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


January 25, 2023


The Honorable Kristey Williams, Chairperson
House Committee on K-12 Education Budget
300 SW 10th Avenue, Room 546-S
Topeka, Kansas 66612
Dear Representative Williams:
SUBJECT: Fiscal Note for HB 2048 by House Committee on K-12 Education Budget
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2048 is
respectfully submitted to your committee.
Under current law, the Tax Credit for Low Income Students Scholarship Program requires
a student’s eligibility for free or reduced prices meals under the National School Lunch Act as a
qualifier for participation in the program. HB 2048 would remove this eligibility and would
instead require that an eligible student must: (1) not have graduated from high school or reached
the age of 21; and (2) have an annual family income that is less than or equal to 250.0 percent of
the federal poverty guidelines, as determined by the US Department of Health and Human
Services. The bill would continue to require the student be a Kansas resident.
In addition to meeting these qualifiers, the bill would require a participating student to: (1)
enroll in kindergarten or in any of the grades one through 12 for the first time; (2) have been in
foster care or placed in a kinship care placement at any time prior to graduation from high school
or the age of 21; (3) have a parent who is on active duty with any branch of the US armed forces;
or (4) have a parent who is an emergency medical service provider, firefighter, or law enforcement
officer.
For contributions to a scholarship granting organization, current tax law provides a tax
credit of up to 70.0 percent of the amount contributed with a maximum allowable credit of
$500,000 in any tax year and a program aggregate of $10.0 million of tax credits in any one tax
year against a company’s corporate income tax liability or a bank or insurance company’s privilege
tax liability. HB 2048 would change the tax credit, beginning in tax years after December 31,
2022, to equal to 100.0 percent of the amount contributed to a scholarship granting organization,
up to a maximum of $500,000 per taxpayer. In each tax year after December 31, 2022, the
Secretary of Revenue would be required to determine whether the total amount of credits claimed
exceeds 80.0 percent of the aggregate tax limit. If this condition is satisfied, the aggregate tax
limit would be increased by 20.0 percent for the succeeding tax year with a maximum aggregate
limit of $20.0 million.
The Honorable Kristey Williams, Chairperson
Page 2—HB 2048

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($5,000,000) ($5,000,000)
Expenditure -- -- $105,940 $105,940
FTE Pos. -- -- -- 0.50
According to the Department of Revenue, in Tax Year 2022, approximately $5.0 million
in tax credits have been approved for the program. Because the bill would allow a greater number
of students to qualify and would increase the maximum credit allowed to 100.0 percent of a
contribution to a scholarship granting organization, the Department estimates that credits would
increase by $5.0 million (to a total of $10.0 million) in Tax Year 2023, with an additional increase
of $2.0 million (to a total of $12.0 million) in Tax Year 2024. The Department estimates additional
increases of $2.0 million in each subsequent year beyond Tax Year 2024. The Division of the
Budget notes that although the current annual statutory cap for the tax credit is $10.0 million, the
projected amounts estimated by the Consensus Revenue Estimating Group in the overall revenues
for the State General Fund in FY 2023 and FY 2024 is based upon the actual tax credits claimed
in the prior tax year.
The Department of Revenue would require $67,190 from the State General Fund in FY
2024 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. 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.
The Department of Education estimates that because of the increased number of students
applying for scholarships, the agency would require additional expenditures totaling $38,750 from
the State General Fund for a 0.50 FTE position to review and process applications. This estimate
includes $36,250 for salaries and wages, including fringe benefits, and operating expenditures
totaling $2,500 for office equipment, phone and internet services, and office rent. Any fiscal effect
associated with HB 2048 is not reflected in The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Craig Neuenswander, Department of Education


Statutes affected:
As introduced: 72-4353, 72-4357, 72-4352, 72-5132