The Hutchinson News, April 21
KCC protects ratepayers from expensive merger
In a somewhat surprising move, the Kansas Corporation Commission last week blocked the sale of Westar Energy to Great Plains Energy, which owns Kansas City Power and Light.
The proposed $12.2 billion deal was deemed “too risky” by the commission. Additionally, the acquisition price seemed too steep for regulators, who indicated the proposal was presented as a “take it or leave it” deal that wouldn’t be subject to regulators’ modifications.
It probably didn’t help that a long list of both companies’ customers expressed a negative view of the merger.
The KCC traditionally has rubber-stamped rate increases for both companies, so it’s refreshing to see that in this instance the commission seemed to operate with utility customers in mind. The merger, while touted by the companies as a great tool that would benefit everyone - customers, shareholders, employees, managers, the environment and whatever else one could think of - it’s likely it would’ve meant higher rates and reduced service for customers.
Allowing the merger would’ve further monopolized the state’s utilities, which already have a stranglehold on consumers. It’s well documented that Westar rates have grown exponentially in recent years.
And, based on the details of the merger, it’s clear that the winner in the joining of these two companies would be shareholders and executives, while the losers would be ratepayers who likely would’ve ended up paying for the bloated cost.
“The Commission is not opposed to mergers as evidenced by its approval of two acquisitions within the past six months,” the KCC rejection noted. “As one of the intervenors notes, in many ways a merger between GPE and Westar makes sense, but for one insurmountable obstacle - the purchase price is simply too high. . the proposed transaction is not a merger of equals, but an acquisition with an excessive purchase price, requiring GPE to take on significant debt. The $4.9 billion acquisition premium exceeds GPE’s $4.8 billion market capitalization by $100 million.”
There might be a time that these two companies come together. The commission has left open the door to this. But, at least for now, the KCC seems to have recognized an unsavory smell in the air about this proposal.
_____
The Lawrence Journal-World, April 21
There’s no good reason for emotional fans at large sporting events to bring weapons with them.
Banning guns from major sporting events on the University of Kansas campus was the right step for the university and the Board of Regents to take.
The change will create some inconvenience for fans, who will be subjected to screenings before entering venues such as Allen Fieldhouse and Memorial Stadium. But there simply is too much risk involved to allow guns at events with as many as 50,000 people in attendance.
Kansas law requires state universities to allow concealed handguns on their campuses beginning July 1. Exceptions are allowed for facilities where adequate security measures such as metal detectors and guards are in place - either permanently or temporarily - to ensure no one takes a gun inside. The university also will ban purses. Fans who want to bring items into the sports venue will have to use clear bags.
Metal detectors and guards would be put in place for men’s basketball games and football games. They also would be used at any other sporting event expected to draw more than 5,000 spectators. It is estimated the additional security will cost more than $1 million, with funding coming from KU Athletics’ operating budget.
The KU proposal - along with similar proposals by Kansas State and Wichita State - was approved in a 4-1 vote Wednesday by the Board of Regents governance committee.
Committee member Shane Bangerter cast the dissenting vote, saying the security was a waste of time and resources. “I don’t think that having adequate security measures at an event like that makes us any safer, or any less safe,” Bangerter said.
But Bangerter’s nonchalance about the issue fails to acknowledge how sporting events differ from others at the university. Fans’ emotions often run high, and alcohol use prior to games affects behavior. It’s not an environment made safer by allowing concealed weapons.
Can a gun incident still occur at a KU sports event? Of course. But banning guns and implementing security measures to screen fans for weapons reduce the risk significantly. It was the right choice for the university, its fans and its teams.
_____
The Manhattan Mercury, April 21
News isn’t great, but it’s a start
The state revenue projections from Topeka on Thursday generated more sighs of relief than jubilation from lawmakers who don’t need to be reminded how monumental their task remains.
The news wasn’t great, but it was good, mostly. In practical terms, that means the state’s two-year projected budget shortfall is now closer to $900 million than to $1 billion.
What’s more, the latest projection constitutes a vast improvement over the previous five biannual forecasts (they’re made each April and November). Beginning in November 2014, those projections called for consecutive shortfalls of roughly $200 million, $90 million, $160 million, $175 million and, last November’s devastating projected shortfall of $350 million.
