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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School Finance Bill to Senate Floor

Mar 6, 2019 by

The Senate Select Committee on School Finance held a hearing and then worked Senate Bill 142, a school finance bill to address the Gannon inflation fix.

The Governor’s school finance bill, SB 44, was split into two bills – SB 142 and SB 147 – with SB 142 referred to the Senate Select Committee on School Finance and SB 147 to the Ways and Means Committee. Together, these two bills match exactly what was in SB 44.

Complicating the discussion this week was the discovery by Schools for Fair Funding (SFFF) that both SB 44 and SB 142 were not written in a way that reflected the plaintiff districts’ interpretation of the Gannon decision. Their interprertation is that the state needed to provide an additional inflation factor above any new money in the out-years of the prior passed law. KNEA has held the same interpretation.

The State Board of Education, however, adopted a position that the requirement was to provide the inflation factor one time and then simply carry it forward. There is a large difference in funding between these two positions.

Today, SFFF presented testimony in opposition to SB 142 while KASB testified in favor saying they supported the State Board. Also in opposition was the Kansas Policy Institute essentially because they believe the Court can’t tell the legislature what to do.

KNEA testified as neutral, telling the committee that we had the same interpretation of the Gannon decision as SFFF and noting that there were two interpretations in the room. The only ones to say what the actual meaning in the Court’s decision are the justices of the Kansas Supreme Court. We noted that, under our interpretation, this bill will not end the litigation.

Said KNEA lobbyist Mark Desetti, “If you send this over to the Court, SFFF will argue against it while the AG will defend it. In the end the Court will decide if this is enough or not.”

KNEA put our position this way:

We ask that the Legislature do two things.

First, leave the finance formula alone. It has been determined to meet constitutionality in terms of equity. Any alterations to the formula, any efforts to have additional funds directed in new or specific ways will simply raise the possibility of once again harming equity. The best thing to do is to put new money on base aid as this not only helps students generally but impacts other aspects of the formula such as at-risk and bilingual funding.

Secondly, provide the inflation fix in each of the out years in a way that gets us to the Montoy “harbor” accounting for inflation.

We firmly believe that if you do these two things, you will resolve the Gannon case and end this cycle of litigation.


After the hearing, the bill was brought to the table for discussion and passed out of committee favorable for passage by the full Senate. It will now go to the Senate for debate and possible action.

In the meantime, we await a hearing in the Ways and Means Committee on SB 147, the rest of the education budget.

Big tax bill – SB 22 – up on the House floor tomorrow!

This year’s big tax cut bill is up for a vote tomorrow on the House floor. The bill includes a huge cut in taxes on multi-national corporations, permission for a few higher-income Kansans to continue itemization on state income taxes, a one cent reduction in the food sales tax, and a new provision allowing for collection of state and local sales tax on internet purchases.

KNEA opposes this bill as it strips over $200 million out of the state treasury before the budget has been passed and before school finance is resolved. The state is still digging out of the Brownback tax disaster; to start cutting taxes of this magnitude at this time is irresponsible.

We urge you to contact you Representative using the link below. Say, “PLEASE VOTE NO ON SB 22!”

Stop a Dangerous New Tax Plan

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Wasn’t that a mighty storm?

Feb 8, 2019 by

One storm was on the Senate floor

Senate President, Susan Wagle

The tax debate storm hit the Senate floor Wednesday night as the ice was moving in on most of the rest of Kansas. And frankly, some of the exchanges in the debate were a tad icy as well!

Senate President and self-appointed chair of the Senate Select Committee on Federal Tax Code Implementation Susan Wagle (R-Wichita) brought her pet project, Senate Bill 22, to the floor for debate. While Wagle has tried to portray her bill as real help for working Kansans, it is in reality a large corporate tax giveaway with little benefit for individual tax filers and no relief to working families.

We’ve been reporting on this bill as it was discussed in Committee but just to review, here are the facts in a nutshell:

  • It decouples the Kansas income tax code from the federal income tax code,
  • It stops retroactively the collection of Kansas income taxes on overseas earnings by multi-national corporations through the repatriation of overseas earnings,
  • It protects multi-national corporations from paying additional Kansas income taxes under the GILTI tax provisions,
  • It allows individual tax filers who will not longer itemize on their federal taxes due to the increase in the standard deduction to continue to itemize on their Kansas income tax forms

The bill has an estimated fiscal note of $192 million with $137 million of the benefit going to the multi-national corporations. $54 million would go to Kansas individual taxpayers who cannot itemize on federal taxes but would benefit by doing so on state taxes.

