Here’s a quick look at changes Gov. Sam Brownback plans to pursue in the legislative session that starts Monday.
Brownback wants to reduce individual state income tax rates and zap some income tax exemptions and credits to create a “flatter, simpler, fairer” tax code. His administration has hushed any further details, saving specifics for his State of the State speech Wednesday night. Income tax is the state’s largest stream of revenue. Democrats and moderate Republicans urge caution, suggesting a reduction could translate to deeper cuts in state services that have already faced big cutbacks. Brownback says his proposal won’t significantly cut state revenue. Meanwhile, Senate President Steve Morris, a moderate Republican, has set up a tax study group that will analyze tax bills and make recommendations to the Senate, which blocked an income tax reduction bill last year.
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Faced with lawsuits for underfunding K-12 education, Brownback’s administration has proposed a new formula that would drop the weighting system that gives school districts specific amounts for students deemed at-risk, usually because of poverty or language barriers. Brownback’s plan would give districts a single payment based on the district’s number of students and property valuations, freeing school boards to spend as they wish. It would send equalization payments to districts with low property valuations, and it would let school boards bring unlimited property tax increase proposals for education to voters. The plan promises districts they will get as much or more state cash when the plan starts in 2013 as they currently get. Brownback’s people say the proposal would end the cycle of lawsuits by increasing per-pupil funding to $4,492 by using an additional $45 million in state general funds. Critics note that the amount schools currently receive is less than a couple of years ago. They also worry the proposal will ultimately give kids in richer districts better schools. Lawyers handling school finance lawsuits say the proposal is almost certainly unconstitutional.
The cost of providing medical care for more than 350,000 poor, elderly and disabled Kansans grows about 7.5 percent a year, and has reached nearly $2.8 billion. Meanwhile, officials expect federal funding to shrink. A study group led by Lt. Gov. Jeff Colyer has a plan it says will reduce costs without compromising care by better coordinating doctor visits and giving incentives for smart health decisions though a system called KanCare handled by contracted companies. It would encourage people to get jobs and exit the system by providing short-term coverage while clients move to private insurance. It would focus payments more on patient outcomes than per service provided. But critics worry that managed-care companies could be less accountable. And others say part of the plan, which shifts people with long-term developmental disabilities into the managed-care system, could lead to subpar service.
State employees and teachers have enjoyed relatively good benefits under the Kansas Public Employee Retirement System. But new employees and those with less than five years on the job may soon get benefits more akin to those in private-sector jobs. A proposal endorsed by a pension study panel would shift them (and elected officials) to a 401(k)-like program while leaving vested employees untouched. It would require employees to invest 6 percent of their salary in the system. The state would add 1 percent of an employee’s salary and increase it over time to up to 5 percent. The proposal does little, however, to deal with the $8.3 billion gap between what the retirement system is projected to generate and what it owes over the next decade. A bill approved last year looks to fill that gap, but lawmakers are examining other possibilities. The bottom line is spending on pensions will pull money away from other services unless a solution is found.