Make no mistake – something needs to be done to address the spiraling costs of Medicaid that Kansas has seen over the past 10 years. Medicaid costs comprised nine percent of the State General Fund (SGF) budget for Fiscal Year 2002. Fast forward ten years later, and Medicaid now constitutes 19 % of the SGF budget. Growth in Medicaid expenditures has averaged around 7.4% a year, and that increase reflects more than just new consumers entering the system. The largest increase has been for persons with disabilities, which increased from approximately $917 million in FY 2007 to $1.16 billion in FY 2010, representing an increase of 26%. The challenge lies in determining what reforms need to be made.

Numerous Medicaid provider and consumer stakeholder groups have raised issues with the Governor’s proposed reforms, voicing concerns that the reforms may in fact not work as advertised but instead wreak havoc on the system. And other states have encountered problems in their attempts to reform Medicaid. A news article recently appeared in the Louisville Courier-Journal reporting about similar reforms that the state of Kentucky implemented on November 1st of last year and the resulting fallout. Kentucky lawmakers are now hearing from their constituents about lack of payments for medical services, challenges in getting patient medications approved and delays in authorizing services. Kentucky’s acting Medicaid commissioner told a Senate committee that “we didn’t expect the level of issues that we had”.

As Kansas embarks on reforming Medicaid, I think we should all keep in mind Hippocrates’ advice to “First Do No Harm”. At a minimum Kansas should look at implementing a limited pilot program to test out the proposed reforms and confirm the results before committing all 380,000+ clients to a new system. Otherwise, we’ll be picking up the pieces of shattered lives for years to come.

To recap, the governor’s plan lowered individual income tax rates by lowering the top tax rate down to 4.9 percent (versus 6.45 percent) on taxable income higher than $15,000 (single) / $30,000 (married), lowering the bottom rate to 3 percent (versus 3.5 percent) and eliminating the current top income bracket of $30,000 (single) / $60,000 (married). His plan also doubled the standard deduction for head of household filers and exempts all non-wage business income from being taxed. The plan paid for the reduction in personal income tax rates and small business income exemption by 1) eliminating all itemized deductions, 2) eliminating various income tax credits including the Earned Income Tax Credit, the Food Sales Tax Rebate, the Child and Dependent Care credit, and 3) making permanent the temporary .6 % sales tax increase passed by the 2010 Legislature.

The Institute of Taxation and Economic Policy, a non-partisan, non-profit think tank that analyzes state and federal tax policy, found that under the governor’s plan the top 20 percent of the state’s earners would see substantial tax cuts while the bottom 80 percent would see a tax hike. For example, those earning less than $20,000 in annual income would pay on average an additional $242 in taxes, while those earning between $20,000 and $35,000 in annual income would pay on average an additional $247 in taxes. Compare that to the earners bringing in $90,000 and above, who actually begin to see savings. The study further concluded that, for most middle and low-income Kansans, any benefit received from the lower income tax rates would be lost due to on elimination of income tax credits and itemized deductions as well as the higher sales tax rate.

As the Kansas economy slowly rights itself, Kansas families continue to struggle to pay their bills and put food on the table. When it comes to taxes, everyone needs to pay their fair share, especially wealthy corporations and the richest individuals. Governor Brownback’s tax plan does exactly the opposite, forcing middle-income and poor families to pay more while dramatically lowering taxes for the most wealthy. It’s time to pull the plug on this clunker of a tax plan and instead focus our attention on the real tax dilemma facing Kansas – burdensome property taxes.

In his 2012 State of the State address, Governor Brownback talked on a variety of subjects but directed most of his comments towards his tax reform, school finance and Medicaid proposals. I found his comments about his tax reform proposal to be particularly interesting. He proposes to lower individual income tax rates for all Kansans by bringing the highest tax rate down from 6.45 percent to 4.9 percent, lowering the bottom tax bracket to 3 percent, and eliminating the middle bracket. His plan would also eliminate individual state income tax on most small businesses. The Governor proposes to pay for the reduction in income tax revenue by eliminating various income tax credits, deductions, and exemptions and making the temporary one cent sales tax increase passed by the 2010 Legislature permanent. Given how Kansas families are struggling during these tough economic times, I think that it is extremely important that everyone pays their fair share, especially wealthy corporations and the richest individuals. As the old saying goes, “the devil’s in the details”, and as more information becomes available we’ll find out who ends up benefitting most from the Governor’s proposed tax reform and who ends up paying for it.

