Kansas Lawmakers Raise Taxes And Spending Before Ending Session

Jun 11, 2017

It took 113 days instead of the scheduled 100, but Kansas lawmakers finally ended their 2017 session Saturday.

Their final act was to approve a two-year budget plan that supporters say will start the process of repairing damage done by Republican Gov. Sam Brownback’s tax cuts. But the session’s climatic moment occurred a week earlier when lawmakers overrode Brownback’s veto of a bill that largely reversed those cuts. 

A group of moderate Republicans and Democrats elected since the passage of the tax cuts in 2012 helped lead the charge, but even some lawmakers who initially supported the cuts joined the override effort.

Senate Majority Leader Jim Denning voted in 2012 for the cuts, hoping they would provide the Kansas economy with the shot of adrenaline that Brownback promised. But weary of perennial budget struggles, Denning said before the override vote that the time had come to admit the cuts hadn’t worked as advertised.

“I’ve always backed up and mopped up my mess. That’s what I’m doing now,” said Denning, an Overland Park Republican.

Moderate-leaning Republican Stephanie Clayton, also from Overland Park, said reversing the tax cuts was a “major step” toward fixing the state’s budget problems.

“We have turned things around and we are headed in the right direction,” Clayton said.

The $1.2 billion tax increase passed over Brownback’s objections raises individual income tax rates and restores a third tax bracket eliminated by the 2012 bill. It also repeals a controversial tax exemption given to more than 300,000 business owners and farmers.

The rollback of his signature policy legislation is an embarrassing political defeat for Brownback, who has been the subject of numerous reports saying he is likely to resign before the end of his term to accept a presidential appointment. 

‘Turn around’ budget

The budget plan reverses some of the spending cuts approved in recent years to make up for shortfalls in state revenues. It also includes approximately $30 million for state employees, who haven’t had an across-the-board pay increase since 2008.

Employees who have worked for the state for five or more years will get a 5 percent bump. Others, including all employees in the state’s court systems, will get a 2.5 percent increase.

Members of the Kansas Senate sit at ease before debating a budget bill Saturday.
Credit Celia Llopis-Jepsen / Kansas News Service

“Even though state employees and judicial employees may not be thrilled with the level of the raise they’re getting, it’s the first time I’ve been able to vote for a raise for them for quite some time,” said Republican Sen. Vicki Schmidt of Topeka. “I hope it’s the beginning of restoration of several things.”

The budget plan authorizes state general fund spending of $6.4 billion in the fiscal year that begins July 1 and $6.3 billion the following year. Those spending levels wouldn’t have been possible without the tax increase that lawmakers approved.

Moderate Republicans and Democrats said a more cordial atmosphere at the Statehouse helped make the bipartisan agreements on taxes and the budget possible.

“It was a very collegial process and collaborative process that brought us to this point,” said Democratic Sen. Laura Kelly of Topeka.

Still, conservatives fought the tax and spending increases to the end.

“What we’re doing is fleecing our constituents on the false premise that it must be done,” said Sen. Ty Masterson, a Republican from Andover.

Sen. Dennis Pyle, of rural Hiawatha, compared his colleagues to city-dwellers who have never lived on a farm and don’t know where their food comes from.

Sen. Carolyn McGinn answers questions about the budget in a GOP caucus meeting Saturday ahead of the vote.
Credit Celia Llopis-Jepsen / Kansas News Service

“Sometimes I wonder if legislators don’t understand where the dollars come from,” he said. “From hard-working people. Small businesses.”

Senator Carolyn McGinn, the Sedgwick Republican who led the budget-crafting process in her chamber, shot back at accusations of wasteful spending, charging that conservatives resorted to budget tricks to balance the budget when they controlled the Legislature.

“This body has had four years to cut this budget. And that didn’t happen,” McGinn said. “Instead, the way we balanced the budget, the way this body balanced the budget in the last four years, was by stealing from KPERS, stealing from KDOT, stealing from fee funds, stealing from the water fund, and I could go on.”

Final day drama

A last-minute dispute threatened to derail the collegial feel and the budget deal Saturday.

At the urging of the chamber’s Democrats, the House budget plan included $17,600 to repay an 84-year-old woman for cash seized by the Kansas Highway Patrol in 1995 when they searched her car for what they suspected was illegal drug money. The woman, Barbara Reese, who was never charged with a crime, insisted she earned the money selling used cars.

Lawmakers advocating for the return of the money said the incident probably would not have happened if Reese wasn’t African-American.

“This body has had four years to cut this budget. And that didn’t happen.”

House members believed that Senate budget negotiators had agreed to the payment. But when the conference committee report arrived on the House floor for a final vote it didn’t include the money, touching off a skirmish that for a while threatened passage of the budget.

“I will not join this highway robbery,” said Valdenia Winn, a Democrat from Kansas City, Kan., who called the item’s last-minute removal from the budget “arbitrary” and “draconian.”

When it came time to vote, about 30 Democrats initially abstained, leaving the bill several votes short of the number needed to pass. But after a few tense moments, most relented and voted for the bill, which ultimately passed 88-27.

Lawmakers will return later this month for the ceremonial end to the session. At 114 days, it will tie the record-long session in 2015.

Unfinished business

One of the thorniest issues of the session remains unsettled. Lawmakers have completed their work on a new funding formula for public schools, but Brownback hasn’t signed off on it and neither has the Kansas Supreme Court.

The high court ruled in March that public school funding in Kansas was constitutionally inadequate and that more money must be put into the system.

The bill that lawmakers passed provides $284 million in new money over the next two years, including $184 million for the upcoming fiscal year. 

Listen: Statehouse Blend Kansas discussion of the session's action-packed final days

However, it’s anyone’s guess whether that will be enough to satisfy the court, which could shut down schools June 30 if a constitutional formula isn’t in place, meaning one that has been signed into law and approved by the court.

If the court rejects the plan, lawmakers could find themselves called back to the Statehouse for a special session in July.

Medicaid expansion gets a vote

The Legislature’s health agenda this session largely focused on two issues: expanding KanCare to adults earning up to 138 percent of the poverty line and exempting public hospitals from having to allow concealed handguns.

Lawmakers voted earlier this year to expand Medicaid, but the House fell three votes short of overriding Brownback’s veto.  Supporters attempted to put together another bill after St. Francis Health in Topeka announced it might close but found little interest. 

The Legislature passed a bill exempting public hospitals, clinics, nursing homes and mental health centers from a concealed carry law, but Brownback hadn’t yet acted on it.  Under state law, publicly owned health facilities must allow handguns or install metal detectors and armed security officers starting July 1. Officials estimated that securing the state hospitals for people with serious mental illnesses or developmental disabilities would cost about $12 million annually

Lawmakers proved willing to put some money into health programs. The budget bill includes $4.7 million for the state to open 20 additional beds at Osawatomie State Hospital or to contract with another entity for beds. The hospital has been running at less than full capacity for more than a year because of a staffing shortage.

The House and Senate also passed a bill Friday that would set up a task force to study the foster care system, but Brownback hasn’t signaled if he will sign it. 

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