The upshot is that lawmakers will have to make up “only” about $900 million instead of $1 billion by July 1, 2019. And even that comes with a significant asterisk; it excludes any additional money the state injects into public school funding as a result of the recent Supreme Court ruling that school funding is constitutionally inadequate.
Revenue is expected to grow over the next two years, but only modestly. Unfortunately, the agriculture and energy sectors are still struggling and private sector employment may dip before it improves. As Raney Gilliland, director of the Legislature’s research staff, said, “There are some storm clouds on the horizon.”
Financial storms in Kansas have been the rule since Gov. Sam Brownback’s first term. That’s when he and a Legislature that was more conservative than the present body approved massive income-tax cuts, including exempting the owners of more than 300,000 businesses and farms. That constricted the flow of revenue that was vital to the support of state programs and services.
Moreover, the state has resorted to internal borrowing on a large scale and has delayed payments simply to keep the budget balanced. Declines in the agriculture and energy industries have contributed to what has become a chronic financial crisis.
Against that backdrop, Thursday’s projections provided a bit of a respite. When legislators return to Topeka May 1, they’ll still need to raise taxes substantially, and they’ll likely have to do it without much assistance from the governor. His defense of those income tax cuts led him in March to veto an impressive bipartisan attempt to raise taxes that would have generated enough revenue to ease the crisis and begin to restore stability to budget policy.
Legislators must try again. Perhaps with the shortfall a little less daunting, they will be more successful.
______
The Topeka Capital-Journal, April 20
Wagle needs to resist Brownback when he refuses to do what’s best for the state
Remember when Senate President Susan Wagle and Gov. Sam Brownback weren’t getting along? In a February op-ed on this page, Wagle accused Brownback of trying to use “one-time money” and “creative gimmicks” to address the state’s $300 million shortfall. She criticized his plan to “deplete the state’s assets,” withhold another KPERS payment, send consumers across state lines with increased tobacco and liquor taxes, and continue allowing “some Kansans to skirt income taxes.” According to Wagle, the governor’s budget proposal was “neither structurally sound nor fiscally conservative.”
In January, Senate GOP leaders released a statement that criticized Brownback for failing to provide a “structural fix” to the state’s fiscal crisis: “The governor continues to use one-time money, adds new taxes on the middle class, and neglects to fix the LLC loophole. The math simply just doesn’t add up.”
When the Senate leadership released its own tax plan in early February, Brownback lambasted it as an attack on the middle class: “Susan Wagle’s tax plan needlessly harms the real people that serve as the lifeblood of Kansas . It punishes job-creators, the backbone of our Kansas economy.” A few days later, Wagle wrote the op-ed that challenged Brownback for his unwillingness to produce a structurally sound budget: “I feel that the governor’s budget proposal falls short of this expectation.” In the same piece, she promised to work with her colleagues to make “tough decisions” and “do right by the Kansans who sent us here.”
For a short while, it looked like Wagle was going to defy the governor and insist on a stable, long-term budget. However, as the legislative session has progressed, her once-robust opposition has all but disappeared. When both chambers passed a tax reform package that would have brought in $1 billion over the next two years and repealed the LLC exemption, Wagle was one of the key senators who failed to override Brownback’s veto (after passing in the House, the override fell three votes short). Despite the fact that more than 80 percent of Kansans want the Legislature to “do right” by their low-income neighbors and expand Medicaid, Wagle took Brownback’s side yet again and voted against expansion.
Wagle was also one of three senators who voted in favor of a 4.6 percent flat tax - the only legislative tax proposal that Brownback promised to sign this session: “The Senate’s flat-tax legislation creates a single low tax rate for Kansans, solving today’s budget challenges without unnecessarily harming economic growth in Kansas.” After the flat tax was almost unanimously defeated, Wagle expressed her gratitude: “I think that (Brownback) softening his position will help us tremendously.” The governor responded in kind: “I’m glad the president and Sen. Denning were willing to move forward with it.”
Instead of voting for legislation that would have restored the third income tax bracket and provided a sustainable source of revenue for years to come, Wagle supported a bill that would have forced low-income Kansans to pay the same tax rate as millionaires (and generated about half as much revenue as House Bill 2178). If this is her way of “doing right” by the people of this state, she needs to have a chat with the many lawmakers who were elected on explicitly anti-Brownback platforms.
While it’s important to work with the governor, the Senate needs a leader who will stand up to him when he’s wrong.
Please read our comment policy before commenting.