Governor's Budget Amendments Governor's Budget Amendment #1 (includes three budget balancing options) is available here. The GBAs were adopted by both the House Appropriations Committee and the Senate Ways and Means Committee today.  Neither committee debated the three options for balancing the budget proposed by the Governor. The committee met jointly this morning to hear the report of the Consensus Revenue Estimating Group and to hear the Governor's Budget Amendments.  The committees met separately this afternoon and reviewed the Omnibus Budget Items (linked here) - budget issues that remain unresolved, and the Consensus Caseloads Report (linked here).  The full Legislature returns next Wednesday, April 27, to develop their final budget recommendations and vote on the many bills that remain in conference committees. Governor's Budget Amendment highlights - $3,855,852 million to continue the Osawatomie State Hospital Diversion Program - providing private beds to supplement the reduced beds at OSH.  The Governor had provided a GBA in 2015 of $3.45 million, which did not last the full year and had to be supplemented within the agency.  (KVC Prairie Ridge program) $1,298,537 to increase pay at Osawatomie State Hospital in FY 17 - 10% increase to Registered Nurses and 12% increase to Mental Health Technicians as per salary study. $450,000 to increase pay at Larned State Hospital in FY 17 - 2.5% to Mental Health Technicians as per salary study.  (Have previously added funds for nurses and clinical staff) $9,503,982 million to pay for lost federal Medicare and DSH payments at OSH due to CMS decertification and costs of recertification - ($5,905,488) offset leaves $3,598,494.  Expect to spend $2.3 m on recertification and staffing plus $1.2 m on consultant contract.  $1,896,018 million to replace funds from withheld federal DSH payments at LSH due to incorrect former reimbursements that included SPTP patients $1.1 million to offer raises to Social Workers at DCF if they switch from classified to unclassified personnel multiple  assumes $10.6 million savings projected from passage of SB 341 Medicaid Step Therapy - bill has not passed assumes passage of KBA bill that has been hung up on STAR bond language. lapses savings from closing YRC beds from the passage of SB 367 Juvenile Justice Reform - research and revisors staff does not agree with agency about how to implement "lockbox" provisions to save those funds for the program.  House Appropriations Committee took action to preserve those funds for KDOC, but Senate did not act. Neither committee took action on the Governor's recommended budget balancing options. *****************************************************************************

Governor's Budget Balancing Options:  (From the GBA memo) In order to balance the FY 2016 and FY 2017 budgets, I offer the following three choices to the 2016 Legislature:   Option One Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017.  The Governor would also carry forward into FY 2017 the 3.0 percent reduction made to Universities in FY 2016, which would be $17.7 million in reduced expenditures.  Legislative Approval Required  In option one; the state could securitize future tobacco settlement payments in excess of $42.0 million for an estimated one-time revenue infusion of approximately $158.0 million in FY 2017. Children’s programs currently financed through the Children’s Initiatives Fund would continue to receive funding of $42.0 million per year. Legislative approval to securitize future tobacco settlement payments would be provided to the Governor through a budget proviso.  Option Two Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017.  The Governor would also carry forward into FY 2017 the 3.0 percent reduction made to Universities in FY 2016, which would be $17.7 million in reduced expenditures.  The Governor would also utilize the special allotment authority to reduce expenditures or transfer $25.0 million in targeted efficiency savings.  Legislative Approval Required  In option two, the FY 2016 fourth quarter KPERS payment would be delayed, as provided for in 2016 House Substitute for SB 161, but repayment would not be made until FY 2018. Legislative approval to reduce KPERS contributions and delay repayments would be provided to the Governor through a budget proviso.  Option Three Governor’s Allotment Authority The Governor would use his special allotment authority to reduce most of the remaining sales tax going into the State Highway Fund. This would transfer $70.0 million to the State General Fund in FY 2016 and $115.0 million in FY 2017.  Legislative Approval Required  In option three, three to five percent expenditure reductions would be made to most state agencies for FY 2017 and would total $139.3 million. Following is a summary of the reductions that would be made to state agencies:  3.0 percent reduction  Department for Aging & Disability Services (excludes HCBS appropriation) – $11,001,850  Department of Agriculture – $296,831  Department of Administration (excludes debt service) – $282,047  Fort Hays State University – $1,016,467  Office of the Governor – $201,225  Kansas Guardianship Program – $34,389  Health & Environment—Environment – $133,228  Historical Society – $130,885  Department of Labor – $9,363  KSU—Veterinary Medical Center – $452,898  Kansas State University—ESARP – $1,422,673  Emporia State University – $948,769  Pittsburg State University – $1,085,716  State Library – $120,751  Board of Regents (excludes debt service) – $5,930,603  Court of Tax Appeals – $23,837  Department for Children & Families (excludes caseloads) – $4,225,999  Department of Education* – $ 57,262,285    * The Department of Education reduction excludes KPERS, bond/interest aid, LOB aid and Capital Outlay aid.  University of Kansas Medical Center – $3,365,797  Kansas Water Office – $34,637  5.0 percent reduction  Health & Environment—Health – $35,636,050  Kansas State University – $5,122,604  University of Kansas (excludes debt service) – $6,814,504  Wichita State University – $3,728,210

