12 January 2024 | Health Early Learning Education Tax and Budget Economic Security

2024 Statehouse Snapshot: Week 1

Kansas Action for Children
January 12, 2024

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Governor Calls for 'Historic' Child Care Funding in State of the State Address

What a great start to the 2024 Legislative Session with so many children’s priorities in the headlines capturing the attention of lawmakers, the media, and key stakeholders. We got right to work on Monday and dropped off packets for lawmakers sharing our legislative priorities, including implementing a state child tax credit, improving food security, and making health care more accessible for kids and families. (Review our 2024 legislative agenda here.)

On Wednesday evening, Governor Kelly presented her budget proposal for the year. Among her calls for expanding Medicaid, fully funding special education, cutting taxes, and addressing Kansas’ water crisis, she also proposed investing millions in our child care and early learning system.

Right now, Kansas needs nearly 84,000 child care spots to fill demand. We know we can’t get there until we support the workers who provide safe, high-quality care that is crucial for kids’ development. This is the largest single-year investment in the early childhood system ever made in Kansas. If the Kansas Legislature follows through, it will put us on the right path toward a child care system that families and providers deserve.

Governor's Budget Recommendations Released

On Thursday, Governor Kelly released her state budget recommendations for the 2025 fiscal year, which begins July 1, 2024, and ends June 30, 2025. It is now up to the Legislature to consider and act on what she has proposed.

Included in the total $26.5 billion budget ($11.2 billion of that from the State General Fund) are proposals to fast track the planned elimination of the sales tax on food (including diapers and feminine hygiene products) to April 1, 2024, instead of January 2025; a four-day back-to-school sales tax holiday in August; another attempt to expand KanCare to benefit 150,000 uninsured Kansans; and pay adjustments for much of the state’s undercompensated workforce.

Strong revenue collections and positive forecasts this year also leave room for several one-time investments, including a proposed half a billion dollars for early debt repayment, facility and capacity enhancements to state correctional and workforce development institutions, and other overdue upgrades to the state’s outdated infrastructure.

The state’s healthy fiscal position opens a world of possibilities for innovative, targeted, and equitable investments that demonstrate our lawmakers care about the well-being and prosperity of every Kansas family. However, the temptation to cut taxes and craft deals that negatively impact the most vulnerable members of our communities is ever-present.

We will release a more detailed analysis of the budget later in the month. In the meantime, you can read our Budget Primer to learn the basics of how the budget works so you can know what to expect from the process during the legislative session.

Kansas Kids under 5 Can Win — If Proposed Child Care Funding is Kept in Budget

Last year, Governor Kelly created a task force to examine how the state could better streamline its services for families and providers. Drawing from the Early Childhood Transition Task Force’s recommendations, Governor Kelly recommended the creation of the Office of Early Childhood to focus on the first five years of a child’s life and centralize the work being done in the early childhood care and education system.

In her budget proposal, the Governor announced $56.4 million for child care and early learning. This includes $30 million toward grants to create an estimated 5,655 new child care spots, $15 million to provide sustainability grants for child care providers (particularly home-based providers), and $5 million to apply toward pilot programs addressing child care availability in Northwest Kansas.

By addressing the complex barriers for both child care workers and families struggling to make ends meet, providers can be supported in their work and kids can be in high-quality learning environments. If lawmakers agree with the Governor’s plan for child care investments, Kansas will be on its way to solving our child care crisis.

Flat Tax Plan Resurrected; Governor Releases Tax Package

Last year, the Legislature ended the session by rejecting the risky, expensive flat tax plan that would have a child care worker paying the same income tax rate as a millionaire. Now, lawmakers are acting fast, scrambling to build a plan that would create a single income tax rate.

On Thursday, a tax conference committee gathered to ask for new data on revised sections of last year’s bill. The 5.25% income tax rate the conference committee is considering would cost more than $300 million, with more than two-thirds of that going to those with household incomes above $130,000 a year!

These flat tax proposals may look simple and appealing, but they do little to benefit everyday working families. Lawmakers must once again reject these short-sighted solutions and instead champion tax reform that strengthens families, like a state child tax credit.

