The tax cut debate in Kansas has stalled for now. The Kansas Senate came up two votes short (25) to override the Governor’s veto of the tax bill - that established one flat income tax rate while speeding up the elimination of the 4% state sales tax on groceries and easing Kansas income taxes on social security benefits. The Governor favored the elimination of the state sales tax on groceries and the social security change but worried that the flat Kansas income tax in the future would threaten the stability of State revenues to fund essential state services. The flat Kansas income tax favors the wealthiest Kansans, as did the Brownback income tax cuts in 2013 & 2015. Legislative leaders have stated there will be no new tax cut package for this 2023 session.

Kansas Senate falls short in attempt to override governor’s veto of flat tax proposal

Kansas Senate’s attempt to override Kelly on tax cuts falls short again — GOP senator sanctioned

For another session, Kansas legislative leaders blocked any discussion of Medicaid (KanCare) expansion and had to spend $71 million in state revenues to block the expansion. The federal government offered Kansas a higher federal match for all Medicaid services if expansion was allowed. This extra funding would have covered the Kansas share of expansion for several years. This all comes at the time when the COVID-19 emergency order has ended. Since 2020, 135,000 Kansans qualified for KanCare without an annual reassessment of their eligibility (which may have changed). That process started on April 1 and will take 12-14 months to complete. Medicaid expansion would have kept a sizeable percentage of these new enrollees on the program.

David Norlin - from Salina - wrote a terrific opinion piece for the Kansas Reflector tying together the health of the climate and the health & need for Medicaid expansion. Medicaid expansion in Kansas started in 2014, 2015, 2016, 2017, and every year since. The Kansas Legislature passed Medicaid expansion in 2017 but that bill was vetoed by Governor Brownback. Well over 70% of Kansans have expressed support for expansion. This has cost Kansans some 6 billion dollars that have gone to expansion in 40 other states. Kansas is among the southern slave states restricting life-saving health care to thousands of lower-income working Kansans. There are now some 55 hospitals in Kansas that are financially at immediate or high risk – more than half of all rural hospitals. (There are links in this opinion piece to the threatened hospitals across Kansas). David goes on to comment on legislation (ESG) that mandates the highest rate of return on the State’s investment, disregarding any future destruction and recovery costs from human-induced climate change. Corporations are free from any ethical standards, so the highest rate of return forgives any child slave labor and any racial or social inequities in employment practices or corporate governance.

In their paroxysms against ‘woke’ culture, Kansas legislators wound our health and environment

KANSAS HOUSING LAW

Senate Bill 17 was signed by the Governor on April 25. This law changes the designation of the Kansas Rural Housing Incentive District to the Kansas Reinvestment Housing Incentive District. It creates certain housing projects in designated cities with a population of 60,000 or more. It expands the list of costs that could be paid for by proceeds of special obligation bonds. It amends the Kansas Housing Tax Credit Act to expand transferability of tax credits that would be issued under this act.

The Kansas Rural Housing Incentive District Act was passed in 1998 to encourage the development and renovation of housing in rural cities and counties by authorizing these entities to assist directly in financing public improvements that support housing in rural areas of Kansas that experience a shortage of housing. Under this new law, a district could not designate more than 100 units for sale in one year or designate more than 100 units for-rent in one year. This law requires that the average size of each residence constructed per project be no larger than 1,650 square feet (excluding any garage or other exterior area). This new law removes the references to ‘rural’ and encourages the development and renovation of housing in cities and counties across the state. This law expands the list of costs that may be paid for by proceeds of special obligation bonds for renovation or construction of residential and multi-family units if the infrastructure (streets, sewer, water, and utilities) has existed for at least ten years.

Under the Kansas Housing Incentive Tax Credit Act – tax years 2022 and thereafter – a tax credit could be claimed against Kansas income tax liability, the privilege tax liability (imposed upon certain financial institutions), and the premium tax liability (imposed upon insurance companies). The tax credit could be claimed by qualified investors and project builders or developers of a qualified housing project. Any portion of the tax credit that is carried forward could be transferred to another taxpayer, and no limit on the number of times a credit or any portion of a credit can be transferred. The total amount (of these tax credits annually) is capped at $13 million - in revenue lost to the State General Fund.

Conference Committee Report Brief Senate Bill NO. 17

ENVIRONMENTAL, SOCIAL, OR GOVERNANCE INVESTMENTS STATUTE

House Bill 2100 amends existing law governing the Kansas Public Employees Retirement Fund (KPERS) investment standards to prohibit state agencies and other political subdivisions from giving preferential treatment to or discriminating against companies based on environmental, social, or governance (ESG) criteria in procuring or letting contracts. This law requires KPERS to act solely in the interest of participants and beneficiaries of the system and restricts state agencies from adopting ESG criteria. The enforcement of this law is by the Attorney General. ESG is defined by several criteria listed in the law, from fossil fuels to nuclear energy to production agriculture to emitting greenhouse gases to firearms to corporate board equity standards to doing business with any company described in the criteria list. The Governor allowed this bill to become law without her signature.

This law requires KPERS’ Board of Trustees (and any investment manager, proxy advisor, or contractor for KPERS) - when making and supervising KPERS investments - to discharge its duties solely in the financial interest of the participants and beneficiaries for the exclusive purpose of providing financial benefits. Concerning the voting of shares (proxy voting), all shares held directly or indirectly by KPERS must be voted solely in the financial interest of the system participants. All proxy votes must be tabulated and reported annually to the KPERS Board of Trustees and the Joint Committee on Pensions, Investments, and Benefits plus posted on KPERS’s website for review by the public. In terms of cost, KPERS would need to hire an additional investment officer (at a cost of $165,000 annually) from the KPERS Trust Fund. KPERS has more than 99,000 proxy votes a year. To manage these votes, KPERS would need to utilize a ‘proxy voting vendor’ at an estimated cost of $750,000 annually.

Conference Committee Report Brief House Bill NO. 2100

FARM BILL WATCH

LEAGUE OF WOMEN VOTERS OBSERVER CALLS

Kansas Legislature Website