The 2016 Kansas Legislative Session is pushing toward First Adjournment March 23 or 24. Osawatomie State Hospital has received two informational hearings and plenty of legislative attention - focusing on CMS disqualifying the hospital from Medicare reimbursement.   Two bills carry Senate amendments that will prevent the State from privatizing state mental health hospitals without specific legislative approval.  A similar proviso was included in the first budget bill - already signed by the Governor.

The Jason Flatts Act for suicide prevention training in schools (SB 323) has passed the Senate and House and is headed for conference committee.  See Testimony below.  This bill was amended by the House to include the provisions of a bill to implement seclusion and restraint policies for schools.

Legislation to impose step therapy for Medicaid prescriptions (SB 341) has strong opposition from various health advocacy organizations, but was passed by the Senate 23 - 16 in February.  The House Health and Human Services Committee held a hearing but took no further action - the bill is considered a vehicle for Medicaid Expansion and House leadership is avoiding such bills.  Advocates expect the bill to be inserted into a conference committee bill because it carries a heavy fiscal note - projecting $10.6 million savings.  

Mental Health Advocacy Day attracted around 300 participants on March 15 and featured a public rally with speeches from Senator Caryn Tyson, Rep. Kathy Wolfe-Moore, and Interim KDADS Secretary Tim Keck.  The weather turned cold and windy, but participants were rewarded with powerful poetry by Sherrie Purpose Hall and Nick Givechi.  Participants were recognized in the Senate by Senator David Haley.  The House Social Services Budget Committee held an informational hearing on the report of the Adult Continuum of Care Committeee that was convened by KDADS last summer.  The hearing was a robust and positive give and take about the shortcomings of the current mental health system and how to improve the continuum.

The Legislature will be on spring break through April until the veto session April 27.

See KMHC testimony below:

2016 Testimony in Support of SB 447 Behavioral Health Tax Checkoff

2016 Testimony for HSSBC Informational Hearing on the Adult Continuum of Care Committee

2016 Testimony in Support of SB 232 Jason Flatt Act for Suicide Prevention Training

2016 Testimony Opposed to SB 341 Medicaid Step Therapy Senate Public Health Committee

2016 Testimony to House Social Services Budget Committee on the Medicaid Mental Health Medication Advisory Committee

Report included dozens of recommendations

By Megan Hart | March 15, 2016

http://www.khi.org/news/article/mental-health-rally-highlights-continuum-of-care-reform 

Photo by Andy MarsoRep. Kathy Wolfe Moore, a Democrat from Kansas City, said the state needs to remove the stigma from mental illness and treat it like physical conditions.

If he had a magic wand, Bill Persinger would turn back time to May 2009.

Failing that, however, he would increase resources for crisis care and substance abuse treatment, said Persinger, who is CEO of Valeo Behavioral Health Care.

Photo by Dave RanneyRep. Will Carpenter, a Republican from El Dorado, said he hopes the Social Services Budget committee will have a proposal to improve the state's mental health system by the end of this session.

View larger photo

Rep. Will Carpenter, chair of the House Social Services Budget committee, asked Persinger and two other people who testified before the committee on Tuesday afternoon what they would do to fix the state’s mental health system if given a magic wand as a way of narrowing down priorities. The Adult Continuum of Care Committee had produced a report with dozens of recommendations, but confronting them all at once would be impossible given limited resources, Carpenter said.

Persinger said he chose May 2009 because the Community Mental Health Centers were relatively well-funded and could see people needing help within a reasonable time. Now, the centers struggle to find providers, and the state as a whole lacks resources to assist people who have mental illnesses with finding transportation, housing and jobs, he said.

