Kelly talks taxes, education, Medicaid expansion in speech to Wichita’s business leaders

As the Kansas House considers legislation offering tax relief to corporations, Gov. Laura Kelly pitched her budget priorities of education and Medicaid expansion to Wichita’s business leaders.

Kelly said her budget, which includes tax revenue that would likely not materialize under the proposed bill, makes more sense for long-term economic growth in the state than another “failed tax experiment.”

“Kansas has been through a world of hurt over the last eight years, with failed tax policy putting our state in the red,” Kelly told the audience at a Wichita Regional Chamber of Commerce lunch Friday.

Kelly wants to keep tax rates the way they are this year.

Republican leaders want to pass a bill designed to prevent Kansas residents and businesses from paying higher state income taxes because of 2017 changes in federal tax laws. They have said the changes are necessary to keep employers in the state and attract new ones.

“Our young people are going to have fewer job opportunities and have fewer companies looking at Kansas,” said Senate President Susan Wagle, R-Wichita, earlier this month. “We need to have an economic environment that encourages growth, encourages new jobs, encourages creativity.”

Kelly, a Democrat, said the state’s problem is attracting young talent to fill the jobs that are already here. Most of the questions from audience members at the chamber lunch were about Kelly’s plans to fix Kansas’ workforce shortage.

Her solutions for attracting high-skilled workers are properly funding education and expanding Medicaid, two things that will create and maintain a well-educated, healthy workforce, she said.

She said she wants to get middle school students thinking about careers to lower the dropout rate. She also wants to strengthen career and technical training programs to train and retrain workers throughout their careers.

“It is critical that businesses have the people they need with the skills they need, and the state can be a partner in making this happen,” Kelly said.

The backdrop for Kelly’s visit to Wichita was a battle raging over taxes in Topeka.

Wagle, the tax bill’s architect who has hinted at a U.S. Senate run in 2020, says the bill would align state taxes with the federal tax overhaul championed by President Donald Trump and Republicans in Congress.

The Kansas Department of Revenue estimates the bill would mostly benefit corporations, with $137 million of the total $187 million in savings in the next budget year going to them.

The tax bill passed the Senate 26-14, one vote shy of being veto-proof. It still has to pass the House before it lands on Kelly’s desk.

Kelly is expected to veto the bill but said Friday that she will wait to see what happens in the House before discussing a veto. The bill is scheduled for a hearing next week.

“I have consistently called on legislators to make no changes to our tax structure. We really can’t afford to do that because we have no idea where we stand revenue-wise,” Kelly said. “So I would really appreciate if they would just relax and give it some time.”

This story was originally published February 15, 2019 at 5:20 PM.