Joint Committees Report of the Legislative Budget Committee to by icecube

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									                                                                  Joint Committees




                                                          Report of the
                                          Legislative Budget Committee
                                                                 to the
                                                2009 Kansas Legislature
Chairperson: Senator Dwayne Umbarger

ViCe-Chairperson: Representative Sharon Schwartz

other members: Senators Laura Kelly and Stephen Morris; and Representatives Don
Dahl; Bill Feuerborn; and Lee Tafanelli

study topiCs
● State Finance

● New Targeted Case Management Rules

● Distribution of Fire Insurance Premiums

● Animal Health Department Facilities Fees

● State Building Insurance

● Staffing of the Larned Sexual Predator Program

● Non-Judicial Employee Pay Plan

● Funding of the Proposed Change in State Tourism Services




                                                                       December 2008
                       Legislative Budget Committee
                                         state FinanCe


  ConClusions and reCommendations
  The Committee would like to commend the KVC Behavioral Health Care for the service,
  dedication, and the facility it has developed in order to provide a high quality continuum of
  medical and behavioral healthcare, education and social services to children and families in
  Kansas, especially those in the foster care and adoption system.

  The Committee recommends a thorough review of all provisos that are contained in the
  appropriations bills by the Senate Ways and Means Committee and the House Appropriations
  Committee. The Kansas Legislative Research Department staff will work with Revisor of
  Statutes’ staff to prepare a list of provisos for the committees to review, focusing on those
  provisos that have been included for several years.

  The Committee also recommends that the House Appropriations Committee, Senate Ways and
  Means Committee, and the House and Senate Taxation Committees work together to produce a
  document that would track all tax receipts and would present a complete picture of the State’s
  different revenue streams. Once completed, the document could be distributed to Legislative
  members.

  The Committee requests the Kansas Department of Health and Environment provide a detailed
  report concerning the mold issues at the Health and Environment lab to the House Appropriations
  Committee, the Senate Ways and Means Committee, and the Joint Committee on State Building
  Construction on or before January 26, 2009. The report should include such items as the
  frequency of inspections to the facility, the statutes or rules governing those inspections, the risk
  to employees who worked in the affected labs, and the pros and cons on whether or not to keep
  the labs at the current facility or move them to a different facility along with a recommendation
  for the best location for the labs.

  The Committee recommended authorizing a request for proposal for a legal services contract that
  could potentially exceed $1.0 million. Kansas State University is requesting a contract for legal
  representation for ongoing litigation with an energy-related service company. Committee review
  is required by the Professional Services Sunshine Act enacted by the 2000 Legislature.

  Finally, the Committee urges the Consensus Revenue Estimating Group to provide an early
  estimate of State General Fund revenues. The timing of the early estimate meeting would be
  after the release of certain key economic indicators in late February or early March. This estimate
  should be a limited report providing early estimates on only major tax sources such as individual
  income and retail sales taxes.



Kansas Legislative Research Department             5-1                             2008 Legislative Budget
  The Committee makes no specific recommendations regarding any of the other topics reviewed
  in this report.

   Proposed Legislation: None.



                 baCkground                                 also provided information on the November
                                                            2008 human services caseload estimates for
     The Legislative Budget Committee, as                   the Department of Social and Rehabilitation
provided by law (KSA 46-1208), can set its own              Services, the Health Policy Authority and the
agenda. The Committee conducted its usual                   Department on Aging; the November school
monitoring of State General Fund finances.                  finance estimates; and the November 2008 State
Other topics that the Committee reviewed                    General Fund Consensus Revenue Estimates.
included the following: Suspension of operations
of the Atchison Juvenile Correctional Facility;             Atchison Juvenile Correctional Facility
reviewed a request for proposal for legal services;            Suspension of Operations
reviewed the Department of Corrections budget
reductions; reviewed the total tax receipts for FY              The Commissioner of Juvenile Justice
2006, FY 2007, and FY 2008; received an update              Authority (JJA) presented information regarding
on mold problems at the Department of Health                the suspension of operations at the Atchison
and Environment labs; reviewed the Governor’s               Juvenile Correctional Facility. On September
requested two percent reductions for the current            8, 2008, the Kansas Juvenile Justice Authority
year; reviewed federal funding shortfalls in                announced plans to suspend operations at the
the Department of Transportation; reviewed a                Atchison Juvenile Correctional Facility effective
proposal from the Aviation Industry in Kansas               December 8, 2008. The intent was to repurpose
for continued funding for research and workforce            the facility for use as a residential care facility, a
development; reviewed actions and problems                  Youth Residential Center II (YRCII). The YRCII
concerning the disaster relief effort for the               would be a group home placement for juveniles
floods of 2007; received a memo on the type of              placed in the custody of the commissioner through
provisos that are allowed in Appropriation Bills;           the issuance of a Request for Proposal (RFP)
and toured the facilities of the KVC Behavioral             process and contract with a private provider.
Health Care in the Kansas City area.
                                                                The Commissioner was planning to meet
                                                            with community leaders of Atchison, to fully
           Committee aCtiVities                             inform them of the intent for the facility. He
                                                            noted that the most serious implication for the
State Finances                                              community would be integration of as many
                                                            as 60 additional youth in the local school
    At each meeting, staff of the Legislative               system. JJA expects a contract for operations
Research Department presented a report                      of the YRCII will be in place and the facility
comparing estimated and actual receipts to                  will become operational between April 1 and
the State General Fund. In addition, staff also             July 1, 2009. The Commissioner noted that this
provided the Committee with information on                  implementation would depend on meetings and
actual FY 2008 State General Fund expenditures,             the Request for Proposal process.
the shifting of certain State General Fund
expenditures from FY 2008 to FY 2009, and
updated State General Fund profiles. Staff
Kansas Legislative Research Department                5-2                                 2008 Legislative Budget
    It was explained that the employees of the              services with certified public accountants,
Atchison Juvenile Correctional Facility who are             attorneys, or consultants. The Act requires that,
subject to layoff as a result of this action were           prior to entering into a legal services contract
provided 90 days advance notice of the intent               where the amount of fee to be paid reasonably
to suspend operations. Affected employees are               may exceed $1.0 million, the Director of
being provided support and assistance through               Purchases must submit a proposed RFP to the
the difficult transition and JJA will do everything         Legislative Budget Committee. If the Legislative
possible to assure all affected employees land on           Budget Committee does not take action on the
their feet.                                                 RFP, then the agency would need to wait 60 days
                                                            before proceeding with any action.
    In late June, JJA and other executive branch
agencies, were given a directive by the Governor                The Director of Purchasing explained
to prepare and submit a plan for a one to two               that in November of 2007 the Committee was
percent reduction in the FY 2009 budget and                 notified and approved a request for proposal for
the Governor directed that a reduced resource               the Attorney General’s Office for legal services
budget proposal be submitted for FY 2010 that               related to pharmaceutical litigation. He notified
provided an additional five percent decrease. The           the Committee that a decision has been made on
suspension of activities at Atchison is expected to         that contract and the Attorney General is ready
save $1.9 million from the State General Fund in            to proceed with the award. After summarizing
FY 2009 and the FY 2010 savings are projected               the proposal, he asked for any questions on the
to be $3.7 million from the State General Fund.             award.

