Big Issues! Tax cuts, KanCare expansion, & School finance

Mar 7, 2019 by

Big Issues! Tax cuts, KanCare expansion, & School finance

It’s big-time under the dome these days (although the light committee schedule would appear to say otherwise).

We’ve spent much time reporting on Senate Bill 22, the budget-busting tax cut bill that passed the Kansas Senate on February 7. As it passed the Senate, the bill would cut taxes by about $190 million putting a budget out of reach that would fund schools, help the foster care system, fix the crisis in Kansas prisons, and restore highway funding. The Senate version would provide about $140 million in tax cuts for multi-national corporations and lets about 9% of Kansas individual taxpayers itemize their state income on taxes even if they can’t on their federal return at a cost of another $50 million.

The Kansas House Tax Committee added a one-cent reduction in the food sales tax, costing the state about $60 million and then inserted a change in the way internet sales taxes are collected and remitted which would increase taxes to the state by about $41 million. So the House version would cost the treasury about $210 million.

After a long debate during which the House rejected all but one amendment to the bill, it was advanced to final action on a vote of 80 to 42. The only amendment that was adopted was one by Rep. Ken Corbet (R-Topeka) defining foods subject to the lower sales tax as those items that can be purchased with food stamps. Amendments by Representatives Jim Ward (D-Wichita) and Tim Hodge (D-Newton) aimed at removing the corporate tax breaks and maintaining those that benefit working Kansans were all rejected on identical party-line votes of 40 to 89.

The bill is now subject to a final action vote which will take place either Friday or Monday.

A “Round-table Discussion” on KanCare expansion

Representative Brenda Landwehr (R-Wichita), chair of the House Health and Human Services Committee, held a days-long round-table discussion on KanCare expansion this week. KanCare is the Kansas version of Medicaid so this amounts to a discussion on the expansion of Medicaid under the Affordable Care Act.

Expansion was approved by both the House and Senate in 2016, only to be vetoed by then-Governor Sam Brownback. The House voted to override the Governor’s veto but the override fell short in the Senate.

Medicaid or KanCare expansion is needed for a number of reasons:

  • Our rural hospitals are in financial trouble and expansion would dramatically improve their chances of staying open. Some hospitals have already had to close. The first to shutter was in Independence and just last month, the hospital in Horton indicated that it may be closed. Employees were working without pay. Hospitals in Fort Scott and Oswego have also closed.
  • KanCare expansion will encourage work and job advancement among low-income parents. In Kansas, a parent makes too much to qualify for KanCare if she earns more $7,896 per year for a family of three. If she works a minimum wage job just more than half-time, she would make too much to qualify. If she gets a better job, a raise, or more hours, she would fall into the coverage gap – her income is too high for KanCare and too low to qualify for assistance to purchase private insurance. If Kansas were to expand KanCare, low-income parents could earn more without losing their health coverage.
  • Expansion would provide coverage to between 130,000 and 150,000 working Kansans who cannot afford coverage now.
  • While Kansas would be required to pay a portion of the costs (about $47 million), the bulk of the cost would come from the federal government. In 2020, 90% of the cost would come from the federal government. Kansas has already forfeited more than $3 billion in federal aid from taxes that Kansans are paying!

While both the House and Senate have voted before in favor of expansion and both would likely do so again now, the leadership in both chambers remains opposed and have worked tirelessly to block all efforts to force a vote on expansion. Rep. Dan Hawkins (R-Wichita) is now the House Majority Leader and has led the efforts to block expansion. Rep. Landwehr who now holds the chair of the Health and Human Services Committee is also a strong opponent of expansion.

During the first day of the round-table, Republicans Jim Kelly (Independence) and John Eplee (Atchison) spoke in support of expansion and raised their personal experiences – Kelly with the harm to his community caused by the closing of the hospital and Eplee to his experience as a physician with the harm to Kansans who can’t get the care they need.

Read about the first day of the round-table in the Capital-Journal by clicking here.

Find out more about KanCare expansion at the website of the Alliance for a Healthy Kansas by clicking here. KNEA is a member of the Alliance.

School finance moving

We reported that the first school finance bill – SB 142 – moved out of committee on Wednesday and will go to the full Senate for debate probably next week. This bill contains only the proposed inflation fix to school finance required by the Gannon decision.

It is important to understand that not everyone agrees that this bill will be approved by the Court. There are two interpretations of what the Court was requiring. This bill puts in one inflation increase and then maintains that through the following years. Schools for Fair Funding (SFFF) believes the Court wants to see an inflation increase each year along with the spending increases passed last year. KNEA’s interpretation has been the same as that of SFFF.

We would anticipate at this time that what is likely to pass is this bill along with SB 147 which is the rest of the education budget. When combined, these bills are the same as SB 44, the Governor’s school finance bill introduced at the start of the session.

We are expecting a Senate floor debate on SB 142 next week.

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