Six takeaways from Kelly’s state of the state speech


The statehouse was unusually quiet Tuesday night when anticipation usually fills the halls of the Capitol with buzz about governor’s State of the State speech.

But COVID-19 changed that and Gov. Laura Kelly delivered her speech virtually over her Facebook page, a vast departure of any speech of the past.

The Capitol was largely vacant by the time the governor began her remarks at 7 p.m.

Here’s a look at the major takeaways from the governor’s speech that was mostly limited in scope with no bold new initiatives and focused heavily on COVID-19 and economic development.

Economic development agenda

The governor has portrayed herself in the past as the “education governor.” Now as she moves into the last two years of her term with reelection in 2022, Kelly is pivoting toward economic development, an area that Republicans have regarded as their turf, especially as they tried to keep the governor from closing businesses during the pandemic.

She touted her administration’s successes, landing projects such as Urban Outfitters’ new distribution center in Wyandotte County that will create 2,000 new jobs and invest more than $350 million. She cited the expansion of Schwan’s Company in Salina, which will be home to the largest frozen pizza production facility in the world.

Kelly talked about how the state is set to announce a comprehensive roadmap – called a Framework for Growth – to ensure that the Kansas economy grows and offers career opportunities for young adults who have been fleeing the state.

Her speech was laced with words such as jobs, economic growth and business recruitment.

She said her administration has recruited dozens of new businesses that created
more than 20,000 jobs, injecting $3 billion into local economies.

Kelly emphasized the importance of helping small businesses.

“I know for many small-business owners, these past few months have been filled with anxiety and heartache – and you’re just trying to do right by your employees and customers,” she said.

“I promise you that I’ll do everything in my power to protect small businesses and the
Kansans they employ,” she said.

A soft approach 

Critics of Kelly have bristled at what is perceived as a sometimes-lecturing approach on public policy and occasionally lashing out at her political opponents.

On Tuesday, Kelly struck a different tone, couching her address more as a conversation with the general public than as an address to the Legislature

“Instead of giving a speech to the legislature, I’m going to have a conversation with you – the people of Kansas – give you an update on where we are, what’s next, and lay out a clear agenda that meets the moment we’re living in.

“In the weeks and months to come, we need to get every Kansan vaccinated. We need to get our economy moving. And we need to get all our kids back into the classroom.

“We need to do it in a way that keeps our budget balanced. And with the sense of urgency
and focus that Kansans deserve. We cannot let political fights slow us down.”

Playing defense

After taking a hit from Republicans in recent in weeks over federal data showing that Kansas was last in administering vaccines, the governor took time at the top of her speech to explain what was happening.

“While our state initially experienced a reporting lag of vaccines administered, the CDC
vaccine tracker is now showing that Kansas is in the top tier for vaccines administered per
capita,” she said.

“We are working as quickly as we can to safely, efficiently deliver the vaccine to all
Kansans. Much of our ability to distribute the vaccine is dependent on the federal
government getting the vaccine to us.”

At the end of the year, the state ranked last in the number of vaccines administered per 100,000 people. As of Tuesday, Kansas ranked 29th after reaching 24th last week.

Data from the Centers for Disease Control and Prevention showed that Kansas had administered 2,687 vaccinations per 100,000, ahead of Missouri, which had given 2,636.

She also defended the beleaguered Labor Department, which was swamped with unemployment claims when the economy went sideways after the pandemic hit the state.

“The volume of benefit applications absolutely overwhelmed our unemployment
system,” Kelly said.

“I want you to know we’ve fixed many of the immediate problems and more Kansans
have received unemployment benefits since the pandemic started 10 months ago, than in
the eight previous years combined,” she said.

The governor said her administration has committed $37.5 million in this year’s budget to update old computer systems that had been neglected over the years.

A nod to red Kansas

Kelly pointed to her administration’s efforts to help the more politically red parts of the state, discussing how her administration partnered with local and federal officials to keep critical food supply chain workers safe and kept production online.

She said the state invested $12 million to increase the capacity of the state’s food supply system.

She also cited the fact that she was the first Democratic governor to publicly support the United States-Mexico-Canada Agreement, an initiative supported by the Kansas Farm Bureau.

Won’t retreat on Medicaid expansion

The odds of expanding Medicaid this session are slim, especially after key supporters in the Legislature lost their primary elections last year and the statehouse is leaning more conservative.

But Kelly isn’t surrendering on what was one of her primary goals when she was elected in 2018. She pressed forward again Tuesday night, using the COVID-19 pandemic to make the case for expansion.

“If we’ve learned anything these past 10 months, it’s that every Kansan deserves health
care they can afford, good health care facilities near their homes, and for our rural neighbors and friends, more access to telehealth services,” she said.

“That’s why I’ll continue to push, over and over again, for what 38 states across the country have done – to expand Medicaid to cover another 165,000 Kansans, to ensure that our rural hospitals remain open, and inject billions of dollars into our economy.”

 A subtle ‘no’ on taxes

Republican leadership in the statehouse has made no secret of its desire to revisit the tax bills that Kelly vetoed two years ago, especially with its supermajorities intact after last year’s elections and a Legislature that appears to be more conservative.

The governor vetoed tax bills that included provisions that would have allowed Kansans to itemize deductions on their state tax returns even if they take the more lucrative standard deduction on their federal tax return.

Kansans can only itemize on the state return if they itemize on the federal return, an unlikely prospect since the federal deductions are fairly lucrative after they were increased in 2017.

The itemization component was rolled together with other corporate provisions that would not have taxed income on foreign earnings and profits from domestic companies between 1986 and 2018.

Even with reelection approaching, the governor didn’t seem more inclined to go along with anything that might cripple the state budget and hurt economic development, alluding to former Gov. Sam Brownback’s tax cuts.

“We’re just a few years removed from the Brownback tax experiment, and it seems as though some of my colleagues in the Legislature have already forgotten just how devastating that experiment was to our economy, our schools and our future,” Kelly said in her address to the Legislature.

“The tough, pragmatic budget choices we have made to this point have given us flexibility to protect our core services – like education, infrastructure and economic development tools – from COVID-related cuts, and have been an historically potent tool we have to recruit businesses to Kansas.

“As we recover from the economic damage caused by effects of this virus, we must continue to prioritize strategic and inclusive economic policies, not Brownback 2.0 tax cuts.”

The question remains: What precisely constitutes Brownback 2.0 tax cuts, and would she be willing to go along with something more moderate in scope like allowing Kansans to itemize on their tax returns if they don’t on the federal form.