The Kansas Legislature has the state's $2 billion surplus to wrangle over this year
Kansas has more than $2 billion in budget surplus. The Republican-controlled Legislature and Democratic Gov. Laura Kelly may use the 2023 session to spar over how that money can be used through tax cuts and government spending, among other political issues.
TOPEKA, Kansas — Kansas lawmakers return to the Statehouse today with more than $2 billion in loose change to fight over.
How the Legislature’s Republican leaders and Democratic Gov. Laura Kelly want to use that money could define the 2023 legislative session.
While Kelly calls for cutting some taxes, she’s also proposing funding increases in health care and education. But Republican lawmakers have rarely backed any of Kelly’s plans.
Instead, the Republican leadership may look at different tax cuts and spending hikes while also looking to pass conservative laws, like exploring new restrictions on access to abortion.
Taxes and spending
With such a large surplus in the state’s coffers, cutting taxes will surely be a major discussion.
Kelly recently proposed a plan that she said will provide $500 million of tax relief over the next three years. The plan includes speeding up the current phase-out of the food sales tax.
New House Speaker Dan Hawkins, a Wichita Republican, said in a statement that Kelly’s proposal will be considered, but he suggested House Republicans are more interested in tax cuts that “will benefit all Kansans.”
Republican Senate Vice President Rick Wilborn said with new leadership in the House, the Legislature’s top Republicans have not yet had a chance to discuss tax strategy for this year. But he knows cutting taxes will figure heavily.
“Taxes will be a very up-in-front issue with the surplus that we’re having in the bank because of the good strong economy in Kansas,” Wilborn said.
Kelly also called for reducing taxes on Social Security income for retirees. Republicans historically favor income tax cuts, giving the Social Security proposal a more likely chance of passing.
Republican Derek Schmidt, who challenged Kelly for the governor this fall, also proposed Social Security income tax relief. And Wilborn said he would like to eliminate income taxes on Social Security completely.
Meanwhile, some of the surplus funds might be used to increase funding for state programs. Kelly calls for increasing special education funding. Under existing Kansas law, the state only covers part of the cost and leaves the rest to local taxpayers.
As of the new year, the Kansas Association of School Boards estimates the state is about $110 million short during the current school year and about $180 million short for the 2023-24 school year.
But Kelly said the state may not be able to close the gap immediately.
“Knowing that it’s a lot of money that we need to put there,” Kelly said, “we may phase it in over time so that we're not disrupting services to any other entity.”
Kansas is just one of 11 states that has not expanded Medicaid. All four of the state’s neighbors have adopted the expansion.
Kelly has proposed expanding Medicaid every year in office. Heading into her fifth year, she said she will do it again. Without it, she said the state is spurring federal dollars that can be used to boost the state’s health care systems.
“We’re just hurting ourselves very, very much by not expanding Medicaid,” Kelly said.
Kelly wants Republicans to work with her to get expansion done. She’s speculated they’d be more willing now because she can’t run for reelection. But Republican leaders have repeatedly rejected expansion. Wilborn said it’s unlikely Republican leaders will change their minds and back expansion in 2023 even though there may be support for it among rank-and-file legislators.
Expanding Medicaid remains popular among the state’s residents, with 72% of residents telling pollsters they support increasing the number of people eligible for the federal health insurance program for the poor.
Medical marijuana has inched its way to becoming law in Kansas for years — and then stalled time and again.
The Kansas House passed a medical marijuana bill in 2021, but it died in the Senate. Wilborn said the Senate needs to make the next move if it is to become law this year.
“The House has publicly said that they provided a bill last year and they will not touch it this year,” Wilborn said. “It’s up to the Senate.”
A Senate special committee held several hearings on the issue in 2022. Republican state Sen. Rob Olson, the chair of the committee, said at the end of the committee’s work that he will introduce a bill. But he said it may be too difficult for the bill to escape from committee.
Additionally, Olson was recently removed from the committee that would normally consider the matter. Republican Sen. Mike Thompson, one of the state’s most conservative legislators, will now lead the Senate’s federal and state affairs committee.
Thompson told the Sunflower State Journal that he has not thought much about medical marijuana.
“It’s something I need to study and do some research on before I make a decision on that,” Thompson said. “Obviously, I have some concerns over what happens.”
Kansas voters made it clear in August that they support access to abortion when they overwhelmingly rejected a proposed amendment to the state constitution that would have removed the right.
The vote surely stops any plans from lawmakers who wanted to enact a total ban on abortion like Oklahoma and Missouri. But they could restrict abortion access in other ways.
The Kansas Supreme Court in 2019 ruled that the state’s constitution protects the right to abortion. Currently the state has a ban on abortion after 22 weeks into a pregnancy. Lawmakers could test how strong that right is with more moderate restrictions.
Greer Donley, a Kansas native and abortion law expert at the University of Pittsburgh, said Kansas lawmakers could pursue a 15-week ban to test the court’s ruling by passing such a law and trying to defend it in court.
Meanwhile, abortion opponents may change focus. Chuck Weber of the Kansas Catholic Conference, which backed the proposed amendment, said he and other groups will likely lobby for state lawmakers to increase state funding for pregnancy resource centers to offer alternatives to abortion.
Weber said the state should also consider making adoption easier and more affordable for Kansas families.
“We want to be ready to go with resources and alternatives,” Weber said. “Our focus has to be on the women and the children.”
Another megaproject deal
Luring Panasonic’s $4 billion manufacturing plant to Kansas with $830 million of incentives is considered one of the few bipartisan victories for the state in 2022.
The deal — promised to create up to 4,000 jobs at the planned plant in De Soto — was possible because of a law passed earlier in the year that gave the state authority for bigger giveaways. But the law only allows one of those types of deals per year in 2022 and 2023. Lawmakers would need to extend the law to allow for such deals in 2024 and beyond.
Kelly said there’s a chance the state will pursue another megaproject in 2023. She said nine companies were looking at the state before her administration landed Panasonic’s deal.
The law is set to end at the end of 2023. But lawmakers this spring could choose to extend it into future years, giving Kansas even more opportunities to lure big businesses to the state.
“The Legislature is going to want to take a look at that bill,” Kelly said, “and see if we don’t want to make it a little more flexible so that we don't pass up incredible opportunities for Kansas.”
Dylan Lysen reports on politics for the Kansas News Service. You can follow him on Twitter @DylanLysen or email him at dlysen (at) kcur (dot) org.
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