Budget and taxes decided, Legislature leaves

A round-up of the 2010 Legislature's actions on major health-related items

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House Assistant Sergeant at Arms Terry Lohrbach delivers freshly printed copies of the Feuerborn amendment to members of the House as they prepared for debate on the budget alternative crafted by Democrats and moderate Republicans. The amendment became the final budget plan adopted by both the House and the Senate.

House Assistant Sergeant at Arms Terry Lohrbach delivers freshly printed copies of the Feuerborn amendment to members of the House as they prepared for debate on the budget alternative crafted by Democrats and moderate Republicans. The amendment became the final budget plan adopted by both the House and the Senate.

— After four months of struggling with the issues of budgets and taxes, the Legislature finished its work today and concluded all but the ceremonial end of the 2010 session.

Final spending plan

The final spending plan for the fiscal year that begins July 1 calls for expenditures of $13.6 billion, significantly less than the $14.4 billion budget of fiscal 2010, which got pumped up more than $1.1 billion thanks mostly to extra federal unemployment payments funneled through the Department of Labor.

Of the $13.6 billion approved by the Legislature for fiscal 2011, $5.6 billion would come from the State General Fund, which covers general services such as K-12 and higher education and the state’s share of social services such as Medicaid.

General fund spending approved by this year’s Legislature was significantly less than the record $6.1 billion of fiscal 2009 but more than the $5.4 billion of 2010 when agency budgets were cut by the governor after the Legislature left town because of shortfalls in tax collections due to the weak economy.

State general fund spending has increased between 4.1 and 9.6 percent in all but four of the past 10 years, usually outpacing growth in Kansas personal income and the Consumer Price Index. In fiscal 2010, however, that spending was reduced almost 9 percent, the biggest retreat in at least 60 years.

Avoiding more cuts

The governor was eager to make up for some of those recent spending cuts. He began the legislative session recommending $13.8 billion in total spending, $5.8 billion from the general fund. The only way to do that was to raise taxes. He proposed a 1 cent sales tax increase and about $50 million in additional tobacco taxes.

“We attempted to start out making cuts that were painful but not crippling. I think we’re to a point now where we’ve made cuts that are potentially crippling,” Gov. Mark Parkinson, a Democrat, told KHI News Service about a month before he presented his budget and tax plans to the Legislature in January and soon after announcing yet another round of cuts to state programs, including a 10 percent reduction in the reimbursement rate to Medicaid providers.

The governor's call for more taxes put him immediately at odds with conservative Republicans in the Legislature who wanted to avoid any new levies. The House has elections this year and resistance there was strongest. House GOP leaders came up with a budget plan that called for $519 million less in spending than the governor proposed but it was understood from the outset that their spending list lacked political traction because it would have meant less money for state employees and schools, both core constituencies for Democrats.

The House GOP leadership budget would have cut state worker pay 5 percent, would have ignored the governor’s proposed $50 increase in per-pupil base state aid to K-12 schools and also would not have replaced about $172 million in disappearing federal stimulus dollars used to plug a hole in the education budget this fiscal year.

Divided Republicans

Republicans, numerically superior in both the House and the Senate, were too divided in either chamber to do anything without the Democrats and so it was no coincidence that the final budget for a while was called the “Feuerborn amendment,” for Rep. Bill Feuerborn of Garnett, the ranking Democrat on the House Appropriations Committee who carried the measure during House floor debate.

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Rep. Bill Feuerborn, D-Garnett, ranking Democrat on the House Appropriations Committee lent his name to the budget plan that displaced one favored by House GOP leaders.

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Moderate and even some conservative Republicans couldn’t tolerate the spending plans GOP conservative leaders had for K-12 schools, including late-hatched proposals that would have expanded local authority to increase property taxes for schools.

Critics said doing that would simply shift more of the state’s financial responsibility for schools onto local school boards. In many rural districts, where property values are generally declining and more and more people live on fixed incomes, raising property taxes was less palatable to legislators than increasing the state sales tax.

Sen. Ralph Ostmeyer, R-Grinnell, a Senate GOP conservative, grew emotional explaining why he couldn’t vote with fellow conservatives on the budget. He said their plan would decimate schools in his sprawling western Kansas district, where enrollment continues to decline as the population shrinks and ages.

What the Legislature ultimately approved was a budget that split the difference between the governor’s plan and the one called for by GOP conservatives.

The “Feuerborn amendment,” which closely resembled the budget plan approved earlier by a coalition of Democrats and moderate Republicans in the Senate, would spend about $212 million less than the governor had recommended but about $307 million more than hoped for by GOP conservatives, who for the second year in a row perhaps had some broad directional input on state budget priorities but left few fingerprints on the final plan.

