GOP leaders close to control over Kansas' COVID relief funds

Kansas small business grants Kelly
Posted at 3:31 PM, May 04, 2021
and last updated 2021-05-04 16:31:13-04

TOPEKA, Kan. — Republican legislators were poised Tuesday to give their leaders the final say over how Kansas spends its federal coronavirus relief funds, and some pushed to set aside nearly $2 billion of it for small businesses.

The Republican-controlled state Senate was expected to override Democratic Gov. Laura Kelly's veto of a provision in budget legislation leaving the final decisions on spending $4.8 billion in federal funds to top lawmakers. The GOP-controlled House voted 86-38 along party lines Monday to overturn Kelly's action.

The Senate also was considering a bill that would set aside nearly $1 billion in coronavirus relief funds for the state and another $1 billion for cities and counties to compensate small businesses that were forced to shut down last spring because of the pandemic. The measure is designed to end the threat that the state, cities and counties could face larger payouts from lawsuits brought by aggrieved business owners.

Senators also were debating another measure that would provide rebates of up to $7,500 from cities and counties to businesses for the property taxes they paid while they were shut down or their activities were limited. Those taxes are based on property values, not income, so they were owed whether or not a business was open.

Sen Caryn Tyson, a Parker Republican who chairs the tax committee, said relief is vital for businesses.

"It sends a strong message that, 'We're here for you. We need you,'" Tyson told her colleagues.

Kelly acted early in the pandemic to close K-12 school buildings and impose a statewide stay-at-home order for five weeks. But Republicans used their legislative supermajorities to limit her power over the state's response in exchange for keeping the state of emergency in place.

Kelly agreed last year to let the State Finance Council make the final decisions over how federal COVID-19 relief funds are spent. The council has eight legislative leaders, and six are currently Republicans, but the governor is the chair, calls the meetings and can veto what the lawmakers do.

The governor has said any change from that process would create confusion and slow the distribution of relief money.

But Republicans said Kelly still used her power to block discussions of GOP spending proposals. Their solution, which Kelly vetoed, was to give the final say to another council made up of only eight top lawmakers, six of them also Republicans.

"The Legislature had the appearance of being involved but were omitted from the discussions," said House Speaker Ron Ryckman Jr., an Olathe Republican. "It's best that we have more say and input in the people's money and how it's being spent."

Discussions about setting aside federal COVID-19 relief dollars to compensate businesses started after a Wichita fitness studio and its owner sued the state in December. His attorneys and Attorney General Derek Schmidt agreed to put the lawsuit on hold to allow state lawmakers to provide compensation.

The bill before the Senate would make funds available to businesses with 50 or fewer employees starting in March 2020. Their claims would be decided by a three-member board in the attorney general's office, which would determine how much would be owed by the state and how much by local governments.

Meanwhile, Republicans have tied their proposal to give businesses property tax rebates to renewing a statewide property tax levy that raises $752 million and is a key source of funding for public schools. The state constitution prevents the levy from being imposed for more than two years at a time, and GOP lawmakers argued that thriving businesses fund schools.

But local officials fear paying the rebates will force them to divert funds from local services. Trey Cocking, deputy director and lobbyist for the League of Kansas Municipalities, said cities generally spend 60% of their budgets on public safety.

"When there's that kind of property tax rebate, it's got to come from somewhere," he said, watching the Senate debate from one of its galleries. "It's most likely to come from public safety."