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
January 31, 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 94 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 94 is
respectfully submitted to your committee.
Under current law, the State of Kansas receives property tax revenue each year from the
1.0 mill Education Building Fund (EBF) tax levy and the 0.5 mill State Institutions Building Fund
(SIBF) tax levy. SB 94 would discontinue these property tax levies after tax year 2023 and
authorize an annual transfer from the State General Fund to these funds starting in FY 2025. The
bill would transfer $41.8 million from the State General Fund to the EBF on July 1, 2024. In future
fiscal years, the transfer from the State General Fund to the EBF would increase by 2.0 percent
each year and would occur on July 1st of each future fiscal year. The bill would transfer $20.9
million from the State General Fund to the SIBF on July 1, 2024. In future fiscal years, the transfer
from the State General Fund to the SIBF would increase by 2.0 percent each year and would occur
on July 1st of each future fiscal year. The bill would remove outdated language on the EBF and
SIBF, including language that allows the Director of Accounts and Reports at the Department of
Administration to credit amounts to the EBF and SIBF for cashflow purposes.
SB 464 would reduce State General Fund revenues by a total of $62.7 million in FY 2025
by authorizing transfers from the State General Fund of $41.8 million to the EBF and $20.9 million
to the SIBF. The bill would decrease state property tax revenues by discontinuing the EBF and
SIBF property tax levies. The Department of Revenue estimates this bill would decrease property
tax revenues to these two funds by a total of $66,930,000 in tax year 2024 or FY 2025, with
$44,620,000 from the EBF and $22,310,000 from the SIBF.
The bill is estimated to have a net reduction of revenue to the state building funds of
$4,230,000 in FY 2025. Specifically, the EBF would receive $2,820,000 less in revenue in FY The Honorable Caryn Tyson, Chairperson
Page 2—SB 94
2025 ($41.8 million in new revenue from the SGF transfer minus $44,620,000 by discontinuing
the property tax). The SIBF would receive $1,410,000 less in revenue in FY 2025 ($20.9 million
in new revenue from the SGF transfer minus $22,310,000 by discontinuing the property tax). The
bill would also provide less revenues to the EBF and SIBF in future fiscal years as property tax
revenues are estimated to increase with property valuations each year by approximately 5.0
percent, while the amount of the State General Fund transfers would grow by 2.0 percent each
year. The reduction in revenue to the EBF and SIBF are shown in the following tables:
Current Law FY 2025 FY 2026 FY 2027
EBF $44,620,000 $46,851,000 $49,193,550
SIBF $22,310,000 $23,425,500 $24,596,775
Total $66,930,000 $70,276,500 $73,790,325
SB 94 Transfers FY 2025 FY 2026 FY 2027
EBF $41,800,000 $42,636,000 $43,488,720
SIBF $20,900,000 $21,318,000 $21,744,360
Total $62,700,000 $63,954,000 $65,233,080
Revenue Reduction FY 2025 FY 2026 FY 2027
EBF ($2,820,000) ($4,215,000) ($5,704,830)
SIBF ($1,410,000) ($2,107,500) ($2,852,415)
Total ($4,230,000) ($6,322,500) ($8,557,245)
The property tax estimates (excluding motor vehicles) were developed jointly by the
Department of Revenue, Kansas Legislative Research Department, and the Division of the Budget
in November 2022 as part of the education consensus revenue estimating process. That process
includes the assumption that approximately 3.0 percent of property taxes become delinquent and
are collected in future years; however, the actual amount of delinquent property taxes varies from
year to year. Delinquent property tax revenue that are collected in future fiscal years would be
credited to the EBF and SIBF.
The Board of Regents indicates that the bill has the potential to provide less funding for
the EBF that would be used to fund deferred maintenance projects at the state universities.
According to the Board, the estimated renewal cost to bring all mission critical buildings to a “state
of good repair” is estimated at just over $1.2 billion in FY 2022. The Board estimates that an
annual amount of $154.0 million is needed for on-going maintenance to prevent any further
backlogs and to adequately maintain university campuses. The Division of the Budget notes that
it is unknown if the State General Fund or other state resources would be used in the appropriation
process to provide additional funding for projects that were previously funded with EBF dollars.
The bill has the potential to provide less funding to the SIBF. The SIBF is established in
the Kansas Constitution for constructing, equipping, and repairing buildings at the state institutions
for the mentally ill and developmentally disabled overseen by the Department for Aging and
Disability Services, the state’s juvenile correctional facility, the Schools for the Deaf and Blind
under the Department of Education, as well as the veterans’ homes and cemeteries. The FY 2024 The Honorable Caryn Tyson, Chairperson
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Governor’s Budget Report indicates that a number of state agencies depend on monies available
in the SIBF for their capital improvement projects. The Division of the Budget notes that it is
unknown if the State General Fund or other state resources would be used in the appropriation
process to provide additional funding for projects that were previously funded with SIBF dollars.
Any fiscal effect associated with SB 94 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
Becky Pottebaum, Board of Regents
Crystal Hewitt, Commission on Veterans Affairs
Leigh Keck, Department for Aging & Disability Services
Randy Bowman, Department of Corrections
Adela Tan, School for the Blind & School for the Deaf