    The Committee expressed concern regarding                   The Director also mentioned that there was
the impact on the community of Atchison,                    another Request for Proposal concerning attorney
their economy and the impact on their school                contracts. The Chevron litigation is still on-going
system.                                                     and Kansas State University wants to prepare for
                                                            possible litigation. Kansas State University is
    Representative Jerry Henry addressed various            seeking competitive proposals from attorneys and
concerns regarding the community of Atchison                law firms interested in assisting in representing
and the repurposing of the Atchison Juvenile                the University in energy service company-related
Correctional Facility. Since the Legislature will           commercial litigation. Qualified attorneys and
not convene until January 2009, he hoped that               law firms selected through this process will be
the community concerns of Atchison would be                 appointed to serve as Outside Counsel to the
addressed in future Legislative Budget Committee            University and will be assigned to this matter
meetings. The community formed a task force,                when appropriate. Assignments will be based on
which includes Representative Henry, to address             a number of factors including cost, experience,
possible problems with the repurposing of the               qualifications, and geographic location.
facility. These concerns include the cost to the
school system and the cost to law enforcement                  The Committee approved the Request for
dealing with possible runaways.                             Proposal by Kansas State University.

Legal Services Request for Proposals                        Department of Corrections Budget
                                                               Reductions
    The 2000 Legislature enacted the Professional
Services Sunshine Act which establishes the                     The Secretary of Corrections put together
procedures to be followed when a state agency               the Department’s FY 2010 budget and noted
wishes to enter into a contract for professional            that when they began the process, they were

Kansas Legislative Research Department                5-3                               2008 Legislative Budget
approximately $2.9 million dollars short using                 Senate and House Chambers were interested in
FY 2009 as a base. The shortage is mostly                      the new format.
comprised of utility cost and personnel costs.
There was also a $678,000 cut made in the central                  The Director of the Kansas Legislative
office in FY 2009 which is carried over. These                 Research Department discussed the proposed
factors needed to be taken into account.                       plan. The Total Receipts, FY 2008, which tries
                                                               to capture total receipts deposited into the State
     Secretary Werholtz explained that there is no             is considerably different than the budgeted
guarantee that there would or would not be an                  receipts amount. The Director of the Kansas
incident at a facility. Staffing is very important,            Legislative Research Department explained the
and in projecting budget cuts, it is a definite factor         format of the chart. He noted that the items under
to take into consideration. He also discussed                  total receipts could be documented in whatever
turnover in staff and El Dorado has the greatest               structure requested.
amount of turnover, currently at 41.5 percent. It
takes 30 days to fill a position, and then there is            Department of Health and Environment
training involved. The Department of Corrections                  Labs
began looking at what functions of the budgets
could be reduced without adversely affecting                       The Deputy Secretary of the Department of
public safety. Currently, they are looking at a                Health and Environment explained the history
possible reduction/closing of a smaller facility               of Building 740, which was constructed in 1956
or facilities, reducing some contractual services              as a U.S. Air Force Base hospital. In 1974 it
and also some corrections programs. This is                    became the Topeka location for the Kansas
only under consideration at this time.                         Department of Health and Environment labs. He
                                                               noted that there were over 30 separate HVAC
    Committee questions and discussion followed.               zones operating in the facility, and as a result, the
The Committee requested a spreadsheet of the                   HVAC system is unbalanced.
average cost per facility that would be proposed
for closure.                                                       In mid-July, laboratory staff working in Room
                                                               3-C-1 of Building 740 noticed a separation of a
Total Tax Receipts for FY 2006, FY 2007,                       ceiling sheetrock seam with one side hanging
   and FY 2008                                                 lower than the other. Over the next few days
                                                               mold growth became visible on the sheetrock.
     Representative Kenny Wilk presented                       By August 25, only two rooms in the building
information regarding Total Tax Receipts for FY                were characterized as potential problem areas for
2006, FY 2007 and FY 2008. Representative                      mold growth, rooms 3-B-11 (pesticide lab) and
Wilk explained that he had been working                        3-B-16 (volatiles lab).
with Kansas Legislative Research staff to
get a complete picture of the State’s different                    There were Committee questions and
revenue streams. Representative Wilk asked                     discussion about immediate needs and
that the Legislative Budget Committee consider                 consideration of the use of the St. Francis
working with the Interim Tax Committee to see                  Hospital vacant buildings in the future.
if a format could be agreed to that would be an
official document from the Kansas Legislative                  Governor’s Requested Two Percent
Research Department. Representative Wilk also                     Reductions
mentioned that the Interim Tax Committee had
                                                                  The Director of the Division of the Budget
a good discussion regarding the format and both
                                                               provided information regarding the letters


Kansas Legislative Research Department                   5-4                                2008 Legislative Budget
that were sent by the Governor to the cabinet                 and will continue into the future, as there will
secretaries and other agencies regarding their FY             not be adequate balances to continue funding
2009 and FY 2010 budgets. He explained that                   transportation at current levels.
following the 2008 Legislative Session last Spring
revenue collections were considerably lower                        The Secretary explained that Congress
than expected. Legislative leaders requested the              recently took steps to shore up the Federal
Governor to direct cabinet agencies and other                 Highway Trust Fund by transferring $8 million
state agencies to take action on the current year,            from the treasury to the HTF. This is a temporary
FY 2009. The Governor sent a letter directing                 fix and the impact to Kansas is real. A long-term
her cabinet agencies to begin operating in FY                 solution is required to address the HTF problem,
2009 as if their approved budget were one to two              but it will not be easy, and Congress will probably
percent lower than what was approved in the last              need to search for new sources of transportation
legislative session and another letter to other state         funding.
agencies requesting the same reductions. These
reductions were to be reflected in the agency’s               Aviation Industry in Kansas
submitted budget.
                                                                  The Senior Vice-President of Product
     The Budget Director noted that the Governor              Engineering of Cessna Aircraft, presented an
is expecting agencies to turn in a revised current            update on the aviation economic impact in
year budget for FY 2009 at one to two percent                 Kansas. He stated that the aviation industry
less than the approved and a FY 2010 budget                   provides 36,500 direct jobs with a payroll
that is flat based on the FY 2009 revised budget.             of approximately $2.4 billion. Each aviation
If the agencies need to request any additional                job generates an additional 2.9 jobs. He noted
funding, it is to be submitted as an enhancement.             that it is anticipated that Cessna will break
They also have requested that if the agencies had             ground for the Columbus facility yet this year.
to cut their base budget by another five percent,             Approximately 300 engineers are expected to
to submit a list of what they would do to achieve             work at the Columbus facility.
that reduction. The Budget Office is reviewing
                                                                  He indicated that in order for Kansas to
this information and working with the Governor
                                                              maintain a leadership position and grow the global
to prepare a recommended budget, but at this time
                                                              market, the industry and the State of Kansas must
it is unknown. In the two percent reductions,
                                                              invest in research and technology. In addition, the
the Governor has exempted school finance,
                                                              state’s investment allows the aviation industry to
debt service and human service caseloads. The
                                                              obtain significant federal and industry funding.
estimated savings is $40 million in FY 2009.
                                                              The National Institute for Aviation Research
Department of Transportation Federal                          (NIAR), located at Wichita State University
   Funding                                                    is ranked third among the nation’s technology
                                                              universities. It is important to maintain present
    The Secretary of Transportation addressed the             and future aviation research at NIAR. For this
Committee on the status of the federal Highway                reason, a request for an additional $5.0 million
Trust Fund (HTF). The Secretary presented                     will be made to the 2009 Legislature.
background information on the HTF regarding
reimbursing state and local governments for                       Responding to questions from the Committee,
qualifying highway and transit expenditures.                  he indicated that NIAR research continues on
A shortfall in the HTF has been discussed and                 composite materials to use in place of metal
anticipated for quite some time. The shortfall                on aircraft. It is essential to continue research
was anticipated to begin at some point in 2009                funding at the federal level. With regard to

Kansas Legislative Research Department                  5-5                               2008 Legislative Budget
recruiting qualified engineers, Cessna mainly                Disaster Relief Effort of the 2007 Floods
recruits within the middle section of the United
States because it is very difficult to get qualified             The Committee reviewed actions and
engineers from either coast to move to the middle            problems that have arisen after the disasters in
section of the country. It is important to look for          southeast Kansas and Greensburg, primarily with
ways to keep students attracted to science and               the Federal Emergency Management Agency
math as well as teach students that they can be              (FEMA) application process and communications
successful.                                                  between officials and residents.