Democrats and mostly moderate Republicans also came together on the bill to increase the state sales tax by 1 percent to 6.3 percent effective July 1.

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Members of the House had a couple of nights during the veto session when they worked past 2 a.m. Yawns were common early Tuesday as the House voted on the tax plan needed to fund its budget. In the foreground is Rep. Dan Kerschen, R-Garden Plain. Behind him is Rep. Dave Crum, R-Augusta.

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In the private leadership meetings that laid the groundwork for the session's conclusion, House GOP leaders were excluded. Instead, those who charted the course were Senate President Steve Morris, R-Hugoton; Senate Vice President John Vratil, R-Leawood, House Minority Leader Anthony Hensley, D-Topeka and from the House, Feuerborn and House Minority Leader Paul Davis of Lawrence for the Democrats and Reps. Charles Roth of Salina and Don Hill of Emporia for the Republicans.

There was an important idea from conservatives brought up late in the session that found a toehold in the budget bill and which likely will take on more significance next year. Looking for ways to fund schools more without a tax increase, conservatives latched onto the idea of selling off between $175 million and $100 million in state properties by June 30, 2011. Many lawmakers agreed that idea had merit, but most agreed it would be difficult or impossible to inventory, appraise and sell off surplus state holdings fast enough to meet 2011 budget needs. Instead, a provision was included in the budget bill to create a committee to review state holdings for possible later sale.

Among some of the other things passed or not passed this session:

Medicaid reimbursement

The budget approved by the Legislature restored the 10 percent cut in reimbursements to the state’s Medicaid providers that was ordered Jan. 1 by the governor in response to the budget shortfall. The governor said from the outset that one of his top session priorities was restoring those cuts and the idea never had serious opposition.

Tobacco

• On March 12, the governor signed into law a statewide public smoking ban, which health advocates called, “a major win.” But his push for a 55 cent tax increase per pack of cigarettes was never debated in either chamber. Democrats, who cared little for more tobacco taxes despite the governor’s urgings, pulled away from the idea after it became clear tobacco taxes wouldn’t be needed to fund the budget they favored. Sen. Roger Reitz, a Manhattan physician, offered an amendment during floor debate to raise the cigarette tax by $1 per pack but failed to get more than two other votes. The other doctors in the chamber, Sens. Jim Barnett, R-Emporia, and Jeff Colyer, R-Overland Park, were among those voting against the Reitz amendment. “We believe that’s a real missed opportunity,” said Christopher Masoner of the High Plains Division of the American Cancer Society. “All the data, all the studies show there’s nothing that is more effective in reducing the smoking rate than increasing the tax and this session presented the perfect opportunity for reaping the benefits of that.”

• In a separate gaming measure to allow slot machines at pari-mutuel tracks, senators agreed to also ban smoking on casino floors. The smoking ban that becomes effective July 1 exempts casinos. But the gaming bill narrowly failed to gain approval in the Senate.

Health Care Freedom Act

A proposed amendment to the state constitution sought by conservatives in response to federal health reform, stating that no Kansan could be “compelled” to have health insurance was rejected in the House and Senate.

Mental Health

After seeing their state aid cut by almost two-thirds - more than $20 million - over the past three years, the state’s community mental health centers were spared further cuts this session.

“The Feuerborn budget was better for community mental health centers than any of the others because it didn’t make any further cuts,” said Kansas Mental Health Coalition Director Amy Campbell. “The others would have cut mental health by another $2 million or $3 million and would have all but eliminated MediKan-mental health,” a program that benefits some of the state’s poorest and most troubled individuals.

Children

• As part of the final budget deal, lawmakers agreed to increase premiums for HealthWave, the state’s health insurance program for children in low- and moderate-income families by $40 per month. Currently, premiums range from $20 to $75 per family per month, depending on household income. That range would increase to $60 to $115 per family per month.

House Bill 2356, which would lead to tighter regulation of child care facilities, was approved. Now, all facilities must be licensed and regularly inspected and all day care providers must have a high school diploma or the equivalent. Some GOP House conservatives said they were concerned that licensing all the state’s day care facilities would help efforts to unionize them and that the increase in licensing fees included in the legislation would drive some day care operators out of business.

• HB 2454, which would allow state health officials to survey mothers of newborns, was approved. The bill was sought by a blue ribbon task force trying to reduce the state’s infant mortality rate.

