By Andy Marso

It’s over.

Republican legislators from the House and Senate mustered just enough votes to pass a more than $400 million tax increase Friday and end the historic 2015 session.

The session traditionally lasts 90 days. Friday was the 113th, as both chambers struggled to get Republican supermajorities to approve a substantial tax hike.

The final plan raises the state sales tax from 6.15 percent to 6.5 percent. Senators ultimately gave up on a quest to tax groceries at a lower rate.

That means Kansans will pay the second-highest sales tax on food in the nation, trailing only Mississippi’s 7 percent.

When local sales tax levies are added, most Kansans will pay the nation’s highest tax on food — more than 9 percent in some areas.

Several senators said Friday’s bill was flawed but they were voting for it to avoid deep budget cuts that Gov. Sam Brownback had promised were coming within days. Several also said their support was contingent on promises that the Legislature would have serious discussions next year about lowering the food sales tax rate.

“I definitely know it’s important to my district,” Sen. Mike Petersen, a Republican from Wichita, said during a Senate Republican caucus before the vote. “I hear about it all the time.”

Some Republicans who voted against the bill cited the high food sales tax as the reason. The bill restored the food sales tax credit to the income tax code, but Sen. Michael O’Donnell, a Republican from Wichita, called the projection of $15 million in tax relief for low-income Kansans “somewhat of a farce.”

O’Donnell said he did not think the measure would bring that much relief, and what it did provide would go only to a relatively small number of people. A food sales tax cut would have been better, he said. “A cut impacts all 72,000 or 73,000 people in my district,” O’Donnell said.

O’Donnell and Sen. Oletha Faust-Goudeau, a Democrat from Wichita, had worked together to promote food sales tax cuts during the session, at one point suggesting a complete exemption for fresh produce. Sen. Vicki Schmidt, a Republican from Topeka who voted against the tax bill, said an exemption could be tricky to implement.

But she agreed something needs to be done to keep Kansans on a budget from gravitating toward the cheapest food options, which often are less healthy. “To not have any offset at all for food and to raise the sales tax that high should give everyone pause,” Schmidt said. During the caucus, O’Donnell asked Senate Majority Leader Terry Bruce how realistic a food sales tax cut would be next year, given the state’s tight cash flow.

Bruce said it would be “very realistic” to lower the rate in the fiscal year that starts July 1, 2016, because that year is projected to have an ending cushion of more than $200 million. Friday’s tax bill also includes a 50-cent per-pack increase in the state cigarette tax, which was one-third of what public health advocates had pushed for as an incentive to reduce smoking rates. The tax will rise from 79 cents per pack to $1.29.

The bill also provides for the first state tax on liquid nicotine used in electronic cigarettes, but that does not take effect until next year. The bill exempts Kansans at the lowest end of the income scale — $5,000 a year or less for individuals and $12,000 or less for couples — from paying any income tax, but that provision doesn’t kick in until tax year 2017. Also delayed is a continuation of Brownback’s “March to Zero” income tax. Senate Democrats, who all voted against the bill, said that approach is what has the state struggling to balance the budget in the first place — and will again in future years. They railed against the 2012 bill that got the march started and exempted more than 300,000 businesses from paying any income tax. Senate Minority Leader

Anthony Hensley said the Republicans were “foisting on Kansans the highest and most regressive sales tax on food in the nation” to subsidize the income tax cuts. “Now we’re asking poor people to pay more to keep a misguided, reckless tax policy in place,” Hensley said. Some legislators complained about threats of cuts to public universities and state hospitals and “political blackmail” to get a plan passed in the final desperate weeks of the session.

But Sen. Ralph Ostmeyer, a Republican from Grinnell, was not among them.

Ostmeyer said he voted for Friday’s tax bill because the Legislature needed to fund the budget, including areas vital to his large, rural district.

His district lost facilities for disabled Kansans in Colby and Oakley in recent years, he said, and could not afford to lose more. “I have a handicapped child,” Ostmeyer said, getting choked up. ”We never talk about them. I take care of my child, but Kansas has a lot of people we need to take care of.”

 

Andy Marso is a reporter for Heartland Health Monitor, a news collaboration focusing on health issues and their impact in Missouri and Kansas.

HUTCHINSON. — A Kansas inmate, who at one time was at the Hutchinson Correctional Facility and  found guilty on a charge of battery of a law enforcement officer, was sentenced to 10 years and two months in prison on Friday.

Officials said Douglas Anthony Kling, 30, was upset when a prison officer did not respond to his demand to file a grievance.

