County may have to slash service 26% if state opts to pay businesses for COVID rules

Sedgwick County officials are raising the alarm about a Kansas bill they say could force county government to cut more than a quarter of its services this year — or raise taxes on homeowners — to pay businesses and commercial property owners who claim they were hurt by COVID-19 health rules.

Senate Bill 286 would create a “certificate of government use” for businesses that had to follow public health orders designed to slow the spread of the coronavirus pandemic.

Those certificates would entitle the businesses to cash payments and/or tax breaks from state or local government if their business was restricted in any manner.

Attorney General Derek Schmidt, who is running for governor, would be in charge of handing out the money.

The bill would also pressure counties and cities to drop mask mandates at the end of April, or face having to pay businesses compensation as long as the requirements stay in effect.

Sedgwick County officials say the bill aims to “gut” the county’s authority to deal with health crises and is designed to punish local governments for acting after the Republican-dominated Legislature stripped Democratic Gov. Laura Kelly of emergency powers and punted public health decisions to the county level.

“It’s clear from from this legislation that they’re blaming the entire pandemic and its effects on businesses on county shutdowns or government shutdowns or state shutdowns, and I just think it’s unfair,” County Counselor Mike Pepoon told county commissioners Tuesday.

“If the state wants to deal with the pandemic, let them take it over and relieve your duties as the Board of Health,” he said. “But if they’re going to expect you to be the Board of Health, then they ought to give you the power to take action without it devastating our taxing ability.”

The bill sets aside $100 million in future federal coronavirus relief aid to the state and puts it under control of Schmidt, a Republican who announced Tuesday his intentions to run for governor in 2022. It would allow him to negotiate settlements with any business or property owner who files a claim, pending approval by the Republican-controlled state finance council.

Businesses could either take a cash payment funded from the $100 million set aside, or claim it as a credit on their next 10 years of income and property taxes.

The $100 million fund would not cover property tax claims against the state’s 105 counties that have adopted a patchwork of local restrictions since last March.

Sedgwick County’s Chief Financial Officer Lindsay Poe Rousseau said the proposed legislation would force the county to cut up to 26% of its services this year in a worst-case scenario.

“That includes everything from the sheriff, which has the largest budget ... to the health department ... to the zoo and Exploration Place,” she said. “So that’s not only quality of life, but our core public safety, our 911 staffing.”

Commissioner David Dennis said the bill, if passed, would “have an absolutely devastating effect” on the county’s operations.

The bill is scheduled for a hearing on Thursday in the Senate Assessment and Taxation Committee.

The chair of that committee, Sen. Caryn Tyson, R-Parker, encouraged Sedgwick County officials to testify against the bill if they don’t like it.

“We had a unique situation last year and it continued into 2021 where the governor and other government authorities told businesses they could not operate; however, their property taxes — there’s nothing to relieve them of that obligation,” she said.

The County Commission did not take a formal position on the bill during its Tuesday staff meeting, although a majority of the board clearly opposed it.

Any opposition by the county would likely require a special trip to Topeka by one of the commissioners because the bill — SB 286 — could present a conflict of interest for the county’s lobbyist, who would typically present the county’s position to legislators.

The county lobbyist is former state legislator Jason Watkins, who also represents the Wichita Area Chamber of Commerce. The Chamber membership includes many business owners who would stand to gain from passage of the bill and is supporting it.

Should the county decide to oppose the proposed legislation, or seek drastic changes to it, Watkins acknowledged he would not be able to represent both clients.

He said such a conflict has only happened once in his seven years as the county’s contract lobbyist, when the Chamber favored Medicaid expansion and the county opposed it.

In that case, Watkins said he stepped aside as the county’s point man in Topeka and the commissioners represented the county’s interests themselves.

This story was originally published March 10, 2021 at 5:01 AM.