This could make for a very interesting legislative session. During my first eight years of service in the Legislature, a coalition of moderate Republican and Democratic legislators guided the legislative agenda in Topeka. That coalition was effectively dissolved during the November 2010 elections as Democrats lost 16 House seats to more conservative Republicans. Right now the Kansas Senate is the only remaining moderate entity in Kansas state government. Given that a slew of conservative challengers have already announced their intentions to run against moderate Republican Senate incumbents in the upcoming 2012 primaries, it will be interesting to see how those dynamics, along with our once-in-a-decade redistricting process that we’ll be undertaking this session, impact the actions and accomplishments of the 2012 Legislature.

As I did last year, I will once again be conducting town hall meetings at various locations throughout the district as we progress through the 2012 session. Notice for these events will be publicized in the near future. I hope to see you there!

Let’s not kid ourselves – these are tough times for Kansas families and businesses! And now, more than ever, Kansas desperately needs moderate voices in legislative leadership positions to help get us through this crisis.

I’m running for re-election to the Kansas Senate because Kansas needs to retain these moderate voices if it is to continue to be an attractive place for families to live and businesses to conduct commerce. I’ve been one of those moderate voices in the Kansas Legislature who has consistently fought for critical investments in our public schools and state infrastructure to protect and grow jobs so that both Kansas families and businesses would flourish.

As the ranking minority member on both the Senate Assessment and Taxation and Commerce committees, I’ve sponsored and supported thoughtful and effective policy for both Kansas families and businesses. Given the economic challenges our state is facing, it is imperative that I return to the Kansas Senate to continue to make meaningful and positive contributions to the state of Kansas and its citizens.

You have a key role to play in our march towards victory in November 2012! A contribution of $50, $25, or other amount would help me to meet my financial requirements for successfully retaining my Senate seat. Your
contribution would be most helpful and deeply appreciated!

Wishing you the very happiest of holidays,

Tom

House Bill 2130 as passed by the House would make it unlawful for any union member, professional or public employee to voluntarily have deductions taken out of their paycheck for political activities. The bill would also prohibit public employees from endorsing candidates for state or local office. The Kansas National Education Association (KNEA), and the Kansas Organization of State Employees (KOSE) were primary targets of this crushing legislation. Both organizations have been very active in Kansas politics.

Proponents in support of the legislation indicated that the purpose of the bill is to “get government out of the political process”. They believe that “government should not be involved in supporting any organization’s political activities, regardless of their merit”. They went on to state that “banning payroll deductions for political speech similarly furthers the government’s legitimate interest in distinguishing between internal government operations and private speech”.

In fact, this bill would directly inject government INTO the political process by hindering the free political speech of union members without any such restrictions to corporations and other membership organizations. The Supreme Court has recently spoken rather forcefully on this issue, coming down foursquare for First Amendment political speech in the recent Citizens United V. FEC case. In its ruling the court specifically extended political free speech to “corporations, unions and any other groups, foreign or domestic in citizenship or allegiance”. This bill also runs into trouble as it is plainly trying to discriminate against a particular viewpoint (i.e. – against that of union employees) as the bill makes no attempt to control or regulate employees making automatic payroll deductions to corporate PACs. First Nat’l Bank of Boston v. Bellotti also suggests constitutional problems (“Especially where . . . the legislature’s suppression of speech suggests an attempt to give one side of a debatable public question an advantage in expressing its views to the people, the First Amendment is plainly offended”).

I find it incredibly ironic that those who would normally clamor for less government intrusion and adherence to free market principles would turn right around and use the cudgel of government to stifle the political free speech of those that they disagree with. Like the marketplace of products and services, there is also a marketplace of political ideas. Let’s let the consumers of political thought have access to all viewpoints and decide for themselves what is best.

