The House gaveled back into session Wednesday afternoon, May 10 this year's legislative agenda in what is known as the Veto Session.

Veto Session

The House gaveled back into session Wednesday afternoon, May 10 this year's legislative agenda in what is known as the Veto Session. The House has proposed several packages in order to reach an agreement with the Senate on taxes and budget and is waiting to receive responses from Senate negotiators. While waiting for a compromise to take shape, the House voted on conference committee reports left from when the legislature adjourned the regular session in April. (Conference Committee Reports allow several similar bills to be bundled together to pass as one bill – this allows weak bills to make it through the system by being bundled with a strong, popular bill. It sometimes forces you to vote in favor of something you oppose, just to ensure the primary legislation does get passed. Many of us opposed the procedural legislation at the beginning of session in January but could not garner enough support to stop the procedure).m

During the veto session, the House meets twice a day to discuss the conference committee reports which are passed during the day. As reports are completed by committees, they are then brought to the House floor for a vote of the full body. This will be the same procedure for the budget and tax reports once an agreement has
been reached. While veto session can be slow and frustrating at times, it is important to allow the process to work to ensure good state policy is achieved.

Budget/Tax Update

The House and Senate both continue to negotiate over differences between our two budget and tax plans. The conference committees on budget and tax have to reconcile the two different budgets and tax plans into one uniform bill for the budget and one bill for the tax plan. The one constitutional duty of the legislature is to pass
a budget before the session ends and a key component to the budget is tax legislation. Thus, the work of the budget and tax conference committees is especially important to ending the session. During the legislative session both the House and Senate passed two-year budgets which included recommendations for FY 2014 and FY 2015, each leaving the state in the black. The House budget has an ending balance of $386.8 million in FY 2014 and $104.8 million in FY 2015. This is compared to the Senate
budget which has an ending balance of $492.0 million in FY 2014 and $377.7 million in FY 2015. The House budget contains an additional $211.4 million in cuts from the governor's recommendation and the Senate plan contains an additional $48.7 million from the governor's recommendation. It is important to note the House budget saves more money and spends less than that of the Senate's. The House's ending balances are lower
because of the differences in the House and Senate tax plans.
The significant difference between the House and Senate tax plans is how they treat the state sales tax rate.

The House plan contains a 2 percent growth in revenue trigger so that as revenues grow above 2 percent from the previous year, the excess funds would be used to continue to buy down income tax rates. The House plan would also allow the state sales tax to drop from 6.3 percent to 5.7 percent on July 1, 2013 as it is slated to do
under current law. The Senate plan, however, would leave the sales tax rate at the current 6.3 percent instead of allowing it to drop by the scheduled 0.6 percent. It is this extension of the sales tax rate that accounts for the higher ending balances in the Senate budget.

The Dilemma

The position many legislators now face is how they will vote on the one cent sales tax. Many legislators opposed the tax when it was voted in two years ago. Several more voted in favor of it two years ago based on the promise that it would sunset, as scheduled this year. Many new legislators campaigned on the issue to
sunset the tax, which supports the House position. The final outcome this week is sure to contain interesting compromises in order to come to agreement on both the tax plan and the budget.

I encourage you to call me at 785-296-7653/913-683-0871 or e-mail me at and let me know your thoughts and/or suggestions. We will adjourn later this month, but I will still be available to discuss any topic you are interested in. Thank you for the honor of serving you!