This upside-down tax plan from the Legislature is in stark contrast to the Governor’s proposal announced on Monday with a bipartisan group of lawmakers by her side. She is calling on the Legislature to immediately eliminate the state sales tax on food (instead of waiting until it goes to 0% on January 1, 2025) while also cutting state taxes on diapers and feminine products. She also proposed:

Raising the exempted portion of property from the statewide residential property tax from $42,000 to $100,000, saving money for many homeowners
Eliminating state taxes on all Social Security benefits
Increasing the standard deduction
Doubling the Child and Dependent Care Tax Credit
Creating a four-day sales tax holiday for back-to-school shopping

The Governor’s tax package was designed by and included crucial support from both sides of the political aisle. There are many choices lawmakers can make in the coming months that could improve Kansas families’ financial security. We will advocate for lawmakers to work together to move forward tax changes that help everyday Kansans while balancing other needs in the state’s budget.

What to Expect from Welfare Reform This Year

The House Committee on Welfare Reform began its work yesterday with a briefing from the Department for Children and Families about federal changes to the Supplemental Nutrition Assistance Program (SNAP), the Temporary Assistance for Needy Families program (TANF), and the new Summer-EBT program. The Chair indicated that next week, the Committee will start looking at a bill he will introduce to reorganize the state law governing SNAP, TANF, child care assistance, and Medicaid so that the statute is divided by program and therefore should be easier to read and understand.

On Tuesday, they are scheduled to hear a recap on the 2023 Special Committee on Homelessness. The Chair added that he has set aside several days for informational hearings related to homelessness and hopes the Committee will craft a bill that has some impact on the issue. During the Special Committee’s hearing this fall, the Chair and other members repeatedly mentioned their intent to focus on “law and order,” while other members of both the Special Committee and the House Committee on Welfare Reform have indicated an interest in more funding for emergency housing and for mental health and wrap-around services.

Speaking of homelessness, the Governor’s budget proposal includes $40 million in emergency housing matching funds and $10 million to support moderate-income housing. We are pleased to see a plan putting state dollars toward filling our state’s affordable housing and homeless services gaps. Hopefully lawmakers will agree with this sentiment.

KanCare and Medicaid Expansion at Forefront of Health Discussions So Far

KanCare and Medicaid expansion received quite a bit of attention when the Joint Budget Committee met on Thursday to hear the Governor’s budget proposal.

Lawmakers heard that over almost four years, the state received nearly $1 billion in federal funds related to Medicaid as part of the pandemic response. Congress distributed these extra funds in exchange for states not disenrolling those with Medicaid and Children’s Health Insurance Program (CHIP) coverage during the public health emergency. However, that money was phased out in 2023. The extra funding contributed to Kansas’ ongoing budget surplus, as the KanCare program did not see significant cost increases with keeping more Kansans on Medicaid and CHIP. The Governor has now proposed several projects this year to take advantage of those surplus funds.

A brief discussion occurred on the number of kids who have lost their KanCare coverage as the state has restarted the process to annually review KanCare eligibility. KAC has tracked that process over the past several months. Sadly, we’re still seeing children losing their coverage at much higher rates than they should be. Kids losing health insurance coverage should alarm us all.

The Joint Committee also spent significant time on the Governor’s latest Medicaid expansion proposal, which is expected to be introduced next week. We urge lawmakers to act on the overwhelmingly compelling evidence for how Medicaid expansion would benefit thousands of Kansans, including the more than 13,500 parents of kids in the coverage gap who make too much to qualify for Medicaid but too little to receive subsidies on the federal insurance exchange.

What to Expect in Week 2

While a few committees sprinted out of the gate this week by holding hearings on some bills (like SB 36, the CROWN ACT), most used their committee time for lawmaker and staff introductions and to hold informational sessions on related subjects.

Next week, committees will start getting deeper into their work for the year. Some of the topics we’re watching are:

Flat tax – With one joint meeting already behind them, the Tax conference committee plans to meet again at 10:30 a.m. Tuesday morning. They should receive data about the costs of various proposals, including a 5.25% flat income tax rate.
ACEs informational hearing – On Wednesday, the House Committee on Child Welfare and Foster Care will host an informational hearing on ACEs (adverse childhood experiences). The Committee will hear from Dr. Linda Bass (KVC Kansas) and Melissa Rooker (Kansas Children’s Cabinet and Trust Fund), who will describe how ACEs factor in child welfare interaction prevention and the Children’s Cabinet’s work.
Medicaid expansion – The Governor’s proposal expanding eligibility for KanCare, the state’s Medicaid program, is expected to be introduced next week. Her proposal is also expected to include work requirements.

Get day-to-day updates on what bills KAC is monitoring during the 2024 Session here. And don't forget to follow us on Twitter @kansasaction for updates throughout the week.