• Lawmakers also agreed to spare cuts to the state’s early childhood development programs by juggling funding streams. “The Children’s Initiatives Fund is being fully funded – that’s way more than what we were expecting at the start of the year,” said Shannon Cotsoradis, vice president of the advocacy group Kansas Action for Children. “So this was an exceedingly successful year for children’s issues.” Level funding was achieved by shifting the Juvenile Justice Authority’s budget from the Children’s Initiative Fund (CIF) to the State General Fund. The move freed up $9 million for early childhood development programs. “We see that as a pretty significant victory,” Cotsoradis said.

Nursing home tax

Lawmakers agreed to a new bed tax for nursing homes. Senate Substitute for Substitute for House Bill 2320 would tax licensed nursing homes to generate about $30 million which, in turn, would be used to draw down $56 million in additional federal Medicaid funding. The $86 million would be returned to the nursing homes based on the number of Medicaid residents in their care. The more Medicaid residents a home had, the more money it would receive.

Traffic safety

• Lawmakers approved HB 2130, a primary seat belt law, mostly because passage of it made the state eligible for an additional $11 million in federal transportation grants. Beginning June 30, police could hand out $5 fines for those caught in moving vehicles without being strapped in.

A ban on texting while driving also was approved. Violators would face a $60 fine. The same bill included a provision that would require children on the backs of motorcycles to wear helmets and protective eye gear.

Social service agencies

Though there were some cuts to social service programs, generally they fared better than was expected at the beginning of the session, when most were slated for deeper rounds of cuts. Intense lobbying efforts by the disabled and their advocates helped, according to some lawmakers.

“I think we’ve heard a lot more from real people this year,” said Rep. Jill Quigley, R-Lenexa, “because they’ve been hurt more than they’ve been hurt in the past. We’ve energized them.”

“I think they (social service programs) fared about as well they possibly could given the financial situation we’re having to deal with,” said Senate President Steve Morris, R-Hugoton. “I’m sure they (program advocates) are disappointed, but at least we managed to avoid even deeper cuts.”

Key items:

• Salaries, wages and administrative overhead at the Kansas Department of Social and Rehabilitation Services were cut by an additional $2.3 million.

• Primary care grants used to underwrite operations at the state’s safety net clinics were reduced by $238,000.

• Lawmakers agreed to spend an additional $10.9 million ($3.3 million from the State General Fund) on home and community based services for the developmentally disabled, and an additional $11.9 million ($3.6 million for the State general Fund) for in-home services for the physically disabled. The increases are expected to “unfreeze” the waiting list for services for the physically disabled and allow 145 developmentally disabled adults to begin receiving services.

• Funding for minimal funeral services for the indigent – almost $520,000 – was cut from the SRS budget.

“Our goal all along has been to preserve the social service infrastructure as much as possible and we did that, but it was at the expense of administrative services,” said Katy Belot, director of public policy at SRS. “There are 950 positions being held open right now and we are already operating at historic lows. I don’t know that I’d say we were for the Feuerborn budget, but at the same time, it kept us from going lower. It lets us continue doing the work that needs to be done.”

• Lawmakers added $1 million to the Kansas Department on Aging budget for enrolling an additional 500 frail seniors in a telehealth pilot project that uses in-home technology to monitor participants’ vital signs and reduce hospital admissions. The pilot currently operates in southeast Kansas. The new budget would expand the pilot statewide.

• A proposed $700,000 cut to KDoA’s senior meals program was restored, putting it even with current-year spending. Then, as the session drew to a close, Rep. Nile Dillmore, D-Wichita, proposed adding $111,000 to the program’s budget. His amendment passed. “I did it for two reasons,” Dillmore said. “It’s a program that helps the frail elderly stay in their homes and, second, with Meals on Wheels we’re really sending an army of volunteers out into the community every day to socialize and interact with our seniors. I can’t think of anything that does more to strengthen our communities.” KDoA Secretary Martin Kennedy said Dillmore’s amendment couldn’t have come at a better time. “We were looking at having to close some congregate meal sites and at some of our Meals on Wheels providers having to close,” he said.

• Lawmakers agreed to limit Medicaid recipients to no more than four brand-name prescription drugs a month, a move expected to save $12.3 million, including $3.7 million from the State General Fund. Also, Medicaid will no longer cover over-the-counter eye drops, decongestants, cough suppressants, and cold medications. And so-called “first fill” prescriptions will be limited to 15 days instead of 30 days.

• Funding for Kansas Health Policy Authority salaries was reduced $200,000. “I’m afraid that the best we could do for the health policy authority was to hold them even with their current level of funding,” said Rep. Don Hineman, R-Dighton, a key member of the coalition that crafted the Feuerborn amendment. “The biggest thing we did, without a doubt, was restoring the 10 percent cut in Medicaid. That was huge.”

Lawmakers will return on May 28 for Sine Die, the official, usually ceremonial close of the session.