     The Director of Labor Relations for the                     The Director of the Office of Policy and
Hawker Beechcraft Company presented an                       Research of the Department of Revenue,
update on Aviation Manufacturing and workforce               provided an update on state business incentive
development. He stated that there is increased               programs for disaster areas and the Kiowa County
global competition in the aviation industry.                 Business Restoration Assistance Program and
25,000 skilled workers will be needed within the             other disaster assistance programs.
next 10 years. As technology changes, extensive
re-training of employees will be necessary.                      The Adjutant General provided a Summary
                                                             of Public Disaster Assistance. The General
     The National Center for Aviation Training is            noted the Adjutant General’s Office is currently
in the building stage to assist the Kansas aviation          working with nine open presidentially-declared
industry and provide qualified engineers. A                  disasters in Kansas. With the magnitude of
request will be made to the 2009 Legislature for             several of these disasters, the resources of the
funding of $5 million for aviation training in each          Office have been stretched thin.
of the next four years for the purposes of building
and construction; equipment and machinery;                       Responding to a question from the
infrastructure, programs and curriculum; and                 Committee concerning the difficulties that have
high tech classrooms. He indicated that the                  arisen from public utilities that were damaged
National Center for Aviation Training is critical            during the ice storms, he noted that discussions
to the aviation industry in Kansas.                          and communication with the utility companies
                                                             and his office are continuing and he will keep
    Responding to questions from the Committee,              the Committee informed of the situation. It was
he noted that Sedgwick County has a $54 million              noted that the estimate for the 2007 Ice Storm for
bond for investment in the National Center with              public utilities should reach $38,500,000.
the County providing $1 million funding for
curriculum. The City of Wichita has provided                     Responding to a question from the Committee,
a 20-year lease on land owned by the Airport                 it was noted that the remaining state’s obligation
Authority.                                                   on the nine disasters is just under $50 million,
                                                             without the funding for the most recent flooding
    At this time, high school students, by statute,          disaster.
are not allowed to attend technical colleges. It
was also noted that high schools receive state                   The City Manager of Coffeyville presented an
funding for vocational and technical classes.                overview of the 2007 flood damage in Coffeyville.
That funding would cease if the students were                He stated that they have worked with the Adjutant
moved to a technical school or college. It was               General’s Office to communicate what could
also noted that when legislation moved technical             have been done to better assist Coffeyville after
schools under the auspices of the Kansas Board               the disaster and what went well. Disasters do
of Regents, the state funding did not follow.                not happen to a whole community on a regular


Kansas Legislative Research Department                 5-6                               2008 Legislative Budget
basis and therefore many procedures are not                complimented the Adjutant General’s Office on
put in place or information readily available              their assistance during the flood disaster.
concerning the federal and state resources and
how to secure the resources and services. One of               The Committee was notified that once a
his recommendations is to have a website where             resident is in FEMA housing for 18 months, by
a community official could go to determine                 law the program benefits end, and the resident
the status of requests. Disaster training for city         must begin paying fair-market rent to FEMA,
officials would also be helpful.                           based on the occupant’s income. FEMA will not
                                                           evict anyone and many of the problems have
    The Human Resources Director of Coffeyville            been a result of lack of communication.
presented testimony on the difficulty experienced
by the City of Coffeyville in processing                        A resident of the City of Erie presented
worksheets, filling out forms, knowing who to              testimony on the problems he has experienced
contact for assistance and general communication           when his home was flooded during the 2007
with state officials and FEMA representatives.             disaster. He did not have flood insurance, lived a
                                                           block away from the drawn 500-year flood plain
    Responding to a question from the Committee            and has not been able to obtain any buy-out from
concerning FEMA responses, the City Manager                FEMA for his property. The resident noted that
indicated that one of the biggest problems was             he did receive a $28,000 grant from FEMA.
the turnover of FEMA staff. There was no
continuum of contact or response. Members                       It was clarified that he did receive money
of the Kansas U.S. Congressional Delegation                from FEMA; however, he is now requesting that
were in contact with Coffeyville concerning the            his property be bought out through the Mitigation
disaster; however, additional intervention would           Program. Because of the regulations, this cannot
have been helpful in understanding FEMA                    be addressed. The Adjutant General’s Office is
delays.                                                    continuing to work with the resident and FEMA
                                                           to determine if any assistance or what assistance
   The Chairman noted that representatives                 is available. It was noted that the property is now
from Representative Boyda’s office, Senator                in the newly-drawn 100-year flood plain. He was
Brownback’s office, and Senator Robert’s office            advised to contact his congressmen at the federal
were in attendance at the Committee meeting.               level.

    The Emergency Manager of Montgomery                        A member of the Adjutant General’s Disaster
County presented testimony on the flood of 2007            Team, stated that FEMA assistance is available
in southeast Kansas. He noted that most of the             for citizens and communities by calling 1-800-
problems in Montgomery County concerned the                621-FEMA. This number is activated when the
Mitigation Buyout Program application which                President declares the area to be a disaster. Only
is still awaiting approval from FEMA Region                one phone call is necessary for citizens to make
VII. County families and county parcels are still          contact with FEMA with applications filled out
in a state of limbo not knowing what recovery              during the phone call.
direction to pursue or the status of their future
after 15 months. There were approximately 22               Provisos Allowed in Appropriation Bills
FEMA-provided trailers temporarily set up within
the County. Because the 18-month temporary                     The First Assistant Revisor of Statues
housing time frame will run out in January                 provided an overview of items which may and
2009, FEMA is meeting with those residents                 may not be included in an appropriation bill. He
of the housing to work out arrangements. He                noted, in general, appropriation bill provisions


Kansas Legislative Research Department               5-7                               2008 Legislative Budget
must relate to the allocation and expenditure             treatment program, for the state. STAR serves
of moneys from the state treasury. Under the              children from the eastern half of the state who
Kansas Constitution, as interpreted by the                are in need of hospitalization for serious mental
Supreme Court, the Legislature may not include            health conditions. KVC also provides adoption
in appropriation bills, subjects that are wholly          services. In addition to services provided to the
foreign and unrelated to the appropriation of             State of Kansas, KVC provides services to a
money.                                                    number of other states. KVC is funded through
                                                          donations from industry and individual donors,
Tour of KVC Behavioral Health Care                        as well as through a contract for services from
                                                          the state.
    The Committee toured the KVC Behavioral
Healthcare facility located in Wyandotte County.              The Committee toured the KVC headquarters
The President and CEO of KVC Behavioral                   facility in Olathe, a state-of-the-art facility
Health-Care gave an overview of the health care           that provides seminars, training sessions and
provided at the facility. KVC offers a healing,           contains KVC offices. A complex data system is
therapeutic environment to meet the psychiatric           maintained that allows KVC to assess treatment
and behavioral healthcare issues of children              needs, compare data and maintain complete
and adolescents up to age 18. Each year, more             records.
than 1,000 children are seen at this Kansas City
facility. The hospital is equipped to handle a
complexity of cases, including major depressive            ConClusions and reCommendations:
disorder, bipolar mood disorder, post-traumatic
stress disorder, ADHD and psychotic disorders.            The Committee would like to commend the
Within the first 24 hours patients receive a              KVC Behavioral Health Care for the service,
thorough psychiatric exam, complete health                dedication, and the facility it has developed in
assessment and physical exam, laboratory and              order to provide a high quality continuum of
dietetic consultation, and an individualized              medical and behavioral healthcare, education
treatment plan that combines active treatment,            and social services to children and families in
physician and nursing services, educational               Kansas, especially those in the foster care and
services, and individual/group/family therapy.            adoption system.

