As the 2017 Legislative session nears first adjournment, the scramble to finish is on. Budget, school funding and revenue issues are on everyone’s mind and resolving them is a slow process. The April 7 deadline is coming up quickly.
Monday, the Senate was on the floor debating several issues, mostly non-controversial. The issue receiving the most attention was HB 2044, which is the Medicaid expansion. Several things happened in the last week to bring more attention to that issue. The first was that the US Congress pulled the ACA repeal bill from the calendar so no change is occurring in Washington DC at this time. The second is that the Kansas Senate passed, without amendment, HB 2044. Since it passed the Senate without amendment, it went directly to the Governor, who almost immediately vetoed it. An hour and a half later a motion was made to override and the motion was tabled, likely until Monday.
There is much speculation about whether expanding Medicaid will cost the State additional funding. Many claim not, but the actual numbers are rather difficult to determine. My own take on it is that if all the benefits are considered, the cost to the State is likely to be minimal, or perhaps zero. With the expansion, hospitals and health care providers will receive at least some compensation for services that had not been compensated before. While the State may see some additional costs, those benefits may be unrealized by the State budget but are very real for providers.
Work on the school funding formula continues. The K-12 Budget Committee finished hearings on the proposed bill and will begin working the bill after a day or two of discussion. Obviously it is a complex matter and deserves much thought and discussion. Chairman Campbell has been steadily moving along, but not in a rush. Given the diversity of schools in the State it is impossible to create a formula that is ideal for everyone, but they are doing their best to accommodate and listen to everyone.
House Appropriations and Senate Ways and Means Committees met and passed their respective FY 2018/19 budgets. As I write this, the full Senate passed their budget out for conference but the House has not. Even if the decision is made to increase taxes, it is becoming more apparent that funding the FY 2018 budget will be difficult, given the 12 to 18 month time lag between implementing a tax increase and the time when that revenue is realized by the State. Often the result is that the Legislature tends to phase in programs. The school funding formula would be a good example of that in that there is already an expectation of phasing in the funding over three years.
Given the difficulty with the FY 2018 budget that is still $248M underwater after considerable work, several things will again be delayed and payments not made on time. KDOT transfers to the general fund will still be made and State payments into KPERS will be delayed because of the cash shortage in the budget. However, I want to stress that KPERS payments to beneficiaries are not compromised in any way. It has taken a while to get in this mess and will take some time to get out.
I have not had time to attend many Tax Committee meetings. When I have attend recently, the discussion has been on income flat tax. Generally the flat tax proposals are not popular because everyone is the same rate regardless of their income and typically several things get pulled in to be taxed that are very unpopular.
Obviously much remains to be finished in the next week and a half. My hope is that these issues are not pushed off to veto session in May. Schools and departments need to move ahead and get budgets in place before the fiscal year begins July 1.
Assistant to Rep. Don Schroeder