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 C. Proffitt, Director Laura Kelly, Governor
Division of the Budget
January 20, 2025
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 35 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 35 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 35 would discontinue these property tax levies after tax year 2025 and
authorize an annual transfer from the State General Fund (SGF) to these funds starting in FY 2027.
The bill would transfer $50.0 million from the SGF to the EBF on July 1, 2026. In future fiscal
years, the transfer from the SGF 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 $25.0 million from the SGF to
the SIBF on July 1, 2026. In future fiscal years, the transfer from the SGF 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would remove outdated language on the EBF and SIBF, including language that allows the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 35 would reduce SGF revenues by a total of $75.0 million in FY 2027 by authorizing
transfers from the SGF of $50.0 million to the EBF and $25.0 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 $84,230,000 in tax year 2026 or FY 2027, with $56,150,000 from the EBF and
$28,080,000 from the SIBF.
The bill is estimated to have a net reduction of revenue to the state building funds of
$9,230,000 in FY 2027. Specifically, the EBF would receive $6,150,000 less in revenue in FY
2027 ($50.0 million in new revenue from the SGF transfer minus $56,150,000 by discontinuing
the property tax). The SIBF would receive $3,080,000 less in revenue in FY 2027 ($25.0 million The Honorable Caryn Tyson, Chairperson
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in new revenue from the SGF transfer minus $28,080,000 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 SGF 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 2027 FY 2028 FY 2029
EBF $56,150,000 $58,960,000 $ 66,970,000
SIBF $28,080,000 $29,480,000 $ 33,480,000
Total $84,230,000 $88,440,000 $100,450,000
SB 35 Transfers FY 2027 FY 2028 FY 2029
EBF $50,000,000 $51,000,000 $52,020,000
SIBF $25,000,000 $25,500,000 $26,010,000
Total $75,000,000 $76,500,000 $78,030,000
Revenue Reduction FY 2027 FY 2028 FY 2029
EBF ($6,150,000) ($ 7,960,000) ($14,950,000)
SIBF ($3,080,000) ($ 3,980,000) ($ 7,470,000)
Total ($9,230,000) ($11,940,000) ($22,420,000)
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 2024 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. Motor vehicle property taxes have a two-year lag with their mill
levy and will not cause an impact until FY 2029.
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 $1.570 billion in FY 2025. The Board estimates that an
annual amount of $168.0 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 2026
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 The Honorable Caryn Tyson, Chairperson
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unknown if the SGF 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 35 is not reflected in The FY 2026 Governor’s Budget Report.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Chris Mitchell, Department of Administration
Becky Pottebaum, Board of Regents
Melissa Ford, Office of Veterans Services
Jennifer King, Department of Corrections
Adela Tan, Schools for the Blind and Deaf