WEDNESDAY, FEB. 13, 2002
THE UNIVERSITY DAILY KANSAN = 50
Budget plan presented to avert cuts
The Associated Press
TOPEKA—Rep. Bill Reardon, veteran House Democrat, outlined a plan yesterday to raise nearly $316 million to avert some budget cuts and provide extra money for public schools.
He said his proposal would raise taxes for the wealthy while Gov. Bill Graves' plan for $228 million in higher taxes and fees would hit poor Kansans the hardest.
Republicans, who hold majorities in both chambers, said they opposed parts of the plan. But some commended Reardon, D-Kansas City, for offering it.
"I'm glad to see someone's thinking outside the box," said Rep. Doug Mays, R-Topeka.
Reardon proposed raising individual and corporate income taxes as well as taxes on banks and insurance companies. He also said he wanted to reinstate the inheritance tax and let the state use $110 million from its cash reserves.
In addition, he proposed increasing the sales tax by 0.75 percent on the dollar, but exempting food from any tax.
The plan would prevent cuts in social service and higher education programs and allow a $172 per-pupil increase in aid to public schools, to a total $4,042, he said.
The state faces a projected $426 million gap between expected revenues and spending commitments for its 2003 budget year, which begins July 1. Some leaders worry the projected gap could grow to $600 million when revenue estimates are revised in March.
Graves has proposed raising $228 million by increasing sales, cigarette and motor fuels taxes and vehicle registration fees. He and many fellow Republicans object to raising income taxes, saying Kansas' rates are higher than those in surrounding states.
Blue Cross-Blue Shield unsure of proposed sale
TOPEKA — Officials of Blue Cross-Blue Shield of Kansas aren't ready to say whether they will pursue another deal following denial of the company's proposed sale to Anthem Insurance Companies Inc.
The Associated Press
The decision Monday by Kathleen Sebelius, insurance commissioner, drew expressions of disappointment from both Blue Cross and Indianapolis-based Anthem, which continued to defend the transaction.
But groups representing doctors, nurses and poor and working class families were pleased. During hearings on the proposed sale, they had questioned whether it would restrict access to health care.
In rejecting the deal, Sebelius said she believed it would have driven premiums up too much. She said Anthem couldn't show how it would make Blue Cross more efficient and — having promised not to reduce health coverage — would have to rely on higher rates to be profitable.
Blue Cross officials have contended that teaming with Anthem would helped the Kansas company compete in a national market and give it new sources of capital.
The companies could appeal Sebellus' decision in Shawnee County District Court.
"The commissioner's written order must be reviewed," said John Knack, Blue Cross president*
and chief executive officer." I believe that decisions will be made quickly."
Neither company would say definitively Monday whether they will bring another deal before Sebelius, or whether Blue Cross will pursue an acquisition by another company.
"We continue to believe that this type of partnership would be best for Kansas," said Anthem snokeswoman Laura Green-Caldwell.
Anthem, a publicly held corporation, operates former Blue Cross plans in eight states and covers about 7.8 million people.
Blue Cross is owned by its policyholders and has 45 percent of the Kansas health insurance market. It has 172,000 group and individual policies covering 400,000 people, and another 315,000 people work for employers who self-insure but have their plans administered by the Blues.
Anthem planned to pay $190 million to acquire Blue Cross, with at least $142 million of it going to policyholders. Blue Cross would have distributed $151 million of its existing reserves to policyholders as well, meaning they could have received up to $321 million.
But the prospect of Kansas Blue Cross' conversion into an operation of a publicly held, out-of-state corporation drew opposition.
Critics said Anthem would have to increase premiums or cut back on medical coverage to make its new Kansas affiliate more profitable.
Liberal wins annual Pancake race
Hurla, 31, ran the 415-yard course in 60.65 seconds, beating Olney's time of 64 seconds by Juliet Minter.
LIBERAL — Physical-education teacher and track coach Melissa Hurla gave Liberal its fourth straight win in its annual International Pancake Race rivalry with Olney, England, yesterday.
