Kansas Senate votes to override Brownback’s veto on legislation restricting STAR bonds

The Kansas Senate voted Tuesday to override one of Gov. Sam Brownback’s recent vetoes, but fell one vote short on another.

The votes took place after weeks of growing tension between the governor and lawmakers over financial issues.

The Senate approved overriding the governor’s veto on a piece of legislation designed to block Brownback’s plan to lure the American Royal, a Kansas City, Mo., event that features the World Series of Barbecue, to Kansas using sales tax revenue bonds, or STAR bonds.

Lawmakers of both parties say the Department of Commerce’s STAR bonds program – which enables municipalities to use sales tax revenue to pay off development bonds used to build tourist attractions and entertainment districts – needs more legislative oversight.

Lawmakers bristled at the long-term costs of Brownback’s American Royal plan – which also would have included the construction of a hockey arena and hotel in Wyandotte County – and inserted a provision blocking new STAR bonds in that county until transparency reforms are enacted.

“We’re in very tight budget times, and we need to be held accountable for responsible use for all the tax revenue we receive,” said Senate Vice President Jeff King, R-Independence, explaining that lawmakers were concerned that tax revenue would have been diverted from state coffers to go to the project.

The governor vetoed this provision two weeks ago, but the Senate voted 30-8 to override that veto. If two-thirds of the Kansas House votes the same way, the governor’s veto will be overturned.

If the override succeeds in the House, this would be the second time the Legislature has overridden one of the governor’s vetoes. The first took place last session when the governor vetoed a bill to enact new regulations on Uber and other ride-hailing services.

Secretary of Commerce Antonio Soave unsuccessfully tried to dissuade Republican lawmakers from overturning the veto at a contentious caucus meeting Monday.

Brownback decried the idea in a statement prior to the Tuesday vote, saying it unfairly singled out one county. The governor said he would halt all new STAR bonds projects in every county as a result.

“As I said in my veto message, no county should be singled out in the manner contained in the budget proviso. I am hereby informing the Legislature that the Department of Commerce will not approve any new STAR Bond projects in any other county,” the governor said in a statement. “This policy would apply to any project not yet approved by the Department of Commerce, and is within my authority under Article 1, Section 3 of the state Constitution.”

The restriction against Wyandotte County would be lifted if the Legislature passes and the governor signs reform legislation by the end of the session.

“I look forward to receiving acceptable legislation before the end of the session. In my view, this approach to reform is much preferred over that taken in the budget,” Brownback said in a statement.

Lawmakers voted 26-13 to overturn the veto on SB 250, a piece of legislation that was meant to block the governor from expending any state dollars to demolish a state office building or construct a new power plant in Topeka. That’s one vote short of the two-thirds majority needed to override a veto.

One member of the Senate was missing during the vote. Sen. Jeff Melcher, R-Leawood, could not be located by other lawmakers or the Kansas Highway Patrol.

The legislation, which Brownback vetoed two weeks ago, was crafted to force the state out of a $20 million lease-purchase agreement with Bank of America that the state entered into without legislative approval.

Brownback and other state officials have argued since last week that overturning this veto could result in a downgrade to the state’s bond rating because it would be seen as an unwillingness by the state to pay its bills, a claim some lawmakers dispute.

King said that these concerns aren’t valid because the state already paid all its debts related to the project, including $2.1 million to McCarthy Building Cos., a construction firm that never broke ground on the project, to exit from a construction contract. The state also paid more than $160,000 to Bank of America to break the lease-purchase agreement.

King said in voting for the override he “wanted to make sure that this ill-advised contract that cost the state over $2 million in penalties would never be tried again. We wanted to make sure that the process for demolishing and renovating state buildings goes through the Legislature.”

However, the uncertainty about the impact to the state’s bond rating was enough to dissuade others from supporting it.

Sen. Steve Abrams, R-Arkansas City, said that the power plant project “may have been poorly conceived,” but that it was not worth risking the state’s bond rating since the power plant deal “is kaput.”

This story was originally published March 15, 2016 at 5:07 PM with the headline "Kansas Senate votes to override Brownback’s veto on legislation restricting STAR bonds."