Kansas Chamber offers state lawmakers smorgasbord of pro-business reform goodies

Lobby group’s wishlist features COVID-19, taxes, education, Medicaid

Alan Cobb, president and chief executive officer of the Kansas Chamber, said the business organization wants the 2021 Legislature and Gov. Laura Kelly to embrace a series of reforms to help the economy survive and recover from the COVID-19 pandemic. (Tim Carpenter/Kansas Reflector)
Alan Cobb, president and chief executive officer of the Kansas Chamber, said the business organization wants the 2021 Legislature and Gov. Laura Kelly to embrace a series of reforms to help the economy survive and recover from the COVID-19 pandemic. (Tim Carpenter/Kansas Reflector)

TOPEKA — The Kansas Chamber is convinced the COVID-19 pandemic requires the state to pause all tax audits, make federal disaster loans tax free, create a tax credit for costs incurred by working remotely, waive licensing fees and compensate businesses restrained by public health orders.

Take a deep breath, because there’s more.

The statewide business organization’s lobbyists also ask the 2021 Legislature and Gov. Laura Kelly to prohibit state or local governments from closing a business making an effort to follow coronavirus protocol. The Kansas Chamber believes businesses should be allowed to collect sales tax but delay transfer of that cash to government without penalty. There is a pitch to keep a waiver on continuing education requirements for frontline workers and people supplying products or services tied to the pandemic.

Alan Cobb, president and chief executive officer of the Kansas Chamber, said the state required a coherent plan to remove barriers to business and encourage job creation as vaccinations become more widespread and the economy returns to a more normal footing.

“The impact of the COVID-19 pandemic and subsequent government shutdowns and restrictions hurt our state’s economy tremendously,” Cobb said. “Unfortunately, much like our historical economic performance, Kansas’ recovery during the second half of 2020 lagged behind the rest of the states. We believe as more Kansas businesses prosper, so will their employees, their communities and our great state.”

 

Business wish list

Kansas Chamber officials offer an annual wish list of proposals designed to help businesses prosper. This year’s model touches on taxes, regulation, education, health care, the law and other subjects ranging from electricity costs to government outsourcing.

The package adheres to the conservative ideology of the organization’s leaders and draws input from an annual survey of business owners at companies large and small.

Gov. Laura Kelly is pressing the 2021 Legislature to expand eligibility for Medicaid despite opposition from the Kansas Chamber to broadening reach of health care to as many as 165,000 low-income Kansans. (Sherman Smith/Kansas Reflector)
Gov. Laura Kelly is pressing the 2021 Legislature to expand eligibility for Medicaid despite opposition from the Kansas Chamber to broadening the reach of health care to as many as 165,000 low-income Kansans. (Sherman Smith/Kansas Reflector)

In addition to tax policy related to the COVID-19 pandemic, the Kansas Chamber renewed opposition to expanding Medicaid eligibility for for 150,000 to 165,000 low-income Kansans. States can expand use of Medicaid under provisions of the Affordable Care Act with the federal government paying 90% of the cost for broadening use of the program and the state picking up 10% of the additional expenditures.

The Kansas Chamber also wants Kansas to continue with the managed-care model for delivery of Medicaid services to about 400,000 people under the KanCare program. KanCare is operated by three for-profit companies under contract with the state.

Kelly has consistently placed Medicaid expansion among her top legislative priorities. She said the pandemic has heightened the need for quality, accessible health care for Kansans. She has said the Republican-led Legislature rejected previous expansion proposals for political reasons.

“If we’ve learned anything these past 10 months, it’s that every Kansan deserves health care they can afford, good health care facilities near their homes and for our rural neighbors and friends, more access to telehealth services,” the Democratic governor said. “That’s why I’ll continue to push, over and over again, for what 38 states across the country have done — to expand Medicaid to cover another 165,000 Kansans, to ensure that our rural hospitals remain open and inject billions of dollars into our economy.”

 

Governor’s veto

The Kansas Chamber’s adherents returned to the Capitol intent on defeating a potential Kelly veto of a bill that would allow Kansans to claim a standard deduction on federal tax returns and itemize deductions on state tax returns. Under existing state law, Kansas returns are coupled to the federal tax policy. Tax filers must accept both standard deductions or itemize on both returns.

This has been an issue since President Donald Trump signed a bill in 2017 that dramatically increased standard deductions on federal taxes. Kelly vetoed legislation in 2019 that would have accomplished what the Kansas Chamber seeks.

Sen. Caryn Tyson, a Parker Republican and chairwoman of the Senate Assessment and Taxation Committee, is working on a bundle of tax reforms stalled by COVID-19 in 2020. (Tim Carpenter/Kansas Reflector)
Sen. Caryn Tyson, a Parker Republican and chairwoman of the Senate Assessment and Taxation Committee, is working on a bundle of tax reforms stalled by COVID-19 in 2020. (Tim Carpenter/Kansas Reflector)

Leaders of the Kansas Chamber also want to expand the state’s Angel Investor Tax Credit, despite a state audit revealing just eight Kansas counties benefited from the program incentivizing cutting-edge businesses from 2015 to 2018. Johnson County scored two-thirds of $51 million drawn to these companies in the Angel Investor initiative.

The Kansas Department of Commerce also has appealed for extension of the tax credit because it served as a vehicle to bring to market innovative medical or technology products and services.

In addition, the Kansas Chamber proposed a change to the sales-tax-collection-obligation imbalance between in-state and out-of-state retailers. The additional revenue collected from out-of-state businesses can be used to lower state taxes, the organization said.

In the realm of education, the Kansas Chamber recommended an amendment to the Constitution shrinking the judicial branch’s role in determining state aid to K-12 public school districts. Decisions of the Kansas Supreme Court have compelled the Legislature to boost funding for public education, and the proposed amendment would declare that the Legislature holds exclusive authority over spending for education.

The Kansas Chamber has also recommended reform of inmate programs to help people re-enter the workforce, establishment of a commission to decide how to realign government agencies, more government outsourcing to the private sector and implementation of a legislative study aimed at lowering the state’s high electricity costs.

 

The Chamber poll

Cobb, the Kansas Chamber’s president, said the organization’s 17th annual poll of business leaders showed the obvious: COVID-19 has been a significant influence on the viability of businesses.

“Our poll found the operations of nearly every business has been directly impacted. Sixty-six percent reported supply chain issues while 46% believe the state’s response to the pandemic was more than what was necessary,” Cobb said.

Pat McFerron
Pat McFerron of Cole Hargrave Snodgrass and Associations conducted a poll of 300 executives in Kansas revealing 49% think business taxes are too high and 77% want spending cuts before tax hikes to balance the state budget. (Screenshot of Kansas Chamber news conference/Kansas Reflector)

Cole Hargrave Snodgrass and Associates, or CHS, performed the Kansas Chamber’s poll of 300 Kansas business leaders. CHS president Pat McFerron said business leaders expressed optimism about hiring in 2021.

“Still, there continues to be apprehensions about the quality of the workforce,” McFerron said. “Fifty-seven percent are concerned about finding employees with soft skills while 25% worry about identifying employees with technical skills their companies need.”

In the poll, 52% of executives said lower business taxes were important to profitability. Sixty-three percent believe lowering taxes helped the economy, while 77% said the state should reduce spending rather than boost taxes to balance the budget. Forty-nine percent of business leaders said companies paid too much in taxes, the survey said, while 5% believe higher taxes would be appropriate.

Three-fourths of the poll’s participants said more state tax dollars should be earmarked for K-12 classroom activities as opposed to expenditures on administration or other areas not directly tied to the classroom experience.