PRAIRIE VILLAGE, Kan. – One of the first slides Duane Goossen presented said simply: “The Budget – trouble ahead.”
And then, for the next 90 minutes, the vice president for fiscal and health policy at the Kansas Health Institute outlined why the upcoming session of the Kansas Legislature could disappoint interest groups pushing for spending on children and health care for low income residents.
“The pressures are going to be to spend more on public education, more on Medicaid, more on higher (education),” Goossen said during a presentation last week. “But the state is not going to be able to do that with the revenue situation that is coming.”
A former state representative who also served for 12 years as the state budget director, Goossen addressed about 100 people at a public policy forum co-sponsored by United Community Services of Johnson County (UCS) and the United Way of Greater Kansas City.
When they take up the budget for fiscal year 2014, which begins July 1, Goossen said lawmakers would face a general revenue fund expected to take in about $700 million less than the $6.2 billion budgeted for this fiscal year.
The drop in projected proceeds, he said, resulted from the income tax cut signed by Gov. Sam Brownback in May and the July 1 expiration of a temporary sales tax increase enacted by the Legislature in 2010.
More than 60 percent of the general fund revenue is used for public schools and universities, another 20 percent goes toward Medicaid, and the remainder includes spending on other human services and public safety, he said.
“So you look at that chart,” Goossen said, “and where is a good place to cut $700 million?”
Many social service advocates are pushing state officials to go along with the Medicaid expansion included in the Affordable Care Act.
Based on the cost sharing in the law, which gives states the option to expand eligibility up to 138 percent of the poverty level, Kansas would receive an estimated $3.5 billion in federal funds from 2014-2019. Kansas would contribute about $166 million.
Goossen said the expansion could add nearly 241,000 Kansans to the Medicaid roles. Kansas now has about 380,000 Medicaid recipients.
But a wrinkle in the law, he said, means that the deal offered by the federal government is not as clear-cut as it might seem.
The enhanced federal match, he said, would apply to about 46 percent of the additional Medicaid recipients – adults who are newly eligible for the program.
The remainder, he said, would likely be adults and children who are eligible now but have not signed up for whatever reason. The expectation, Goossen said, was that these individuals would come out of the woodwork with all the publicity and outreach that would accompany the expansion.
For those “woodwork” applicants, he said, the current federal-state match in Kansas (57 percent to 43 percent) would apply.
“It’s a more complicated decision than saying, ‘Oh, the federal government is going to pay for it, so let’s just expand,’” Goossen said.
UCS Executive Director Karen Wulfkuhle said the figures presented by Goossen were “very sobering.”
She was encouraged at the turnout, hoping that attendees would register concerns with their elected representatives.
State Rep. Barbara Bollier, a Mission Hills Republican, said she knew the gravity of the budget situation.
“This is a crisis,” she said in an interview. “This is not a little thing. This is huge.”
She said that possible revenue proposals from Brownback, including eliminating some income tax deductions and extending the 1-cent sales tax, could generate revenue.
But getting anything that even resembles a tax increase through the Legislature would be extremely difficult, she predicted.
Bollier said she opposes extending the sales tax.
She voted for it as a temporary measure in the midst of the financial crisis because it seemed like the only option.
Along with being “incredibly regressive,” she said, “It is not our only option now.”
State Sen. David Haley, a Kansas City, Kan., Democrat, argued that the Legislature should authorize Medicaid eligibility for adults beyond even the level included in the Affordable Care Act.
He said he planned to introduce legislation to that effect next year.