Kansas House of Representatives
40th District
Volume 2012, Issue 10: March 12-16, 2012
In This Issue
- Drop Dead Day Nears
- Budget Debate All Day Friday
- KPERS Debate this Week
- Keep in Touch
Drop Dead Day Nears
This coming Wednesday is "Drop Dead Day" in the Kansas Legislature.
That means that any bill that is not acted on by the House and Senate by
this day, is considered dead. Of course, there are bills that are
exempt, such as the budget, and it seems like anything can show up in a
conference committee report! So Monday, Tuesday and Wednesday will be
long days of debate in the House Chambers. Thursday and Friday, the
legislative staff and members of conference committees will start the
process of merging bills together and meeting to find compromise between
the House and the Senate. Any of us that have bills out there that we
are tracking to make sure they make it through the process will have to
be vigilant as the schedule is hard to track during this period of time.
Budget Debate All Day Friday
On Friday the House debated its mega-budget that included changes for
the current fiscal year 2012 and then fiscal year 2013. Debate went for
7 hours, there were at least 23 amendments offered and at my count, 8
actually adopted. There was a lot of time spent on debating the merits
of the new rule adopted last year that does not allow an expenditure in
the budget unless there is a corresponding cut. As there is a revenue
surplus right now over $400 million, there is great debate over whether
we should reinstate some of the most painful cuts from the last few
years or continue to build up the bank account. Many of the proposed
amendments were reflections of this debate, including putting money back
into things such as:
-K-12 education
-Parolee, probation and anti-recidivism programs
-Community Mental Health
-Services for autistic children
-Raising state employees' wages that are undermarket and/or under the
poverty level
-Kansas Highway Patrol
Some of us tried to keep track of the changes as amendments were offered
and either adopted or rejected. It appears that this version of the
budget actually spends more than last year, and even adds an additional
$1million to the legislative budget. Maybe this is a sign that we will
not be finishing the session within the 80 day goal set by the Speaker
of the House after all. But remember, even after the long debate on
Friday, we still have to see what the Senate does with their own version
of the budget, see on what compromise the conference committee agrees,
and then see if the Governor uses his line item veto or vetoes the
entire bill. We are quite a ways from a finished product!
KPERS Debate this Week
One of the subjects that I get questions on almost every day is the
Kansas Public Employees Retirement System (KPERS). This is one of the
goals that the Governor set last year when he took office was to come up
with a plan to address the unfunded liability level of the current
KPERS. A special committee traveled Kansas all last summer and
submitted a proposal to the legislature this session to switch to a
defined benefit system, that has been rejected by the House Committee on
Pensions.
It seems that everyone agrees that KPERS is a well run program that has
very low overhead costs and has received the investment returns right on
target of its estimates. The unfunded liability comes from the
Legislature's choice to not fund its portion since the 1980s.
Therefore, those who are in the system continue their view that they put
in their required contributions, so the state needs to do its part.
This week the House Chamber will be debating the KPERS bills that the
House Pension Committee finally came up with last week after hearings
all session. The provisions included in the bill are:
- a 3-year salary cap of $20,000 for school professionals who go back to
work after retiring
- a raise of Tier 1 employee contribution rates from 4.0 to 6.0 % and a
multiplier increase from 1.75 to 1.85 %
- elimination of the automatic cost-of-living adjustment (COLA) for Tier
2 employees, while maintaining the current 6.0 % employee contribution
rate and raising the multiplier from 1.75 to 1.85 %
- raises each year of the employer contribution until it reaches 1.2 %
in 2017
- creates a new Tier 3 that uses a Cash Balance plan for new employees,
for more information on what the bill's Cash Balance plan does, please
see the website's supplement note on SB259 at,
http://www.kslegislature.org/li/b2011_12/measures/documents/supp_note_sb259_01_0000.pdf
Overall, a cash-balance plan is a defined benefit plan that is a whole
lot like a traditional pension, but with a few elements that closely
resemble a 401(k). You don't invest any of your own money in the plan,
nor do you have any responsibility for the investment choices. Instead
of your benefit in retirement being based on a formula that takes into
account how long you were on the job and your average salary during your
last few years of employment, the cash-balance plan credits your account
with a set percentage of your salary each year, plus a set interest rate
that is applied to your balance. Each year, you get a statement that
shows the hypothetical value of your account, as well as what sort of
monthly income payout (or lump sum) that will generate when you retire
at 65. If you leave the company before retirement age, you may take the
contents of your cash-balance plan as a lump sum and roll it into an
IRA. A traditional pension is not portable. The Office of Budget
Management has reported that the Cash Balance plan results in lower
benefits for participants that have been in a retirement plan for a
while. A cash-balance plan is great if you are young and plan on
job-hopping. But if you work for the state for a very long time - the
total amount you'll get from a traditional pension plan is typically
bigger than what you'll get from a cash-balance plan, because the
formula for a traditional pension gives heavy weight to your average
salary over the last few years of employment. With a cash-balance plan,
it is a simple average of every year's salary.
Keep in Touch
You can track my activities on my website www.meier4kansas.com, my
FaceBook page www.facebook.com/Meier4Kansas, and Twitter
www.twitter.com/melaniemeier. I am privileged and honored to be your
voice in the Kansas Capitol.
If I can ever be of assistance to you, please feel free to contact me at
home or in Topeka. My office is still in the Docking State Office
Building on the 7th Floor, Room 722. To write to me, my office address
is Kansas State Capitol, Topeka, KS 66612. You can also reach me at
(785) 296-7668 or call the legislative hotline at 1-800-432-3924 to
leave a message for me. Additionally, you can e-mail me at
melanie.meier@house.ks.gov. You can also follow the legislative session
online at www.kslegislature.org.
If you need to directly contact a particular agency in state government,
you can find useful telephone numbers online at
http://da.state.ks.us/phonebook.
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