“I can find a psychiatrist. I can’t pay for them. They don’t earn back enough in fees,” he said. “The issue isn’t the lack of available people. It’s about finding them and getting them to stay and paying them enough. There a lot of other, more attractive places to go” than Kansas.

Rick Cagan, executive director of the National Alliance on Mental Illness Kansas, said the state needs to improve its inpatient care. It also should explore peer-run respite facilities, which have been successful in other states, he said. Respite facilities are run by people who also experience mental illness, and can provide a low-stress environment for people who are dealing with a flare-up in their symptoms but who don’t need hospital care.

“I think (respite facilities) would be a wonderful return on investment,” he said. “More public-private partnerships are what we’re shooting for so individuals can be hospitalized, if necessary, closer to home.”

Amy Campbell, director of the Kansas Mental Health Coalition, said the state needs to fund wrap-around services, because they decrease the likelihood a person will end up in jail or the state hospital, and offer incentives for people to go into mental health careers. She suggested the state also should continue investing in short-term crisis facilities like RSI, a small stabilization center operating in the former Rainbow Mental Health Facility in Kansas City.

“They don’t have as many repeat customers coming back in crisis” after a stay at RSI, she said. “It’s sort of the low-hanging fruit, something you know that works.”

Campbell objected strongly, however, when Kelly Ludlum, deputy secretary of the Kansas Department for Aging and Disability Services, said the department expects the crisis facilities to eventually become at least partially financially independent. Most people seeking crisis services don’t have Medicaid or private insurance, meaning the facility doesn’t have any way to collect payment for services provided to them, Campbell said.

“If the state is not going to have an ongoing role in the existence of these entities, then just forget it. These are not profit-making facilities,” she said. “I’m not saying the state has to pay all the costs. The state has to help that (type of facility) survive.”

Photo by Andy MarsoTim Keck, the interim secretary of the Kansas Department for Aging and Disability Services, speaks at a mental health rally Tuesday. Keck told the crowd that Rainbow Mental Health Facility in Kansas City, Kansas, should be a model for continuum of care reforms.

View larger photo

About 200 people attended a rally hosted by mental health advocates earlier in the day. At the rally, KDADS secretary Tim Keck said the Rainbow transition could serve as a model for other communities. He also said the state is working to improve staffing at its two struggling psychiatric hospitals and he expects the one in Osawatomie to be recertified by the federal government soon.

But Keck acknowledged that challenges remain.

“Our current system is stretched beyond its capacity,” Keck said.

Starting toward solutions

Carpenter said he intends for the committee to consider the advocates’ priorities and the other priorities from the Continuum of Care report as soon as its schedule allows. Its task will be to build a consensus that it can promote in a difficult budget year, he said.

“I want to come out of here with a statement from this committee on mental health and where we can head that we can sell to the rest of our legislative friends,” he said.

The state already is spending to treat people in the psychiatric hospitals and to house them in jail, Carpenter said, so the committee needs to come up with a consensus on how the state could save money long-term by investing in other areas of the mental health system. Most people are affected either directly or indirectly by mental health and substance abuse disorders, making it an issue the state needs to address now, he said.

“This problem is there, it’s real and it’s being lived throughout our state,” he said. “I know we don’t have the resources, but we can’t just sit here and throw up our hands and say ‘We don’t have the resources.’”

The issue isn’t the lack of available people. It’s about finding them and getting them to stay and paying them enough."

- Bill Persinger, CEO of Valeo Behavioral Health Care

Cagan said he wasn’t under any illusions the issues could be fixed quickly. The state needs a 10-year plan to begin reshaping its mental health system, he said, and may need to look even further into the future.

“It’s a huge amount of gaps in our system. We can’t do them all at once. But we need a plan,” he said.

Persinger said he sees one clear advantage in trying to improve mental health care in Kansas now: people who weren’t interested before are paying attention.

“For one of the first times in my career, people want to talk about mental health other than when it affects their family,” he said.

Checkoff could fund mental health programs

The Senate Assessment and Taxation committee heard about one option to raise more funds for mental health programs on Tuesday, though it almost certainly would fall far short of what would be needed for system-wide changes.

Senate Bill 447 would allow people to donate money while filing their state tax return to a fund for grants to raise awareness and reduce stigma related to mental illness and substance abuse. The Department of Revenue would deposit money into a specific fund, which the Kansas Department for Aging and Disability Services could use to fund the grants.

Kansas currently allows people to choose from several funds on their tax return, including Meals on Wheels, habitat preservation for threatened species and breast cancer research.

