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 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


February 10, 2023
REVISED

The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Revised Fiscal Note for HB 2009 by Representative Sawyer-Clayton
In accordance with KSA 75-3715a, the following revised fiscal note concerning HB 2009
is respectfully submitted to your committee.
HB 2009 would provide a sales tax exemption for diapers and feminine hygiene products
beginning on July 1, 2023. The bill includes definitions for diapers and feminine hygiene products.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($6,800,00) ($8,300,000)
Expenditure -- -- $1,200 $1,200
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2009 would decrease state revenues by $8.3
million in FY 2024. Of that total, the State General Fund is estimated to decrease by $6.8 million
in FY 2024, while the State Highway Fund is estimated to decrease by $1.5 million in FY 2024.
Since the original fiscal note was issued, the Department of Revenue revised its estimate of the
fiscal effect. This bill also is estimated to decrease local sales tax revenues; however, the specific
estimate of lower local sales tax revenues was not calculated by the Department of Revenue. The
fiscal effect to state revenues during subsequent years would be as follows:
The Honorable Adam Smith, Chairperson
Page 2—REVISED HB 2009

FY 2025 FY 2026 FY 2027 FY 2028
State General Fund ($8,100,000) ($8,300,000) ($8,400,000) ($8,500,000)
State Highway Fund (1,730,000) (1,830,000) (1,850,000) (1,850,000)
($9,830,000) ($10,130,000) ($10,250,000) ($10,350,000)
To formulate these estimates, the Department of Revenue reviewed data from the U.S.
Bureau of Labor Statistics Consumer Expenditure Survey and the Kansas Department of Health
and Environment. According to the Department of Revenue, reissuing sales tax publications and
revising forms would cost $1,200 from the State General Fund in FY 2024.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund as noted above. KDOT indicates that when the state
receives lower State Highway Fund dollars it may be required to make corresponding reductions
to planned expenditures for projects funded under the comprehensive transportation plan.
The Kansas Association of Counties and the League of Kansas Municipalities indicate that
the bill would provide a net reduction to local sales tax collections that are used in part to finance
local governments. The bill also has the potential to reduce revenues that are pledged to repay
STAR bond projects; however, it is unknown what impact this bill would have on the viability of
those projects.
The fiscal effect associated with SB 89 is reflected in The FY 2024 Governor’s Budget
Report. However, the total reduction in sales tax revenue is slightly less in FY 2024 for SB 89 as
compared to the tax policy recommended by the Governor. There is a one-month lag in sales tax
collections after a sales tax change goes into effect and the Governor’s tax policy recommendation
would take effect three months earlier on April 1, 2023.


Sincerely,

Adam Proffitt
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Brendan Yorkey, Department of Transportation
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties


Statutes affected:
As introduced: 79-3606