Gov.-elect Laura Kelly plans to explore fine print on the state government’s no-bid contracts and place economic development incentive programs under a spotlight.
This pair of financial management topics are on Kelly’s mind as she prepares to assume the governorship in January from Republican Jeff Colyer. The Democratic state senator from Topeka has two months to fill Cabinet and executive branch jobs before delivering a speech to the 2019 Legislature outlining budget and policy goals.
Kelly, who served on the Senate’s budget committee for years, said during an interview for the The Topeka Capital-Journal Capitol Insider podcast, she would authorize evaluations of state incentive programs purported to create jobs and of large state contracts issued without open bidding.
“I do not want to do no-bid contracts. We will avoid them like plague. We’re also gong to be digging down into all the no-bid contracts — actually, all the contracts — the state is involved with right now. We will be working to modify those that are not in the best interests of citizens and we’ll keep the ones that work,” she said.
Kelly vowed to carefully evaluate economic development incentives granted businesses by the Kansas Department of Commerce. She said the assessment would allow reappropriation of state funding to “evidence-based programs that we know will produce the results that we want, which would be more and better jobs.”
In terms of the administrative transition, Kelly said she was in the process of assembling a bipartisan group to identify prospective agency leaders and to get a handle on the greatest challenges facing the agencies.
“They’ll be helping us figure out specifically where the issues are and what we need to do to address those, and also be looking for some highly skilled, competent folks to come in and lead those agencies,” she said.
Kelly said she wasn’t shocked the Kansas Department of Revenue, under the administrations of Colyer and Gov. Sam Brownback, failed to disclose the full fiscal impact of the 2012 state income tax exemption for owners of more than 300,000 businesses. The so-called LLC tax break was rescinded by the 2017 Legislature over Brownback’s veto.
In state revenue projections revised earlier this month, the revenue department revealed that elimination of the LLC loophole would result in collection of up to $300 million more this fiscal year than previously anticipated.
“I’m not terribly surprised,” the governor-elect said. “We always thought that there might not be an accurate estimate on the impact of eliminating the tax on LLCs.”