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Kansas Lawmakers Already Have Plans for COVID Relief Funds

GOP lawmakers want to use the estimated $1.6 billion that the state will receive from the federal relief package to fund $500 million in tax cuts, the unemployment insurance fund and teacher bonuses.

(TNS) — Early Saturday morning, Kansas' three Republican U.S. House members voted against the massive Biden administration pandemic relief package that will send an estimated $1.6 billion to the state.

Rep. Jake LaTurner, who represents the Topeka area, ripped the measure earlier this month as a "liberal state bailout." Freshman GOP Sen. Roger Marshall is one of the $1.9 trillion bill's most outspoken critics in the Senate, which will now take it up.

Their GOP counterparts in the Kansas Legislature? They've effectively spent much of it already.

Republican lawmakers are eyeing the relief dollars to fund $500 million in tax cuts, heavily targeted to multinational corporations and wealthy and retired Kansans. They also want the money for refunds to students relegated to online learning and replenishment of the state's unemployment insurance fund, which has been depleted by a record volume of legitimate and fraudulent claims. A House committee on Thursday recommended using the federal aid to fund $500 bonuses for teachers and grants for school security.

The state Senate approved the tax cut earlier this month after growing its size from a proposed $175 million to an estimated $500 million. Though the House has not yet picked up the measure, Senate Republicans have pitched federal dollars as a way to keep it alive.

Senate Majority Leader, Gene Sullentrop, a Wichita Republican, said immediately after the vote that the final size of the cut would be dependent on federal funding.

"We don't know the revenue stream that's going to ultimately come from the feds to provide relief in all areas of the budget," Sullentrop said.

The tax measure has been blasted by Senate Democrats, who said it would decimate the state budget by using a one-time federal stimulus to pay for on-going expenses. They called it a "bullet train to Brownbacksville," a reference to the deep tax cuts under Gov. Sam Brownback that created huge budget shortfalls for the state.

Gov. Laura Kelly said any stimulus funds need to be spent on one-time programs, not tax cuts or regular expenses.

"What we're getting from the stimulus will be one-time money so you don't pay for things that are going to be ongoing expenses," said Gov. Laura Kelly.

'Hold the Line on Spending'

Sen. J.R. Claeys, a Salina Republican and vice chair of the Senate Ways and Means committee, said he is most interested in preserving a provision of the tax cut that allows Kansans to itemize on state returns and not federal. Kansas returns are currently tethered to federal tax policy. Filers must accept standard deductions on both returns or itemize on both.

According to Richard Auxier, a Brookings Institute tax analyst and member of the governor's council on taxes, the decoupling would bring the largest benefit to wealthier Kansans. Many of them, he said, have stopped itemizing on their federal returns because of an increase in the standard deduction included in the Trump administration's 2017 tax bill. They would gain a larger refund if they could still itemize on state returns.

But using stimulus funds for such a change would create difficult decisions later as it reduces state tax revenue.

"If you got an infusion of federal dollars maybe you can find a way to make the math work this year but then you're going to get into next year and the year after that," Auxier said.

Claeys said he wasn't concerned about subsequent years. When federal dollars stopped coming it would simply be incumbent on the state to tighten its budget.

"We have to hold the line on spending," he said. "You can cut taxes and have fair tax policy without having federal dollars come pouring in for something."

Education and Unemployment

In the House, Republican lawmakers said they would opt instead to direct federal funds toward unemployment insurance, refunds for higher education and to help the state's ending balance.

Speaker of the House, Ron Ryckman, an Olathe Republican, said he anticipated the House would present its own version of the tax cut bill that would look closer to the $175 million the Senate originally proposed.

"What we're looking at is we have a major hole in our unemployment trust fund that was caused by the fraud that we're hoping that there's any stimulus funds that it can maybe help there," Ryckman said.

The Kansas Department of Labor estimates that $290 million in fraudulent claims were paid out last year. A non-partisan Legislative Post Audit put the figure at $600 million.

Additionally, House Republicans have suggested spending federal dollars on refunds for college students who had to learn remotely during the pandemic.

Rep. Kristey Williams, an Augusta Republican, asked the House budget committee on Thursday to delay acting on the state's budget for K-12 schools until there was a better understanding of what federal funding was available.

A K-12 Education Budget Committee chaired by Williams later recommended that schools use federal relief to provide security grants, fund a mental health pilot project and help pay for the Kansas School for the Deaf in Olathe.

"This is like our GOP leaders saying thank God the Democrats have control because we get money, but we're gonna complain about it while we do it," said Mark Desetti, a lobbyist for the Kansas National Educator's Association. "That's just shameful behavior."

Last week, Rep. Susan Humphries, a Wichita Republican, said federal dollars could help cover the cost of refunds to college students who were forced to take classes online as a result of the pandemic.

Rep. Brandon Woodard, a Leawood Democrat, called a proposal to give students refunds a "reckless" move that could wreck the budget for colleges and criticized lawmakers' dependence on federal funds.

"I, like everyone else, am optimistic that the federal package that will provide relief to our state and local governments will help but we can't rely on our federal government," he said, noting that many federal dollars will come with strings attached.

Rep. Troy Waymaster, a Bunker Hill Republican and chair of the House Appropriations Committee, said he doesn't think the state needs the money or that the federal government should allocate it.

If it comes, which he acknowledged is likely, Waymaster said his preference would be to use it on unemployment and cautioned that use of the funds on long term programs, like tax cuts, could hurt the state down the line.

"I'm timid I guess on receiving more money from the federal government and just accelerating the deficit and the debt that we have at the federal level," he said.

(c)2021 The Kansas City Star (Kansas City, Mo.) Distributed by Tribune Content Agency, LLC.

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