Kelly uses veto authority to reject infectious disease, Medicaid and election bills

Governor’s arguments hinge on public health, transparency and separation of powers

by Tim Carpenter and Noah Taborda, Kansas Reflector

Topeka — Gov. Laura Kelly signed a bill allowing autonomous vehicles to operate on Kansas roads and vetoed legislation restricting public health officials’ response to all infectious disease outbreaks, a mandate imposing a no-bid contract for Medicaid services and limitations on the executive branch’s enforcement of election law.

Gov. Kelly began by vetoing Senate Bill 34, which was adopted during a late-night session of the Legislature and targeted mask mandates, quarantine orders and vaccination requirements that some Republican lawmakers believed undermined individual liberties during the COVID-19 pandemic. It wasn’t passed by two-thirds majorities in the House and Senate, which would be the threshold required to override a veto.

The Democratic governor said she opposed vaccine passports and COVID-19 vaccination mandates, but couldn’t accept the “one-size-fits-all approach” for all infectious diseases erupting in Kansas. For example, she said, the bill would make it more difficult for the Kansas agricultural sector to fight the highly pathogenic avian influenza.

“As a result,” she said, “this legislation creates significant safety concerns for workers, for employers, for the economy and for all Kansans. Schools could not adequately respond to an outbreak of measles in a classroom, and manufacturing facilities could not respond to a tuberculosis outbreak.”

Gov. Kelly vetoed House Bill 2387 that required her administration to halt development of an update to the state’s $3.9 billion Medicaid contracts with managed care companies coordinating services to elderly and disabled Kansans. She said a transparent, competitive bidding process was key to making certain contracts with the MCO companies provided the most value to Kansas taxpayers.

During the 2022 legislative session, Republicans sought to delay reworking KanCare contracts until after the November election in hopes a Republican was elected governor. GOP lawmakers who pushed the bill refused to identify individuals, companies or organizations in support of the delay, preferring to keep that information confidential. In addition, there was no guarantee federal regulators would approve of Kansas extending contracts into 2023.

“The language included in HB 2387 regarding the current MCO contracts is a product of closed-door dealings to push legislation that did not have a single proponent,” Gov. Kelly said. “There is little question that this effort is fraught with legal issues and jeopardizes our Medicaid program.”

This bill wasn’t approved by the House and Senate with the two-thirds margin indicating a veto override would be a certainty.

“We must favor transparency and fair competition over attempts to re-insert corruption into the state contracting process,” the governor said.

Gov. Kelly is seeking re-election in November, and her likely GOP opponent is Attorney General Derek Schmidt.

In addition, Gov. Kelly rejected House Bill 2252 that forbid the executive branch, including the governor, secretary of state or attorney general, from entering into agreements to enforce election law. She said the bill was an overreach into the executive branch’s constitutional duties, but this bill was supported by two-thirds majorities in the House and Senate.

“If passed, it would also lead to costly litigation at the expense of Kansas taxpayers,” she said.

Rep. Tatum Lee, a Ness City Republican, objected to the veto of the election bill and the COVID-19 legislation in a Facebook post shortly after the veto announcement. She called on House and Senate leadership to help override the vetoes when the Legislature returns to Topeka later this month.

“The war is real you all. We are fighting for the soul of our nation,” Lee said . “Ryckman, Hawkins, Finch in the House and Masterson in the Senate. Do they have the courage to fight back? Do they have the courage to stand?”

Gov. Kelly said she signed Senate Bill 313 which provided for the use and regulation of autonomous motor vehicles and established the Autonomous Vehicle Advisory Committee.

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Kansas governor signs law legalizing sports betting

by Noah Taborda, Kansas Reflector

Topeka — After years of waiting, Kansans will soon be able to legally wager on sporting events under a new law signed Thursday by Gov. Laura Kelly.

Senate Bill 84 allows for the four state-owned casinos to use digital or in-person avenues to engage in the business of sports betting. The casinos, established under the control of the Kansas Lottery, can create and operate sportsbooks or partner with up to three online betting operators each to launch mobile platforms.

Native American tribes can negotiate a new or updated gaming compact regarding sports wagering.

“Legalizing sports betting will bring more revenue to our state and grow our economy,” Gov. Kelly said. “This is another mechanism that casinos, restaurants, and other entertainment venues can now utilize to attract Kansans to their establishments.”

The long-sought law gained approval 73 to 49 in the House, and, in the waning hours of the veto session, the Senate followed suit 21 to 13.