     KVC’s philosophy is to provide professional          The Committee recommends a thorough
and timely care by assessing a child’s needs              review of all provisos that are contained in the
and developing a specialized treatment plan.              appropriations bills by the Senate Ways and
KVC collaborates with the patient, family and             Means Committee and the House Appropriations
community to provide care in a safe and secure            Committee. The Kansas Legislative Research
environment. Services are offered in-house or at          Department staff will work with Revisor of
an outpatient clinic. KVC works with community            Statutes’ staff to prepare a list of provisos for
services and others to assure a continuum of care         the committees to review, focusing on those
to the children when they leave KVC services.             provisos that have been included for several
                                                          years.
    KVC provides services for children in foster
care for the State of Kansas. Data is maintained
                                                          The Committee also recommends that the House
on potential foster homes to insure a good match
                                                          Appropriations Committee, Senate Ways and
when a foster child comes into the system. In
                                                          Means Committee, and the House and Senate
addition, KVC operates the STAR, a specialized
                                                          Taxation Committees work together to produce


Kansas Legislative Research Department              5-8                              2008 Legislative Budget
a document that would track all tax receipts and            a request for proposal for a legal services
would present a complete picture of the State’s             contract that could potentially exceed $1.0
different revenue streams. Once completed, the              million. Kansas State University is requesting
document could be distributed to Legislative                a contract for legal representation for ongoing
members.                                                    litigation with an energy-related service
                                                            company. Committee review is required by the
The Committee requests the Kansas Department                Professional Services Sunshine Act enacted by
of Health and Environment provide a detailed                the 2000 Legislature.
report concerning the mold issues at the
Health and Environment lab to the House                     Finally, the Committee urges the Consensus
Appropriations Committee, the Senate Ways                   Revenue Estimating Group to provide an early
and Means Committee, and the Joint Committee                estimate of State General Fund revenues. The
on State Building Construction on or before                 timing of the early estimate meeting would
January 26, 2009. The report should include                 be after the release of certain key economic
such items as the frequency of inspections to               indicators in late February or early March. This
the facility, the statutes or rules governing those         estimate should be a limited report providing
inspections, the risk to employees who worked               early estimates on only major tax sources such
in the affected labs, and the pros and cons on              as individual income and retail sales taxes.
whether or not to keep the labs at the current
facility or move them to a different facility along         The      Committee      makes   no specific
with a recommendation for the best location for             recommendations regarding any of the other
the labs.                                                   topics reviewed in this report.

The Committee recommended authorizing




Kansas Legislative Research Department                5-9                              2008 Legislative Budget
                       Legislative Budget Committee
                        new targeted Case management rules


  ConClusions and reCommendations
  The Legislative Budget Committee recommends that the Department of Social and Rehabilitation
  Services report the results of the targeted case management rate study, once completed, to the
  House Appropriations Committee and the Senate Ways and Means Committee at the beginning
  of the 2009 Legislative Session.

  The Legislative Budget Committee also recommends that the Department of Social and
  Rehabilitation Services and the Department on Aging continue to monitor the costs of providing
  targeted case management services, especially the costs to the Department on Aging of moving
  services away from a single point of entry. The Committee recommends that the agencies
  continue to report the costs of providing targeted case management services, especially any
  changes in the costs of provision of service to the House Appropriations Committee and the
  Senate Ways and Means Committee.

  The Legislative Budget Committee recommends that the appropriate budget committee of the
  House Appropriations Committee and subcommittee of the Senate Ways and Means Committee
  review the results of the pilot project by the North Central Flint Hills Area Agency on Aging
  regarding the transition of individuals back into home settings.

   Proposed Legislation: None.


                 baCkground                                         Committee aCtiVities
    The Legislative Coordinating Council (LCC)                The Legislative Budget Committee received
requested that the Legislative Budget Committee           an overview from staff regarding recent
review the effects of the implementation of               changes to Targeted Case Management (TCM)
the new federal targeted case management                  reimbursement including information regarding
rules which limits reimbursement for certain,             directives from the federal Centers for Medicare
expenditures including travel time to see                 and Medicaid Services (CMS) which indicated
individuals in their homes. In addition, the LCC          that the previous method of operation used by
requested that the Committee study when case              Kansas to provide targeted case management
management services for individuals in hospitals          services was not going to be allowed in the
are subject to reimbursement.                             future, and failure to change methodologies
                                                          might result in significant federal reimbursement
                                                          withholding.




Kansas Legislative Research Department             5-11                              2008 Legislative Budget
     A representative of the Kansas Health Policy             documentation to show that an activity is a
Authority (KHPA) addressed the recent CMS                     covered TCM activity. The representative of SRS
scrutiny in Kansas. The focus of the federal                  explained that the largest effect of the CMS rule
reviews focused on three areas: Local Education               changes on TCM for persons with mental illness
Agencies (LEAs), Mental Health/Child Welfare,                 involves the expectation that case management
and Targeted Case Management. The issues                      providers not be allowed to provide other mental
identified by the federal Office of Inspector                 health services. The SRS representative indicated
General (OIG) and CMS regarding TCM                           that it recently requested a state plan amendment
included inaccurate payment methods, lack of                  which would allow a case management provider
adherence to the Medicaid State Plan and lack                 to provide other mental health services. SRS
of adherence to existing and forthcoming federal              and KHPA are currently completing a rate study
regulations. The KHPA representative indicated                in regard to the TCM services. This study is
the CMS focus on TCM centered on how rates                    anticipated to be completed in January 2009.
are set for non-institutional services, and included
direction that allowable plans would include no                   A representative of the Kansas Department
bundling, severely limit non-productive activities            on Aging addressed the fiscal impact on the
(including travel time, otherwise known as                    Area Agencies on Aging (AAA’s) which provide
windshield time); and on medical necessity for                services to elderly Kansans. In addition, the
TCM services. The representative of the KHPA                  representative discussed the history, current status,
then explained the current agreement with                     and the recent changes in TCM and Medicaid
CMS. The changes in the TCM reimbursement                     administration billing. The representative noted
payments were implemented in July 2007.                       that the Secretary on Aging had sent a letter to
The KHPA representative also testified about                  the director of the Centers for Medicaid State
changes required by CMS, the process by which                 Operations, CMS. In the letter, the Secretary
the changes were accomplished, a time line of                 addressed several issues of concern to her,
activities related to TCM, and the remaining                  including the tradition of using the AAAs as a
issues with TCM. The KHPA representative                      single point of entry, limitations on community
also noted there is currently a moratorium on                 transition programs, restriction on administrative
implementation of a portion of the interim final              costs and requirements for a single case manager
federal rules which expires in April 2009.                    per individual. The representative of the
                                                              Department on Aging noted that the department
    A representative of the Department of Social              was participating in the new TCM rate study
and Rehabilitation Services (SRS) addressed                   being conducted by the Department of Social
the impact of the TCM changes made to the                     and Rehabilitation Services.
programs administered by SRS. The programs
affected serve individuals with developmental                     A representative of the Kansas Area Agencies
disabilities, physical disabilities, and mental               on Aging Association addressed the impact of the
illness. The SRS representative noted that the                CMS rule changes on Area Agencies on Aging
change to the 15 minute unit, from a monthly                  and case management services in hospitals. The
rate for service required providers to move to a              representative noted that the TCM rule changes
more regimented and intricate billing cycle to                will impact reimbursement for travel time, and
ensure they were able to fund the services they               allow for independent targeted case managers. The
provided. The change also has led to increased                representative noted the cost of the Department
documentation and requirements and monitoring                 on Aging monitoring and providing quality
for providers. Providers have indicated that                  control could be extensive. The representative
more time is needed to provide the necessary                  explained that part of continuing the success of
                                                              aging community programs and improvement of