He made noise and began kicking the door of his isolation cell. The officer, Jason Garcia, said he tried to get Kling to calm down, but he didn’t, so he opened the cell door.

Kling tried to leave the cell and attacked the officer

At trial, Kling chose to represent himself with the assistance of a public defender.

Kling is serving time for convictions in Marshall County for attempted murder, aggravated kidnapping, aggravated battery, aggravated assault and criminal threat. He also has a conviction for burglary in Nemaha County.

 By DAVE RANNEY

Two of the three companies that sell individual-market policies for Kansans on the federally administered health insurance marketplace are proposing significant premium increases for 2016.

Rate increases proposed by Blue Cross and Blue Shield of Kansas, the state’s largest insurer, range from 35 percent to 39 percent. Aetna and Coventry Health Company, which merged in 2013, requested rate increases of 20 percent to 35 percent.

The proposed increases have been added on healthcare.gov, the exchange marketplace created as part of the Affordable Care Act. Plan rates are available by searching for ACA-compliant plans in Kansas that will be effective Jan. 1, 2016.

“Federal law requires the posting of any proposed health insurance increases of more than 10 percent,” Kansas Insurance Commissioner Ken Selzer said in a prepared statement, referring to a provision in the ACA that requires states to share the proposals with the public on or before June 1.

The proposals, Selzer said, are now subject to review and approval by the Kansas Insurance Department, which made an initial announcement about the increases last week.

“We will be working to find ways to keep consumer health insurance increases as low as possible and still allow the companies to offer required quality products and service,” he said.

Department officials have until Aug. 25 to rule on the proposed increases. Historically, adjustments in the proposed increases are not unusual.

The third company on the marketplace, Blue Cross and Blue Shield of Kansas City, proposed an individual-market increase of slightly less than 10 percent.

In Missouri, insurers have proposed individual-market increases ranging from 12 percent by Blue Cross and Blue Shield of Kansas City to 34 percent by Time Insurance Co.

Unlike Kansas, Missouri insurance regulators don’t have the authority to regulate premiums on most types of health insurance. Rather, as an “open competition” state, it relies on competition among insurers to keep rates down.

A national issue

News of the proposed increases surprised few of the exchange’s observers.

“We’re seeing the same sort of thing in a lot of other states,” said Sheldon Weisgrau, director of the Health Reform Resource Project in Kansas. “This is a reflection of what it actually costs to insure a large majority of population, whereas before what we had was a market that excluded a lot of people.”

Mary Beth Chambers, a spokesperson for Blue Cross and Blue Shield of Kansas, said the company’s proposals are driven by a need to offset higher-than-anticipated costs in 2014. That was the first year that the ACA required most U.S. citizens to have health insurance — and the first year that insurance companies could not deny coverage to people with pre-existing health conditions.

It also was the first year of operation for the online marketplaces, which were created as part of the federal health reform law to increase access to health insurance.

“Our 2014 claims experience was more adverse that what we had anticipated, and the same thing is going to be true for 2015,” Chambers said. “We are looking to adjust rates so that we’ll be able to collect enough in premiums to pay for the claims that we anticipate our members will need in 2016.”

The company’s overall costs last year, she said, exceeded its premium collections.

“In 2014, we absorbed about $74 million in underwriting losses,” Chambers said. “I don’t have a projection for 2015 yet, but we are projecting a loss for this year as well.”

Much of the shortfall, she said, is a consequence of the company having to predict the costs of providing coverage for the newly insured without having a full year’s worth of claims data.

“In April of 2014, we had to file our rates for 2015 with only three months of claims experience, and we were still taking on new members because the marketplace was still open,” Chambers said. “And here we are now, filing rates for 2016 that are based on just a year’s worth of claims in a marketplace that’s still evolving.”

She said people obtaining insurance through the marketplace required more services, had more chronic conditions and needed more high-priced drugs than the company anticipated.

Rohan Hutchings, a spokesperson for Aetna and Coventry Health Company, said the company’s proposed increases “simply reflect the costs of health care, including the cost of services, the amount of services people will receive and an increase in pharmaceutical costs.”

Blue Cross and Blue Shield of Kansas City proposed an 11 percent increase for its small-group plans. Small-group increases proposed by Blue Cross and Blue Shield of Kansas and Aetna/Coventry fell below the 10 percent threshold.

Other factors can affect cost

If upheld, the increases will take effect Jan. 1. Open enrollment for the 2016 marketplace begins Nov. 1, 2015, and ends Jan. 31, 2016.

