March 2011 Legislative Report

By:  Ken Daniel

Here’s where we are on our biggest concerns for business at the 2011 Legislature.


Bill Sneed, lobbyist for State Farm, and I met with Attorney General Derek Schmidt’s Chief of Staff, Eric Montgomery, along with the Assistant Attorney General for Consumer Affairs, Jim Welch, and two of his staff attorneys.  We were very short of time, yet we hoped we could pull this together yet for this session.  There were a surprising number of things that had to be done to make this a good Kansas bill, and in the end Attorney General Schmidt asked us to put this on the back burner until after the session.

The AG is very supportive of our bill but wanted time for his staff and us to work on language.  We may be able to go back to work in June.

WORKER’S COMPENSATION.  In spite this being in the hopper since before the session started, it is still not finished.  Remember that the unions and businesses, including the Kansas Roofing Association, drafted a compromise bill that would be the first meaningful work comp bill in 15 years.  Unfortunately, many legislators from both sides, and some administration leaders, want to offer their own “ornaments” for this Christmas Tree.

At this point the Senate has disposed of almost all of the ornaments.  The two houses will have to work on an agreement now.  I predict the final bill will look very much like the original bill and the Governor should sign it.

UNEMPLOYMENT INSURANCE.  The Secretary of Labor wants a provision that will raise the basis to $9,000 next year, $10,000 the year after, and $11,000 the year after that.  The rationale is that this would rebuild the Unemployment Insurance Fund very rapidly, probably by 2015.  However, remember that 100% of this “rebuilding” money will come from employers, and 100% of Kansas employers will experience a 37.5% increase in U.I. taxes using this method.  This is at a time when the U.S. and Kansas economies are in the tank and businesses need that money to survive in the meantime.

It is hard to fathom that Republican leadership wants to risk killing off thousands ofKansas businesses so we can get this money back into the U.I. Fund in a hurry, where it will be unavailable for business use.

EXPENSING.  This is good news for small businesses.  Virtually all purchases of business machinery and equipment and computer programming can be expensed in the current year, lowering Kansas income taxes on businesses and leaving most of the money in the hands of businesses for years.  Eventually the state will recover all of that money except for the effects of interest.  In the meantime, Kansas businesses will have more money for operations and expansion.