Kansas Legislative Research Department                 5-12                                2008 Legislative Budget
its nursing home diversion programs is having               and Rehabilitation Services report the results
the ability to access the senior population where           of the targeted case management rate study,
they live.                                                  once completed, to the House Appropriations
                                                            Committee and the Senate Ways and Means
     In addition, the representative of the Kansas          Committee at the beginning of the 2009
Area Agencies on Aging Association noted                    Legislative Session.
that the North Central Flint Hills Area Agency
on Aging conducted a pilot program in which                      The Legislative Budget Committee also
employees were stationed in local hospitals to              recommends that the Department of Social and
assist individuals in transitioning back into home          Rehabilitation Services and the Department
settings from the hospital with minimal delays.             on Aging continue to monitor the costs of
The findings of this pilot program indicated that           providing targeted case management services,
persons can be diverted from nursing facility               especially the costs to the Department on Aging
placement with early intervention and in-home               of moving services away from a single point
services even after an acute care stay in a                 of entry. The Committee recommends that the
hospital facility. Education of medical personnel           agencies continue to report the costs of providing
on in-home long term care program provided                  targeted case management services, especially
successful outcomes.                                        any changes in the costs of provision of service
                                                            to the House Appropriations Committee and the
     A representative of the Northeast Kansas Area          Senate Ways and Means Committee.
Agency on Aging, addressed some issues that
are currently impacting rural Kansas, including                 The Legislative Budget Committee
a loss of population and infrastructure, medical            recommends that the appropriate budget
professional shortages, and loss of providers due           committee of the House Appropriations
to low reimbursement rates.                                 Committee and subcommittee of the Senate
                                                            Ways and Means Committee review the results of
                                                            the pilot project by the North Central Flint Hills
  ConClusions and reCommendations                           Area Agency on Aging regarding the transition
                                                            of individuals back into home settings.
    The Legislative Budget Committee
recommends that the Department of Social




Kansas Legislative Research Department               5-13                               2008 Legislative Budget
                       Legislative Budget Committee
                 distribution oF Fire insuranCe premiums reView


  ConClusions and reCommendations
  The Committee suggested, in light of budget constraints and likely discontinuance of Homeland
  Security Funds for the Bomb Unit staffed by the Fire Marshal and Kansas Highway Patrol, that
  during the 2009 Legislative Session, budget consideration be given to bomb unit coverage and
  whether or not partnerships with military or other bomb units can provide coverage to areas for
  which this funding was being used.

  The Committee noted the services that the Kansas Fire and Rescue Training Institute provides,
  and encourages the Institute to adhere to its core mission, and to make sure that these services
  are available to rural volunteer fire departments.

  The Committee recommends further consideration of the levy amount and statutory distribution
  during the 2009 Legislative Session budget process. With additional information, further attention
  to agency needs and responsibilities should be considered in order to ascertain whether or not the
  statutory breakdown of the fire insurance premium levy should be changed to meet the needs of
  the agencies supported by the levy.

   Proposed Legislation: None.


                 baCkground                                          Committee aCtiVities
    The Legislative Coordinating Council                       At the October meeting, staff provided an
requested the Legislative Budget Committee                 overview of the current apportionment of the
review the current distribution of Fire Insurance          1.25 percent levy on fire insurance premiums,
Premiums, particularly in relation to funding              as well as an overview of 2008 Senate Sub.
issues with the Fire Marshal’s ability to comply           for HB 2634 (which concerns inspections of
with the office’s statutorily-required duties. In          non-fuel flammable or combustible liquid above
addition, the Committee was requested to review            ground storage tanks) and 2008 SB 178 (“flame
the fiscal impact on the Office of the State Fire          retardant” cigarettes standards). Per statute (KSA
Marshal of Senate Sub. for HB 2634 (which                  75-1508), the Board of Emergency Medical
concerns inspections of non-fuel flammable                 Services receives 0.25 percent of this levy, the
or combustible liquid above ground storage                 KU Fire and Rescue Training Institute receives
tanks) and SB 178 (“flame retardant” cigarettes            0.20 percent, and the Office of the State Fire
standards), both of which were approved by the             Marshal receives the remaining 0.80 percent,
2008 Legislature.                                          with the statutory administrative services fee
                                                           (KSA 75-1514) coming from the Fire Marshal’s
                                                           portion.


Kansas Legislative Research Department              5-15                               2008 Legislative Budget
    An Audit Manager from Legislative Post                    in funding for FY 2010, it is anticipated that
Audit presented an overview of the 2004                       additional cuts will need to be available by the
Performance Audit Report on the Kansas Fire                   agency to remain within funding.
Marshal reviewing the funding and administration
of the agency, without any updated information.                    Additional concerns were raised as to the
The audit in 2004 concluded that it was difficult             possible discontinuance of federal Homeland
to determine how much fire insurance premiums                 Security Funding. The State Fire Marshal noted
would grow in the future. In fiscal years 2003                that one of the programs transferred to the State
and 2004, the fire insurance premiums were                    Fire Marshal’s office as a result of the federal
divided between the Fire Marshal’s Office and                 Homeland Security grant funding is the Bomb
two additional programs. The Fire Marshal’s                   Unit, costing approximately $200,000 - $250,000
Office now receives a smaller share of those                  annually. It is anticipated that federal funding
revenues and the balance in its fee fund has                  for this program could be discontinued. Staffing
significantly decreased causing the agency                    for the Bomb Unit is provided by the State Fire
to be more vulnerable if levy revenues do not                 Marshal’s Office and the Kansas Highway Patrol.
grow significantly. It was advised that the actual            With reference to the two percent reduction in
growth of the fire insurance premium fund be                  the current budget requested by the Governor,
scrutinized to determine the fiscal position of the           the State Fire Marshal indicated that the agency
State Fire Marshal’s Office.                                  has produced a budget with the two percent
                                                              reduction; however, the agency needed to take
    The State Fire Marshal presented testimony                a six percent reduction to stay within existing
on the effects of the distribution of fire insurance          revenues. The Fire Marshal noted that a number
premiums, noting that the distribution of these               of staffing positions have not been filled due to
premiums has had a negative impact on the                     funding issues.
agency and the services provided. The levy on
fire insurance premiums is at the maximum                         The Chief Administrator of the Kansas
allowed by statute and is used for the support of             Board of Emergency Medical Services (EMS),
other agencies as well as the statutory transfer              presented testimony on the EMS Operating Fund.
to the State General Fund (SGF). Because of                   The Chief Administrator stated that the portion of
these actions, the balance in the Fire Marshal Fee            the levy on the fire insurance premiums directed
Fund has gone negative on several occasions and               to EMS is used to finance the operations of the
required a loan from the Hazardous Materials                  agency, including salaries and wages, contractual
Emergency Response Fund, which, due to                        services, commodities and capital outlay.
budgetary constraints, has not been repaid.
                                                                   The Director of the KU Fire and Rescue
    The State Fire Marshal stated that, at this               Training Institute (KF&RTI), presented
time, the agency is not able to fulfill the new               testimony on the duties and funding of the KU
statutory mandates passed during the last                     Fire and Rescue Training Institute. He stated that
legislative session, including the inspection of              KF&RTI was created in 1949 by statute to train
above ground storage tanks, without affecting                 Kansas firefighters, and that its functions are not
existing mandates such as inspections of schools              duplicated by any other state agency. The Fire
and health care facilities. A number of other                 Service Training Commission provides oversight
services have been decreased as presented in                  and guidance. KF&RTI provides over 100 courses
the testimony. At this time, it is anticipated that           related to the directive. The portion of the levy
the Fire Marshal Fee Fund will temporarily go                 on fire insurance premiums received by KF&RTI
negative by mid-November, depending on when                   is used to pay expenses related to performing the
fee revenues are received. Without any change                 assigned mission, including instructor wages/