In the debate Sen. Wagle noted that 9% of Kansas tax filers can continue to itemize under the federal law and see a tax decrease under the Trump tax cut. Those 9%, the wealthiest Kansans, get no benefit from SB 22.

Another 9% of Kansans will see a tax benefit by no longer itemizing on their federal taxes and will see a modest tax increase in Kansas as a result. This 9% of Kansas tax filers will get a small benefit from SB 22.

The other 82% of Kansas tax filers – those working families and low income workers – get no benefit at all. Talking about this bill as tax relief for working Kansans is just not right. It really only benefits the wealthiest individuals and multi-national corporations.

What the bill will do, especially coupled with Senate Bill 9, is to drain much of the state treasury before a budget can be adopted making it much harder for Governor Kelly to address school finance, the failing foster care system, highway maintenance, health care, and the mess in our prison system. This bill is essentially a cynical political attempt to hamstring the Governor.

The only amendment considered last night was offered by Senator Dennis Pyle (R-Hiawatha). The Pyle amendment would have exempted social security income from state income taxes. Pyle asserted that retirees are fleeing Kansas seeking homes in those states that don’t tax social security. Pyle also admitted he had no research or data to prove his point. His amendment received only five votes. Pyle had asked for a roll call vote but failed to get five senators to support him on that.

Senator Tom Holland (D-Baldwin City) moved to send the bill back to committee with the intent of splitting the corporate and individual tax provisions and considering alternatives to simply decoupling from the federal code. His motion failed on a vote of 12 – 28 with Senator Mary Jo Taylor (R-Stafford) joining the Democrats in supporting the motion.

In the end the bill was advanced to final action on a voice vote.

Overnight storm closes almost everything…but not the Statehouse

While most of Northeast Kansas was closed due to a nasty ice storm and a dusting of snow on top of slick roads, Wagle announced that the Legislature would open so she could get her bill voted on final action.

In explanations of vote, Senator Bollier (D-Mission Hills) noted that the bill was fiscally irresponsible, that the fiscal note was speculative, and that the budget should be settled before considering tax changes. Senator Hensley said, “Kansans made it clear they don’t want more irresponsible policy when they elected Laura Kelly.”

“For the cost of this bill,” said Hensley, “the food sales tax could be cut in half.”

Republican Senator Mary Jo Taylor voted NO and suggested that the Legislature should first address their responsibilities before considering this bill.

In the end the bill was adopted on final action on a vote of 26 to 14. Senators John Doll (I-Garden City), John Skubal (R-Overland Park), and Mary Jo Taylor (R-Stafford) joined all 11 Democrats in voting no. The bill must now go through hearings and votes in the House before it can go to the Governor for signature or veto.

Governor’s school finance plan hearings in Senate Ed Finance Committee

Senate Bill 44 is currently in the Senate Select Committee on Education Finance. The hearing on the bill began yesterday and will continue on Tuesday next week.

This week many superintendents from around Kansas testified in favor of the bill, as one might expect. But the most notable testimony came from Schools for Fair Funding (SFFF), representing the Gannon lawsuit districts.

SFFF told the committee that should the Legislature pass SB 44 without amendment and with no changes to the school finance formula, they would stipulate to the Court that the solution met the funding needs of schools providing the Court retained jurisdiction in order to ensure that future Legislatures do not renege on the promises made in this legislation.

Senator Denning (R-Overland Park) pressed SFFF repeatedly on this issue to make it clear that the bill would be acceptable despite the fact that the inflation factor used in the bill – and recommended by the Kansas State Board of Education – is somewhat lower than the actual CPI.

We will see if this information has an impact. If adopted as is with no changes to the formula, SB 44 could actually end the Gannon school finance lawsuit.

This hearing will continue next week when KASB, KNEA, Game on for Kansas Schools, and the PTA will testify in favor. The only opponent will be the Kansas Policy Institute who consistently asserts that schools have more than enough funding right now and are failing.

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Of Taxes and Torpedoes

Feb 1, 2019 by

A Tale of Two Tax Committees

Senate President, Susan Wagle

If you’ve been reading our reports, you know that we are focused for the time being on the tax discussion in the House and Senate where the latter is grappling with Senate leadership’s desire to give away hundreds of millions of tax dollars before we figure out how to finally fund our schools, expand Medicaid, restore our highway department, and fix our damaged foster care system. It almost feels like the plan is to give away as much revenue as possible so it won’t be possible to do those things. Partisan politics where Senate leadership is willing to risk returning to Brownback-style policies appears to be the prevailing strategy to torpedo Governor Kelly’s budget.

