Archive for Tuesday, March 15, 2016

GOP senators vent frustrations at Brownback, but veto override unlikely

March 15, 2016

TOPEKA — Republican leaders in the Kansas Senate said after a heated caucus meeting Monday that they are no longer sure they have enough votes to override two of Gov. Sam Brownback's recent vetoes.

But whether any override attempts are successful, or even attempted, the discussion Monday showed there is plenty of anger and frustration within the GOP ranks over the administration's handling of two major projects.

Sen. Julia Lynn, R-Olathe, after the caucus meeting described the level of anger as being "at an all-time high" and said it has been building within the caucus at least since the 2015 session.

Republicans caucused after Monday's Senate session to discuss the possibility of overriding two of Brownback's recent vetoes:

• Senate Bill 250, aimed at blocking the administration from signing any contracts to demolish the Docking State Office Building or to relocate a heating and air conditioning power plant in the building without legislative approval.

• And a proviso in the recently passed budget bill that would block the formation of any new STAR bond districts in Wyandotte County, where the administration hopes to lure the American Royal from Kansas City, Mo., and the development of a new hotel.

Docking building

Lawmakers passed Senate Bill 250 in haste Feb. 23 after they were caught off guard to learn that the administration had entered a lease-purchase agreement with Bank of America and signed a construction contract to relocate the heating and air conditioning unit known as a "power plant," even though an oversight committee had expressed misgivings because bids for the project had come in much higher than expected.

It passed 40-0 in the Senate and 121-1 in the House.

Sen. Kay Wolf, R-Prairie Village, who chairs the oversight committee, said that at no time during the debate on the bill did anyone from the administration raise concerns about its impact on the state's bond rating, and it was never mentioned in the governor's veto message delivered March 4.

In fact, his veto message said only that the bill was not needed because the administration had already cancelled the contract, although senators noted that the contracts weren't cancelled until after the bill passed.

"We passed this legislation on Feb. 23," Wolf told Secretary of Administration Sarah Shipman. "It was enrolled on the 24th, given to the governor, and you didn't say anything until, I assume, March 4."

The bill was what lawmakers call as a "non-appropriation" bill because it blocked the use of any state funds for payment of a contract, thus triggering a standard clause in state contracts that says they are subject to appropriation.

In addition, though, it also would have prohibited the administration from entering into any contract to demolish the Docking building without legislative approval. Because of the high cost of moving the power plant, some senators have suggested keeping the building, or leaving the ground floor and the power plant in place.

But Dennis Lloyd, a bond adviser from Columbia Capital Management, told senators that bond rating companies are "hyper-sensitive" to any indication from a governing body that it might not be willing to pay on a legal debt. He said passage of the bill could conceivably drop the state's bond rating to Bbb, down from its current Aa-.

Wolf and other senators, including Jim Denning of Overland Park, said they doubted that any such downgrade would occur, especially since the bill provided that the state would pay all of the legal obligations it had incurred up to the time the bill passed.

Sen. Ty Masterson, who chairs the Senate Ways and Means Committee, said Brownback did express concerns about the bill's impact on the state's bond rating during private discussions, but Masterson said they agreed not to talk about it publicly, especially in front of news media, for fear of triggering concern by bond rating agencies.

But that only further angered senators who were not part of that discussion, including Sen. Michael O'Donnell, R-Wichita, who shouted, "He announced it on Twitter."

STAR bonds restriction

One possible override that may have a better chance of success is the budget proviso halting the formation of any new sales tax revenue or STAR bond districts in Wyandotte County until lawmakers can pass another bill tightening controls on the use of those bonds.

STAR bond districts are areas where the new sales taxes generated by new commercial development are used to pay for streets and other infrastructure in that development area. The Village West shopping area, which also includes the Kansas Speedway and other sports facilities, was the first STAR bond district established by the state.

Denning added that proviso as an amendment during debate on the budget bill. And during Monday's caucus meeting, he accused the administration of trying to circumvent the Legislature by committing sales tax from the Village West development in Kansas City, Kan., which is about to come back on the tax rolls, to new developments in that area that have not yet been approved by the Legislature.

Specifically, Denning said one of the reasons why estimates of future sales tax revenue were revised downward in November is because Brownback has already committed $4 million a year from Village West to finance development around the Schlitterbahn water park and a new athletic training center in the Village East district.

In addition, though, Denning said Brownback has been planning to commit $42 million a year from Village West to finance development in yet another STAR bond district that hasn't been approved, one where the administration hopes to lure the American Royal, which is now located in Kansas City, Mo.

On top of that, he said, there are plans to use $1 million in sales taxes from a hotel that's being proposed in the Village West area as additional funding for development around the American Royal facility.

Brownback's communications office did not immediately respond to questions about whether those statements were accurate.

Denning said he wants to make sure that STAR bond districts are treated as a whole, and that sales taxes from one are not used to pay for projects in other districts.

Other senators said the same thing could be accomplished by passing a STAR bond cleanup bill that has already cleared a Senate committee and is waiting for action by the full Senate.

But Senate President Susan Wagle, R-Wichita, said that bill has already drawn substantial opposition from developers, and she said she doesn't think it will pass until very late in the session.

The Senate could decide to take up either one or both of the veto overrides as early as Tuesday.

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