Kansas Legislative Research Department                 5-16                               2008 Legislative Budget
expenses, materials and equipment for training            Unit staffed by the Fire Marshal and Kansas
programs; staff salaries and institute operating          Highway Patrol, that during the 2009 Legislative
costs; and the purchase of training equipment.            Session, budget consideration be given to bomb
                                                          unit coverage and whether or not partnerships
    The Director stated that the Fire Service             with military or other bomb units can provide
Training Commission has worked to establish               coverage to areas for which this funding was
programs, purchase priorities, and continue to            being used.
work the plan with available funding. Funding
sources for the agency include fire insurance                  The Committee noted the services that
premium tax levy, University of Kansas general            the Kansas Fire and Rescue Training Institute
use funds, fees and services income, and state            provides, and encourages the Institute to adhere
and federal grants.                                       to its core mission, and to make sure that these
                                                          services are available to rural volunteer fire
    Additional testimony was provided by the              departments.
following:
                                                              The Committee recommends further
   The Executive Director, KU Continuing                  consideration of the levy amount and statutory
Education; and                                            distribution during the 2009 Legislative Session
                                                          budget process. With additional information,
    Wellington Fire Chief & Fire Service                  further attention to agency needs and
Training Commission Chairman.                             responsibilities should be considered in order to
                                                          ascertain whether or not the statutory breakdown
                                                          of the fire insurance premium levy should
  ConClusions and reCommendations                         be changed to meet the needs of the agencies
   The Committee suggested that, in light of              supported by the levy.
budget constraints and likely discontinuance
of Homeland Security Funds for the Bomb




Kansas Legislative Research Department             5-17                              2008 Legislative Budget
                       Legislative Budget Committee
                             animal health department Fees


  ConClusions and reCommendations
  After completing its review of this topic, the Committee makes no specific recommendations.

   Proposed Legislation: None.


                 baCkground                                 been increased only one time. This occurred in
                                                            2005.
    The Legislative Coordinating Council
requested the Legislative Budget Committee                       The Animal Health Department stated that
review the Animal Health Department’s Animal                while some breeders and distributors are going
Facilities Inspection Program’s statutory fees              out of business due to the current state of the
that are assessed for licenses of various animal            economy, the animals from those businesses
facilities. Additionally, the Committee was                 are most likely staying in Kansas. The number
asked to compare the Animal Health Department               of licensees in the state has remained constant
facilities inspection fees, the number of                   since the agency’s inception and the agency has
inspections per facility type, program staffing             not observed any negative trends in the overall
levels, and program funding levels with other               number of licensees. The agency stated that
states that have similar programs.                          Kansas, along with other Midwestern states,
                                                            still has a reputation of being a puppy mill state.
                                                            Kansas ranks fourth in the country for the total
           Committee aCtiVities                             amount of state and United States Department
                                                            of Agriculture (USDA) licenses for kennels.
    At the November meeting, Animal Health
                                                            The agency added that other states, primarily
Department staff provided background on the
                                                            on the east coast, license and inspect facilities
Animal Facilities Inspection Program and the
                                                            more frequently than Kansas and these states
program’s statutory fees. The agency discussed
                                                            have considerably smaller numbers of animal
the current fee structure for licensees that
                                                            breeders.
distribute, breed, board, rescue, foster, and sell
animals and what triggers the need for a license                The Animal Health Department recently sent
under the provisions of the Kansas Pet Animal               a survey to the 49 other states with regard to other
Act. Most of the fees for the sixteen licenses              states’ animal facility inspection programs. The
required by the agency are currently set at the             agency received responses from 34 states and
statutory maximum amount, with the exception                of those that responded, the agency found that
of two licenses: small organizations and                    26 states have programs similar to the Kansas
individuals with smaller populations of animals.            program. While no programs are identical to
The agency explained this is due to a smaller               the Kansas program, the agency found two state
amount of resources available to those particular           programs with different methods of funding
licensees. Since the statutory maximum levels               program expenditures. The first state the agency
for fees were established in 1994, the fees have

Kansas Legislative Research Department               5-19                                2008 Legislative Budget
discussed was Missouri, which requires licensees
to pay a base fee plus one dollar per animal. The
agency also discussed Pennsylvania’s licensing
and inspecting program, which is funded entirely
by fees, fines, and penalties. Pennsylvania
structures its fees by the purpose of the kennel,
whether the kennel is for-profit or not-for-profit,
and by how many animals are kept within the
kennel during the year. The kennels which are
for-profit and have large numbers of animals pay
the highest license fees.


  ConClusions and reCommendations
    After completing its review of this
topic, the Committee makes no specific
recommendations.




Kansas Legislative Research Department                5-20   2008 Legislative Budget
                       Legislative Budget Committee
                             state building insuranCe poliCy


  ConClusions and reCommendations
  The Committee expressed its satisfaction with the current State building insurance plan, as well
  as the new plan implemented by the Regents.

   Proposed Legislation: None.


                 baCkground                                  Correctional Facility in 1999, the University of
                                                             Kansas in 2006, and Kansas State University in
    The Legislative Coordinating Council                     2008.
requested the Legislative Budget Committee
review the current property insurance on state                   The Director indicated that the current
buildings. In addition, the Committee was                    three-year policy for the State, which expires
asked to determine if the current coverage,                  on June 30, 2011, provides for $100 million
including the deductible amount, is adequate.                loss limits per occurrence with a $5.0 million
The Committee was asked to review the loss                   deducible per occurrence. “Occurrence” is
experience and insurance cost since the current              defined as one loss, disaster, casualty or series of
insurance program has been in place.                         losses, disasters or casualties arising out of one
                                                             event. This includes most damages to a building,
                                                             including equipment permanently affixed to a
           Committee aCtiVities                              building.
    At the November meeting, the Director of the                  The 2007 premium for the current insurance
Division of Finance and Facilities Management                policy was $636,390, which covered $5.0
presented an overview of the current state                   billion in property values for 685 buildings.
building insurance policy. Since 1993, the State             The premium was paid with the Educational
of Kansas has carried a catastrophic property                Building Fund ($415,000), Corrections Building
insurance policy covering buildings valued at                Fund ($71,000), State Institutions Building Fund
greater than $500,000, and not covered under                 ($77,000) and Division of Facilities Management
agency-specific policies. Property insurance                 Rents/Direct Bill Fund. The 2008 premium
policies are competitively bid on a three-year               is $288,000, covering $1.6 billion in property
basis, depending on the insurance company’s                  values for 386 buildings. This decrease reflects
offering, which is based on the total property               the separate policy obtained by the Regents
values covered, the anticipated risk involved, the           beginning July 1, 2009.
deductible and any prior loss history. In addition,
an annual review is performed to adjust property                 The Executive Vice President of Arthur
values and premiums. In the last decade, the                 J. Gallagher Risk Management Services, Inc.
State of Kansas has had three claims: Lansing                spoke to the Committee about the new policy