Illegal immigrants come to the U.S. for jobs. The Pew Hispanic Center has estimated that there were approximately 11.2 million illegal immigrants living in the U.S. in March 2010 with approximately 8 million illegal immigrants in the work force. This means that illegal immigrants currently make up approximately 5 % of the U.S. work force, with one out of every twenty workers in America being an illegal immigrant. And this phenomenon comes with a hefty price tag. A study published by George Borjas, a professor of economics and social policy at Harvard University, concluded that by increasing the supply of labor between 1980 and 2000, immigration reduced the average annual earnings of U.S.-born men by an estimated $1,700 or roughly 4 percent. He also found that among U.S.-born men without a high school diploma (approximately the poorest tenth of the U.S. workforce), the estimated impact was even larger, reducing their wages by 7.4 percent.

I have consistently maintained that the only way we will ever reduce this significant pool of illegal labor is by having the U.S. government aggressively 1) protect its borders and 2) identify and sanction those employers who knowingly hire illegal immigrants. Given the federal government’s continued inaction on the issue, however, states across the country are implementing their own solutions. This year I have sponsored legislation (SB 181) that would require both Kansas governmental entities and
Kansas businesses who receive government contracts to use the Department of Homeland Security’s E-Verify system to verify the employment eligibility of new hires starting on or after January 1st, 2012. The purpose of the bill is to begin putting employers on notice that purposefully hiring illegal immigrants will no longer be tolerated.

The Kansas Legislature has a rather dubious record on this issue. Despite a number of bills introduced since the 2003 session (a number of which I have sponsored or co-sponsored), the legislature has failed to toughen existing penalties that are widely perceived as being weak and ineffective. The legislature did, however, make some progress during 2006 by passing misclassification legislation I sponsored that assists the Kansas Department of Revenue in identifying those companies that purposefully mis-classify workers as independent contractors instead of W-2 employees (a prevalent business practice for those firms employing illegal immigrants). The bill allows the Department to charge those violators with penalties and interest for not reporting and paying state income tax withholdings. Given Kansas citizens’ concerns regarding illegal immigration, I am hopeful that E-Verify will finally become part of the state’s hiring practices this year.

There will always be those who would try to use illegal immigration as a means for simply fanning American fears and prejudices against immigrants. If we want to get serious about stopping illegal immigration, however, we must instead focus our attention on fellow U.S. citizens who knowingly or intentionally hire illegal immigrants. We simply cannot tolerate those deliberate business practices that slowly but surely undermine the economic aspirations and potential of Kansan working men and women.

Unfortunately, a bill approved by the Senate last week directly contradicts that message. Senate Bill 77, which was introduced on behalf of Brownback’s newly-appointed Labor Secretary, raises unemployment taxes on Kansas employers, reinstates the waiting week and eliminates trailing spouse benefits for non-military families.

All totaled, SB77 eliminates more than $13 million in annual unemployment compensation. And while it begins to replenish our UI Trust Fund, it does nothing to address those Kansas employers who have paid out nearly seven times more in unemployment benefits than they have contributed.

Because claims were initially processed manually, a “waiting week” was necessary at one time. But there is no logical reason to have a delay in benefits in today’s computer age – which is exactly why the Legislature eliminated it in 2007. Reinstating the waiting week only serves to keep needed benefits out of the hands of out-of-work Kansans and prevents those who are out of work less than 26 weeks from receiving benefits they’re rightfully due.

Eliminating “trailing spouse” benefits will make it more difficult for families to stay together when one spouse has been transferred out of the region. It sends a terrible message to Kansans about the value we place on family and marriage; and it is a step backward for thousands of Kansans trying to balance the needs of work and family.

Kansas’ home mortgage foreclosure rate is at a sobering 7 percent, while our unemployment rate is at 6.8 percent. Kansas families are in need right now!

Now is not the time to eliminate benefits that unemployed workers rely on to survive. Now is not the time to turn our backs on the promises we made to the people of Kansas.

