Proposed Budget Highlights
The proposed budget for fiscal year 2025 pays down existing debt early, cuts taxes, fully funds schools, expands Medicaid eligibility, and makes investments in infrastructure, early childhood services, and housing. Highlights of the budget proposal include:
Providing Tax Relief
- Proposes various tax changes to reduce the tax burden across most major tax sources that will provide estimated savings of $439.5 million to Kansas taxpayers in fiscal 2025. The following tax changes are proposed:
- Eliminate the state level food sales tax, effective April 1, 2024.
- Provide a sales tax exemption for diapers and feminine hygiene products.
- Create a four-day sales tax holiday for back-to-school shopping.
- Exempt Social Security income from state income tax for all taxpayers.
- Increase the Kansas standard deduction for personal income taxes.
- Double the Child and Dependent Care Tax Credit, saving families $6.0 million per year.
- Reduce the privilege normal tax rate for banks, trust companies, and savings and loan associations.
- Increase residential tax exemption and eliminate future exemption increases.
- Transfer $54 million in State General Funds to the Local Ad Valorem Tax Relief Fund.
Medicaid Expansion
- Proposes expanding Medicaid eligibility to the full amount allowed under federal law beginning January 1, 2025.
Early Childhood Care & K-12 Education
- Continues to fully fund K-12 through funding the state-based aid for student excellence (BASE)
- Appropriates $30 million to the childcare capacity accelerator grant program.
- Directs $15 million to fund sustainability grants to act as direct support to existing childcare providers.
- Invests $5.0 million in pilot program to address rural healthcare needs.
- Proposes an incremental increase of $74.9 million each year for the next five years to fully fund special education.
- Increases funding by $3.0 million to expand the Mental Health Intervention Team (MHIT) pilot program.
- Recommends fully funding the Mentor Teacher State Aid program.
Post-Secondary Education
- Increases need-based aid funding by $14.1 million.
- Directs $12.7 million to Emporia State University for the early retirement of debt and to reduce student fees and housing costs.
- Provides $5 million toward the expansion of Wichita State University student affordability, retention, and work development.
- Recommends $36.9 million for the Postsecondary Institutions Operating Grant to be distributed to individual institutions.
- Appropriates $20.0 million for the capital renewal of university mission critical buildings.
- Provides $75.0 million to the University of Kansas Medical Center for a new cancer research facility.
Water
- Fully funds the State Water Plan Fund.
- Provides $5.0 million to Kansas State University to establish the Water Institute.
- Invests $10 million in one-time funding to the Kansas Department of Health and Environment for infrastructure assistance.
State Employees
- Introduces a statewide 5 percent pay adjustment for state employees.
- Sets minimum starting wage at $15 per hour for all state employees.
- Proposes a 7.5 percent pay adjustment for all 24/7 salaried employees.
One-Time Investments
- Utilizes current surplus of $1.3 billion including $1.0 billion in federal funds to fund the following one-time expenditures:
- $500 million to pay down long-term state debts ahead of schedule.
- $500 million in cash to fund new capital projects.
- $200 million for postsecondary education projects.
- $80 million in community investments (housing, infrastructure, etc.)