Kansas Legislative Research Department                5-21                                2008 Legislative Budget
purchased by the Regents. The objectives in the              million, with boiler and machinery protection and
search for a new policy included a master policy             increases in other areas. The new policy saved
for all Regents property - both State-owned                  the Regents institutions $100,000 in premiums
buildings and auxiliaries - a significant reduction          with the combined policies.
in the $5.0 million deductible on the State-owned
buildings, contents coverage, an increase in
the coverage limits, improvement in coverage,                  ConClusions and reCommendations
competitive rates, and working closely with the
Department of Administration to make sure there                  The Committee expressed its satisfaction
was not a significant adverse effect on the rest of          with the current State building insurance plan,
the agencies.                                                as well as the new plan implemented by the
                                                             Regents.
   The result was a policy with a $100,000
deductible with an overall loss limit of $500.0




Kansas Legislative Research Department                5-22                              2008 Legislative Budget
                       Legislative Budget Committee
               staFFing oF the larned sexual predator program


  ConClusions and reCommendations
  The Committee suggested that, in light of budget constraints and current staffing shortages at the
  Sexual Predator Treatment Program (SPTP) located at Larned State Hospital, during the 2009
  Session, the House and Senate Judiciary Committees reevaluate and restructure the SPTP so that
  a revised program can be created that would be able to function at current budget and staffing
  levels.

  The Committee expressed concern about the current program’s ability to effectively treat sexual
  predators and the need to provide safety and security for the patients and the community.

   Proposed Legislation: None.


                 baCkground                                     A representative of the Department of Social
                                                            and Rehabilitation Services (SRS) stated that
    The Legislative Coordinating Council (LCC)              the census of the Sexual Predator Treatment
requested that the Legislative Budget Committee             Program has been steadily increasing since the
review the current staffing of the Sexual Predator          founding of the program in FY1994. The SRS
Treatment Program (SPTP) located at Larned                  representative noted that the SRS has requested
State Hospital and the future staffing needs of             additional funding for several years to address
the facility due to increasing patient census. In           the increase in census, based on a just in time
addition, the LCC requested that the Committee              funding process, because of the unpredictability
appraise the adequacy of staffing levels to                 of the actual number of offenders who enter the
provide safety and security for the patients and            treatment program from year to year. According
the community.                                              to the representative, there are currently a wide
                                                            range of additional staff needed as the treatment
                                                            program surpassed budgeted capacity in FY
           Committee aCtiVities                             2009. Increased resources and staff are needed
    The Legislative Budget Committee received               to ensure the success of the program and meet
an overview from staff regarding the history                treatment standards.
of the Sexual Predator Treatment Program,
                                                                A representative from the Pawnee County
treatment standards, persons committed to the
                                                            Legislative Committee and Pawnee County
Sexual Predator Treatment Program, growth of
                                                            Economic Development Commission in
the treatment program, staffing and costs of the
                                                            Larned, Kansas, addressed the consequences
treatment program, and comparisons to other
                                                            of not staffing and funding the Sexual Predator
states’ treatment programs for sexual predators.
                                                            Treatment Program at a level comparable to
                                                            the patient census. These consequences include


Kansas Legislative Research Department               5-23                              2008 Legislative Budget
endangerment to patients, state employees,                    with the program have created a staff shortage
and residents of the Larned community. The                    that results in safety concerns for workers, staff,
representative asked the Committee to consider a              and clients.
budget enhancement for the balance of FY 2009
to cover the shortfall for other operating expenses
for the Sexual Predator Treatment Program                       ConClusions and reCommendations
to fill staff vacancies, a budget enhancement
for FY 2010 to comprehensively cover the                           The Committee suggested that, in light of
anticipated shortfall and other operating expenses            budget constraints and current staffing shortages
experienced at the facility since FY 2004, and                at the Sexual Predator Treatment Program
construction enhancements for the treatment                   (SPTP) located at Larned State Hospital, during
program.                                                      the 2009 Session, the House and Senate Judiciary
                                                              Committees reevaluate and restructure the SPTP
     An additional conferee employed as a State               so that a revised program can be created that
Security officer with the Larned State Hospital               would be able to function at current budget and
Security Department testified about his personal              staffing levels.
observations and experiences as a Safety Security
Officer which included working with the Sexual                    The Committee expressed concern about
Predator Treatment Program. The conferee noted                the current program’s ability to effectively
that Safety Security Officers work all four units at          treat sexual predators and the need to provide
Larned State Hospital and respond to all trouble              safety and security for the patients and the
calls. The vacant security positions associated               community.




Kansas Legislative Research Department                 5-24                               2008 Legislative Budget
                       Legislative Budget Committee
        Funding oF the proposed Change in state tourism serViCes


  ConClusions and reCommendations
  The Committee notes the importance of properly funding tourism services in the State of Kansas
  and recommends that the Department of Commerce present suggestions to improve state
  tourism services to the Senate Ways and Means Committee, the Senate Commerce Committee,
  the House Appropriations Committee and the House Economic Development and Tourism
  Committee during the 2009 Legislative Session. Furthermore, the Committee concurs with
  the recommendation of the Joint Committee on Economic Development that the Secretary of
  Commerce elevate the Division of Travel and Tourism within the Department of Commerce
  and collaborate with the Department of Wildlife and Parks in an effort to strengthen travel and
  tourism within the State of Kansas.

   Proposed Legislation: None.

                 baCkground                             Kansas economy. The KTC, as defined in the
                                                        legislation, would focus on enhancing the visitor
    The Legislative Coordinating Council                experience through targeted marketing, product
requested the Legislative Budget Committee              development, and professional development and
review the funding of the proposed change in            research.
state tourism services as provided in 2008 SB
501 which would have established the Kansas                The KTC would be governed by a 13-member
Tourism Corporation.                                    Board of Directors. The appointments to the
                                                        Board would be as follows:

           Committee aCtiVities                         ● The Governor         would     appoint    three
                                                          members;
    At the September meeting, staff provided
an overview of 2008 SB 501 which would have             ● The President of the Senate would appoint
established the Kansas Tourism Corporation                two members;
(KTC). The bill would have transferred the
Travel and Tourism Division of the Kansas               ● The Speaker of the House of Representatives
Department of Commerce to the KTC and                     would appoint two members;
statutory references to the Travel and Tourism
Division would be replaced by the KTC. The              ● The Minority Leader of the Senate would
bill would also eliminate the Kansas Tourist              appoint one member;
Attraction Evaluation Committee and the
Kansas Council on Travel and Tourism. The               ● The Minority Leader of the House of
KTC would create a separate entity for public             Representatives would appoint one member;
and private organizations to collaborate on               and
influencing tourism spending and growing the

