Kansas ROADmap may be Less Traveled for a Reason

The Kansas ROADmap may be Less Traveled for a ReasonBlog_Field1.png

MainStream Coalition 2015 Legislative Session Recap

Posted June 26, 2015

In South Carolina, Republican Gov. Nikki Haley couldn’t pass income tax cuts even after declaring, “We are not doing what Kansas did.” Salon (2015)

Kansas Legislators Approve ‘Band-Aid’ Budget with Largest Tax Increase in State History. Lawrence Journal World (2015)

Just one election cycle prior…  Governor Brownback claimed that, "Critics said we couldn't cut taxes and invest more resources in public education.” He pronounced, “We can, we did and we will as long as I am governor. Period."  (2014)

The Kansas Experiment has put sweeping policy changes in motion, policies that reflect the Christian Conservative values on which Governor Brownback ran for office and the limited-government, free market ideologists who funded the campaign (State of the State, 2015).The preliminary outcomes of this high-risk experiment are rolling out generally as predicted (KHI, 2012): substantial budget shortfalls, smaller state government and privatization of state obligations, reallocation of reduced taxpayer dollars to corporate priorities, social engineering of the religious-intolerant kind, executive overreach into judicial authority, legislative overreach into local authority, and the like. 

This ill-fated road trip can be traced to a few pivotal lane-changing bills, flooded by a downpour of boilerplate ALEC legislation, which has brought Kansas to this crossroads. Future legislative sessions and elections will serve as a more blatant test of our resolve to restore equitable and adequate opportunities for all Kansans. Will eligible voters continue to allow 333,000 businesses a free pass on their income tax while their employees shoulder the responsibility of maintaining opportunity and attempt to provide quality services like schools, roads, and public safety that make Kansas a great place to live and do business? Will voters stand up for a separation of governmental powers and a healthier division between church and state?

The tipping point is approaching a level of significance reminiscent of the national battle played out on our borders in the late 1850s. The question at hand is whether the 24% of Kansans who voted for the current agenda and the 52% who did not vote at all – will make a different choice for themselves and our state come 2016?

.... And whether two years is enough time for Secretary of State Kris Kobach to correct his error that kicked 22,500 (1%) eligible Kansas voters off the registration rolls.

LANE CHANGE #1.  Diminish State Government  

Kansas has reduced its annual revenue intake by more than $700 million, phasing out the income tax which generated over half our State General Fund (KCEG).  “Goal to shrink state government, check.”  

 BlogChart1.pngThe revenue decline was so dramatic, Governor Brownback issued a $280 million, 4% across-the-board mid-year cut in December 2014 just to balance the budget (Kansas City Star).  Despite the trending economic downturn, Kansas leadership opted to double-down during the 2015 legislative session on the policy that triggered this revenue shortfall. The 2012 business income tax exemptions were declared off limits by threat of veto, as legislators deliberated on a plan to balance the $800 million state budget gap (Kansas City Star). 

 Half of the shortfall was patched by one-time fund transfers and $50 million in additional budget cuts – yet to be announced. As the Kansas legislature faced the other $400 million gap, nearly one out of every three had made a no-tax pledge and found themselves in a jam (Topeka Capital-Journal). Resolution was slow and tearful (Governing), but it was their mess to clean up. These are the very same legislators who passed the business tax exemptions in 2012 (aka cut) and made the Block Grant education budget promise in 2015 (aka spend). 

The governor’s 4% mid-year cuts used to balance the 2015 budget, made the prospect of more cuts politically dicey for the no-tax Blog_Chart2.png
pledgers. The governor’s office threatened to furlough 24,000 state employees, threatened to defund higher education, and threatened an additional 6.2% across-the-board cuts if a balanced budget was not provided. Were the threats real or political cover?  In the end, tax exemptions for business owners remained intact, for which subsidiaries of Koch Industries recently became the largest at $115 billion (Broadview Networks). With 84 votes, the price tag passed onto the rest of Kansas taxpayers is roughly $384 million in tax increases and added healthcare fees (Governing). 

Adding insult to this excessively regressive tax package, the bulk of exempted income revenue only benefits 5% of the businesses AND the biggest increase in Kansas history didn’t even fix the problem. Kansas will have to fill the other $400 million gap that was kicked down the road to next session, plus the nearly $1 million invoice generated by 23 days of session Over Time. Concerns have been raised that this failure to pass a sustainable tax and budget resolution could trigger another bond downgrade (Kansas City Business Journal) and jeopardize the state’s financial capacity to issue the $1 billion KPERS bond authorized in April.  Perhaps next year, the legislature and governor will start sooner than Day 97 of the session to establish real revenue reform?   But then again, the governor does not consider the 2015 tax package a tax increase (Topeka Capital-Journal). 