In light of our tight revenue projections, state agencies must be scrutinized. Their missions, policies, and processes must all be thoroughly reviewed to ensure that our state is operating as efficiently as possible. That’s why I support the Governor’s proposals to eliminate Kansas, Inc. and move the Kansas Health Policy Authority (KHPA) back under the Executive branch.

As a director on Kansas Inc.’s Board, I have had the opportunity to work with their management team and am impressed with the quality work they do. But I have always felt that their mission was much better served by the Kansas Department of Commerce.

I also believe that KHPA never should have been its own agency in the first place. In 2005, then-Governor Sebelius proposed that KHPA exist under the Kansas Department of Health and Environment. Instead, the legislature chose to set KHPA up as a separate entity outside of the Executive branch.

While these changes will eliminate inefficiencies and improve responsiveness, I have serious reservations about a number of Governor Brownback’s other restructuring proposals. In particular I am concerned with his proposals to eliminate the Kansas Technology Enterprise Corporation (KTEC) while transferring its functions into the Department of Commerce, and elimination of the Kansas Arts Commission.

KTEC is a private/public partnership that promotes technology-based economic development in Kansas. It is a critical component of promoting innovation and creating high-paying jobs for our citizens. Eliminating KTEC investments and Pipeline programs will not only make it more difficult for Kansas entrepreneurs in the short term, but will stymie development over the long haul.

Changing the Kansas Arts Commission into a private, nonprofit Kansas Arts Council would eliminate annual state funding of $815,000 and another $778,300 in annual federal matching funds. More than $400,000 in annual grant from the Mid-America Arts Alliance would also be lost. As a result of these funding cuts, nearly 4,000 full-time jobs supported by the non-profit arts sector would also be on the chopping block.

As our new governor, Mr. Brownback has an opportunity to take a fresh look at state organizations and challenge “business as usual” practices. With proper planning, I believe some government restructuring will be good for our state. But we mustn’t restructure so quickly as to force the elimination of services to needy Kansans.

I hope that Governor Brownback and his team carefully consider the adverse impact these decisions may have on Kansas citizens. If not, we’ll be putting our state through a lot of unnecessary transitional turmoil.

I applaud the Governor for addressing our budget crisis.  It is critical that we fill the $7.7 billion long-term funding gap in KPERS and address the state’s burgeoning Medicaid costs.  But when it comes to K-12 education funding, the Governor’s stance is that the state is spending too much.  By having the Kansas Legislature redefine its constitutional duty to fund a “suitable” education, he’s attempting to justify more cuts.

We’ve been down this path before.  In 2001 the Kansas Legislature commissioned a study to define the costs of a suitable K-12 education.  And guess what – results said that the legislature was, in fact, woefully underfunding education.  In 2003 the Shawnee County District Court declared Kansas’s school finance formula unconstitutional and the Kansas Supreme Court later confirmed the district court’s findings.  Finally, in 2006, the legislature passed an enhanced school finance plan that put another $466 million into public schools over a three year period.  This bipartisan supported plan guarantees a quality education to every Kansas child, in every corner of this state. 

As a result, we’ve seen improved student achievement across the board.  In the last four years alone, reading scores have improved more than 8 percent while math scores have improved more than 10 percent.  We were clearly on the right path, but now we’ve changed courses. 

Let’s be clear about where this is headed – Governor Brownback and Speaker O’Neal want to drastically cut state funding and have local school districts pick up the difference.  And the real losers will be the kids living in poorer areas of Kansas.  Schoolchildren in districts with high property valuations will continue to enjoy a top-notch education.  But those school kids living in significantly poorer districts will be left behind.

The one saving grace is the Montoy case precedent.  My guess is that some individual or party will eventually file suit against Speaker O’Neal’s new school finance formula and the courts will eventually rule in the plaintiffs’ favor.  And so, like Phil Connors, the Kansas Legislature will find itself reliving the same event as it redefines, under court order, the school finance formula long after the 2011 legislative session is over.

In particular, it’s high time we all do a little bit more listening and a little less screaming at one another in the body politic.