Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 5, 2019


The Honorable Carolyn McGinn, Chairperson
Senate Committee on Ways and Means
Statehouse, Room 545-S
Topeka, Kansas 66612
Dear Senator McGinn:
SUBJECT: Fiscal Note for SB 2 by Senator Denning
In accordance with KSA 75-3715a, the following fiscal note concerning SB 2 is
respectfully submitted to your committee.
SB 2 would create the Federal Medical Assistance Percentage Stabilization Fund in the
Department of Health and Environment (KDHE). The bill would require that any funds recovered
from the federal government as a result of the pending lawsuit Texas v. United States, no. 7:15-cv-
00151-O be deposited into the new fund. In years when the Federal Medical Assistance Percentage
(FMAP) increases resulting in lower state expense for Title XIX programs, the bill would require
a transfer of the amount of those savings from the State General Fund to the new stabilization fund.
In years when the FMAP decreases, the corresponding dollar amount of increased state share
responsibility would be transferred from the stabilization fund to the State General Fund.
Beginning in FY 2020, all transfers from the Federal Medical Assistance Percentage Stabilization
Fund would have to be used to fund additional Title XIX cost incurred due to any decreased in the
Kansas FMAP.
Beginning in FY 2020, on each December 1 and June 30, the Secretary of KDHE would
be required to determine and certify the amount of any increased or decreased state obligation for
Title XIX costs resulting from increases or decreases to the FMAP. Upon such certification, the
Director of Accounts and Reports would implement the transfers to and from the Federal Medical
Assistance Percentage Stabilization Fund and the State General Fund as specified by the bill. On
or before September 1 of each year, the Secretary would submit an annual report to the Legislative
Budget Committee and the Legislature detailing the transfers to and from the fund and the
expenditures from the fund.
The Honorable Carolyn McGinn, Chairperson
Page 2—SB 2

The Kansas Attorney General’s Office states that the moneys recovered under the
definitions of this bill would include any attorney fees, expenses or costs that are awarded to the
State of Kansas under this lawsuit. Normally in such cases, attorney fees, expenses and costs are
retained by the Office of the Attorney General to reimburse the office for expenses incurred in the
lawsuit. Therefore, the Office would experience a net loss of costs incurred. Additionally, the
Kansas Attorney General’s Office states that Texas v. United States is still in litigation and it is
unknown if or when any funds may be received.
KDHE states that the FMAP for Kansas is increasing by 2.13 percent from FY 2019 to FY
2020 which will result in increased federal funding and a corresponding decrease in state funding
for Title XIX expenditures. Under the current Consensus Caseload Estimate the state will be
required to spend $64.4 million less from the State General Fund. These State General Fund
savings are reflected in The FY 2020 Governor’s Budget Report; however, the transfer of $64.4
million from the State General Fund to the Federal Medical Assistance Percentage Stabilization
Fund that would be required by this bill is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Dan Thimmesch, Health & Environment
Willie Prescott, Office of the Attorney General