Category: Gov. Laura Kelly

New revenue projections give Kansas a $3.1B surplus as governor pushes for food sales tax cut

Next year’s revenues increase by $407.8M in forecast, enough to cover $402.5M cost of ending state sales tax on food

by Sherman Smith, Kansas Reflector

Topeka — A revised economic forecast for Kansas projects the state will collect $407.8 million more than previously expected in the upcoming fiscal year, adding to a budget surplus that could be used to eliminate the 6.5% state sales tax on food.

Gov. Laura Kelly, a Democrat seeking reelection this year, has made the elimination of the sales tax on food a cornerstone of her campaign. Republicans have favored an approach that would phase out the tax over several years, as long as revenue numbers remain strong, while eying other potential tax cuts and criticizing the governor for vetoing a tax bundle three years ago.

The new revenue estimate, which is tempered for inflation and includes all of the legislation already signed by the governor, shows the state would have a $2.7 billion surplus entering July and a $3.1 billion surplus in another 12 months. The elimination of the sales tax on food would reduce revenue by an estimated $402.5 million.

“I can’t get out of this room without making another plug, specifically with inflation happening, that this does reaffirm the governor’s position that we can clearly immediately repeal the entirety of the state level food sales tax on groceries in Kansas effective July 1,” said Adam Proffitt, the state budget director, during a news conference Wednesday at the Statehouse. “These numbers do put enough into the cushion there.”

The Consensus Revenue Estimating Group, composed of state analysts and university economists, produced the revised forecast. The projections reflect spikes in oil and gas prices, payroll growth constrained by the limited pool of available workers, struggles in the manufacturing sector, and an expected reduction in net farm income.

“The good news is, even with the inflation running as high as it is, right now, the real GDP for the state of Kansas is forecasted well into the positive territory,” Proffitt said. “So a lot of good things happening across the Kansas economy. A lot of folks are at work. A lot of folks are making money.”

The projected surpluses include the budget and tax bills the governor recently signed, as well as school funding obligations the Legislature has not yet passed. A potential transfer of $1 billion into the state retirement system isn’t part of the equation.

Lawmakers on Monday will return to Topeka to wrap up work for the current legislative session, which includes putting the final touches on the state’s spending blueprint and considering an assortment of tax cuts.

Kelly appeared Wednesday at Jamboree Foods in Norton, just south of the Nebraska border, to tout her plan to “axe the tax” on food.

“Kansans are finding relief from inflation on groceries by traveling to our neighboring states, and that’s unacceptable,” Gov. Kelly said. “That trip for savings hurts our Kansas businesses and makes it difficult for local stores to stay open. Eliminating the state tax on groceries would keep that money in the Kansas economy.”

Republican Attorney General Derek Schmidt, who is running against Kelly in this year’s governor’s race, said the governor is “not being up front” about the impact of her veto of legislation in 2019 that included a phased reduction of the state sales tax on food. The bill included large tax breaks for multinational corporations and other tax provisions.

“I would have signed that bill into law, and as a result Kansans would already have some relief from Joe Biden’s out of control inflation at the grocery store,” Schmidt said. “Once again, the Legislature is left to clean up Laura Kelly’s mess.”

Schmidt urged lawmakers to resist the temptation of a spending spree with the new revenue forecasts.

“Legislators also should fully fund public schools as promised, reduce or eliminate the state sales tax on groceries, and then place the rest of this windfall in a rainy day fund,” Schmidt said.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/04/20/new-revenue-projections-give-kansas-a-3-1b-surplus-as-governor-pushes-for-food-sales-tax-cut/

Kansas governor approves budget including extension of postpartum coverage

by Noah Taborda, Kansas Reflector

Topeka — Gov. Laura Kelly signed Wednesday a $16 billion state budget backed by most lawmakers from both parties, including an extension of postpartum Medicaid coverage, a fully funded water plan and rainy day money.

The budget for 2022 and 2023 places $500 million in the state’s budget stabilization fund. This record deposit leaves the fund five times higher than ever before, providing a cushion should revenue falter. In addition, the budget fully funds the state water plan for the first time since 2008.

A notable inclusion is the extension of postpartum Medicaid coverage from 60 days to 12 months, which advocates hope will reduce pregnancy-related complications. More than 30% of Kansas births are covered by KanCare.

