Kansas Gov. Laura Kelly’s administration laid out a plan Wednesday to cut taxes while spending more on education, law enforcement and mental health services as state lawmakers consider what to do with a surplus that could top $3 billion.
The details came as her administration revealed the budget plan hinted at in her State of the State address Tuesday night.
“There’s a host of investments,” Budget Director Adam Proffitt told lawmakers. “There’s debt paid down. There are savings accounts. There’s investing in core programs.”
There’s likely to be conflict between the Democratic governor and Republicans who are interested in less spending and broader cuts in taxes — issues likely to play out in Kelly’s reelection campaign.
Before Proffitt even presented the plan, the chairman of the Senate’s budget committee said lawmakers should be cautious about spending too much of the money in reserve.
“These dollars could disappear really, really quick,” Republican Sen. Rick Billinger said. “We appreciate all the input and the ideas on how to get rid of all this money, but we cannot afford reckless spending.”
Kelly’s spending plan is the blueprint lawmakers will start with as they craft a state budget. They’ll ultimately write the budget and send it to Kelly’s desk for her consideration.
Here are some of Kelly’s spending priorities her budget director outlined:
- Eliminate the 6.5% state sales tax rate on food. Local sales taxes could remain in place. Those local levies are part of the reason sales taxes top 10% total in some parts of Kansas. Eliminating the state sales tax on groceries would cost about $450 million in state revenue during the first year.
- Add $70 million more spending on higher education with the goal of restoring universities to pre-pandemic levels of funding and freezing tuition rates. The decision whether or not to increase tuition would ultimately be made by the Kansas Board of Regents.
- Direct income tax rebates of $250 per individual and $500 per couple filing jointly. That would amount to approximately $460 million.
- Pay down $586 million in state debt. That includes a $172 million bond for the National Bio and Agro-defense Facility in Manhattan and $254 million for the state employee pension plan. In total, Kelly’s administration says paying off the debts early would save Kansas $250 million in the long term.
- End the practice of diverting money from the Kansas Department of Transportation highway fund, which has been used in recent years to prop up the state’s overall budget. Those transfers are often referred to as “the bank of KDOT.”
- Continue the state’s K-12 funding plan that ended a years-long lawsuit over education spending.
- Spend $20 million on moderate-income housing in response to a report that found middle-income families in Kansas have few housing options. The administration did not have specific details on spending the money, as it would be handled by the Department of Commerce.
- Increase by more than $30 million spending for mental health services and suicide prevention. That would come as suicides have been rising in Kansas.
- Expand Medicaid in Kansas, which would provide health care coverage for around 150,000 low-income Kansans. This has been opposed by Republican lawmakers in recent years and appears likely to stall again.
Stephen Koranda is the news editor for the Kansas News Service. You can follow him on Twitter @Stephen_Koranda or email him at stephenkoranda (at) kcur (dot) org.
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