City employee Patty Rutledge, a late entry, stayed with Hurla through much of the race but finished third. Miss Kansas, Kimber-
Hurla pulled away early in the homestretch, taking the lead out of the second turn of the zigzag course, and cruised to the win 12 yards ahead of her training partner, 21-year-old kindergarten teacher Christy Lyddon.
lee Grice, finished fourth as an honorary runner.
"I thought, 'I need to go now,' or I wasn't going to go," said Hurla, who was running in her first race. "That last stretch is the worst. It's a long one."
"Oh my goodness. That's very bad news for Olney," said British Consul General Robert Culshaw, Olney's representative in Liberal
Yesterday's races were the 54th in a series of friendly competitions across the Atlantic.
Hurla has already decided to defend her title next year.
Minter, 29, finished ahead of the pack in the 415-yard dash from The Bull pub to the ancient Church of St. Peter and St. Paul.
"I doubt it will ever be an Olympic sport." Minter said.
Spillman, now Lisa Spillman Mesa, won three straight races for Liberal. By rule, three-time winners must retire from further competition.
Minter's time was three seconds better than her winning effort last year in Olney. But she was trounced a year ago by Lisa Spillman, who won the Liberal race in a record 58.1 seconds.
for yesterday's race.
The Associated Press
Shrove Tuesday, known in Britain as Pancake Day, traditionally was the last day for merrymaking before the start of Lent. Pancakes were thought to be a good way to consume the fat the faithful were supposed to do without during the period of self-denial.
According to legend, the Olney race started in 1445 when a harassed housewife, rushing to be on time for church, arrived at the service still clutching her frying pan with a pancake in it.
Liberal joined in the friendly rivalry two years later, after seeing a picture of the Olney race in Time magazine.
After a lapse during World War II, the race was revived in 1948.
Liberal leads the series 28-24-1, with one race ruled a draw when a BBC truck blocked the finish line in Olney. The 25th anniversary race in 1994 was not counted toward the total.
Western Resource's debt plan under scrutiny
The Associated Press
piled by Western's Protection One subsidiary.
TOPEKA — The Kansas Corporation Commission plans to conduct a hearing into Western Resource's plan to pay off as much as $1 billion of its nearly $3 billion debt.
an order issued late Monday.
"A full examination is necessary to protect Kansas electric consumers from harm caused by misallocation of debt between and among Western Resources Inc. and its unregulated subsidiaries," the commission said in
The commission said Monday that it wants to determine if Western is tying up its utility assets with more debt. The hearing is scheduled for May 31.
Last July, the commission blocked Western's original restructuring plan, which would have split its utilities and unregulated businesses into separate publicly traded companies. Commissioners said they were concerned that utility consumers would be left paying off debt com-
By late Monday afternoon, the KCC had received 22 letters from legislators, said commission spokeswoman Rosemary Foreman. Rep. Lee Tafanelli, R-Ozawkie, and Rep. Doug Mays, R-Topeka, were among the
Western submitted a new plan in November that critics said was little different from the one the commission rejected. Nearing a deadline to file its new plan with the federal Securities and Exchange Commission, Western asked several legislators to send letters to the KCC urging commissioners not to block or delay the company's filing.
The commission also ordered Western to explain within three days why the pledging of utility assets to secure additional debt didn't violate a previous commission order issued in July. The company also was directed to reveal whether it had sold or transferred utility assets in violation of the order.
"Time is of the essence," wrote Mays, a former Kansas securities commissioner. "Efforts to reduce Westar's debt should not be delayed further."
Western recently renamed its KPL and KGE utilities Westar Energy.
The letter-writing campaign backfired, consumer advocate Walker Hendrix said.
"I'm sure the fact that the company tried to do an end run by organizing legislators struck a raw nerve," said Hendrix, the chief attorney for the Citizens Utility Ratepayers Board, a state agency that represents residential and small business consumers.
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