Tax hike, school funding still await legislative action
By Rod Haxton, editor
There’s no mistaking that the mood of the Kansas Legislature has been much different over the past three months compared to what it’s been over the previous four years.
Veteran lawmakers agree that the level of cooperation is much different and the legislature has been willing to tackle difficult issues that include taxes, school funding and Medicaid expansion.
Now it’s time for that cooperation to produce results.
With a huge budget deficit still on the horizon for the next two fiscal years, the legislature has yet to reach agreement on a tax plan to fund state government, a school finance plan hasn’t been finalized and Medicaid expansion appears dead for the remainder of this session following the failure to override a governor’s veto.
And time is running out.
“Gridlock isn’t like it has been, but it’s still frustrating that there are things we can’t get past the governor’s veto,” State Sen. John Doll (R-Garden City) said during a town hall in Leoti on Tuesday evening.
“The legislature is a different place than it was a year ago. The political philosophy has shifted to the center,” added House Majority Leader Don Hineman (R-Dighton).
Despite having the support of more than 60 percent of Kansans, a tax plan that included elimination of the LLC exemption, along with Medicaid expansion, both narrowly failed to survive vetoes by Gov. Sam Brownback.
“Medicaid expansion for hospitals in Western Kansas only makes sense,” Doll said.
At the same time, he was among senators who rejected (by a 37-3 vote) a flat tax that had been endorsed by the governor as a replacement for his 2012 “march to zero” tax plan.
The flat tax would have increased the tax rate for low- and middle-income Kansans to 4.6 percent, up from the current 2.7 percent. The rate for upper-income Kansans would have seen no change.
“It would have meant a tax increase for 65 percent of Kansans,” Doll noted. “And it still wouldn’t have been enough to fund state government. We’d have had to raise taxes somewhere else.”
Doll remains optimistic that the tax plan which was vetoed will be passed with some minor changes.
“I would hope that we’ll eventually see some form of that first tax proposal. We’re past crunch time,” said Doll. “Something needs to be done.”
Big Decisions Await
Before the current session began in early January, Hineman had hopes of the legislature completing its work within 90 days. The chances of that are quickly disappearing with major issues still to be resolved when the session resumes on May 1.
“I had hoped to be home planting milo by May 15, but I don’t see that happening,” he says.
Hineman disagrees with the handful of ultraconservative lawmakers who insist that budget cuts are still the best option for filling a funding gap that’s currently projected at $1 billion over the next two fiscal years.
“A tax increase is inevitable,” said Hineman. “We need additional revenue and everyone knows that. It’s a matter of what it will look like. (A tax plan) may come together pretty quickly when we go back to Topeka in May.”
He points out there are only two areas in which the state is budgeting more money than it was in 2012 - human services and KPERS.
Human services includes programs that benefit children, mothers and senior citizens. One reason for the higher costs is due to increasing population trends which put greater demand on services.
“KPERS was underfunded and it still is,” Hineman said. “We had to increase our contributions.”
“With every other function of state government, spending has either remained the same or it’s declined (since 2012), which has become a problem. A lot of agencies are severely underfunded and, consequently, they can’t keep employees,” he pointed out. “Without adequate staffing our state can’t do the job that’s expected by taxpayers.”
Hineman says the state has about 5,000 fewer employees than it had in 2012.
The House of Representatives has presented a school funding plan that Hineman calls a “starting point.” He says that because of the grant funding plan that’s been in place for the last couple of years, some districts could see a big loss in state funding.
The grant program maintained funding at the 2014-15 level for the past two years, regardless of whether enrollment was increasing or decreasing. While there will be mechanisms in place to soften the blow, districts that have lost enrollment over the last couple of years could see a pretty significant loss of funding when the new formula takes effect for the 2017-18 school year.
Under the latest House plan, the Dighton district will lose about $30,000 due to declining enrollment while Wichita County will gain about $10,000.
The bigger issue facing the legislature will be where to find the additional money for public education. An initial effort to pump just $75 million into schools was rejected. Lawmakers are now looking at a plan to put $150 million per year into schools over the next five years - a total of $750 million.
“I don’t know how we’ll fund it. We’re already looking at a budget deficit (next year),” Hineman said.
On the Senate side, Doll is perplexed at the leadership’s slow response in looking at a funding plan. He said a group wasn’t appointed until just before adjournment to consider a finance formula. And some senators with an education background weren’t even asked to serve on the committee.
Doll, who is a former teacher and is vice-chairman of the Education Committee, wasn’t named to the group. Neither was Sen. Mary Jo Taylor (R-Stafford) who is a school superintendent.
Perhaps one of the big surprises during the legislative session was passage of Medicaid expansion by the House and Senate. Gov. Brownback vetoed the measure and the House fell three votes shy of a veto override.
Despite talk about another possible veto override attempt in May, Hineman considers that unlikely.
“I expect another attempt at Medicaid expansion in 2018,” he adds.
Beer in Grocery Stores
•Some concern was expressed with a bill passed by the legislature to allow the sale of “strong beer” (six percent by volume) in grocery and convenience stores starting April 1, 2019.
Grocery stores would be limited to beer sales only. As a compromise, liquor stores will be allowed to sell non-alcohol products such as tobacco, lottery tickets, etc.
Doll says a study has indicated the state could lose up to 200 liquor stores as a result of the bill. Some Leoti residents are concerned that their liquor store could be on that list.
•Doll and Hineman were questioned about Medicaid expansion and whether the state could afford the added cost, especially if the federal government doesn’t keep it’s promise to provide 90 percent of the funding.
Doll said that the 10th Amendment gives states the right to pull out of the expansion program if the federal government cuts its promised share of funding.
•A bill passed by the legislature requires home-owned carnival rides to meet state inspection standards. Terry Laws, a member of the Wichita County Amusement Association board is worried about the added cost to their carnival operation and others across Western Kansas.
“In close to 30 years we’ve never had a major incident,” noted Laws. “What’s the chance of legislation to exempt home-owned carnivals?”
Hineman said legislation won’t be passed at this late date in the session and he was skeptical about it happening next year.
No User Comments
Be the first to comment on this story.