Gov. Laura Kelly calls for Medicaid expansion, offers tax cut plan that speeds up end of grocery tax

Jan 10, 2024, 5:14 PM | Updated: 5:52 pm

Democratic Gov. Laura Kelly renewed her call Wednesday to expand Medicaid and countered an anticipated single-rate flat income tax for individuals with a plan that would instead cut taxes by doing things like accelerating the phasing out of the state’s sales tax on groceries.

Kelly said in her annual State of the State address that her slate of proposals, which also includes an ongoing focus on addressing falling water levels in a vast aquifer used to irrigate crops, are key to helping rural parts of the state.

So far Medicaid expansion has been a non-starter in the Republican-controlled Legislature. But she noted the challenges rural hospital are facing as she tried again following five years of failed efforts to provide state health coverage to an additional 150,000 people.

“They say that Medicaid expansion is not a silver bullet for our rural hospitals,” she said. “You know what? I agree. Of course, it’s not going to solve every challenge facing rural health care, but it’s a critical part of the solution. We can’t solve the problem without it.”

House Speaker Dan Hawkins decried the Medicaid expansion in a message on X, formerly Twitter.

“The Governor should know- nothing in life is free, certainly not Medicaid expansion! Who’s going to end up paying- you and me! That’s who those costs get passed on to,” he said, adding afterward, “Limited resources should be reserved for the truly needy instead of siphoning them away to able bodied adults who don’t want to work and who have access to other health care options.”

Kansas is among only 10 states that have not expanded Medicaid in line with the 2010 federal Affordable Care Act, which promises federal funds to cover 90% of the new costs. In two other states, Georgia and Mississippi, top Republicans have signaled a willingness to discuss expansion this year, so the issue isn’t a dead letter.

In Kansas, conservative opposition is rooted in small-government beliefs and decades of skepticism about social services. The federal government also is offering remaining non-expansion states another financial bonus. A promise of an additional $1.8 billion over two years was crucial for GOP lawmakers in North Carolina. Kelly’s office expects Kansas to receive a total bonus of between $370 million and $450 million.

Kelly faces leaders of GOP supermajorities whose priorities are to cut income taxes and rein in local property taxes, not to expand Medicaid.

Her tax cut proposal, which she touted as far better than a flat personal income tax that Republicans plan to again propose this year, also would eliminate taxes on retirees’ Social Security incomes, increase the standard deduction for all Kansans, reduce property taxes and create a back-to-school sales tax holiday. She first unveiled the plan earlier this week alongside two Republican state senators and a conservative independent senator.

“Let’s take the flat tax off the table once and for all,” she said.

Kelly voiced opposition to the kind of sweeping plan to use state education dollars to help parents pay for private or home schooling that states such as Iowa, South Carolina and Utah enacted.

“Vouchers will crush our rural schools plain and simple. Our teachers don’t support vouchers. Our local officials don’t support vouchers. And Kansans don’t support vouchers,” she said to applause.

She also described addressing water issues as “an existential issue” not just for rural Kansas but the entire state.

“My goal for the rest of my term is to put Kansas on the path to resolving this crisis,” she said.

The issue is dropping water levels in the Ogallala Aquifer, which covers roughly 175,000 square miles (453,000 square kilometers) in the western and Great Plains states of Texas, New Mexico, Oklahoma, Kansas, Colorado, Nebraska, Wyoming and South Dakota.

Kansas produces more than 20% of the nation’s wheat and has about 18% of the cattle being fed in the U.S. The western third of Kansas, home to most of its portion of the Ogallala, accounts for 60% of the value of all Kansas crops and livestock. That is possible because of the water.

Her comments came after state Supreme Court Chief Justice Marla Luckert told lawmakers earlier in the day that courts are getting closer to functioning normally after affiliates of a Russian-based ransomware group infiltrated the system three months ago.

The public court portal is back online, and electronic filing also was restored Wednesday in two judicial districts, with the rest expected to follow within the next couple weeks.

Luckert stressed that the state didn’t pay the ransom, and it is working to identify and notify those whose personal information was stolen.

“We are optimistic that full functionality of our systems, including appellate e-filing, is on the near horizon,” Luckert said in her State of the Judiciary address .

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Gov. Laura Kelly calls for Medicaid expansion, offers tax cut plan that speeds up end of grocery tax