Topeka ? As the major part of the 2007 legislative session neared completion Tuesday, key state lawmakers challenged Gov. Kathleen Sebelius and Kansas University leaders over the issue of KU Medical Center’s proposed partnership with a Missouri hospital system.

House Republican leaders insisted that language be placed in the $12.3 billion state budget to give KU Hospital veto power over the planned research partnership between KU Medical Center and Kansas City, Mo.-based St. Luke’s Hospital.

Some lawmakers say they fear an agreement with St. Luke’s would hurt both KU Hospital, which is the medical center’s primary partner, and physician training in Kansas.

“The future of medical education in Kansas is at stake,” said House Speaker Melvin Neufeld, R-Ingalls.

But Sebelius has sided with KU Medical Center officials who say the partnership with St. Luke’s will strengthen life sciences research in Kansas and help KU achieve status as a national cancer center.

“It’s essential that we get this regional affiliation accomplished so that we can move in that direction,” Sebelius said.

Sebelius, however, has declined to say whether she would line-item veto the budget provisos dealing with the affiliation.

Preparing for break

Those provisos were in the major state budget bill as lawmakers neared adjournment to take a three-week break before returning April 25 for a wrap-up session.

One proviso states that an affiliation between KU Medical Center and St. Luke’s cannot be implemented until the agreement has been reviewed and approved by the Kansas Board of Regents and KU Hospital Authority Board.

Dennis McCulloch, a spokesman for the KU Hospital, said, “This just puts the Legislature on record with what we have wanted all along, which is to do this thing right. It is too risky not to take the time to do it right.”

Last week, the medical center and KU Hospital signed “guiding principles” for an affiliation but missed a Saturday deadline for signing an agreement, extending it until May 31. Meanwhile, KU Medical Center and St. Luke’s board plan to sign their agreement by June 30.

Another measure in the budget will require KU Medical Center to maintain at least the current number of medical residents at KU Hospital and its Wichita program, and consider expanding its operations with Via Christi Medical Center and Wesley Medical Center, both in Wichita.

In addition, the budget would allow the State Finance Council to disapprove any affiliation agreement with St. Luke’s. But Sebelius controls the agenda of the Finance Council.

Deferred maintenance

On another higher education issue, lawmakers conceded earlier this week that they had failed to resolve the $663 million worth of repairs at Kansas University and the five other regents schools. Key leaders vowed to produce a plan by the wrap-up session.

Proposals to increase taxes, turnpike tolls and tuition all had been considered and then rejected. Higher education officials sought to stake out a claim to a portion of revenue expected from the new legislation that expanded gambling, but no definite dollar amounts were proposed.

State pay raise

Under the proposed budget, state workers would get a 2 percent pay raise on July 1 and a $860 bonus on Dec. 14.

For Kansas University employees, the salary increase and bonus funds would be pooled and sent to the university as part of the school’s block grant. University administrators then will make the decision on the size of pay raises.

Tax cuts and increases

The Legislature sent to Sebelius a bill that would give Jefferson County authority to increase the sales tax by one cent for road and bridge improvements. The tax couldn’t be imposed until approved by voters there.

Another part of the tax bill would allow Johnson County to establish the Johnson County Education Research Triangle Authority, which would be funded with either an increase in that county’s sales tax of up to 0.2 of a cent, or a property tax increase of up to 2 mills, or a combination of both.

The authority could use those funds for building and operating three new higher education facilities: a clinical trials unit in northeast Johnson County for the KU Cancer Center; a classroom and office building for the KU Edwards campus; and a building at Kansas State University’s location in Olathe.

Among tax cuts, the Legislature worked on a package to phase out the business franchise tax during five years; increase the Earned Income Tax Credit from 15 percent to 17 percent; exempt Social Security benefits from state income tax for taxpayers with Kansas adjusted gross incomes of less than $50,000 this year, and $75,000 next year; and expand a homestead property tax refund for low-income people who are 55 and older.