Topeka Capital-Journal Op-Ed: Lowering sales tax on food and funding Medicaid expansion should go together in Kansas Legislature

By: Bill Pannbacker, former Kansas Representative | January 14, 2022

The bandwagon to eliminate the Kansas sales tax on food is gathering a crowd. The governor, the likely Republican gubernatorial nominee, former state senators from both political parties hailing from across the state and a prominent Wichita businessman are among those expressing support.

As with any change in policy, it is wise to consider all aspects of the proposed change.

In 2019, the state sales tax on food raised approximately $430 million annually. Kansas has 2.9 million citizens. That comes to an average contribution of $148 per Kansan annually. Put another way, each Kansan contributes an average of 40 cents a day to the state that supports services that benefit all.

Included in those services are a tuition free K-12 public education system, a corrections system, mental health support and services for children and families, among others.

If one considers a fair tax as one in which the contribution is proportionate to the benefit derived, the sales tax on food is a fair tax. You buy food, you pay. You buy expensive or processed food, you pay accordingly.

Sales tax on food may be the only contribution some Kansans make toward the support of state services. Those who do not own property or pay income tax have the opportunity to help support state services via the sales tax on food.

According to the Legislative Research Department in 2019, Kansas receives approximately 1,250,000 income tax returns. Of those, 26,000 get a refund, 440,000 pay an average of $6 a taxpayer and the remaining 780,000 taxpayers pay 99 percent of income tax collected by the state.

For those who suggest that now is the time to do away with a tax with as broad a base as sales tax on food, remember things like our KPERS system, our schools, our corrections system that has been battered by staff shortages and COVID, our aging state technology systems and burgeoning mental health issues, among others.

If the state were to eliminate the sales tax on food, then consider this. Given the argument that Kansas can afford to do away with the $430 million generated by sales tax on food, the argument that $149 million is too much to pay for Medicaid expansion comes into question. If the sales tax on food were to be lowered to 2%, Medicaid expansion in Kansas would be essentially funded.

According to the Kansas Hospital Association, Medicaid expansion would benefit frontier hospitals by offsetting on average 46% of the uncompensated care they provide. Other rural hospitals could offset an average of 26% of their uncompensated care.

In past sessions, Medicaid expansion was not brought before either chamber in maneuvering over the Value Them Both abortion amendment. Now that VTB is on the August primary ballot, that barrier to consideration does not apply.

If the Legislature addresses eliminating or at least lowering the sales tax on food and the voters of the state get to vote on the VTB amendment, why shouldn’t Medicaid expansion (which some polls show Kansans support at the 60%-plus level) come before the House and Senate?

That looks like a win-win-win for Kansas!

Bill Pannbacker is a farmer-stockman in Washington and served one term in the Kansas House of Representatives (2019-2021).

Read the article here.