Wait, there is more to diminishing state government. The revenue squeeze was shifted into overdrive, with the recent addition of local revenue growth caps coupled with the state caps. The final budget bill that passed this session includes a state mechanism to ‘ratchet down’ revenue growth, essentially by unfreezing the march to zero income tax, to be paid for by revenue growth in excess of 2.5% (Lawrence Journal World), assuming Kansas resumes economic growth. The companion piece is an unprecedented policy rider that severely restricts city and county revenue authority. Local governments are now required to get voter approval by ballot to spend revenue generated through increases in assessed property valuation beyond inflation. Mayors are unhappy by this seizure of local control (Topeka Capital-Journal).  

The excuse used for this state-enforced restriction on local government is based on the dramatic increase in local property taxes that have been required just to maintain services that the state no longer funds (KCEG). Without sufficient state and/or local funding, school, roads, safety cannot be maintained. Why does the state no longer fund all these services?  Is this what limited-government looks like?  Should tax exemptions for 333,000 plus business owners really be off the table?    


LANE CHANGE #2.  Dismantle Public Education – State’s Largest Budget Item  

Kansas leadership accomplished their strategic maneuver for getting out from under the State Supreme Court ruling on school finance, by successfully repealing  the K-12 school finance formula (MainStream). The potential ‘savings’ to the state is about $550 Blog_Chart3.pngmillion, the Courts estimated cost of restoring public schools to adequate, pre-recession funding levels.  “Goal to dismantle K12 public education, check – for the time being.” 

 This Block Grant bill passed in March with 89 votes, against the overwhelming opposition from the Kansas Association of School Boards, United School Administrators of Kansas, all but a handful of Kansas superintendents, Kansas National Education Association, Kansas PTA, Game on for Kansas Schools, MainStreamBlog_Chart4.png Coalition and many more Kansans. At present, public schools are left without a formula for providing districts
 with the resources students need to achieve the state education standards, nor a legislative procedure for
 establishing a new formula. Instead, districts are locked into the insufficient 2015 education budget, at the governor’s 4% reduced rate and frozen through 2017 – regardless of increased enrollment or increased needs of the student population or cost of living increases. 

A final ruling from the Courts’ on school funding, particularly in light of the Block Grant legislation, could be announced by the end of June. No attempt was made this session to budget for the adequacy portion of the Court’s ruling, which could require the legislature to double the tax increase just passed.    

Higher education could not avoid the long arm of Kansas leadership either. The Board of Regents was given a choice this session of more budget cuts (on top of the $16 million mid-year cut the governor made to balance the 2015 budget, Kansas City Star) or a ‘self’-imposed tuition-increase cap of 3.6 percent. Kansas college students and their parents will notice a slight increase in tuition, along with bigger increases is user fees (KCUR). KU Chancellor Gray-Little reported that per-student state support for tuition has declined nearly 40% over the past 15 years, shifting more of the burden to students and families (The Pitch). Essentially, the state is minimizing students’ opportunity for post-secondary education at time when jobs that pay livable wages require nothing less. 

Wait, there is more to dismantling public education. The legislature reallocated need-based scholarship funds this session so that Kansas private college students are awarded 7 times more taxpayer scholarship money, than public university students.  Here is the math: 60% of scholarships are now designated for private school students, 40% of funds are for public, while 80% of students attend public universities. And just a week ago, Governor Brownback hand-picked three new appointees for the Kansas Board of Regents. All three appear to be selected for their professional and ideological background rather than any academic expertise. One is a member of groups that lobbied to retain the income tax exemption for business owners these past few weeks (Wichita Eagle). And perhaps next session, our legislators will make another run at banning professors and other university employees from using their official titles in letters to the editor (Topeka Capital-Journal).

The policies and misinformation chipping away at K-12 public education are no less invasive. Governor Brownback commented recently that Kansas has put over $400 million more into the KPERS pension fund over the past couple of years (KCUR, 2015), to make up for decades of SGF borrowing from this pot of money.  Yet the governor continues to deny that the back pay for the unfunded pension obligation has come out of K-12 classrooms almost dollar-for-dollar. Securing the state pension system is critical, but consider this analogy:  while “2 KPERS apples – 1 classroom orange = more fruit” we are still left with fewer oranges.  

Positive educational outcomes cannot be sustained for all students when classrooms are being run on the same operational budget allotted in the year 2000. Adjusted for inflation, today’s teachers, students and parents are expected to achieve more with less funding than the state contributed in 1992 (aka, the year the school finance formula was re-written). 