Kelly Ludlum, deputy secretary of the Kansas Department for Aging and Disability Services, said donated funds would be used for grants. The department would have to see how much money was donated and what proposals from community groups would maximize those funds before deciding how to distribute it, she said.

“Generally, prevention offers more bang for the buck,” she said.

One particular area of need is suicide prevention, Ludlum said. KDADS currently doesn’t fund any programs focused on the signs a person is contemplating suicide or how to get help. In 2014, 454 people in Kansas died by suicide, making it the 10th-leading cause of death overall and the second-leading cause of death for people aged 15 to 24.

Colin Thomasset, associate director for the Association of Community Mental Health Centers of Kansas, said the association supports the bill, but would like to see it cover grants for treatment.

“We feel that this might be an oversight in the bill, as allowable programs involve awareness, prevention and stigma reduction – all very worthy aspects that can use more money,” he said. “However, it is also important to note that investing in community-based mental health services directly lowers healthcare costs.”

Campbell agreed that treatment should be added to the list of possible uses of the grant funds. Implementing the checkoff would be a positive step, she said, but it won’t solve the state mental health system’s problems on its own.

“The legislature should commit to close gaps in the continuum of care, and this could be a starting place,” she said. “447 won’t solve all of our problems in the mental health system, but it would be one more tool in the toolbox.”

The nonprofit KHI News Service is an editorially independent initiative of the Kansas Health Institute and a partner in the Heartland Health Monitor reporting collaboration. All stories and photos may be republished at no cost with proper attribution and a link back to KHI.org when a story is reposted online.

- See more at: http://www.khi.org/news/article/mental-health-rally-highlights-continuum-of-care-reform#sthash.QhRXnhCn.dpuf

By Lindsay Sax  | 

Posted: Tue 1:02 PM, Mar 15, 2016

     

TOPEKA, Kan. (WIBW)- Mental health advocates from across the state convened at the Statehouse to raise awareness that support services are important to Kansas communities.

The Kansas Mental Health Coalition is sponsoring Tuesday’s event. It started with more than 350 members of the Kansas Mental Health Coalition, advocates, patients and supports at an advocacy rally on the south side of the Statehouse.

“Our biggest fears in the state of Kansas is that we will have continues erosion of the both outpatient and inpatient mental health services,” said Susan Crain Lewis, president, Kansas Mental Health Coalition.

Crain Lewis says that the cuts in mental health funding will leave patients needing help without care.

“When those services are not available those individuals that end up in crisis, they end up on our streets, they end up in our jails, they end up in our emergency rooms; none of the places are they getting treatment,” she said.

In the afternoon Crain Lewis says that an informational hearing on the Adult Continuum of Care Report will be held. She says it is a step in the right direction discussing what a robust, effective mental health delivery system looks like.

August 10, 2015      For more information, contact:
Angela de Rocha, Director of Communications
Kansas Department for Aging and Disability Services
785-806-7482

TOPEKA – Kansas Department of Health and Environment (KDHE) Secretary Dr. Susan Mosier and Kansas Department for Aging and Disability Services (KDADS) Secretary Kari Bruffett announced today a series of public forums to discuss integration of the state’s home- and community-based Medicaid waiver programs.

The forums are scheduled to be conducted in Topeka, Wichita, Kansas City, Coffeyville and Garden City. The agencies also plan to conduct one or more teleconference calls to discuss waiver integration, which will be announced at a later date.

“Our goal is to speak to Kansans receiving HCBS services to understand and address their frustrations with the current waiver system,” Dr. Mosier said. “These forums will provide Kansans who are on HCBS waivers and their families the opportunity to give input about how the waivers work for them.”

KDADS administers seven individual home- and community-based services Medicaid waivers for individuals with physical disabilities, developmental disabilities, traumatic brain injury and autism, those with a need for technology assistance, youth with a serious emotional disturbance and the frail elderly. There are a specific list of services provide under each individual waiver.

“A new 1115 waiver would allow us to establish an integrated set of services that would be available to all waiver recipients regardless of the waiver in which they are enrolled,” Secretary Bruffett said. “We want to move toward a system that no longer defines individuals by a specific disability, but rather by their needs and capabilities. CMS approval of a new Kansas 1115 Medicaid waiver would give us the ability to provide the right services to individuals regardless of their disability definition.”

