Breaking down Gov. Kelly’s FY 2021 budget proposal

Kansas Center for Economic Growth
Jan. 17, 2020

Hot on the heels of her State of the State address, Gov. Laura Kelly released her budget proposal, recommending $19.8 billion in expenditures for FY 2021. The governor’s budget reflects several priorities, including:

  • Fiscal responsibility: The proposed budget shows the state general fund (SGF) balances exceeding percentage requirements. For FY 2021, the proposed budget would have an SGF ending balance for $627.8 million. The plan also includes decreased reliance on the Kansas Department of Transportation and continued phase-out of State Highway Fund transfers.
  • Pay off debts: The Governor’s plan includes paying off several debts early in FY 2020, including KPERS layering payments, the PMIB loan, and IMPACT bonds. The total debt amount to be paid off in FY 2020 would total over $600 million.
  • KPERs reamortization: Despite last year’s strong legislative disapproval, the Governor has again recommended reamortizing KPERS over 25 years, arguing the restructuring will provide more stability to the SGF budget.
  • Medicaid expansion: With the recent announcement of a bipartisan plan to expand KanCare this session, the Governor’s recommendation includes $17.5 million to expand Medicaid. Expanding eligibility for the program will allow 150,000 low-income Kansans access critical health care coverage.
  • Refundable food sales tax credit: The refundable credit would replace the current non-refundable food sales tax credit, benefitting more than 540,000 tax filers.
  • Other tax changes: The Governor’s budget also includes recommendations related to retail sales and compensating use taxes of digital property, marketplace facilitators’ tax collection, and addressing local property tax through Local Ad Valorem Tax Reduction Fund (LAVTRF).
  • Human services, education, and public safety: The budget lists additional funding for the proposed Department of Human Services, K-12 education to keep funding constitutional, higher education, and public safety.

ClayBreaking down Gov. Kelly’s FY 2021 budget proposal