The proposed increases are averages. Actual increases will vary depending on beneficiaries’ age, family size, location and tobacco use.

The insurance department does not regulate premiums for large-group and self-insured plans.

For many beneficiaries, the increases will not be an onerous as they appear, according to Weisgrau.

“We’re hearing a lot nowadays about how premiums are increasing 30-plus percent,” he said. “But what’s not getting much coverage is that if you bought health insurance on the exchange, you probably got a tax credit that made the premiums affordable. That tax credit is still going to be there in 2016, so if your premium goes up, your tax credit is going to go up as well.”

Also, Weisgrau said, consumers have the option of buying less expensive plans on the exchange.

“There’s nothing that says you have to choose the same plan next year,” he said.

The Health Reform Resource Project is supported by several Kansas foundations, including the Kansas Health Foundation, the primary funder of the Kansas Health Institute, which is the parent organization of the editorially independent KHI News Service.

Dave Ranney is a reporter for Heartland Health Monitor, a news collaboration focusing on health issues and their impact in Missouri and Kansas.

SEDGWICK COUNTY – Three people were injured in an accident just before 10 p.m. on Friday.

The Kansas Highway Patrol reported a 2002 Toyota van driven by Joseph M. Schippers, 20, Murdock, was eastbound on Kansas 42 making a left hand turn at Maize Road.

The vehicle struck a 2007 Chevy Cobalt driven by Rhonda M Arensman-Holler, 46, Norwich, which was westbound on Kansas 42.

Schippers, a passenger in the van Christopher T Schippers, 18, Murdock, and Arensman-Holler were transported to Wesley Medical Center. A teenage passenger in the Cobalt was not injured.

All were properly restrained at the time of the accident according to the KHP.

Congressman Tim Huelskamp (KS-01) issued the following statement following the vote in favor of Trade Promotion Authority (TPA):

“Trade is critical to our state’s economy, particularly for Kansas agriculture and manufacturing. And nearly every day, I see and hear of brilliant examples of Kansas products being sold across the globe.

“But we can do better for Kansas. For far too long, our producers have been stymied by foreign governments and Washington politics. Whether it is a 252% Japanese tariff on wheat, expensive tariffs targeting American beef and pork, a regulatory maze to sell pork into Vietnam, non-scientific trade restrictions and artificial quotas in multiple countries, or a Washington system and Administration that hasn’t broke down these barriers, it is time for Congress to fight for our producers.

“The bipartisan vote in favor of TPA showed strong support for breaking down these job-killing trade barriers while imposing strong Congressional oversight and clear Constitutional mandates upon the Obama Administration. Under TPA, Congress outlines 150 requirements that must be met for Congress to consider any trade agreement, including lower tariffs, protection of property rights, defense of religious liberties, and unprecedented transparency. By putting these guard rails into place, Congress can ensure any trade agreement protects American interests – and if Obama submits one that doesn’t, Congress can and will reject it.

“I am confident that, given a free and open marketplace, Kansans can meet and beat our competitors around the world. Ninety-five percent of our potential customers live outside America – and, with TPA, we can move forward to a time when Kansans are no longer shackled by foreign governments and Washington politics.”

Jennifer Peltz, Associated Press

NEW YORK (AP) — A new study finds American cities are enticed by the economic growth and services that “sharing economy” companies such as Uber, Lyft and Airbnbcan offer.

But officials are anxious about safety in a largely unregulated realm. The National League of Cities released the findings Wednesday.

They’re drawn from survey responses from 245 leaders of American municipalities large and small.

Last month, Kansas Gov. Sam Brownback signed a compromise on regulations that the ride-hailing company Uber says will allow it to stay in the state.

Under the new Kansas law, Uber and other ride-hailing companies are allowed to do their own private background checks on subcontracted drivers, but the attorney general also can sue them if drivers are found to have criminal backgrounds.

Uber spokeswoman Lauren Altmin reported in April that riders in Lawrence, Leavenworth, Manhattan and Topeka could begin hailing Uber drivers soon. The company already offers service in Wichita, Kansas City, Kansas, and Johnson County.

Seventy-one percent of city leaders surveyed say they want to see the “sharing” sector grow.

Yet 61 percent say they’re concerned about the safety of using apps and websites that let everyday people rent out rooms, arrange car rides and provide other services to strangers.

More than half the cities said they imposed no rules on “sharing” players.
Companies say they’re safety-conscious contributors to cities’ economies.