 Blog_Chart5.pngThe same faux-education legislators who claim school districts have more money than ever, have repeatedly accused superintendents and school boards of exaggerating the demands of at-risk students and hording funds in contingency reserve, dismissive of districts well accounted for needs (KASBKS PTA). Multiple full page ads of distorted data claiming Kansas public schools are failing and unworthy of more taxspayer dollars were paid for by KPI lobbyist, while the state reduces support and increases expected outcomes (KNEA). Why the deceit? Why declare K-12 public education is inefficient and rolling in money? Refer back to Lane Change #1.

A multitude of bills that undermine K-12 public education were stopped this session, yet a few others made it to the governor’s desk:

  • The education scholarship law was expanded. This voucher gateway program allows corporations to earn a 70% tax credit on a maximum $10 million contribution. All students are now eligible, not just youth living in poverty, and corporations can give would-be taxpayer dollars directly to religious, private, non-credited, and home schools, even if the student would not typically be charged tuition (Game on for Kansas Schools).  Another step has been taken toward privatization of elementary and secondary education.Blog_Chart6.png
  • Educators can now be criminally prosecuted for teaching what a parent deems offensive materials (NEA). This bill was passed in response to one incident, one parent, under charge of one legislator.
  • Superintendents must now compete and beg for finite emergency state education aid via the school funding Block Grants, as the only means to address unmet needs due to increased enrollment (MainStream Hunger Games Blog).  The Block Grant promise of “stability, predictability, and certainty” was broken. Revenue was not found until June 11, several months AFTER school boards needed to sign teacher contracts, finalize their annual budgets, and get on with the business of running a district – no stability. Another unspecified $50 million will be cut from the 2016 state budget and more KPERS payments may be shifted to schools operating funds – no predictability. Confidence in revenue estimates are low, given all but a few reports have come in below projections – no certainty.  


LANE CHANGE 3.  Divest from Medicaid – another Big Budget Item  

Capping another big state budget item was achieved in 2013, when the Brownback administration divested from Medicaid and went live with the privatized KanCare program (KDHE). “Goal to shrink state government, check-check.”

Kansas contracted with three health plans, or managed care organizations (MCOs), to coordinate health care for nearly all Medicaid beneficiaries. KanCare covers about 425,000 children and low-income, disabled and elderly adults, though accessed by very few adults without disabilities (KHI). Only those adults with dependent children can participate in KanCare, if their annual income is about $9,000 or less for a family of four. 

Blog_Chart7.png Just getting approval to hold a hearing on Medicaid expansion took 3 years of persistence and some skillful political maneuvering by Rep. Jim Ward during one of the longer days this session (KHI). While expansion is estimated to cost the state an additional $312 million through 2020, the investment is projected to be offset by about $2.2 billion of federal dollars between 2016 and 2020, combined with potential savings in other programs. Failure to expand is largely a political issue (PVpost), opposed by 4 limited-government-backed opponents versus 150 plus conferees testifying in support of expansion including the KanCare contractors. Continued refusal to expand Medicaid has knowingly left 100,000 to 170,000 uninsured Kansans without access to an affordable health care plan (KHI).  However, this did not stop the legislature from capitalizing on KanCare this session, by assessing an HMO user privilege fee, said to generate $47 million for the state.  

Wait, there is more to divesting from Big Budget Items. A new law effective July 1 phases out civil service protections for most state administrative employees. Agency heads, appointed by the governor, are now authorized to shift existing state jobs from classified positions to unclassified and to decide whether to hire workers as unclassified. Unclassified employees can be dismissed by their supervisors at any time with or without cause (Wichita Eagle).


LANE CHANGE 4.  Demand Authority over Oppositional Entities  

Kansas legislative leadership are using the power of their positions to further align Kansas with their vision of a Christian Conservative, limited-government state. “Goal to retain control of agenda, check.”Blog_Chart9.png

 Each of these policy changes reflects a breach in separation of governmental powers or separation of church and state. The sheer
magnitude of changes that have accumulated over the past five years is staggering, considering this list is not comprehensive. 

