- Associated Press - Tuesday, January 10, 2017

The Lawrence Journal-World, Jan. 9

Lawmakers have done precious little in the past two years to figure out how to fund our public schools.

However daunting the task may be, Kansas legislators must put forth a school-funding plan this session. There simply is no reasonable excuse not to do so.

In 2015, Kansas lawmakers repealed the existing school funding formula, replacing it with a block-grant system that effectively froze funding in place for the next two years. During the two-year period, lawmakers were to write a new formula. That timetable is now less than six months away and little progress has been made.

That has to change. Now. The 2017 Legislature and its 50 new members owe it to Kansas’ taxpayers to develop and approve a new formula. There isn’t a legislator who didn’t know this was necessary when he or she decided to run. Many were elected largely on their promise to address school funding.

It won’t be easy. The Kansas Supreme Court has established a new legal standard for judging whether overall funding is adequate. In the school finance lawsuit Montoy v. Kansas in 2005 the court ruled funding must be based on the cost of providing the educational services the state required. In 2014, in the current lawsuit Gannon v. Kansas, the court set a new legal standard, one based on educational outcomes. Funding must be sufficient to ensure that when students graduate, they have sufficient knowledge and skills in specific areas.

And there is the enormous political problem of writing a formula that is both equitable and acceptable to a majority of the state’s 286 school districts. The state’s wealthiest school districts, which theoretically have the most to lose in developing a new formula that makes funding more equitable, also have the most political influence and historically have wielded that influence very effectively to limit or quash plans that reduce their level of state funding.

The 1992 school funding plan provided a base amount of funding per pupil for each district, with additional funds made available for difficult to educate populations such as low-income students and English language learners. That continues to be the most logical foundation for a school-funding plan.

In recent years, there has been a significant lack of pragmatism and compromise during Kansas legislative sessions. But if this group of legislators is going to write a school finance formula in six months, they need to acquire a healthy dose of both pretty quick. Because failing to approve a plan simply isn’t excusable.

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Topeka Capital-Journal, Jan. 8

Is Kansas a ‘model’ on welfare reform? There are a few reasons to doubt it

As Gov. Sam Brownback tries to figure out how to manage a $342 million budget shortfall and the prospect of a $580 million reduction in revenue next fiscal year, he’s eager to tout a different aspect of his tenure: his record on welfare reform.

Brownback recently said our state’s welfare system has a “decent chance” of being emulated at the national level: “We’re already seeing a series of states enact work requirements modeled after what Kansas has done and I think you’ll see it go into federal legislation - a decent chance of seeing a major expansion.” Considering the number of high-profile members of the new Republican Congress who identify with our state’s approach to welfare, such as House Speaker Paul Ryan, Brownback might be right.

However, more information is necessary before the federal government and other states mirror Kansas on welfare. The Brownback administration has been trying to increase the financial independence of low-income families in our state (getting welfare recipients back to work, connecting them with professional mentors, etc.), and this is a worthy goal. But we need to make sure impoverished Kansans aren’t suffering before declaring that our state is a model for the rest of the country.

Last year, Brownback signed the Hope, Opportunity and Prosperity for Everyone Act, which curtailed the amount of time Kansans are eligible to receive Temporary Assistance for Needy Families from 36 months to 24 months. The lifetime limit has been cut from 60 months to 24 months since Brownback took office. There were almost 39,000 people receiving TANF benefits every month in 2011, but this number dropped to just more than 12,000 by November 2016 (a 10 percent decline from the preceding year alone). Meanwhile, the average number of children receiving benefits from the program has decreased significantly over the past six years, from almost 26,000 in 2011 to 9,000 in 2017. Although Brownback often cites these numbers as unambiguous indicators that his welfare policies are working, there are reasons to doubt his confidence.

While it’s true that there are fewer Kansans on welfare than there have been in years, this isn’t evidence of success on its own. For example, according to the U.S. Department of Health and Human Services, only 9 percent of the Kansans who stopped receiving TANF benefits in 2014 reported that they had found jobs. It’s likely that many of these former TANF recipients simply failed to cite a reason when they left the program (meaning they may have found work), but it’s worth noting that employment was cited 41 percent of the time in 2006.