Participants may RSVP for these public meetings at the following link:

http://www.kdads.ks.gov/commissions/csp/home-community-based-services-(hcbs)/hcbs-current-news

Details of the forums are as follows:

Tuesday, August 25
Topeka Capitol Plaza Hotel
1717 SW Topeka Blvd.
Topeka, KS
10:30 am-12 pm
2-3:30 pm
5:30-7 pm

Wednesday, August 26
Kansas City Hilton Garden Inn
520 Minnesota Ave.
Kansas City, KS
10-11:30 am
2-3:30 pm
5:30-7 pm

Wednesday, August 26
Wichita Marriott
9100 Corporate Hills Drive
Wichita, KS
10-11:30 am
2-3:30 pm
5:30-7 pm

Thursday, August 27
Coffeyville Sleep Inn & Suite
202 W 11^th Street
Coffeyville, KS
10-11:30 am
2-3:30 pm

Thursday, August 27
Garden City Clarion Inn
1911 E Kansas Ave
Garden City, KS
10-11:30 am
2-3:30 pm

If a person with a disability needs a reasonable accommodation to participate in the call they should contact Laura Leistra at 785.296.4980 or by email atLaura.Leistra@kdads.ks.gov by Friday, August 21.

The Adult Continuum of Care Committee Report puts a finer point on the issue that many Kansas families already know – the Kansas mental health system is scrambling to meet the needs of Kansans with mental illness and substance use disorders.  The Kansas Mental Health Coalition endorses the report, and hopes the strategies suggested in the report will help the Department on Aging and Disability Services to build on its recent work  – bringing together Kansas City area stakeholders to form Rainbow Services Inc. and providing grant funds to Sedgwick County to create crisis services there.  There is more to be done.

This summer, the further reduction of state mental health hospital beds has made the gaps in our continuum of care obvious.  The State and the community mental health centers have partnered to respond to the growing need, but financial and staff resources are in short supply.  The lack of appropriate, more intensive treatment options at the community level for people needing a higher level of treatment or a step down from hospitalization has been a barrier.  Where you live determines your opportunities for recovery, and even in the Kansas City region it is uncertain whether the model crisis and referral program at Rainbow is sustainable.  As stated in the report:  “An underfunded system is challenged to meet the basic needs of people with severe mental illness, let alone develop evidenced based practices, enhance existing services, or create needed alternatives of care.”

We hope the Report will stimulate broader support for further community level investments and strategies targeted to improving the continuum.  The Report advocates expanding access to crisis services, residential programs, housing and peer programs, in addition to boosting community based outpatient programs.  The Committee also encourages improved transitions between facilities and communities, with treatment provided while people await admissions and after discharge. 

In the short term, Kansas should apply for federal resources such as the Excellence in Mental Health Act, endorse change to the federal IMD Exclusion that prevents Medicaid reimbursement for some residential psychiatric treatment, and re-open the 60 beds at Osawatomie State Hospital as soon as practically possible.  (The beds are currently unavailable while safety repairs are made.)

The Kansas Mental Health Coalition will review the report at its August meeting and is prepared to advocate for action to expand access to quality treatment for more Kansans.   One thing is certain, when we do not treat persons with mental illness, communities pay the price.  Individuals pay the price. People are all too often caught in an unending cycle of repeated hospitalizations or incarceration and the costs are more than fiscal, they include broken families, broken people and the loss of life itself.  

The Adult Continuum of Care Committee met for 9 weeks this summer to develop a report advising Secretary Kari Bruffett, Kansas Department on Aging and Disability Services, of recommended strategies to improve the behavioral health continuum.  The Committee was created by the Secretary as the agency faced a remodeling project ordered by CMS at the Osawatomie State Hospital that takes 60 hospital beds out of operation for the summer.

Read the Report.

Read the Adult Continuum of Care Committee Charter.

June 12 2015 – Friday – marked the end of the 2015 Legislative Session.  It was the longest legislative session in Kansas history at 113 days. The Legislature will return on Friday, June 26 for sine die – the procedural “last day”.  Legislators will have to take a vote on Friday, to correct an inconsistency in the final tax legislation.

Most of those who live and work daily with the Legislature would mark this session as a painful one.  The choices that were left on the table at the end were not what anyone would have wanted – passing the largest tax increase in Kansas history, when measured in terms of overall revenue at $385 million.   And, although Governor Brownback is painting the final tax legislation as consistent with the objectives of the “path to zero” income tax experiment, the Republicans who dominate the Kansas Legislature’s majority are hoping mightily that their efforts will have been enough to balance the budget for at least two years.  Some advisors have indicated that a least two elements of the revenue package are not reliable, and if the taxation of LLC guaranteed payments does not raise $23.7 m and the tax amnesty plan does not raise $30 m, legislators may have to raise taxes again next year.  That is something they will need to avoid, and hope that the voters won’t remember this session when they cast their votes in November 2016.

