Topeka ? Approximately 1,140 former Kansas University Medical Center students received $17.75 million in FICA refunds last week, state officials reported today.

Now the question is what to do when the state receives the $25 million representing the employer’s share of the FICA withholding.

During the last legislative session, Brownback proposed using some of that money, $10 million, to help Kansas University Medical Center build a new $75 million to $80 million medical education building. KU officials have said the project is a top priority because the current building is outdated.

Brownback’s Republican colleagues in the Legislature, however, rebuffed him.

But today, Brownback said he may try again.

“We need to expand the number of docs who graduate in this state. There is a good chance we do that again, but I’m not going to stand here and tell you that decision has been made because that will come up in a broader budget context,” Brownback said.

The refunds represent Social Security and Medicare taxes, plus interest, withheld from the paychecks of former medical residents from January 1993 through March 2005 under the Federal Insurance Contribution Act.

“These refunds were possible due to the dedication and commitment of our state employees,” Brownback. “They are literally responsible for saving Kansas taxpayers millions of dollars,” he said.

“We’ve worked hard over many years to ensure that the money that residents and the KU Medical Center paid to the IRS is returned,” said KU Chancellor Bernadette Gray-Little. “This is good news for our former medical residents, and we look forward to the return of the full amount of the employer contribution,” Gray-Little said.

The IRS agreed to issue refunds following litigation by medical schools across the country that claimed the medical residents were students and therefore exempt from FICA taxes under IRS regulations in place at that time.

To avoid further litigation, the IRS clarified the regulation, effective April 2005, to specify that medical residents were full-time employees and therefore ineligible to receive the student exemption, according to the Kansas Department of Administration. In 2011, the U.S. Supreme Court upheld that decision.

State officials said that staff at the KU Medical Center, the Department of Administration, and the Kansas Board of Regents worked more than 18 years to ensure that medical residents and the state were eligible to claim refunds for the maximum number of years available under the IRS settlement ruling.