Here are some of the key points of Gov. Sam Brownback’s budget proposal. Amounts saved or generated are for two years, except where noted.
Brownback wants to increase taxes by $377.7 million over two years.
▪ Double the alcohol tax to 16 percent starting in July; $107 million
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▪ Increase the cigarette tax to $2.29 a pack from $1.29; $88.5 million
▪ Double the tax rate on other tobacco products to 20 percent; $14 million
▪ Keep the rate for the lowest income tax bracket at 2.7 percent rather than dropping it to 2.6 percent in 2018 as scheduled; $20.9 million
▪ Tax rents and royalties; $40 million a year
▪ Increase annual filing fee for for-profit entities from $40 to $200; about $33.6 million a year
▪ Increase the privilege fee for managed care organizations from 3.31 percent to 5.77 percent and the hospital provider tax from 1.83 percent to 4.65 percent. This would draw more federal Medicaid dollars that would be used to increase reimbursement rates for medical providers that were cut in May and to increase reimbursements to rural hospitals.
Money sweeps, transfers
▪ Sweep $596.8 million from the highway fund over two and a half years, halting any new expansion projects.
▪ Sell future proceeds from a legal settlement with tobacco companies. The state gets about $60 million annually. It would trade payment in the next 30 years for cash now – an estimated $530 million over two years. It would switch funding for children’s programs to the general fund through 2019.
▪ Take money from the state’s long-term investment fund and repay it over seven years.
▪ Freeze the state’s contribution to KPERS at 2016 rates instead of increasing it annually. That would save $85.9 million in 2017, $140.2 million in 2018 and $198.6 million in 2019.
▪ Merge school district health plans under one state-run plan as recommended by efficiency consultants; $120 million
▪ Require school districts to buy goods through a joint procurement program; $16 million
▪ Merge the state’s securities commissioner’s office with the Kansas Insurance Department; $750,000
▪ Add $3 million in fiscal 2018 and $6 million in fiscal 2019 for scholarships for students who agree to teach in rural areas.
▪ Add $1 million a year, starting in 2018, to fund 50 scholarships for any university that offers a bachelor’s degree for $15,000 or less.
▪ Add $800,000 for initial planning costs for a dental school at the University of Kansas Medical Center.