- Associated Press - Tuesday, January 24, 2017

Wichita Eagle, Jan. 22

The majority of Kansans want the state to repeal its tax exemption on pass-through business income. So do many businesses - including Koch Industries.

Will lawmakers get their act together and do it? Likely, though that’s still unclear.

And if they do pass such a measure, would Gov. Sam Brownback sign it? So far that seems unlikely, as Brownback continues to claim that the exemption is a success.

A signature element of Brownback’s tax cuts was an exemption on income from LLCs, subchapter S corporations and other businesses in which profits pass through to owners. The exemption ended up benefiting about 330,000 Kansans and costing the state about $250 million a year in tax revenue.

Not only has the tax exemption failed to trigger the “shot of adrenaline” that Brownback promised, many Kansans complain that it is unfair to people whose salaries are taxed. Also, though the exemption was pitched as a boost to smaller businesses, 40 percent of the overall tax savings goes to business owners who make $500,000 or more a year.

It’s no wonder 61 percent of Kansans want the exemption repealed, according to a recent survey by Fort Hays State University.

Many business owners and executives also question the fairness of the tax policy.

Steve Feilmeier, chief financial officer and executive vice president at Koch Industries, said recently that Koch didn’t lobby for the tax exemption and does not support Brownback’s efforts to preserve it.

“There needs to be more equality in how the tax gets applied,” Feilmeier said. “You can’t have half the state exempt and the other half not exempt.”

Feilmeier also emphasized the need to fix the state’s “spending problem.” Additional spending cuts, along with more tax revenue, will be needed to plug the state budget shortfall, which is estimated at about $900 million over the next 18 months.

Though a majority of lawmakers appear to support repealing the exemption, it is unclear if or when they might do so. Some Republicans want to repeal it as quickly as possible, capitalizing on the momentum of the past election and enabling the repeal to apply retroactively to the 2017 tax year. But some Democrats want the repeal to be part of a larger tax reform package, noting that repealing the exemption won’t be enough to solve the state’s revenue shortfall.

Brownback is fighting against a repeal. He spent part of his State of the State address defending the exemption, saying the “policy has worked.” But his budget plan did propose adjusting the law so that passive rental and royalty income would be taxed. Last week he indicated a willingness to accept other changes, such as possibly capping the amount of income that would be tax exempt.

But if the public, business leaders and the Legislature want a repeal, how could our governor oppose them?

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Lawrence Journal-World, Jan. 20

It’s good that a bill to expand Medicaid in Kansas has been introduced in the Legislature. It’s a debate that lawmakers need to have even with the looming threat that Congress will pull the plug on Obamacare.

State Rep. Sue Concannon, R-Beloit, asked for the bill to be introduced. “What we heard during the campaign season was that there are a lot of Kansans who want us to talk about this,” she said.

Concannon is vice chair of the Health and Human Services Committee. The committee is set to hold hearings on expansion in early February.

Kansas has one of the strictest eligibility requirements for Medicaid of any state. It is available only to pregnant women, children, disabled adults and seniors who meet certain income guidelines. Medicaid expansion provided for under the Affordable Care Act extends Medicaid to those younger than 65 whose family income is at or below 133 percent of federal poverty guidelines.

The federal government paid for 100 percent of the Medicaid expansion for 2014 through 2016. Federal funding dropped to 97 percent this year and will gradually decrease to 90 percent by 2020.

Kansas is among 19 mostly conservative states that have refused to participate in Medicaid expansion out of opposition to Obamacare. Gov. Sam Brownback has said repeatedly that Obamacare is part of the problem in Kansas, not the solution. The governor blamed Obamacare for cuts in Medicare that he said have been far more devastating to health care in Kansas than any benefits Medicaid expansion could provide.

But the Kansas Hospital Association estimates Kansas has forfeited more than $1.6 billion - and counting - in federal funds by not participating in expansion since the program began on Jan. 1, 2014. An estimated 150,000 Kansans would be covered by the expansion.

That’s a lot of residents to overlook and significant funding to dismiss.

There is the issue of Congress, which has already taken steps to repeal Obamacare. But it’s important not to confuse the unpopularity of Obamacare with the popularity of certain aspects of Obamacare. In other words, even if Obamacare is repealed, it’s reasonable to expect that aspects of the program, including Medicaid expansion, could continue.

“We need to at least have a thorough discussion about the needs of 150,000 Kansans who don’t have health insurance,” said state Rep. John Wilson, a Lawrence Democrat. “And we need to get a sense of what it would cost us should we want to provide coverage for them if it’s in a different form than under the Affordable Care Act.”

Wilson is right. Kansas has left a lot of money on the table by not participating in Medicaid expansion and the state has yet to offer an alternative solution. It’s past time to put the politics of Obamacare aside and look seriously at what federal Medicaid expansion might do to help Kansans.