The Kansas Lottery and the Kansas Racing and Gaming Commission will share oversight of sports wagering. Betters on the casinos’ platforms will have to be physically located in Kansas to bet and must be 21 years or older.

There is some hope the system could be set up in time for the NFL and college football seasons, but its more likely to be place in January 2023.

Opponents of legalizing this form of gambling when the industry has contributed to 65,000 problem gamblers in Kansas. They argued the 10% state tax on sports gambling generating $1 million to $5 million in annual revenue was not enough financial incentive to legalize the activity and risk more trouble with this potential addiction.

The state-affiliated casinos stand to make $9 million to $45 million annually on sportsbooks.

“I was excited to pass sports wagering in Kansas, it’s something that Kansans are already doing, and it will bring additional tax revenue to our state to help with our needs,” said Sen. Rob Olson, an Olathe Republican and chairman of the Senate Federal and State Affairs Committee. “My constituents have pushed for this legislation for years, and now, the next time we have a significant sporting event in our state, Kansans will be able to bet on their hometown team.”

Eighty percent of state revenue from legal gambling on sports will go into a Kansas Department of Commerce fund to be used to support the establishment of a professional sports facility in Kansas, to lure a team such as the Kansas City Chiefs across state lines.

Casinos can enter agreements with professional sports franchises and place kiosks at a team’s facility to allow fans to place bets. They can also partner with 50 businesses and entities, one-fifth of which must be nonprofit organizations.

“We have heard from our constituents for years about the need for a sports wagering program here in Kansas, both for the value it will bring to their lives and for the revenues it will generate for our state,” said Sen. Oletha Faust-Goudeau, a Wichita Democrat and ranking member of the Senate Federal and State Affairs Committee. “I’m proud to have contributed to this package that will do just that and revitalize my community by creating jobs in Wichita.”

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Kelly goes shopping for sweet food sales tax repeal, settles for gradual reduction

Bill to be signed by governor ends 6.5% state tax on groceries in 2025

by Tim Carpenter, Kansas Reflector

Olathe — Gov. Laura Kelly planned a trip to a Hy-Vee store in Olathe to sign a bipartisan bill Wednesday phasing out over three years the state’s 6.5% sales tax on groceries, but would prefer the Legislature reconsider her proposal to promptly wipe out the state tax on groceries.

The Republican-led Legislature is sitting on a large budget surplus, but has been wary of wholesale deletion of the state’s tax on food on July 1 because it would be a political victory for the Democratic governor and the lost state revenue could haunt lawmakers in a recession. The governor has campaigned to “Axe the Food Tax,” which would be popular among consumers grappling with the highest inflation rate in decades.

Instead, the House and Senate overwhelmingly approved a bill that would culminate with repeal of the state’s food sales tax in 2025. The reform wouldn’t alter local sales tax on grocery purchases.

Under House Bill 2106, the state would lower the state’s sales tax on groceries to 4% on Jan. 1, 2023. It would slide to 2% by Jan. 1, 2024. The tax would be eliminated Jan. 1, 2025. The first phase of the rollback would cost the state $77 million. The second year revenue reduction would be an estimated $252 million, followed by $411 million in 2025.

Gov. Kelly referred to the Legislature’s alternative to her plan as a “good first step,” because it would deliver savings for every Kansan. She said strong state tax revenue collections in April demonstrated the Legislature could take up the issue May 23 when legislators return to Topeka.

House Majority Leader Dan Hawkins, R-Wichita, said an extreme downturn in the state’s economy had to be anticipated. The stair-step process of lowering the sales tax on groceries would allow the Legislature to remain nimble, he said.

The bill to be signed by Gov. Kelly defined food as standard groceries as well as bottled water, candy, dietary supplements, soft drinks and food sold through vending machines. It excluded alcoholic beverages, tobacco and prepared food offered by restaurants.

The unusually high statewide sales tax on groceries was raised to 6.5% in 2015. It was bumped up to help balance the budget because former Gov. Sam Brownback’s strategy of aggressively lowering the state’s income tax — his goal was to eliminate that tax in Kansas to create job growth — depleted the state treasury to an extent it was difficult state government to fulfill basic duties.

In 2019, Republicans in the Legislature passed two tax-cut bills vetoed by Gov. Kelly. GOP lawmakers attempted to induce Gov. Kelly to approve of the cuts by inserting a reduction in the state food sales tax. Gov. Kelly rejected the legislation, saying it would have been irresponsible to add financial instability to the budget.

Derek Schmidt, the attorney general and a candidate for governor in 2022, said the latest phased approach to the sales tax on groceries was Gov. Kelly’s “second chance to get it right.”

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