THE BUDGET

SB 112 is the mega-budget bill that had been agreed – for the most part – early in May by the conference committee and was ultimately adopted.  Read the conference committee report description here.  It was further amended by the budget conference committee to include most of the Governor’s Budget Amendments and a few omnibus adjustments.   

For behavioral health, the Governor’s budget cuts to state general funds stand – resulting in reduced contracts for a variety of programs including Keys for Networking, NAMI, Kansas Family Partnership, CROs, CAC and others.  On the other hand, there is the revolving loan fund – investing the income from the sale of Rainbow Hospital building into crisis/hospital diversion services, a $500,000 addition to OSH, $3.4 m supplement to care for people diverted from OSH during the renovations this summer, and the continuation of the Governor’s mental health initiative grants from last year.

It was a risky plan – to hold over the mega-budget agreement until the veto session and attempt to push it through without further major adjustments.  The Governor and administration officials wanted to keep the budget as agreed during the regular session and avoid deeper cuts into the agencies.  The Governor had promised K-12 and Regents Universities that no further reductions would be made. But for many legislators, the 4% state general fund cuts, the transfers of fee fund balances and reductions to existing programs already contained in the budget were forgotten in the months since the regular session.  Many were pushing for deeper reductions to state spending rather than voting for any kind of tax increases.   Estimates varied, but an additional 6.2% across the board state general fund cut was promoted as a way to close the $406 million gap and avoid tax increases altogether.  “Kansas doesn’t have a revenue problem, we have a spending problem,” was the quote often heard as the House and Senate each debated and rejected multiple variations of HB 2109 and SB 270 – the tax bills.

The threat level was increased in the first week of June, as Shawn Sullivan, Budget Director, warned legislators that the state might have to lay off thousands of state employees if the budget bill was not adopted soon.  The House moved forward and adopted H Sub for SB 112 with no debate on June 3.   The Senate, however, would not debate the budget bill until it had approved a revenue package.  Saturday, June 6, the House and Senate quickly adopted a brief change to Kansas statute to prevent state employee furloughs.  The temporary fix in SB 11 classifies all state employees as “essential” for the balance of the month of June.  This prevents the furlough of 24,000 state employees deemed “nonessential” who received notices on Friday.  Read KHI article.

Sunday, June 7, after passing the conference committee report on S Sub for HB 2109, the revenue package – raising $406 million revenue in this version – the Senate adopted H Sub for SB 112, the major budget bill of the 2015 legislative session.  Although many hoped the Senate action would lead to House approval the next day – and adjournment, it would be five more days (and two more very late nights) before the veto session would end.

To form the state budget for FY 15, FY 16 and FY 17, in addition to H Sub for SB 112, the Legislature passed a rescission bill (further reducing the FY 15 budget early in the session), a Judiciary budget bill, and the K-12 block grant funding bill. 

THE REVENUE PACKAGE

The final tax package is a combination of S Sub for HB 2109 as adopted by the Senate on June 7 and the tax trailer bill H Sub for SB 270 – which was written to amend HB 2109 in order to gain passage in the House.   A third piece of the puzzle is the modified fee plan for managed care organizations proposed by the Governor’s original budget, which brings in $47.8 million by drawing federal funds into the Medicaid program.

Multiple combinations of revenue ideas were put forward, debated and ultimately voted up or down in the last 23 days of the session.  In some ways, the development of the revenue package was one of the most democratic processes we have seen in the Legislature for some time.  The Senate debated its tax bill for several days, with multiple amendments considered, before putting HB 2109 into conference committee.  Once in conference, it took five conference committee reports to find a plan that was not rejected by one chamber or the other.  This meant multiple floor debates in each chamber discussing the options.