The House is taking a different approach to dealing with the unintended consequences of President Trump’s tax policy- which has been derided by Republican leadership in the Kansas Senate but willingly supported by the six Kansas Republicans in the U.S. House and Senate when the bill came to them.

In the Senate, Senate President Susan Wagle (R-Wichita) has taken the matter into her own hands, stripping authority for tax issues from Tax Committee Chair Caryn Tyson (R-Parker) and forming her own committee with herself as chair, the Senate Select Committee on Federal Tax Implementation.

Wagle’s Committee held a hearing on SB 22, a bill to decouple the Kansas income tax from the federal income tax in order to allow individuals to continue itemizing and to assist corporations in not paying taxes on their overseas earnings.

In the days of discussion – first in Tyson’s Assessment and Taxation Committee and now in Wagle’s Senate Select Committee – the conferee time has been handed over to the Kansas Chamber of Commerce and the chamber has happily filled that time bringing in corporate tax accountants to wail about the unfairness of it all while making veiled threats about leaving the state if they don’t get what they want. Department of Revenue staff- whose jobs are to provide careful and reasoned analysis of these issues- sit in the committee room waiting patiently to be asked to what seems to be a party they’ve clearly not been invited to.

With about six minutes left in the meeting today, Wagle pushed the bill out of committee on a voice vote. It will now go to the full Senate for debate, probably next week.

Then there’s the House Committee on Taxation chaired by Steven Johnson (R-Assaria). In contrast to the Senate, Johnson has not brought a bill forward. Instead he is holding briefings by the Department of Revenue on how the various issues play out in reality. They spent one day on itemized deductions diving into how many Kansans actually did itemize before the change and what the impact is on those taxpayers who can no longer itemize. They even reviewed hypothetical scenarios to reveal the impact on middle class taxpayers.

They had another day to dive into the two corporate provisions – GILTI and Repatriation – to find out how these provisions work in the real world, again looking at how a typical corporate entity would be taxed with and without the changes sought by the Chamber.

The Chamber will have their time before the committee but not until a bill is scheduled for a hearing. The difference is that in the Senate, the Chamber has essentially been given the spotlight before the committee while the Department of Revenue waits silently in the wings.

It’s a rhetorical question, but we must ask; which chamber is interested in ramming a corporate wish list through the process and which is working deliberately and thoughtfully?

So back to cynical, partisan politics. There are some who believe that Wagle and her allies in the Senate want to ram as many revenue slashing bills through the Senate as they can simply to deny Governor Kelly the ability to responsibly deal with the State’s budgetary obligations – schools, highways, health care, and the crumbling foster care system. In that way, Wagle and her supporters can criticize the Governor for not solving those problems. It’s kind of like a similar strategy used against public schools. Defund them so they’ll struggle, label schools a failure and enact policies that benefit a select few while calling it all “reform.” The Kansas City Star has hypothesized that this is all about Senator Susan Wagle and her desire to run for the United States Senate now that Pat Roberts is retiring. The Star noted, “It’s a deeply cynical, hyper-partisan approach to tax policy.” To read the Star’s take, click here. We’ll have to wait and see how this plays out in the coming weeks.

Governor’s school finance bill to get a hearing next week- A CALL TO ACTION.

Senate Bill 44, Governor Kelly’s school finance bill that would enact the State Board of Education’s finance recommendation in response to the latest Supreme Court ruling in the Gannon lawsuit, will get a hearing in the Senate Select Committee on Education Finance next Wednesday.

The bill will provide for the inflationary funding increase called for in the Supreme Court ruling without making any other changes to the school finance formula. If adopted as is, most education advocates believe that it will finally result in a fully constitutional school funding system – the first such system in about a decade!

We hope that the Senate will approve the bill with no changes and do so quickly. With the deadlines set by the Supreme Court, the Legislature’s response should be done by March 1. That would allow time for the Attorney General to prepare for the April Court hearing.

We would urge you to contact Senators and let them know how important this issue is. Kansas school employees want to be assured that their schools will open on time for the 2019-20 school year. The time for games and posturing is over. Kansas is close to closing the book on the Gannon suit and ensuring our school finance system is constitutional.

