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 169 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 169 is
respectfully submitted to your committee.
Under current law, individual income tax rates are set at 3.1 percent for income under
$15,000 ($30,000 for married filing jointly), 5.25 percent for income between $15,000 and $30,000
(between $30,000 and $60,000 for married filing jointly), and 5.7 percent for income $30,000 and
over ($60,000 and over for married filing jointly). SB 169 would eliminate the individual income
tax for taxpayers with income under $5,225 ($10,450 for married filing jointly) and set the
individual income tax rate to 4.75 percent for income over $5,225 ($10,450 for married filing
jointly) beginning in tax year 2024.
Estimated State Fiscal Effect
FY 2023
SGF
FY 2023
All Funds
FY 2024
SGF
FY 2024
All Funds
Revenue -- -- ($170,400,000) ($170,400,000)
Expenditure -- -- $52,150 $52,150
FTE Positions -- -- -- --
The Department of Revenue estimates that SB 169 would decrease State General Fund
revenues by $170.4 million in FY 2024, $568.5 million in FY 2025, and $574.2 million in FY
2026. To formulate these estimates, the Department of Revenue simulated this tax policy change
based on actual tax return data from tax year 2020. The estimate for FY 2024 includes 30.0 percent
of tax year 2024 tax liability. The estimate for FY 2025 includes 70.0 percent of tax year 2024 tax The Honorable Caryn Tyson, Chairperson
Page 2—SB 169
liability and 30.0 percent of tax year 2025 tax liability. The estimated impact by tax year and fiscal
year are as follows:
Tax Year Fiscal Year
2024 $566,800,000 $170,400,000
2025 $572,500,000 $568,500,000
2026 $578,200,000 $574,200,000
The Department indicates that the bill would require $52,150 from the State General Fund
in FY 2024 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required.
The Department of Administration indicates that adjusting state income tax collections has
the potential to have a fiscal effect on the amount of revenue collected from its debt setoff program.
This program intercepts individual income tax refunds and homestead tax refunds and applies
those amounts to debts owed to state agencies, municipalities, district courts, and state agencies in
other states. Debts include, but are not limited to child support, taxes, educational expenses, fines,
services provided to the debtor, and court ordered restitution. As the dollar amounts of refunds
are increased, the amount available for possible debt setoffs is also increased. However, the
Department is unable to make a precise estimate of the number of debts setoffs that will be
intercepted as a result of the bill. Any fiscal effect associated with SB 169 is not reflected in The
FY 2024 Governor’s Budget Report.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Tamara Emery, Department of Administration