-93

$3,600

2002-03

$3,863

1993-94

$3,600

2003-04

$3,863

1994-95

$3,600

2004-05

$3,863

1995-96

$3,626

2005-06

$4,275*

1996-97

$3,648

2006-07

$4,316

1997-98

$3,670

2007-08

$4,374

1998-99

$3,720

2008-09

$4,400

1999-00

$3,770

2009-10

$4,012

2000-01

$3,820

2010-11

$3,937

2001-02

$3,870

2011-12

$3,780

*In 2005 $244 of the increase in BSAPP was the result of lowering low-enrollment weighting and increasing the base with the savings resulting in no increase in spending authority.

Three Representatives who sit on the House Appropriations Committee were fighting for much larger cuts to base state aid even into the last week of the session. Representatives Anthony Brown (R-Eudora), Owen Donohoe (R-Shawnee), and Kasha Kelley (R-Arkansas City) tried in committee to cut an additional $100 per pupil. Fortunately the proposal got only four votes.

Click here to read a terrific editorial in the Johnson County Sun on the Kansas budget and education.

Three addition school finance measures

Three other adopted conference committee reports deal with school finance in various ways.

Most important is the conference committee report on HB 2015. This bill extends for another two years the state-wide 20 mill property tax levy for schools. This tax which is a primary source of school funding must be renewed every two years. Also in this report is an extension of the so-called “LOB hold harmless” provision that allows school districts to calculate their LOB as if BSAPP was $4,433. This means that as the state makes cuts to schools, local effort stays the same.

Click here to read the conference committee report on HB 2015.

The conference committee report on SB 111 delays the implementation of a change in the special education formula. This change sets a floor and ceiling for the reimbursement of special education excess costs. No district could receive more than 150% or less than 75% reimbursement. Many school districts would have lost money if the change had gone into effect so the legislature opted to wait another year before implementing the change. This bill also allows for the expenditure of certain unencumbered funds to make up the difference between the current BSAPP and $4,012.

Click here to read the conference committee report on SB 111.

Finally, the conference committee report on SB 21 establishes a uniform accounting system for school districts, allows Leavenworth School District to pick up high school students from Ft. Leavenworth, and adjusts an issue on motor vehicle taxes that is relevant to school districts with a cost of living or declining enrollment weighting.

Click here to read the conference committee report on SB 21.

Anti-KNEA measures

Stopped for this year

Two bills introduced this year were calculated efforts to attack public sector unions. Both passed the House but were stopped in the Senate.

House Bill 2130 would have prohibited employers from providing a payroll deduction option for professional association or union members to contribute to political action committees. The bill is near and dear to the conservative legislators and the Kansas Chamber of Commerce because unions tend to support moderate Republicans and Democrats over the conservatives endorsed by the Chamber.

The bill would also have prohibited these organizations from endorsing or recommending candidates and put strict limits on their ability to communicate with their members. Proponents argued that PAC money could still be collected but that it would have to be collected by personal check and that each check would have to be formatted in a fashion designated by the government.

Senators saw this bill for what it was — an attempt to silence one side in all political discourse — and rejected it. When the Senate refused to act on the bill, Rep. Anthony Brown (R-Eudora) attempted to amend it into a crucial unemployment bill. That effort failed as well.

House Bill 2229 would have given special privileges to organizations seeking to decertify teacher bargaining units. Brought to the legislature by the anti-collective bargaining organization AAE, it sought to change the professional negotiations act such that an organization that lost a representation election would have the same rights to access as the winner. It is the equivalent of giving a losing legislative candidate the same franking (state-sponsored mail) privileges as a sitting legislator.

AAE has gained some legislative advocates in the House this year, most notably Rep. Greg Smith (R-Overland Park) who promotes the organization on his Facebook page and lambasted KNEA members for not volunteering to take a pay cut to balance the budget. That, of course, is the AAE way — don’t advocate for schools, just cut your pay.

The bill passed the House but not the Senate.

Plenty of controversial measures

Not just illegal immigration and abortion, this year’s flare-ups included smoking and voting

The election of Governor Brownback and a more conservative House gave rise to more bills on abortion rights and illegal immigration this year. These are the issues that consume the most floor debate time in any session and this one was no exception. Abortion rights advocates found themselves on the losing end this year but despite the heightened anti-immigrant rhetoric, no action was taken on illegal immigration issues.

There was a bill to repeal in-state tuition for the children of undocumented workers. It passed the House but not the Senate. And there was much talk of the possibility of an Arizona-style immigration bill but it never materialized. Part of the lack of enthusiasm may have been the result of Rep. Virgil Peck’s (R-Tyro) unfortunate suggestion that the illegal immigration problem could be solved by hunting from helicopters. The controversy over his remarks may have tempered the discussion.

But the newly enacted smoking ban — a highly controversial subject from the 2010 session — generated some heat this year as attempts were made to revoke the casino floor exemption. This exemption in the law allows smoking on casino floors while it is banned almost everywhere else. Proponents of the exemption feel it keeps gamers in Kansas instead of sending them to the smoking casinos of Missouri while opponents of the exemption call it hypocrisy.

During the battle over the exemption this year, there was even an unsuccessful attempt to repeal the smoking ban. In the end, the smoking ban — with the casino exemption — was maintained.

And then there was voting. The election of Kris Kobach as Secretary of State brought life to the voter ID bill. Kobach’s plan, which ultimately passed, is to require a birth certificate or passport to register to vote. The measure is widely seen as a voter suppression tactic since it has the effect of eliminating voter registration drives as we know them. What good is a voter registration table in the mall? How many shoppers are likely to be carrying around a birth certificate or passport?

One of the biggest controversies in the bill is the cost. In order not to disenfranchise voters, the state will need to make the appropriate documentation available at no cost.

Implementation of the bill is delayed until 2013 at which time it is expected that technology will allow for instant access of birth records. A late effort to move implementation up in time for the 2012 elections failed in the Senate.


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