The state of Kansas is flush with cash. Gov. Laura Kelly announced last week that the Department of Revenue took in $42 million more in taxes during September than officials originally expected — a total of $991.6 million for the month. That number actually underplays the Sunflower State’s bulging bank accounts: Projections now suggest Kansas could be running a nearly $3.2 billion budget surplus by the end of June 2025.
That is good news. Kansas is not so far removed from the days of then-Gov. Sam Brownback’s notorious “tax experiment,” which strangled state revenues, forced public schools to tighten their belts and produced a voter backlash. At risk of stating the obvious, it is better for the state government to have a bit too much in its coffers than too little.
Now, however, leaders in Topeka face a serious question: What to do with all that money?
We have some ideas. There are three things the Kansas Legislature should do with the budget surplus — and one it shouldn’t.
• Expand Medicaid. Gov. Kelly has tried time and again to lead Kansas to join the 41 states that have used federal funds to expand Medicaid coverage to cover nearly all adults with incomes up to 138% of the federal poverty level.
The Republican-controlled Legislature has refused to go along — and its leaders show no sign of giving ground. “Big government is not and will never be the answer to increasing health care access to Kansans,” Kansas House Speaker Dan Hawkins and Senate President Ty Masterson said in a joint statement last week.
We disagree. Up to 150,000 Kansans would benefit from expanding Medicaid eligibility. Studies show that the expanded program in other states has reduced the number of hospital closures, particularly in rural areas.
And importantly, polls show Kansans overwhelmingly want Medicaid expansion. Legislators should at long last listen to their constituents on this issue.
• Fully fund special education. State law requires Kansas to fund local schools for 92% of the excess costs of special education programs, but the state hasn’t actually met this obligation for more than a decade.
That has forced school districts to divert money from their general education budgets, straining the resources available for all students. But the Legislature earlier this year passed on Kelly’s $72 million request for special ed funding.
This is another issue where partisanship shouldn’t be a factor. Republicans hold a 7-3 majority on the Kansas State Board of Education, yet in July the board unanimously endorsed a four-year plan to raise state special education funding by $86.6 million a year.
“We certainly have the budget as a state right now to cover this,” said Melanie Haas, the board chair. “It’s time we caught up.” She’s right.
• Smart tax cuts. Not all of the excess revenues should be invested in new spending programs — some of it should go back to the taxpayers.
In April, Kelly called for a one-time rebate of $450 to individual taxpayers and $900 to married couples filing jointly. That proposal found no traction in the Legislature. Kelly is ready to try again, announcing last week that she wants cuts to property, grocery and retirement taxes. That makes sense.
• But not those tax cuts. Republicans tried and failed to pass a flat income tax during the 2023 legislative session. They have made clear that they will try again in 2024. We will see the details of the new proposal then, but flat taxes are inherently regressive: They put cash in the pockets of the richest Kansans while offering precious little to the people who need it most. One analysis of this year’s vetoed proposal found it would give $3,000 back to top earners — and just $50 to folks at the bottom of the scale.
