Pub. 7 2018 Issue 1

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 10 By Doug Wareham, EVP-COO, KBA BROWNBACK APPOINTMENT & SUPREME COURT RULING CLOUDING 2018 STATE LEGISLATIVE SESSION KBA LEADERS LEDGER A FOG HAS SETTLED IN AT THE KANSAS Statehouse that is largely attributed to two great unknowns. First: The failure of the U.S. Senate to confirm President Trump’s appointment of Governor Sam Brownback as the Ambassador-at-Large for International Religious Freedom before Congress adjourned last month has stalled the transition of power for Kansas’ chief elected official from Brownback to Lieutenant Governor Jeff Colyer. Colyer, who is also actively campaigning to be the 47th Kansas Governor, has begun the process of assembling his staff team, but it’s not certain when he’ll have the gubernatorial reins. Brownback has been re-nominated for the Ambassadorship by President Trump, but at this point, it is unclear when the U.S. Senate will act leaving Colyer with no other choice but waiting in limbo to see if the Brownback appointment is finalized. Any uncertainty relating to that transition of power will hamper the ability of executive branch to provide leadership under the statehouse dome. That reality is already being felt at the Statehouse where many Republicans and Democrats alike publicly discounted Governor Brownback’s final state-of-the-state speech in light of Brownback’s anticipated exit. Second: An even darker cloud looming for State Senators and State Representatives is the fact the Kansas Supreme Court rejected funding levels for K-12 education adopted last year as part of their ruling on Gannon vs Kansas. The court ruling directed state lawmakers to “adequately” fund Kansas schools, but failed to indicate what amount of funding they’ll deem adequate. Complicating the situation is the short timeframe the court is giving legislators to respond. The Supreme Court plans to begin reviewing the Legislature’s response to their “inadequate funding ruling” on April 30th. That deadline has led Kansas Attorney General Derek Schmidt to encourage state lawmakers to enact their legislative solution to education funding adequacy by March 1st to allow time for the legislation to be signed into law by the Governor and to allow the Attorney General’s office time to prepare to defend the Legislature’s position on school finance to the court’s seven justices. Adopting legislation to infuse millions more into the K-12 funding formula by March 1st will be an extremely tall order considering it took a record long 114-day session last year to enact a new school finance formula and accompanying income tax rate increases. Further exacerbating the education finance challenge facing state lawmakers this spring is the fact that 2018 is an election year for the 125 members of the Kansas House of Representatives. Many of the State Representatives that supported tax increases tied to additional funding for school districts one year ago will likely be more skittish about raising taxes on their constituents during an election year. Those same constituents will be heading to the voting booth in early August. As the 2018 state legislative session gets underway, KBA will once again be steadfastly defending the interests of Kansas banks, including opposing any tax proposal that financially burdens Kansas banks or negatively impacts the services banks provide to their customers. KBA will press for the adoption of revisions to the state banking code to provide a state-charter option for savings banks located in Kansas and KBA will also support legislation designed to ensure privilege tax filers are eligible to participate in Kansas’ E-community tax credit program designed to foster entrepreneurship and small business development.