Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor
Division of the Budget
February 14, 2023
The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 138 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 138 is
respectfully submitted to your committee.
Under current law, property owned by the Strother Field Airport Commission as of January
1, 1992, is exempt from property taxes. SB 138 would expand the property tax exemption to
include the property owned by political subdivisions comprising the Strother Field Airport
Commission and the property tax exemption would be extended to property included in the
airport’s federally approved airport layout plan whether used for aviation related purposes, to
promote aviation commerce, or to provide revenue to operate all Strother Field components and
activities. The bill would also cancel all property taxes, penalties, and interest owed on this
property before January 1, 2023.
The Department of Revenue indicates that there are currently two parcels of property in
Cowley County that have the potential to be impacted from the expansion of this property tax
exemption included in SB 138. Exemption applications for both parcels are pending with the
Board of Tax Appeals (BOTA). If BOTA rules that these two parcels of property are exempt, this
bill would have no fiscal effect on state and local property revenues. If BOTA rules that these two
parcels of property are not exempt, the bill could decrease property tax revenues by expanding a
current property tax exemption. The state funds directly affected by this bill are the two building
funds, the Educational Building Fund (EBF) and the State Institutions Building Fund (SIBF). The
Department of Revenue estimates this bill could decrease revenues to these two funds by $513 in
FY 2024, with $342 from the EBF and $171 from the SIBF. Less property tax revenue would also
affect state expenditures for aid to school districts. To the extent that less property tax revenue
would be available from the state’s uniform mill levy to fund expenditures for school districts, the
state could be required to provide an additional $6,834 in state aid from the State General Fund The Honorable Caryn Tyson, Chairperson
Page 2—SB 138
through the school finance formula in FY 2024. Local governments that levy a property tax could
also receive less revenue; however, the amount of reduced property tax revenues was not
estimated. The bill has the potential to reduce future state and local property taxes if additional
buildings are constructed for businesses that would be exempt from the property tax. The fiscal
effect to state revenues during subsequent years could be as follows:
FY 2025 FY 2026
School District Finance ($7,244) ($7,678)
EBF (362) (384)
SIBF (181) (192)
($7,787) ($8,254)
The Department of Revenue indicates the bill would have no fiscal effect on its operations.
Any fiscal effect associated with SB 138 is not reflected in The FY 2024 Governor’s Budget
Report.
The Kansas Association of Counties indicate that the bill has the potential to reduce the
amount of local property tax revenues that are used in part to finance local governments.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Craig Neuenswander, Department of Education
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties