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


March 1, 2023


The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 164 by Senate Committee on Commerce
In accordance with KSA 75-3715a, the following fiscal note concerning SB 164 is
respectfully submitted to your committee.
SB 164 would create a new income tax credit for qualified employees of licensed childcare
facilities beginning in tax year 2023 and ending in tax year 2025. The income tax credit would be
used in the year the taxpayer is or has been a qualified employee of the licensed facility. The credit
would not be refundable and could not be carried forward into future tax years. To qualify for the
tax credit, an individual would be required to work a minimum of 900 hours at a licensed childcare
facility during the tax year.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($4,300,000) ($4,300,000)
Expenditure -- -- $99,895 $99,895
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 164 would decrease State General Fund
revenues by $4.3 million in FY 2024, FY 2025, and FY 2026. To formulate these estimates, the
Department of Revenue reviewed data from the Bureau of Labor Statistics which indicate that
there were 6,450 Kansas childcare workers in 2021. The maximum credit available would be
$12.9 million, but since this credit would be nonrefundable, it is estimated that only 33.0 percent,
or $4.3 million, would be used each tax year. The Department estimates that to claim the full
The Honorable Caryn Tyson, Chairperson
Page 2—SB 164

$2,000 credit, a single taxpayer would need to make $49,000 in Kansas adjusted gross income,
and a married taxpayer would need to make $62,500.
The Department indicates that the bill would require $99,985 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. Any fiscal effect associated with SB 164 is not
reflected in The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue