Kelly vows to rebuild Kansas with focus on schools, foster care, Medicaid

Jan. 17--TOPEKA -- Gov. Laura Kelly vowed to fully fund Kansas public schools and not raise taxes -- a promise some Republicans predict she can't keep -- during her first State of the State address Wednesday.

Years of crisis have left Kansas "on the brink of collapse" but the state of the state is improving, Kelly said in her speech to a joint session of the House and Senate.

Kelly decried a "moral crisis" and said she will ask for funding to hire more social workers to fix the state's troubled foster care system. She also will send a proposal to expand Medicaid to lawmakers by Jan. 29, Kansas Day.

Kelly's plans, offered on her second full day in office, were met with a sharp response from Senate President Susan Wagle, R-Wichita. Wagle said Kelly would have lawmakers "surrender" to the state Supreme Court on school finance and predicted Kelly's budget will "absolutely require" tax increases.

Kelly, a Democrat, in the past has appeared unfazed by Republican criticism. On Wednesday, she reiterated her calls for bipartisanship as she presented her priorities, beginning with school funding.

"Unfortunately, throughout the decades, Kansas has made promises and then fallen into a troubling pattern. It begins with a promise from elected leaders to fund our schools. Then a failure to follow through on that promise," Kelly said. "That is going to change this year. This year, we will end this cycle of litigation and meet the needs of our students and teachers once and for all."

Kelly's speech didn't call for a specific spending level, but she has previously endorsed adding $90 million more a year to address concerns from the Kansas Supreme Court that the current education funding formula doesn't account for inflation. Lawmakers have until June to respond to the court's concerns.

Last year, the Legislature approved increasing annual spending for schools by $525 million, with the increases phased in over five years.

Kelly said schools will be properly funded every year she is governor. She called for "modern classrooms with modern technologies." Children need to graduate high school or technical school or college so they can find jobs in Kansas and stay in the state, she said.

Though the governor typically presents her budget proposal as a single plan, Kelly said she will separate education spending from the rest of the budget. The idea, she said, is to provide legislation for lawmakers "to consider the matter cleanly and quickly."

Wagle, in prepared remarks from her official response, criticized Kelly's proposals, saying she would have lawmakers "surrender to the edicts of an unelected Supreme Court, spending even more than the billion dollar increase already approved for public education through 2023."

"While we've had some difficult years, I can happily say we have come through the worst of it. As 2019 begins, revenues have rebounded, and we have a small surplus," Wagle said. "Unfortunately, Governor Kelly's first budget would squander our fiscal recovery with a massive spending increase that would deepen our debt and require another major tax hike."

House Speaker Ron Ryckman, R-Olathe, said he welcomed Kelly's pledge to be fiscally responsible and not raise taxes. Senate Vice President Jeff Longbine, R-Emporia, predicted that ultimately lawmakers will approve increased education funding.

"We'll complain and we'll say it's not right and all those type of things, but at the end of the day, the court has asked us to comply and I anticipate the Legislature will comply with the court order sometime during this first session of the Legislature," Longbine said.

Kelly said she will balance the budget without raising taxes and asked lawmakers to help protect both sides of the "budget equation" -- presumably referring to revenue and spending -- until the state's fiscal health stabilizes.

Kansas has endured two national recessions in the past 20 years and another "will soon be upon us."

"Unlike the last two record-setting downturns, Kansas finds itself now completely unprepared. We have no margin for error," Kelly said. "That is why we must be cautious, we must be conservative and we must be fiscally responsible."

Promising to fix foster care

Kelly also sought to focus lawmakers' attention on foster care and the state's social service system, describing the situation as "an emergency" but cautioning that there are no easy answers.

The number of Kansas children in foster care has risen by 45 percent since 2011, and high-profile child deaths in recent years have rocked the system. The system has been overwhelmed by the sheer numbers of children and families in need, Kelly said. She also promised to restore funding to the Children's Initiative Fund, which helps pay for early childhood programs.

Kelly's budget will include funding to hire more, qualified social workers and reduce caseloads.

She urged lawmakers to remember Evan Brewer, a 3-year-old Wichita boy who was killed in 2017 and encased in concrete; Jayla Haag, an 18-month-old El Dorado girl who died in 2012; and Mekhi Boone, a 4-year-old Hiawatha boy who was killed in 2013. All three cases raised serious questions about whether the Kansas Department for Children and Families had failed the children.

"Those were our children ... in our communities. And I refuse to forget them," Kelly said. "We must fix this now."

Calls for Medicaid expansion

Kelly also provided the beginnings of a timeline for action on Medicaid expansion. She will announce a working group next week to "finalize a path forward" and that lawmakers will have a proposal by Jan. 29.

"I can imagine no better way to celebrate our state's 158th birthday than by embracing a policy that would make every Kansas community healthier, stronger and more secure," Kelly said.

She cited the closure of rural hospitals -- in Independence in 2015 and in Fort Scott last year -- as reason to expand. People near the now-closed hospital in Fort Scott will have to drive further for emergencies, births and tests, she said.

House Majority Leader Dan Hawkins, R-Wichita, said Medicaid expansion will not solve the financial problems afflicting rural hospitals.

"We need to think in a lot different terms than just Medicaid expansion," Hawkins said.

For states that expand Medicaid eligibility to people who make up to 138 percent of the federal poverty level, the federal government pays 90 percent of the cost of expansion. For a family of four, 138 percent of the federal poverty level is $34,638 in annual income.

Kansas for years has declined to expand the program. Lawmakers approved expansion in 2017, but then-Gov. Sam Brownback vetoed it.

Wagle said Kelly wants to expand Medicaid under a "broken ObamaCare system" and that 98,000 Kansas families have suffered from skyrocketing premiums under ObamaCare. Wagle said those families deserve more affordable options.

According to the Kaiser Family Foundation, about 84,000 Kansans paid premiums on healthcare.gov insurance plans last year, and about 88 percent received federal subsidies based on income to help defray the costs of their premiums.

More details coming

Kelly's address was also notable for what she did not speak about. She did not speak about higher education funding. She did not speak about transportation infrastructure, or public safety or mental health -- absences she acknowledged.

State Budget Director Larry Campbell will provide Kelly's full budget proposal on Thursday. That will detail all of Kelly's spending ideas.

Kelly cautioned lawmakers that the governor alone cannot achieve consensus and she emphasized the need for cooperation and compromise.

"These past eight years have been a hardship, no doubt about it," Kelly said. "But we're united by a common sense of values. That spirit of neighbor-helping-neighbor. Respect for one another. And always doing right by our children."

It was the 33rd state of the state speech for House Minority Leader Tom Sawyer, D-Wichita. Of those, 20 were by Republican governors and 13 by Democrats.

"That may have been the best one; it was right up there at the top," Sawyer said. "She hit all the key points, funding our children's education and expanding Medicaid, taking care of our foster kids, working in a bipartisan manner, balancing the budget without tax increases."

He said it was gratifying that Kelly mentioned Evan Brewer, who lived in Sawyer's district.

"It means a lot," he said. "That was a big case and it got a lot of people's attention. Maybe even people who hadn't realized how bad the foster care system was. That case opened a lot of people's eyes."

Reforming foster care was one of only two standing ovations that brought both Republicans and Democrats to their feet.

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