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 C. Proffitt, Director Laura Kelly, Governor


January 31, 2024


The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2528 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2528 is
respectfully submitted to your committee.
HB 2528 would cap homestead property taxes to no more than the amount established in
the base year for individuals 65 years of age or older or their surviving spouse beginning in tax
year 2025. For individuals that turned 65 years of age prior to 2025, the base year would be 2024.
If the property or ad valorem taxes that are levied are less than the amount established as the base
year amount, the lesser amount would be levied and collected and that amount would be used as
the new base year amount for future years. All moneys received from taxes levied on the
homestead property would be allocated and distributed to the appropriate taxing subdivisions to
the proportion of the cumulative tax levies for that property. The Department of Revenue’s
Division of Property Valuation would be required to make available suitable forms with
instructions for claimants. Copies of the forms would also be made available to all county clerks
and county treasurers in sufficient numbers to supply claimants residing in their respective
counties. The county clerk would have the duty to assist claimants seeking assistance in filing
their claim. Claimants would be required to submit their application to the county treasurer by
April 1st, who would grant or deny the application.
Enactment of HB 2528 would decrease property tax revenues by adding a new property
tax exemption for individuals 65 years of age or older. The state funds directly affected by this
bill are the two building funds, the Educational Building Fund (EBF) and the State Institutions
Building Fund (SIBF). The Department of Revenue estimates this bill would decrease revenues
to these two funds by $510,000 in FY 2026, with $340,000 from the EBF and $170,000 from the
SIBF. The bill would decrease property tax revenues that school districts would receive through
the state’s uniform mill levy by $6,820,000. The bill would also decrease revenues to any local
government that levies a property tax; however, the specific estimate of lower local property tax
The Honorable Adam Smith, Chairperson
Page 2—HB 2528

revenues was not calculated by the Department of Revenue. The fiscal effect to state revenues
during subsequent years would be as follows:
FY 2027 FY 2028 FY 2029
School District Finance ($13,990,000) ($21,530,000) ($29,470,000)
EBF (700,000) (1,080,000) (1,470,000)
SIBF (350,000) (540,000) (735,000)
($15,040,000) ($23,150,000) ($31,675,000)
The Board of Regents indicates that the bill has the potential to provide less funding for
the EBF that would be used to fund deferred maintenance projects at the state universities.
According to the Board, the estimated renewal cost to bring all mission critical buildings to a “state
of good repair” is estimated at just over $1.3 billion in FY 2023. The Board estimates that an
annual amount of $166.0 million is needed for on-going maintenance to prevent any further
backlogs and to adequately maintain university campuses. The Division of the Budget notes that
it is unknown if the State General Fund or other state resources would be used in the appropriation
process to provide additional funding for projects that were previously funded with EBF dollars.
The bill has the potential to provide less funding to the SIBF. The SIBF is established in
the Kansas Constitution for constructing, equipping, and repairing buildings at the state institutions
for the mentally ill and developmentally disabled overseen by the Department for Aging and
Disability Services, the state’s juvenile correctional facility, the Schools for the Deaf and Blind
under the Department of Education, as well as the veterans’ homes and cemeteries. The FY 2025
Governor’s Budget Report indicates that a number of state agencies depend on monies available
in the SIBF for their capital improvement projects. The Division of the Budget notes that it is
unknown if the State General Fund or other state resources would be used in the appropriation
process to provide additional funding for projects that were previously funded with SIBF dollars.
The Division of the Budget notes that the estimated reduction in revenues from the 20-mill
school levy would require an offsetting appropriation for State Foundation Aid from the State
General Fund to keep the Base Aid for Student Excellence (BASE) in the school finance formula
at $5,623 for FY 2026, as included in The FY 2025 Governor’s Budget Report. If this provision
of the bill would be enacted without a corresponding increase to the State General Fund
appropriation for State Foundation Aid, the Department of Education would have to prorate the
BASE by reducing state aid to school districts in FY 2026. The Department of Education indicates
the bill would also reduce property taxes collected by local school boards to support capital outlay
projects by unknown amounts beginning in FY 2026.
The Department of Revenue indicates that the bill would require $43,395 from the State
General Fund in FY 2025 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
The Honorable Adam Smith, Chairperson
Page 3—HB 2528

Department’s current budget may be required. Any fiscal effect associated with HB 2528 is not
reflected in The FY 2025 Governor’s Budget Report.
The Kansas Association of Counties and the League of Kansas Municipalities indicate that
the bill by itself would lower local property tax collections that are used in part to finance local
governments by providing a new property tax exemption. To offset this decrease, local
governments would likely increase property taxes from other taxpayers not receiving this property
tax exemption. The Kansas Association of Counties indicates the bill would increase costs by
unknown amounts for county clerks to assist claimants seeking assistance in filing their claim and
for county treasurers to review applications.

Sincerely,

Adam C. Proffitt
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties
Gabrielle Hull, Department of Education
Leigh Keck, Department for Aging & Disability Services
Jennifer King, Department of Corrections
Adela Tan, Schools for the Blind and Deaf
Crystal Hewitt, Commission on Veterans Affairs Office
Becky Pottebaum, Board of Regents