1) Governor Recommends Drastic Cuts for Cities and Counties

Earlier this week, Governor Sebelius unveiled her recommendations concerning the remaining FY 2009 state budget along with the starting point for discussions on the FY 2010 state budget (note: the State of Kansas operates on a fiscal year that runs from July 1 to June 30). The Governor’s initial budget proposal includes a series of cuts in payments to cities and counties.

Possible Impact to Cities and Counties of Governor's Budget Proposal

Liquor Tax. The Governor is proposing to take 100% of the local liquor tax dollars to use for state purposes beginning in July of 2009. Cities and counties use this money for drug and alcohol addiction programs, parks and recreation, and general fund purposes.

Machinery and Equipment (M&E). In 2006, the Kansas Legislature passed a bill that removed the property tax from certain business machinery and equipment. In order to help mitigate the local impact of this decision, the so-called “slider” payments were included in the legislation. The Governor is recommending the elimination of all slider payments beginning in July of 2009. In addition, her budget document indicates that it may also be necessary to eliminate the slider payments which are due to cities and counties in February of 2009.

Special City-County Highway Funds (SCCHF). The Governor is recommending the elimination of the State General Fund transfer portion of the SCCHF. This will include a $15 million reduction in calendar year 2009 and a $5 million reduction in 2010. We estimate that this would be about a 10% hit on your SCCHF budgets in 2009.

Local Ad Valorem Tax Reduction (LAVTR). As part of the agreement on M&E two years ago, the Legislature included provisions to begin the reinstatement of LAVTR beginning in July of 2009. The Governor has recommended elimination of these funds as well.

Immediate Action Requested. We are very concerned about the impact of these cuts on local governments in Kansas. It is imperative that each city consider the potential impact to their community and communicate that message to your legislators. Most legislators will be home for the long Martin Luther King, Jr. holiday weekend. Please encourage your legislators to reject the Governor’s proposal and ask them not to balance the State’s budget on the backs of local officials.

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2) City Hall Day Needs You

LKM is finalizing plans for City Hall Day on Wednesday, January 28. Remember that the morning is for attending hearings and having meetings with legislators, and the program will begin after lunch. Therefore, call your Senators and Representatives now to schedule a time to discuss important city issues. This year city officials’ attendance is more important than ever given the grim budget proposal from the Governor. It is important to understand that this budget will affect both current year revenues and next year’s revenues for cities if adopted, and city officials need to come to Topeka and meet with legislators to discuss the impact proposed cuts will have in their cities. If cities are going to be able to impact the proposed budget cuts, it will take a concerted effort from as many city officials as possible, and a high turnout at City Hall Day will be a great start.

In the afternoon, beginning at 1:30, city officials will have an opportunity to hear presentations from House and Senate leadership discussing the issues at the forefront of this legislative session. That will take place in Memorial Hall just east of the Capitol at the corner of 10th St. and Jackson. Finally, at 5:00 p.m., there will be a reception at the Capitol Plaza Hotel for city officials and legislators. This is another opportunity for city officials to discuss the budget and other important city issues with legislators. All legislators have been invited, but city officials are urged to make contact to personally invite their legislators to attend this event.

More information on City Hall Day is available at www.lkm.org or by calling the LKM office at 785-354-9565.

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3) New CMB License Application Available

The Attorney General’s office has revised the CMB application form used by cities and that may be accessed at http://www.ksag.org/files/shared/Corporate.Retail.Application.pdf. Note that this is the corporate application form and some of the questions, particularly question 6, have changed. It had previously asked for residency information for the manager, which is not required when the applicant is a corporation. For more information, contact Sandy Jacquot at 785-354-9565 or at sjacquot@lkm.org.

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4) Sign-up for the January and February MLAs

January's course, Advanced Municipal Finance, will be in Liberal on January 24. It will offer participants an increased understanding of municipal finance issues in Kansas. Advanced Municipal Finance has been designed as an extension to the themes covered in the core class Municipal Finance. Prior participation in Municipal Finance not required. To register, click here.

February's course, Personnel Management, will cover the basics of personnel management in today's changing municipal workplace. To register or view a schedule of event dates, please click here.

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