Bill Summary – FastDemocracy

Division of the Budget
Landon State Office Building                                                                         Phone: (785) 296-2436
900 SW Jackson Street, Room 504                                                                      larry.campbell@ks.gov
Topeka, KS 66612                                Division of the Budget                              http://budget.kansas.gov
Larry L. Campbell, Director                                                                        Laura Kelly, Governor


                                                  February 4, 2019


         The Honorable Sean Tarwater, Chairperson
         House Committee on Commerce, Labor and Economic Development
         Statehouse, Room 151-S
         Topeka, Kansas 66612
         Dear Representative Tarwater:
                   SUBJECT:       Fiscal Note for HB 2022 by Representative Ward
                 In accordance with KSA 75-3715a, the following fiscal note concerning HB 2022 is
         respectfully submitted to your committee.
                 HB 2022 would enact the Kansas Working Families Pay Raise Act which includes two
         increases to the state’s minimum wage for all employees in the State of Kansas. Effective January
         1, 2020, the minimum wage would increase from its current rate of not less than $7.25 per hour to
         a rate of not less than $11.00 per hour. The rate would then increase to not less than $15.00 per
         hour on and after January 1, 2021.
                 The bill would also increase the minimum wage for employees who receive tips and
         gratuities. On January 1, 2020, the minimum rate for such employees would increase from the
         current rate of $2.13 per hour to a rate of at least $2.63 per hour. The rate would then increase to
         at least $3.13 per hour on and after January 1, 2021. Employers would still be required to pay
         additional wages to employees whose combination of minimum wage and tips and gratuities did
         not equal the standard minimum wage referenced in the first paragraph. The combination must at
         least equal the standard minimum wage in effect at the time.
                 The Department of Administration estimates that increasing the minimum wage to $11.00
         per hour on January 1, 2020, would increase the base salaries of 478 executive branch, non-
         university employees at a total cost of $1,429,296 annually.        Increasing the minimum wage
         to $15.00 per hour on January 1, 2021, would increase the base salaries of 3,642 executive branch,
         non-university employees at a cost of $13,763,464. Taken together, HB 2022 would increase base
         salaries paid to the executive branch employees by $15,192,760. The amount would increase total
         executive branch expenditures by $714,648 in FY 2020, $7,596,380 in FY 2021 and $6,881,732
         in FY 2022.
The Honorable Sean Tarwater, Chairperson
Page 2—HB 2022

        The Department of Labor estimates that there are 306,716 employees in Kansas that make
less than $11.00 per hour and there are an additional 580,210 employees that make less than $15.00
per hour. The Department indicates the State of Kansas employs 1,484 employees who make less
than $11.00 per hour and 7,552 employees who make less than $15.00 per hour. The agency does
not have exact wages for local government or all employers; therefore, the fiscal effect cannot be
provided. The agency estimated the fiscal effect on unemployment benefit payments because of
the effect on the state’s average weekly wage. There was no discernable effect on unemployment
benefits.
       According to the Board of Regents, increasing the minimum wage to $11.00 per hour on
January 1, 2020, would increase salaries for 8,600 university employees at a total cost of
$14,562,000 annually. Increasing the minimum wage to $15.00 per hour on January 1, 2021,
would increase salaries for 10,700 university employees at a cost of approximately $34,866,100
annually. For universities, the total fiscal effect would be $49,428,000 and would increase
expenditures by $7,281,000 in FY 2020, $24,714,000 in FY 2021 and $17,433,000 in FY 2022.
       The Office of Judicial Administration indicates HB 2022 would primarily affect Trial
Court Clerk II FTE positions and Trial Court Clerk III FTE positions at a cost of $1.1 million
annually.
       Kansas Legislative Services estimates HB 2022 would increase legislative branch salaries
by $131,692 in FY 2020 and up to $578,881 in the future years.
       Any fiscal effect associated with HB 2022 is not reflected in The FY 2020 Governor’s
Budget Report.


                                                    Sincerely,

                                                    Larry L. Campbell
                                                    Director of the Budget


cc: Linda Kelly, Corrections
    Colleen Becker, Department of Administration
    Kelly Oliver, Board of Regents
    Janie Harris, Judiciary
    Karen Clowers, Legislative Services
Statutes affected: 
As introduced: 44-1203