“We commend Gov. Kelly and the Kansas Legislature for extending postpartum KanCare coverage to 12 months,” said David Jordan, president and CEO of the United Methodist Health Ministry Fund. “This will positively impact 9,000 Kansas mothers each year — reducing maternal mortality, improving health outcomes, and reducing disparities.”

Representatives backed the budget, 104 to 12, and senators followed suit, 33 to 5. The governor vetoed two items: an allocation of $200,000 to the Benedictine college engineering program and an opportunity for legislators to reverse their decision not to join the Kansas Public Employees Retirement System.

The budget does not include funding for the Kansas State Department of Education or school districts, about $6.4 billion. Lawmakers are still at odds over allowing students to enroll in out-of-district schools if there is space, among other matters.

The added postpartum coverage provides an extension of temporary federal aid in response to the pandemic to provide 12 months of coverage. Proponents of added postpartum coverage say this extension will lead to early identification and intervention of conditions among infants and, in turn, improved health outcomes.

In addition to the extension of postpartum coverage, the budget will increase funding for mental health services in home and community-based services and behavioral crisis stabilization for Kansans with intellectual and developmental disabilities. It also approves enhancements for emergency medical services, newborn screenings, cancer screenings and more.

Gov. Kelly, who is running for reelection, was optimistic about the changes made to improve Kansans’ health, but she said there was more to push for.

“With all the budget does accomplish, it could do more to ensure that all communities in the state have the access to healthcare that Kansans deserve and that prospective new residents expect,” the governor said. “Given how new business growth requires a healthy workforce, I will continue to urge the Legislature to make the commonsense decision to expand Medicaid and return Kansas’ federal tax dollars to our communities.”

A rare budget surplus eased contentious budget debates and allowed for the appropriation of $16 billion in the next fiscal year, in addition to $1.2 billion of largely federal funds in the current year ending June 30.

As of April 1, the state has accrued just over $300 million, or 5%, more than anticipated in total tax revenue.

Additional allocation in the budget includes increased funding for the Office of Broadband Development, and the Kansas Highway Patrol will also have $20 million to purchase two aircraft and replace the executive aircraft used to transport officials around the state. The budget restores higher education funding, including one-time investments in need-based aid and workforce development efforts at community and technical colleges. It also provides a 5% pay increase for state workers, their first bump since 2018.

Senate Minority Leader Dinah Sykes said this was one of the better starting points for a budget during her tenure in Topeka.

“I’m particularly proud of the investments in intellectual and developmental disability services, higher education, and public safety,” Sykes said. “I’m anxious to return for veto session to address K-12 education funding and to come together to eliminate the sales tax on food.”

Kansas Reflector stories www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/04/20/kansas-governor-approves-budget-including-extension-of-postpartum-coverage/

Kansas governor announces food company’s $110 million investment in Olathe warehouse

by Noah Taborda, Kansas Reflector

Topeka — Gov. Laura Kelly touted Tuesday a food company’s $110 million investment for an automated distribution center in Olathe that could create more than 125 new jobs.

The distribution complex for Smithfield Foods, a “vertically integrated” food company and the world’s largest pork producer, will span near 20 million cubic feet. The facility modification will decrease costs and increase reliability for the company to handle and transport goods.

The governor said the project represents a win for the whole state.

“Lineage Logistics’ decision to build the Smithfield Foods distribution center in Kansas is confirmation that our central location, strong infrastructure and world-class workforce are exactly what companies need to expand business operations,” Kelly said. “Their investment helps solidify our role as a 21st century hub for transportation, logistics and distribution.”

Lineage designed the warehouse to be state of the art, including 18 automated cranes, the largest temperature-controlled layer-picking systems in the world and more, to decrease the cost of operation.

“This advanced, state-of-the-art, fully-automated new facility speaks volumes to the innovation we are excited to have in the state, said Lieutenant Governor and Commerce Secretary David Toland. “Both Lineage and Smithfield exemplify the type of businesses we are working to attract and retain, and we are excited about their new investment in Kansas.”

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/briefs/kansas-governor-announces-food-companys-110-million-investment-in-olathe-warehouse/