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


March 27, 2019
REVISED

The Honorable Steven Johnson, Chairperson
House Committee on Taxation
Statehouse, Room 185-N
Topeka, Kansas 66612
Dear Representative Johnson:
SUBJECT: Revised Fiscal Note for HB 2264 by Representative Whipple
In accordance with KSA 75-3715a, the following revised fiscal note concerning HB 2264
is respectfully submitted to your committee.
HB 2264 would provide a $500 refundable tax credit, beginning in tax year 2019 to any
qualifying student who attends a public postsecondary educational institution in Kansas and is a
Pell Grant recipient. The bill defines qualifying student as an individual who attends a
postsecondary educational institution located in this state; and is the recipient of a Pell Grant from
the U.S. Department of Education during that tax year. The Department of Revenue would have
the authority to adopt rules and regulations to implement the bill.
The Kansas Board of Regents indicates HB 2264 would have no fiscal effect on the Board
office or Kansas public postsecondary educational institutions. However, the Board estimates the
income tax credit would reduce individual income tax revenues to the State General Fund by
approximately $23.7 million annually. The estimate is based on 47,391 Kansas students in the
Regents system who received the Pell Grant during the 2017-2018 school year. The estimate
assumes all of these individuals are employed and would file Kansas income taxes to receive the
tax credit (47,391 students x $500 tax credit = $23,695,500).
The Department of Revenue indicates HB 2264 would reduce revenues to the State General
Fund, but does not have sufficient information to produce a reliable estimate with respect to a
resident individual who is a qualifying student. The Department indicates a hypothetical estimate
would be a $2.3 million reduction in revenues to the State General Fund. The Department indicates
76.0 percent of U.S. postsecondary education students were employed during 2017 and 2018
which would equate to 36,017 postsecondary education students in Kansas. The hypothetical
The Honorable Steven Johnson, Chairperson
Page 2—HB 2264

estimate assumes 38.0 percent of those students would file a Kansas tax return and, of that amount,
34.0 percent would be able to take advantage of the tax credit (36,017 students x 38.0 percent of
student filers x 34.0 percent of student filers qualified for the credit x $500 tax credit = $2,326,698).
The Department indicates it would require a total of $552,520 from the State General Fund
in FY 2020 to hire 2.00 FTE positions to implement the bill and to modify the automated tax
system. The required programming for this bill by itself would be performed by existing staff of
the Department of Revenue and outside contract programmer services. In addition, if the
combined effect of implementing this bill and other enacted legislation exceeds the Department’s
programming resources, or if the time for implementing the changes is too short, additional
expenditures for outside contract programmer services beyond the Department’s current budget
may be required. Any fiscal effect associated with HB 2264 is not reflected in The FY 2020
Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Kelly Oliver, Board of Regents
Lynn Robinson, Department of Revenue