When Brownback was elected governor in 2011, there were 125,000 Kansas children living below the poverty line and more than 20 percent of them (26,000) received TANF benefits. By 2014, the number of children on TANF had been cut in half (12,782), but more than 118,000 children were still in poverty. This means less than 11 percent of impoverished Kansas children were receiving TANF benefits in 2014 than in 2011 - a nearly 50 percent decline.

If these trends hold through 2017 (more recent data needs to be released), Americans may want to look elsewhere for a “model” of welfare reform.

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The Wichita Eagle, Jan. 6

Is merger of utilities good for the state?

Recent testimony by state analysts raises concerns about the proposed merger of Westar Energy and Kansas City Power & Light and whether it is in the best interest of consumers.

State regulators shouldn’t be quick to approve the merger - as Gov. Sam Brownback and Wichita Mayor Jeff Longwell may have been in endorsing it.

KCP&L;’s parent company, Missouri-based Great Plains Energy, has applied for state permission to buy Westar. The $12.2 billion transaction would pay Westar shareholders $2.3 billion more than the company’s stock market value before the proposed merger was announced.

That acquisition premium - and the $4.4 billion Great Plains plans to borrow to pay for the deal - has analysts and some consumer groups concerned.

Analysts representing the staff of the Kansas Corporation Commission and the Citizens’ Utility Ratepayer Board warned that the merger could result in a financially weakened company and lead to higher electric bills.

“This transaction is being driven by the desire to handsomely reward Westar shareholders and to find a source of new earnings for GPE shareholders,” testified Andrea Crane, a consultant for CURB, the state agency that represents residential and small-business utility customers. “Ratepayers are a means to these ends.”

KCP&L; officials contend that the merger would result in $2 billion in operational savings in the first 10 years, which could help hold down rates. Brownback and Longwell argue the merger would lead to beneficial growth for the utility and the Kansas economy.

The review of the merger is still in its early stages, with more technical analysis to come. But based on the testimony of state analysts, the merger seems to mostly benefit Westar shareholders and not the state or its ratepayers.

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The Manhattan Mercury, Jan. 8

Revenue report not great, but OK

Kansas hasn’t enjoyed a big dose of good financial news in a long time, and given the degree of budget turmoil, Kansans would be wise not to hold their breath waiting for great news.

Still, the first revenue report of 2017, if not a blockbuster, was positive; tax collections in December exceeded estimates by $6.2 million, or 1 percent. Even better, the report was the second in a row in which collections exceeded projections; The December report, for November’s collections, topped estimates by 0.3 percent.

It’s easy to make too much of this, particularly given that state officials, weary of watching revenue fall short of projections, - sometimes by tens of millions of dollars - sharply lowered their forecasts last November.

The immediate upshot of those recalculations was a budget shortfall of about $345 million in the present fiscal year, which ends June 30, and a shortfall of almost $600 million more the following fiscal year.

If the new estimates are indeed more accurate as well as easier to meet, they can serve the state well. In addition to being a source of sorely needed optimism about the future, reliable estimates are essential to sound financial planning.

A regional economic survey whose release coincided with the Kansas revenue report offers a bit more reason for optimism about the state’s economy.

The Mid-American Business Conditions Index, overseen by Creighton University economist Ernie Goss, showed solid regional economic growth in the last two months. The survey covers nine Midwest and Plains states. In addition to Kansas, they are Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Scores based on various economic factors run from zero to 100, with scores below 50 indicating declines and scores above 50 reflecting growth. As a whole, the region’s index improved from 43.8 in October to 46.5 in November to 53.1 last month.

Kansas wasn’t the leader, but neither, for a change, was it the laggard. Its index rose from 44.4 in November to 51.1 in December. That’s not great, but it’s progress.

In comparison, both Missouri and Nebraska’s indexes exceeded 55, with Missouri’s 57.1 being the highest in the region. Oklahoma’s index was the only one below 50; it was 48.8 in December, but that was up from 43.3 in November.

Each state has its own assets and problems. For Kansas, correcting reckless tax policies won’t be a panacea, but will help restore the financial stability that can create opportunities for prosperity that have been few and far between in recent years.


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