Kansas Legislative Research Department           5-25                              2008 Legislative Budget
● The Travel Industry Association of Kansas                Furthermore, Kansas, Inc. estimated that it would
  would appoint four members.                              need between $75,000 and $100,000 to perform
                                                           this evaluation. Funding for this evaluation
     The bill would allow the KTC to hire a                would not be needed until FY 2011.
President and staff and require that Kansas, Inc.
evaluate and report on the effectiveness of the                A representative of the Travel Industry
operation every three years. The KTC would be              Association of America spoke in favor of 2008
required to publish an annual report and present           SB 501 and provided a legislative history of
it to the Legislature, the Governor, and Kansas,           both 2008 SB 501 and 2008 Senate Sub. for HB
Inc.                                                       2827. The representative of the Travel Industry
                                                           Association of America stated that tourism is one
     As amended, the bill would have provided              of the top five industries in Kansas, yet, Kansas
funding for the KTC from two sources. The first            ranks 46th in overall spending for tourism.
source of revenue would come from collection
of 50.0 percent of the growth in state sales tax               A representative of the Abilene Convention
collected from tourism companies with the base             and Visitors Bureau presented testimony and
tax year being 2007. Tourism companies would               noted that in 2006 the Abilene Convention and
be determined by the North American Industry               Visitors Bureau received $1.1 million in sales
Classification System, commonly known as                   tax generated from the travel industry. The
NAICS. Funding from the state sales tax collected          representative stated that the tourism industry
from the tourism companies would be transferred            should be recognized as an investment in
to the KTC on a quarterly basis. The second                Kansas.
funding source would be the funding currently
provided to the Division of Travel and Tourism                 The Committee also heard testimony from
at the Kansas Department of Commerce.                      representatives of Destination Marketing in
                                                           Lawrence, Kansas, and the Kansas Sampler
     The Kansas Department of Commerce                     Foundation. Both representatives spoke to the
currently has 13.0 FTE positions and 1.0                   Committee about the importance of tourism in
non-FTE unclassified permanent position in the             small towns and communities in Kansas.
Travel and Tourism Division. The expenditures
of the KTC would be outside of the state treasury
and positions would have become contract                     ConClusions and reCommendations
employees outside of the state government payroll
                                                               The Committee notes the importance of
system. According to the Kansas Department of
                                                           tourism in Kansas and recognizes the value of
Commerce, transferring the Travel and Tourism
                                                           investing in tourism. Specifically, the Committee
Division to the KTC may create a disjointed
                                                           addressed the possibility of more Kansas
brand image for the state and any cost savings
                                                           residents vacationing in Kansas due to increased
associated with operating shared resources may
                                                           fuel costs.
be lost with transferring the Division.

    Kansas, Inc. indicated 2008 SB 501
would require it to evaluate and report on the
effectiveness of the KTC every three years.




Kansas Legislative Research Department              5-26                              2008 Legislative Budget
                       Legislative Budget Committee
                             non-JudiCial employee pay plan


  ConClusions and reCommendations
  After reviewing the topic, the Committee made no specific recommendation.

   Proposed Legislation: None.


                 baCkground                                ● Include a pay-for-performance component
                                                             and a separate pay plan for supervisors;
    The Legislative Coordinating Council
requested that the Legislative Budget Committee            ● Extend the probationary period for new
review the existing non-judicial employee                    employees from six months to one year;
pay plan and study the equity of the plan in
comparison to the Executive Branch pay plans.              ● Allow a judicial district to hire employees
In addition, the Committee was requested to                  above entry level when the district demon-
review the financing of the pay plan, including              strates that an employee cannot be hired at
the enactment of 2008 HB 2968 which increased                entry level compensation;
docket fees by $9.00 in order to meet the changes
in non-judicial salaries.                                  ● Support the elimination of longevity bonuses
                                                             if the pay plan was adequately maintained;
                                                             and
           Committee aCtiVities
                                                           ● Provide periodic review of the Judicial
     At the October meeting, staff from the
                                                             Branch pay plan.
Judicial Branch provided testimony on the
non-judicial employee pay plan. An overview
                                                               In August 1999, the Supreme Court accepted
of the background indicated that due to the
                                                           the recommendations of the committee and
inability to recruit quality applicants and
                                                           included it in the FY 2001 budget submission.
retain experienced employees, the Supreme
                                                           The 2000 Legislature approved the pay plan
Court appointed a committee, the Non-judicial
                                                           and it was implemented in July 2000. The pay
Salary Initiative (NJSI) committee. The focus
                                                           plan, as implemented, eliminated the nearly
of the committee was to study the turnover and
                                                           automatic annual step movement in order to
difficulty in recruiting and retaining employees
                                                           provide more meaningful raises at measurable
and make recommendations for improvement.
                                                           performance-related benchmarks. During a one
The NJSI committee developed the following
                                                           year probationary period, managers train and
recommendations:
                                                           develop new employees through performance
● Review and adjust the non-judicial employee              assessments in the form of progress reports
  pay plan based on economic indicators, spe-              or a full evaluation at three, six, nine and 12
  cifically the Employment Cost Index (ECI);               months. Evaluations focus on job duties and



Kansas Legislative Research Department              5-27                             2008 Legislative Budget
the employee’s ability to perform them. In                   brought up to market value. The current budget
addition, the current plan allows for a 7.5 percent          request includes a funding request for the second
pay increase after one year. The original plan               phase of the plan through a 5.25 percent increase,
allowed for a 2.5 percent increase after one year            all of which would come from the State General
which was offset by a 4.0 percent reduction                  Fund.
from KPERS resulting in a decrease in pay.
Furthermore, a pay for performance component                     During discussion of Kansas docket fees,
was implemented which allows employees to                    the agency stated it is difficult to compare
be counseled from year one to year three on                  docket fees among states due to the various
progress toward full performance of the job. Full            approaches used. While Kansas uses a uniform,
performance is required in order to progress in              inclusive docket fee depending on case type,
the pay plan. Since the implementation of the                other states separate fees and charge additional
plan, Judicial Branch budget submissions have                fees for technology and retirement systems.
included salary plan adjustments based on the                Other states have specialized courts or courts of
Employment Cost Index (ECI) for the preceding                limited jurisdiction with separate fee schedules.
fiscal year resulting in a requested increase of             In determining whether an additional docket fee
15.75 percent. The 2008 Legislature approved                 should be implemented to fund the pay increase,
the increase but chose to implement it over                  the Judicial Branch questions whether the users
a three year period resulting in a 5.25 percent              can bare the cost of the increase.
base salary adjustment per year. This increase
was funded through a $9 increase in docket fees.                 A representative of the Kansas Association
Employees also received the 2.5 percent cost of              of District Court Clerks and Administrators
living adjustment. However, coupled with the                 (KADCCA) stated that low pay levels and low
3.4 percent increase based on the ECI, the salary            pay increases, in addition to high turnover, had
plan currently is 11.0 percent below the agency              become an issue for district court offices. The
goal.                                                        jobs have become more stressful and salaries
                                                             have fallen behind those of other government
    According to agency testimony, the NJSI                  agencies and the private sector resulting in
committee believes that its work mirrors that                retention and recruitment problems. The
of the Hay Group. The Hay Group performed a                  representative emphasized that the remaining
pay study and presented a plan to the Employee               two years of funding is needed in order to retain
Compensation Oversight Committee and the 2008                employees and remain competitive with other
Legislature. During the 2008 Session, a model of             employers throughout the state.
an effective compensation and classification plan
was presented which included four components:
classification, job evaluation, pay structure and              ConClusions and reCommendations
pay delivery. The model recognized that the pay
                                                                After reviewing the topic, the Committee
plan should be maintained with adequate salary
                                                             made no specific recommendation.
adjustments and address the four components
of classification in order to be effective. The
NJSI Committee adjusted classifications among
non-judicial employees, established a new
evaluation system and new pay structure with
a pay-for-performance component and also
reached the conclusion that market adjustments
should be made each year until the positions are


Kansas Legislative Research Department                5-28                               2008 Legislative Budget

								
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