Kelly will push for Medicaid expansion, special ed funding. But will GOP thwart her agenda?

Kansas Democratic Gov. Laura Kelly will begin her second term facing a skeptical, even hostile, Republican-controlled Legislature, placing her agenda at risk and testing her ability to strike bipartisan deals.

Kelly’s major calls for accelerating the elimination of the state sales tax on food, boosting funding for special education students, legalizing medical marijuana and expanding Medicaid all hinge on whether the governor and legislators can overcome long-running tensions that have thwarted past proposals.

After campaigning for reelection as a “middle of the road” leader, Kelly won by less than 20,000 votes. Republicans, who have already spent four years tangling with the Democratic governor, are unlikely to grant Kelly much deference given her narrow 49% to 47% victory over Republican state Attorney General Derek Schmidt.

Kelly can veto legislation, but Republicans appear set to retain their two-thirds supermajority in the Kansas House. That will allow the party to continue to override her vetoes, but they have to hold together nearly every single GOP legislator to do so.

Whether Kelly can successfully block bills, advancing her own legislation and priorities will depend entirely on winning over GOP lawmakers. It’s a potentially tall order coming out of a hard fought and bitter race.

Kelly told The Star’s editorial board before the election that electoral politics limited how much she could accomplish in her first term. She predicted that in a second term, there would be less partisan competition.

“I’m never going to be on the ballot again and so it won’t be a win-lose kind of situation,” Kelly said.

A test of bipartisanship

Kelly emphasized her bipartisan bona fides in her campaign, noting that she had worked with lawmakers to balance the budget and approve the largest economic incentive project in state history to lure Panasonic.

On election night, she told supporters that Kansans value character and hard work over political party and ideology. Kelly said everyone is “tired of the hyper-partisanship and vitriol in our politics.”

But Republicans say the governor has no clear mandate for her agenda, having won the governorship without a majority vote.

“Laura Kelly benefited from a split Republican electorate, which for the second time gave her the win without a majority of Kansas supporting her or her agenda,” said Kansas Senate President Ty Masterson, an Andover Republican.

In a statement, Masterson pointed to Florida as an example of the policies Kansans want. In his unsuccessful campaign, Schmidt invited Florida Gov. Ron DeSantis to the state and pledged to mimic his policies.

“While the Legislature will continue to work with the governor on issues in which there is clear consensus from Kansans, we will reject ideas that grow government - and instead turn our focus to proposals that promote freedom and empower Kansans,” Masterson said.

Kelly will be sworn in for a second time on Jan. 9. If current results hold, the Kansas House will have 85 Republicans and 40 Democrats in a chamber where 84 votes are needed to override a veto. The Kansas Senate, which didn’t have elections, remains at 28 Republicans, 11 Democrats and one independent. In the Senate, 27 votes are required to override a veto.

Currently, five Kansas House races have margins of less than 200 votes, including one separated by just 80 votes as of Monday. Four of those are in Johnson County, which will begin its canvass on Wednesday. During the canvass, officials will decide what provisional ballots, which often tend to be more favorable for Democrats, will count. Another House race is primarily centered in Sedgwick County, where officials will hold their canvass on Friday.

These races will prove especially key to Kelly’s influence in the Legislature. The House will convene in January with a Republican majority that is more conservative than it was before, after primary contests pushed the caucus further to the right. Some moderate Republicans who Kelly had counted on to uphold her past vetoes retired or lost their primaries.

At a rally in Shawnee two days before the election, Kelly urged voters to elect Democrats to the Legislature because of these lost moderates. And she acknowledged she will once again find herself in showdowns with Republicans over legislation even as she remains hopeful that she can find bipartisan agreement in some areas.

“I believe it will be necessary for me to veto a few things that come across my desk so please make sure I have the help,” she said.

Mike Kuckelman, the chair of the Kansas Republican Party, called on her to prove the “middle of the road” credentials she campaigned on.

“She wasn’t working with Republicans (in her first term), she was vetoing everything Republicans passed,” he said.

New push on food sales tax

Kelly’s first major test will come early, when she attempts to convince the Legislature to immediately end the state sales tax on food.

Kansas currently taxes groceries at a rate of 6.5%. Combined with local sales taxes, Kansas has among the highest tax rates on food of any state. For years, legislators in both parties called reductions, but proposals always failed or were tucked into larger bills that were vetoed.

The Legislature passed, and Kelly signed, a bill in May that is set to gradually ratchet down the rate as both Kelly and Schmidt sought reductions. Kelly signed the bill after her initial proposal, to immediately eliminate the tax fully, was rebuffed by GOP legislators.

Kelly plans to try again, betting the end of the campaign season will help. Kansas is also in a stronger financial position than in the spring.

A twice-a-year revenue forecast released last week by state officials projected Kansas would collect total revenues of $10.1 billion in the next fiscal year, about $423.3 million more than the previous forecast last spring.

Kelly’s budget director, Adam Proffitt, told reporters that last week that the additional revenue could certainly be used for the immediate elimination of the food sales tax, increased special education funding, changes to taxing on social security and elimination of sales tax on diapers and feminine hygiene products.

“Mathematically there is absolutely no reason not to pull that policy forward,” Proffitt said of the food sales tax elimination.

State Sen. Tom Hawk, a Manhattan Democrat, predicted lawmakers would have a “bigger appetite” for immediate elimination, given last week’s positive revenue forecast.

“I would think that now that we have the election politics out of the way, that there certainly would be a budding consensus to speed that timeline up,” Hawk said.

But GOP leaders were less certain.

State Rep. Adam Smith, a Weskan Republican who chairs the House Taxation Committee, said he’d prefer to continue on the financially cautious path the state is currently on. If the Legislature opted to eliminate the tax entirely, he said, that would limit what the Legislature could do to address other taxes this year.