Members of the Senate Select Committee on Education Finance are; Molly Baumgardner, Jim Denning, Anthony Hensley, Bud Estes, Dan Goddard, Dan Kerschen, Carolyn McGinn, Pat Pettey, and Eric Rucker. You can email them using firstname.lastname@senate.ks.gov. Ask them to support Senate Bill 44 without amendment.


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Windfall? Not Really. & Kansas Teacher of the Year Team Visits Legislators

Jan 29, 2019 by

Fiscal note on SB 22, tax cut bill, is out … and it’s a doozy!

The fiscal note for SB 22, the so-called “windfall” tax bill being pushed by Senate President Wagle (R-Wichita) is out and it’s big. Passage of SB 22 would strip about $400 million out of the state treasury in three years – $191 million in 2020 alone.

The issue is relatively simple to understand. When Congress, with the full support of all six conservative Republican members of the Kansas delegation, passed the Trump tax bill they simply ignored the fact that their huge tax break for the wealthy would result in a state tax hike for average Kansans. By raising the standard deduction in the federal tax code, they wiped out itemization for most middle-income taxpayers. And since the state and federal codes are “coupled,” that means that if you can’t itemize on your federal taxes, you can’t itemize on your state taxes. Thus state taxes for most middle-income earners went up.

The Department of Revenue released three hypothetical Kansas taxpayers (married filing jointly with 2 children and a federal adjusted gross income of $120,000; married filing jointly with no children and a federal AGI of $60,000; and married filing jointly with one child and a federal AGI of $60,000). In those three scenarios, the first taxpayer with the AGI of $120,000 saw an increase of $39 in state taxes due to the federal law while the other two saw an increase of $12. That state tax increase was not passed by the Kansas legislature but instead by Trump and the congressional Republicans.

Kansas Republicans are aghast and seek to immediately decouple from the federal tax code to prevent this increase. Wagle wants to do this so quickly that she formed a special committee in the Senate naming herself as chair to get it out of committee this week. Today the Kansas Chamber and some corporate tax advisers talked to the committee about provisions in the bill that would exempt corporations from paying state taxes on overseas earnings that are “repatriated” to the U.S.

KNEA is neutral on the policy – whether or not to adjust the Kansas tax code to deal with the unintended consequences of rushed tax changes by Congress is a decision the Legislature should debate. But we are not neutral on the impact. If a bill is passed that strips nearly $200 million out of the treasury in one year with more than $100 million per year lost in the following two years, how does the Legislature plan to pass a responsible budget that funds our schools and restores service cuts across agencies? And perhaps that is the point.

We all know what happens when tax policy is done in a rush! Trump and his supporters in the House and Senate in Congress rammed through their tax bill without having any idea of its impact and the harm it might do to middle income taxpayers. Sam Brownback and his allies rammed through a tax bill in 2012 that brought Kansas to the brink of collapse.

So here’s our plea. Stop the rush! Be deliberate; consider the consequences of each change; look for alternative ways to address the issue without decoupling. Try exercising a little restraint. SB 22 will strip too much money out of the Kansas treasury while we are still in recovery from the Brownback disaster.

Kansas Teacher of the Year Team 2019

KTOY Team 2019

As today was “Kansas Day,” it was a perfect time to celebrate all that makes our state great, including the dedicated professionals who work so hard to make sure our kids are safe, learning and growing in our public school classrooms. The 2019 Kansas Teacher of the Year team is recognized for its members’ outstanding contributions to their students, but also works to be a strong voice for educators during the year. Today, the team addressed a joint House and Senate Education Committee to bring both their optimism and concerns before our state representatives.

2019 Kansas Teacher of the Year, Whitney Morgan

The 2019 Kansas Teacher of the Year, Whitney Morgan shared some of what she believes would be beneficial for students including embracing diversity, targeted interventions, smaller class sizes and professional development. Whitney teaches English and English for speakers of other languages in Kansas City, Kansas.

Team member Sharon Kuchinski, a high school social studies teacher from Leavenworth, gave some very strong testimony over concerns for the difficulty our state is facing attracting new teachers to the profession, particularly when many teachers- but certainly early career educators- are faced with working multiple jobs in order to make ends meet.

We applaud the Kansas Teacher of the Year team for their efforts and advocacy. The team will continue to meet with various groups throughout the state, including Kansas NEA, to share their insights throughout the coming days and weeks. We look forward to hearing and learning from them.

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