Post-COVID Recovery Plan

As the “peak” of the COVID-19 crisis nears, and passes, it will be increasingly important to look to what comes next. To look at how and when Kansans get back to work, how students are educated, and how state and local governments should respond. The plan outlined below represents a series of ideas – some big, some small, some codifying actions already taken – for a post-COVID recovery plan.

Some economists believe the impact could be even worse than the 2009-10 recession. The exact budget deficits will depend upon the depth and length of the economic shutdown. But two things are certain: (1) there will be significant deficits, and (2) the longer that state and local officials impose shutdowns, the worse the deficits will be.

The state budget deficit would exceed $1 billion over the next two years if the revenue impact is about half of what the state experienced during the 2009-10 recession; the full impact of the recession would push the deficit over $2 billion.

Our policy team assembled the recommendations in our post-COVID Recovery Plan as a starting point. Some suggestions are state-specific but others also apply to cities, counties, school districts, universities, and other government entities. The recommendations are not listed in any sort of priority but are numbered for ease of reference.

We encourage Kansans to share additional recommendations (click here to share your ideas) and we’ll update the plan periodically as more ideas come forward.

Budget Recommendations and Governance Recommendations

1. Hiring freeze – don’t replace retirees and resignations; reallocate employees across agencies; Kansas has 37% more state employees per capita than the national average and 36% more local government employees.

2. Eliminate state governmental positions that have been vacant for the six months prior to the COVID outbreak.

3. Spend down cash reserves to buy time to find other cost reductions – school districts, for example, started this year with $942 million in operating reserves; they could reduce reserves by about $300 million and still have the same operating cash reserve ratio as in 2005.

4. Establish an independent, auditable cost/benefit analysis program for all new regulations. Implement the same procedure for existing regulations (see Point 19 below).

5. Have a joint interim budget committee that meets regularly during the off-season to drill down on savings through the PBB system and publish findings before the start of the next session. This process should occur every year and will be only more-important before the 2021 session.

6. Eliminate all revenue transfers and subject each to the regular appropriations process.

7. Eliminate 1.5 mills of property tax for the state building funds and appropriate as necessary through the appropriations process.

8. Allow itemization on Kansas tax returns to encourage charitable giving and minimize state taxes owed.

9. Increase the de minimis threshold on sales taxation for out-of-state businesses to encourage business activity.

10. Use federal bailout money to reduce sales tax rates in order to encourage consumption.

11. Repeal any regulations that artificially increase costs on government projects, such as federal Davis-Bacon prevailing wage requirements.

12. Implement a Tax and Expenditure Limit (TEL) law that caps spending increases and places excess revenue in a Rainy Day fund for emergencies.

13. Pass Senate Bill 294 as approved in the Senate, providing Truth in Property Taxation, which has successfully reduced effective property tax rates in Utah and Tennessee.

14. Pass House Bill 2586, allowing public employees to resign their union and stop paying dues at any time, and require annual affirmative consent to authorize dues withholding in compliance with the U.S. Supreme Court ruling in Janus v AFSCME.

15. Don’t expand Medicaid. In addition to budgetary and other reasons we’ve published for not expanding, the number of Kansans eligible for existing Medicaid or other welfare programs will increase and likely capture a greater number of needy Kansans.

16. State legislators should give local officials authority to waive penalties and interest on late property tax payments. School districts and other local government entities should reduce costs and reduce property tax mill levies.

17. Ensure that state pension payments are made as scheduled to protect Kansas government retirees and that the long-term fiscal sustainability of Kansas isn’t made any worse.

18. Reinstitute work requirements on welfare and “looking for work” requirements for state unemployment insurance payments.

19. Implement a Sunset Review Board for state regulations, agencies, boards and commissions.

20. Implement the Independent Audit for Improper Payments Act to allow independent firms to audit state agencies to find improper payments of taxpayer funds.

21. Increase the use of privatization and competitive contracting.

22. Implement a state Savings Reward Programs to reward state employees for saving taxpayer money through innovative or reengineering existing government processes

Regulatory Recommendations

23. Create a Kansas universal recognition in occupational licensing in order to allow anyone with an occupational license in another state to immediately work in Kansas. This could be done via passage of a version of HB 2506.

24. Make permanent any regulations waived in reaction to COVID-19 unless there is evidence that a waiver caused public harm.25. Pass the Kansas Nurse Practice Act that was the original content of HB 2066 from the 2019 session, allowing Advance Practice Registered Nurses to practice without a Collaborative Practice Agreement with a physician.

26. Have state and local permitting function as “shall issue” so that businesses can (re)open without waiting for inspections, application delays, etc.

27. Eliminate any state or local inspections required before re-opening a business that was temporarily closed due to COVID-19.

28. Create a one stop shop in the State Department of Commerce to coordinate federal, state and local permitting for new businesses, business expansions, or business reopenings.

29. Implement a statewide “self-certification” model. This is a streamlined and deregulated permitting process for architects, contractors, and engineers. If they agree to random audits, they can submit plans for a variety of residential and commercial construction projects and walk out with a permit in the same visit.

30. Relax local zoning regulations and ordinances to make it easier for Kansans to operate businesses from their own homes.

K-12 and Higher Education Recommendations

31. Freeze school funding at the current per-pupil basis for BASE funding. The 1994 state supreme court ruling in USD 229 v State of Kansas said the constitution does not require any particular level funding, but just a ‘system’ of funding. The current court ignored precedent and had no authority to order funding increases. Additional funding has not produced the achievement gains predicted by the authors of the legislature’s cost study.

32. Spend down cash reserves to buy time – school districts, for example, started this year with $942 million in operating reserves; they could reduce reserves by about $300 million and still have the same operating cash reserve ratio as in 2005. (Repeated from above as school spending is operated differently than the remainder of the State General Fund.)

33. Provide non-instructional K-12 services (transportation, food service, purchasing, accounting, payroll, human resources, information technology, maintenance, etc.) through regional service centers or through the Department of Education. Allocate half the savings to instruction enhancements (online learning, merit pay for highly effective teachers, etc.) and reduce property taxes with the other half.

34. Require school districts to set meal prices so that they don’t lose money on food services. 252 of the state’s 286 school districts collectively lost $17.4 million on food service last year.

35. Allow students who are below grade level on the state assessment in Reading or Math to take their BASE state aid to a private school of their choice, this would be done via an Educational Savings Account; this saves the state money and gives those students an opportunity to attend the school that best suits there need. This could, in part, be undertaken with federal discretionary spending subsequent to the CARES Act.

36. Expand broadband internet availability so that students are able to expand educational opportunities from the home or school building.

37. Help teachers and staff be more prepared to deliver “virtual” classes.

38. Increase the availability for “virtual” options to include individual course choice (i.e., allow a student to enroll in a virtual Mandarin class even if not offered in their home school district).

39. Require KSDE and the state board to be proactive in alternative education by providing students more opportunities in terms of computer-based, standards-related virtual classrooms.

40. Freeze tuition and fees for public universities and community colleges for the duration of a student’s enrollment.