The final tax package includes:

• -          State Sales Tax Increase from 6.15% to 6.5%  ($164 m)  (H 2109 as passed by the Senate increased to 6.55%)
• -          Increases cigarette taxes 50 cents per pack ($40 m)
• -          Amends the 2012 tax exemption for LLCs to tax “guaranteed payments” ($23.7 m)
• -          Reduces itemized income tax deductions ($97 m)
• -          Creates tax amnesty program for delinquent tax payments ($30 m)
• -          Freezes income tax rates that are scheduled to decrease ($26.4 m)
• -          Raises $384.7 million for FY 16 (H 2109 as passed by the Senate would have raised $406 m)
• -          Requires the Governor to cut an additional $50 million to reach an ending balance of $86 million for FY 16   (We do not know where these cuts will occur, although a significant portion is likely to come from IT.)
• -          Eliminates income taxes for the state’s 388,000 lowest income tax paying citizens in FY 17
• -          Sets a 2.5% limit for revenue growth – triggering income tax rate reductions whenever revenue exceeds the limit (H 2109 as passed by the Senate included 3% limit)
• -          Maintains the current food sales tax rebate (H 2109 as passed by the Senate repealed the rebate, but reduced the sales tax rate on food to 4.95%.   Legislators hope that reducing food sales tax rates can be achieved in a future session.)

When the Senate approved S Sub for HB 2109 on June 7, it included two very controversial sections.  First, the sunset of numerous sales tax exemption statutes by 2018 – with a committee created to review and recommend whether or not those exemptions should remain in law.   This provision caused great concern for hospitals, non-profits and others.   The section was dropped from the final package, but the Legislature plans to spend time next session reviewing sales tax exemptions for possible repeal.  This exercise has been done in the past, without successfully reforming the exemption statutes in the way that proponents would like to see.

Second, a property tax lid provision that would require a public vote whenever local governments raised property taxes beyond a certain rate.   The final package loosens the restrictions, allowing for increases based on rate of inflation, infrastructure, road construction, bonds and interest, state and federal mandates, etc.

At the end, there was a joint meeting of House and Senate Republicans where the Governor’s staff threatened terrible budget cuts within 3 days.  Legislative leaders urged the caucus to make the very difficult votes needed to end the session.   Democrats and moderate Republicans held firm, unwilling to go on the record voting for any tax increases – most stating that they would not help to solve the budget problems they believe were caused by the income tax cuts of 2012 and 2013.  This meant that the Republican conservatives were then fragmented into smaller contingents, mostly including what could be called the center right and the ultra-conservatives.  It was these groups that had to forge a compromise to adopt a revenue plan in order to balance the budget.  But for some to move away from their anti-taxation principles was extremely difficult, and there were rifts created and relationships marred.   The lessons of the 2010 and 2012 elections were quite clear – with groups such as the Kansas Chamber, Americans for Prosperity, and the Kansas Policy Institute raining postcards into legislative races against those deemed as “tax and spend” politicians.  It will be interesting to see how many conservative Republicans will have to pay a similar price in 2016 for voting for the 2015 tax increases – being touted as the largest tax increase in Kansas history.

Read KHI Article: Why the Legislature is Struggling to Pass a Tax Plan.

The Kansas Dept. of Health and Environment will soon convene an advisory committee to create recommendations for managing behavioral health medications in Medicaid.  The committee is created by HB 2149, signed by Governor Brownback on May 15.  The conference committee report also includes other Medicaid policy provisions.  Read a description of the bill here.  

 HB 2149 was originally a bill to provide for Medicaid coverage of donor breast milk.  The Senate added the provisions of SB 181 - creating an expedited process for newly introduced prescription medications.  The Senate also inserted a new plan for instituting management of mental health medications in Medicaid through a specialized advisory committee.  This advisory committee was proposed after SB 123 was defeated by the Senate.  Senators agreed with advocates that SB 123 went too far by deleting the statutes that exempt mental health medications from prior authorizations or other drug management restrictions.  

The bill allows prior authorization or other restrictions on medications used to treat mental illness to be imposed on Medicaid recipients for medications subject to guidelines developed by the Board in accordance with provisions of the bill; establishes instances not to be construed as restrictions; provides for the development of guidelines; establishes requirements for Board review of medications used to treat mental illness available for use before and after July 1, 2015; and creates a Mental Health Medication Advisory Committee (Committee), outlining Committee membership and appointments, meeting frequency, and member compensation.   

Advocates view the new provisions as a better option than SB 123 - which would have simply deleted the statutory exemption from Medicaid management for MH drugs.  SB 123 was defeated by the Senate.   Read more about this issue.

The section of the bill regarding approval of new prescription medications (SB 181) amends the procedures regarding restrictions of patients’ access to any new prescription-only drug under the Kansas Medicaid Program and would establish meeting requirements for the Medicaid Drug Utilization Review Board (Board). 

