The Kansas Chamber was disappointed in Gov. Laura Kelly's vetoes of tax packages the chamber aggressively pursued in the Legislature this year, including an attempted compromise late in the session.
The packages offered relief for individuals who wanted to itemize on state tax returns while taking the standard deduction at the federal level, as well as a reduction in the sales tax rate for food.
For corporations, the tax plans also would have retained a shelter on foreign income that will be returned to the United States under the provisions of federal tax reform.
Eric Stafford, a chamber lobbyist, said Kelly ran as a compromise governor who wanted to be a partner with the business community.
"The very first and biggest piece of priority legislation that the business community was asking for, she chose to veto twice, so her actions don't match her words," Stafford said.
Stafford joined chamber colleague Kristi Brown and Jeff Glendening, of the Kansas chapter of Americans for Prosperity, for a review of the legislative session from a conservative vantage point in the latest episode of the Capitol Insider podcast. A forthcoming episode will reflect a liberal point of view.
Kelly, a Democrat, rejected the attempts to reform Kansas tax code while pointing to severe revenue shortfalls that followed 2012 tax changes. Republicans in the Legislature failed to find the two-thirds majority support needed in both the Senate and House to override the governor's vetoes.
"Successful tax reform must be shaped by thoughtful, big-picture vision," Kelly said. "I look forward to working with experts, stakeholders and lawmakers to craft responsible tax policy that provides relief for the families who need it the most.”
The most contentious provision of proposed changes dealt with the tax benefits for businesses, which would have saved an estimated $120 million over three years.
Stafford and Brown said the failure to install tax changes effectively amounts to an unintended tax increase that places Kansas businesses at a competitive disadvantage.
"Corporations aren't faceless, nameless organizations," Brown said. "They employ thousands of Kansans, and trying to pursue tax policy that ensures individuals and job creators and sustainers are protected, I think that's what we're here to do."
The conservatives also raised concerns with overall spending in a $7 billion budget, which has increased $1.4 billion in three years. Brown said "painful decisions" will have to be made within a couple of years, based on budget forecasts.
Kelly attempted to strike $54 million in spending with line item vetoes, but Republicans in the Legislature led an effort to successfully override those vetoes. Just because lawmakers have "Republican" by their name, Glendening said, doesn't mean they should escape scrutiny from voters.
"Their constituents need to ask them the tough questions about whether you are fiscally conservative," Glendening said. "What are you doing to keep that budget balanced? We clearly have a problem in this state. We've had a problem in this state for decades. We continually increase spending just at astronomical rates. If there's any extra money in the bank account, people are just jumping all over themselves trying to spend it."
The three were grateful that lawmakers looked for ways to address health insurance options that didn't include the expansion of Medicaid — a Kelly priority.
Medicaid expansion would benefit an estimated 130,000 low-income adults and children at a cost of about $47.4 million in the first year before accounting for possible increases in tax revenue from a $1 billion influx in federal dollars. The House passed an expansion plan that was blocked from consideration by Senate leadership.
Stafford noted the praise the House action received from U.S. Sen. Bernie Sanders, a Democrat from Vermont and presidential candidate who supports Medicaid for all. Stafford said he believes the goal of the Affordable Care Act, which allows for expansion, is to eliminate health insurance.
"We just philosophically disagree with that," Stafford said.
Instead, lawmakers passed a law easing restrictions on association health plans, which allow small businesses to band together and get lower rates by having a larger pool of employees.
The chamber pushed for the association plans but remained neutral on more controversial legislation that allows the Kansas Farm Bureau to offer an unregulated alternative to health insurance.
"I love the idea that we're looking outside of government to solve all the problems with health care," Glendening said.