  • Governor Brownback signed a bill to defund the Kansas judicial branch, if the Court’s overturn statute put in place last year that removed authority of Supreme Court Justices to set budgets and select District Court judges, effective 2015 (Lawrence Journal World).  The governor achieved authority to hand pick judges, who meet his ideological litmus test, for the Kansas Court of Appeals by getting the merit-based nomination process repealed in the 2013 legislative session.
  • State government forced all local municipalities to change their spring elections to the fall, moving school board elections, city council, county offices and such closer to the partisan election cycle and overcrowding state and national ballots, effective 2017. Secretary of State, Kris Kobach, is sure to rerun his companion straight-ticket party voting bill in the 2016 session (Wichita Eagle).
  • Governor Brownback, by executive order, rescinded protected-class status for LGBT state workers. Just like that – gone (MSNBC). The opportunity to infuse partisan politics and ideological priorities throughout state agencies is wide open, with this lack of employee protection for sexual orientation and gender identify and coupled with the loss of job protection for unclassified state employees, effective 2015.
  • State government restricted patient and physician rights regarding women’s reproductive health and banned a common second-term abortion procedure, first of its kind in the United States, effective 2015. A series of statutory restrictions over the past five year led Governor Brownback to declare, “Kansas is the most pro-life state in America.  And we are not going back.” (State of State Address, 2015).
  • State government restricted the spending authority of cities and counties, requiring annual elections at a cost of $1 million to obtain voter approval for use of revenue growth in excess of inflation, effective date to be determined on June 26 (Topeka Capital-Journal). 
  • State government imposed restrictions on Kansas welfare recipients, itemizing a list of improbable and highly condescending activities and reduced the duration of state support (Kansas City Star). Observers of this legislation have described it as ‘mean-spirited’ and clearly demeaning for Kansans working their way out of poverty and off of welfare support. A legislative fix regarding the $25 per day ATM limit has already been added to this new law, primarily out of need to be in compliance with conditions of the federal grants that funds the Temporary Assistance for Needy Families (TANF) program, effective 2015.
  • State government raised the sales tax on food to the second highest in the Country. KCEG Executive Director McKay reported that a family of four earning $30,615 or more, spending $200 a week on food, will now average $676 a year in Kansas food sales taxes without a compensating credit (Kansas City Star) and the 8% to 9% cumulative sales tax is likely to drive consumers across the state line (Kansas City Star).
  • State government coerced the Board of Regents to impose a cap on tuition increase of 3.6% in exchange for no further budget cuts, along with funneling more need-based scholarship dollars to private and religious Kansas college students, effective 2015 (Lawrence Journal World).  
  • State government forced a compromise decision to change the 20% renewable energy performance standards requirement to a voluntary goal (International Business Times). 
  • State government usurped local gun and safety authority allowing Kansans to carry a concealed weapon without a license, without training, without experience, effective 2015 (PVpost). Just last year, the state government mandated that private business owners who choose to prohibit people from openly carrying weapons into their stores and offices must post signage outside their buildings to keep guns out.
  • State government gave the Secretary of State authority to criminally prosecute individuals suspected of voter fraud, effective 2015. Kris Kobach’s signature voter ID law went into effect 2011, putting nearly 34,000 voters’ applications in suspension as of May (Topeka Capital-Journal).
  • State government authorized a gateway school voucher bill, providing tax credits linked to corporate scholarship accounts. The program put into statute last year was expanded this session to bypass students living in poverty and to allow tuition payments to be made directly to the religious, private, unaccredited, and/or home schools even if tuition was not required (KCUR). 


The New Normal 

Five years of travel down the Brownback administration’s road map has led our state to a very different Kansas. The 2012 tax policy has indeed limited state government by about $700 million in reduced revenues and voluntarily kept Kansas in a state of recession. 

Our job growth lags behind regional and national averages, low-wage jobs fail to offer a livable wage, the state population continues to decline and our bond rating has been downgraded multiple times (KCEGMainStream). Local communities have been shouldering the slack for the fall out (Reroute the Roadmap). Thousands of Medicaid eligible Kansans remain uninsured, TANF participation rates have dropped dramatically, yet child poverty rates have increased while most states declined. State aid for local health services is down more than 12% and our state hospitals are understaffed without the budget to fill a third to half of their positions. Our State Highway Patrol staff levels are critically low, leaving 29 counties without a designated trooper. A third of the pavement on our rural roads is in poor condition, ranking Kansas 5th on list of America’s worst rural roads. State aid for public schools is down 8%, shorting districts and students by hundreds of millions of dollars. State support for libraries has been cut by over 30% and state support for community-based corrections has been cut by 21 percent (KCEG). 

Yet, Kansans still faces a $400 plus million budget shortfall following the biggest tax increase in our state’s history. And what else did the 2015 legislature do?  Restricted municipalities from further efforts to fill in the gap. 

The only opportunity for a course correction will require registered voters to elect more legislators who are willing to invest in our citizens and opportunities for prosperity, including public schools, hospitals, roads, and safety.

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