State Sen. Caryn Tyson, a Parker Republican who chairs the Senate Taxation Committee, said she is prioritizing reducing taxes on retirement benefits. Schmidt during his campaign had proposed eliminating state income taxes on retirement benefits.

“I think it’s hypocritical of the governor to ask for an immediate cut on food sales tax when she’s one of the biggest complainers about the income tax cuts in 2012,” Tyson said, referring to cuts signed into law by former Republican Gov. Sam Brownback and largely repealed back in 2017.

Health care focus

Kelly has also promised to make her fifth recommendation for Medicaid expansion when the legislative session begins. Days after winning reelection she posted to Twitter that it’s “time to finally expand” the program which would extend coverage to an estimated more than 100,000 Kansans.

But Masterson and Kansas House Majority Leader Dan Hawkins, a Wichita Republican, have both been longtime opponents of expansion, however. Hawkins has a significant chance of winning election as House speaker when Republican legislators gather for an organizational session in December. Hawkins didn’t respond to a call on Monday.

Kansas is one of 12 states that hasn’t yet expanded the program. In 2020 Kelly struck a deal with then-Kansas Senate Majority Leader Jim Denning, an Overland Park Republican, but then-Kansas Senate President Susan Wagle, a Wichita Republican, blocked the bill from hitting the floor. The start of the pandemic brought an abrupt halt to the session and the deal went nowhere.

Kelly’s campaign spokeswoman Lauren Fitzgerald pointed to that deal as evidence the policy could pass in the next four years.

“She’s got a great ability to literally reach across the aisle and negotiate a deal,” Fitzgerald said.

But the policy has been dead on arrival for the past two years. Walking into her second term Kelly has said she’s hopeful lawmakers will work with her secure in the knowledge she can’t use that victory in a reelection campaign.

During her Shawnee rally, Kelly lamented that for years Kansans federal tax dollars have paid for other states to expand medicaid.

“I am sick and tired of giving money in Washington, D.C. We have $6 billion there now to go to New York, to go to California, to go everywhere else to help their states help their people. We need to bring that money home to Kansas,” Kelly said. “We need to take care of folks, we need to protect our rural hospitals and we need to create 23,000 jobs that Medicaid expansion will bring.”

State Rep. Troy Waymaster, a Bunker Hill Republican who chairs the House Appropriations Committee, said it wouldn’t be that simple. While some Republicans favor Medicaid expansion, others are firmly opposed on ideological grounds.

“I don’t know exactly how that would progress through the Legislature because it’s a polarizing issue,” Waymaster said. “At this moment, I don’t see that ideology changing in the near future.”

Education, marijuana up for debate

Kelly is also expected to encounter resistance as seeks to fully fund special education.

By law, the Legislature is required to fund 92% of special education costs not covered by the federal government. However, the state falls about $223 million short annually.

Republican legislators may try to pair additional funding with other changes to public schools. For instance, conservative legislators last year sought a parents’ bill of rights, which would allow parents to challenge material taught in their children’s schools.

GOP lawmakers have twice sent bills to Kelly’s desk aimed at banning transgender athletes from girls sports. Some GOP lawmakers have also advocated for educational transparency policies that would require teachers to post all materials used in the classroom online.

With a more conservative majority in the House, Republicans predicted they may have an easier time overriding Kelly’s vetoes on the issues. Prior to the election, state Sen. Molly Baumgardner, a Louisburg Republican, said those issues would remain a priority regardless of who won the race.

“We are finding that parents are absolutely being shut out of board meetings,” Baumgardner said.

Some Republicans have also for years wanted to move Kansas closer to a voucher system, in which students and their families would be able to use public funding to attend private schools or public schools of their choice. The Legislature passed a bill this year requiring all Kansas school districts to develop a policy allowing students who live outside district boundaries to enroll if there is space. The policy was paired with overall funding of K-12 schools.

Kelly sought additional special education funding during the legislative session but lawmakers rejected it. The governor has framed additional funding for special education as an extension of fully funding the entire public education system.

Kelly in 2021 signed a funding bill that allowed Kansas to resolve a years-long lawsuit over state aid to schools.

“We have fully funded K through 12 for the last four years. We now need to put in place a process to fully fund special education,” Kelly said at her Shawnee rally.

State Rep. Kristey Williams, an Augusta Republican who chairs the House K-12 Education Committee, said she wasn’t inclined to change course.

“I would love for the governor to really petition the Biden administration to increase their funding, if they did that it wouldn’t cost us anything more,” Williams said. “It’s easy to just hand out some dollars when asked but I think we also have to be responsible and do what’s best ultimately for the kids.”

The issue, however, has become a focus of public education advocacy groups. In a press conference last week, education officials from districts across the state called for increased funding.

“When it comes to meeting the needs of our most vulnerable and most challenged students the money has not followed to meet these students’ needs,” Shannon Kimball, president of the Lawrence school board, said.

“Education programs for all students are being shorted because districts must use general education funding to make up the difference.”

Just like special education funding, Kelly’s hopes for medical marijuana may also rest on reaching a compromise.

The Kansas House voted last year to legalize medicinal use but the bill stalled in the Senate. Masterson said last month the issue is not a priority but an interim committee has met twice this fall to consider it.

Proponents of a medical program are hopeful Missouri’s vote last week to legalize recreational marijuana will ramp up pressure on Kansas legislators to at least advance medical use – even as some Republicans remain skeptical.

Kelly has repeatedly called for medical legalization, including once proposing using revenue generated by medical marijuana to pay for Medicaid expansion.

“I’ve been an advocate for medical marijuana legalization for years and I want to push that through next term to make sure that we get there,” Kelly told The Star in August.