As posted at www.kshouserepublicans.com Friday, June 5th, 2015 @ 9:08AM

TOPEKA–House leaders and House Republican legislators on Friday implored the Kansas Senate to pass the conference committee report on the state budget without delay to prevent state government furloughs.

The House passed the budget on Wednesday. Without Senate approval and a signature from Governor Brownback, non-essential state government workers in the executive branch will be furloughed beginning Monday.

“There is no time to waste. Kansans expect state government to be there for them when they need it, and state workers who provide valuable services should not have to endure furloughs because the Senate stalled on taking up the budget,” said House Speaker Ray Merrick (R-Stilwell). “While some parts of this process were unavoidably delayed, this budget plan was constructed over the course of months and the time to act is now.”

Meanwhile, tax negotiations in order to fill the roughly $348 million hole in the budget the House approved are ongoing.

“The unfortunate reality is that revenues will be raised this year because we made a commitment to K-12 schools not to cut their funding and we kept that promise with the budget we passed,” said House Majority Leader Jene Vickrey (R-Louisburg). “We scoured the other half of the budget for savings and we implemented them. Now we are going to find a tax compromise and get it passed.”

The budget passed by the House represents a 2.3 percent increase in FY 16 over the current fiscal year, and a .47 percent increase in FY 17. The slight increases represent funding for K-12 education, KPERS, and social services caseloads. The budget keeps Regents’ funding steady, and also includes a tuition freeze limited to the 2 percent over the rate of inflation. It also includes $3 million to fund an efficiency study that will identify further savings in state government to ensure the most effective use of taxpayer dollars. It imposes a 25 percent reduction on executive branch travel, as well as reduced subscriptions and advertising expenditures for agencies, in addition to other efficiencies.

“I applaud Senate President Susan Wagle in her efforts to push this process forward, and ask Senate Majority Leader Bruce to join her in the movement to debate and pass the budget we sent them,” said House Speaker Pro Tem Peggy Mast (R-Emporia).

Representatives who voted yes on the budget conference committee report and join with leadership in calling on the Senate to pass it as soon as possible include:

Rep. Bud Estes (R-Dodge City); Rep. Mike Houser (R-Columbus); Rep. James Todd (R-Overland Park); Rep. Jack Thimesch (R-Cunningham); Rep Gene Suellentrop (R-Wichita); Rep. Keith Esau (R-Olathe); Rep Lane Hemsley (R-Topeka); Rep. Becky Hutchins (R-Holton); Rep. Steven Johnson (R-Assaria); John Ewy (R-Jetmore); Rep. Sharon Schwartz (R-Washington); Rep. Kyle Hoffman (R-Coldwater); Rep. Mark Hutton (R-Wichita); Rep. Dan Hawkins (R-Wichita); Rep. Ron Highland (R-Wamego); Rep. Kent Thompson (R-Iola); Rep. Randy Powell (R-Olathe); Rep. Steve Alford (R-Ulysses); Rep. Steve Anthimides (R-Wichita); Rep. John Barker (R-Abilene); Rep. Tony Barton (R-Leavenworth); Rep. Rick Billinger (R-Goodland); Rep. Troy Waymaster (R-Bunker Hill); Rep. Sue Boldra (R-Hays); Rep. Kristey Williams (R-Augusta); Rep. John Whitmer (R-Wichita); Rep. Chuck Smith (R-Pittsburg); Rep. Joe Seiwert (R-Pretty Prairie); Rep. Scott Schwab (R-Olathe); Rep. Steve Brunk (R-Wichita); Rep. Travis Couture-Lovelady (R-Palco); Rep. Larry Campbell (R-Olathe); Rep. Blake Carpenter (R-Derby); Rep. Will Carpenter (R-El Dorado); Rep. Susan Concannon(R-Beloit); Rep. Ken Corbet (R-Topeka); Rep. Erin Davis (R-Olathe); Rep. Willie Dove (R-Bonner Springs); Rep. Dick Jones (R-Topeka); Rep. Jim Kelly (R-Independence); Rep. Jerry Lunn (R-Overland Park); Rep. Charles Macheers (R-Shawnee); Rep. Les Mason (R-McPherson); Rep. Les Osterman (R-Wichita); Rep. Jan Pauls (R-Hutchinson); Rep. Richard Proehl (R-Parsons); Rep. Marty Read (R-Mound City); Rep. Marc Rhoades (Newton); Rep. Ron Ryckman Sr. (R-Meade); Don Schroeder (R-Inman); Dennis Hedke (R-Wichita).