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Topeka Capital-Journal, Jan. 23

The Kansas State Library’s origins can be traced to 1855, when the Kansas Territorial Library first received funding. Eight years later, the Legislature appropriated $2,000 to establish the Kansas State Library, which was originally located in the east wing of the Capitol. The renovated two-story library is now housed on the third floor of the north wing (where it has been since 1900), and it’s open to the public from 8 a.m. to 5 p.m. Monday through Friday year-round.

Since the Rev. Dr. David Dickinson was appointed as the first state librarian in 1870, he has had 15 successors (which means librarians serve an average of more than nine years). State Librarian Jo Budler took the job in 2010, and her negotiations to control the exploding administrative costs of ebook access earned her Library Journal’s Librarian of the Year award in 2013. Budler has since worked with libraries across the state to ensure that they have the resources they need, such as databases, ebooks and other research materials.

According to Budler, “The thing I love about my job here is you can look at what’s coming out in the library field and know the smallest libraries are not going to be able to afford this service.” She says it’s important to figure out what the State Library can do to address this problem: “How can we make it available statewide so that residents of the state, no matter where they live, have the best library service?” Considering the number of small, rural libraries in Kansas, our interlibrary loan system (which is paid for with federal funds) is essential for providing everyone in the state with the “best library service.”

Budler explains how the system works: “We have databases that we purchase. About $1 million in cost. If the libraries across the state purchased it one at a time, it would be $53 million. That’s not a cost savings. That is a cost avoidance. Because there is no way we could afford that.” This diffusion of cost is even more critical at a time when state aid to libraries has suffered a substantial decline in Kansas. According to a 2015 report issued by the Kansas Center for Economic Growth, funding was reduced by 60 percent (when adjusted for inflation) between 2008 and 2014. Between 2013 and 2014 alone, funding dropped by 23 percent.

Kansas Library Association president Terri Summey said the funding reductions were having a harmful impact on basic services: “There’s not a lot more we can cut and still provide the resources and services that kids need and adults need, that the community needs.” Even though state funding has been disappointing over the past decade, it’s encouraging that dedicated librarians like Budler are working hard to control costs and give everyone in our state access to the resources that only a good library can offer.

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Salina Journal, Jan. 23

In Gov. Sam Brownback’s State of the State address on Jan. 10, he lauded KanCare as an innovative Medicaid program that’s gaining national traction: “Fortunately for our budget, Kansas had the foresight to reform Medicaid - a policy others are following. Instead of an open-ended fee for service entitlement, Kansas became the first state in America to serve its entire Medicaid population through managed care.”

Less than a week after Brownback made these comments, a damning letter from the Centers for Medicare and Medicaid Services criticized Kansas for multiple failures to administer the program properly. The Jan. 13 letter was written by James Scott, CMS associate regional administrator for Medicaid and Children’s Health Operation, and he summarized the agency’s concerns: “The results of our onsite review confirm that Kansas is substantively out of compliance with federal statutes and regulations, as well as its Medicaid state plan.”

A few days later, Kansas Medicaid director Mike Randol was informed that CMS had denied the state’s request for a one-year extension of KanCare. According to the director of the state demonstrations group at CMS, Eliot Fishman, the agency had received substantial complaints about the implementation and oversight of the program. When CMS conducted an onsite review of KanCare in October, it found that many of these complaints were warranted. Kansas has until Feb. 17 to develop a plan that will address each of the concerns outlined by CMS, and this process will be monitored by federal officials.

While the findings cited by CMS are too extensive to list in their entirety, here are a few of the general problems that were referenced in the letter: KanCare needs a more robust tracking system for incidents, quality and access; the oversight of managed care organizations has become less thorough over time; reports from MCOs need to be acted upon with greater frequency; there needs to be more cooperation between state agencies responsible for administering the program; and KanCare employees should be given more comprehensive guidelines to follow.

All of these issues must be considered in the larger context of KanCare’s clunky implementation. From the dysfunctional rollout of the Kansas Eligibility Enforcement System to an increase in Medicaid denials to a huge backlog of unprocessed applications (which briefly surpassed 10,000 last year), KanCare hasn’t been the success story that Brownback presents.

In response to the accusations made by CMS, KanCare spokeswoman Angela de Rocha said, “It is perplexing that CMS granted 11 other states extensions of their 1115 waivers, but denied Kansas.” While she said the Kansas Department of Health and Environment would work to meet the obligations imposed by CMS (the agency is working on a “corrective action plan”), she added, “.we do not agree with all of their conclusions.”

To take those points in order: If the CMS findings are true, would it really be “perplexing” that Kansas wasn’t treated the same as other states? And the fact that KDHE disagrees with CMS is meaningless until de Rocha or someone else produces evidence to the contrary.

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