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


February 14, 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 2529 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2529 is
respectfully submitted to your committee.
Under current law, individual income tax rates are set at 3.1 percent for income under
$15,000 ($30,000 for married filing jointly), 5.25 percent for income between $15,000 and $30,000
(between $30,000 and $60,000 for married filing jointly), and at 5.7 percent for income $30,000
and over ($60,000 and over for married filing jointly). HB 2529 would set individual income tax
rates at 2.25 percent for income under $15,000 (under $30,000 for married filing jointly), 5.0
percent for income between $15,000 and $30,000 (between $30,000 and $60,000 for married filing
jointly), 5.5 percent for income $30,000 and over ($60,000 and over for married filing jointly).
The lower income tax brackets would go into effect in tax year 2025. The bill also removes
outdated language from previous tax years.
Estimated State Fiscal Effect
FY 2024 FY 2025 FY 2026
Expenditures
State General Fund -- $61,700 --
Fee Fund(s) -- -- --
Federal Fund -- -- --
Total Expenditures -- $61,700 --
Revenues
State General Fund -- ($108,200,000) ($361,700,000)
Fee Fund(s) -- -- --
Federal Fund -- -- --
Total Revenues -- ($108,200,000) ($361,700,000)
FTE Positions -- -- --
The Honorable Adam Smith, Chairperson
Page 2—HB 2529

The Department of Revenue estimates that HB 2529 would decrease State General Fund
revenues by $108.2 million in FY 2025, $361.7 million in FY 2026, and $365.3 million in FY
2027. To formulate these estimates, the Department of Revenue reviewed tax returns from tax
year 2021 and created a simulated tax table. The estimate for FY 2025 includes 30.0 percent of
tax year 2025 tax liability. The estimate for FY 2026 includes 70.0 percent of tax year 2025 tax
liability and 30.0 percent of tax year 2026 tax liability.
The Department indicates that the bill would require $61,700 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
Department’s current budget may be required.
The Department of Administration indicates that adjusting state income tax collections has
the potential to have a fiscal effect on the amount of revenue collected from its debt setoff program.
This program intercepts individual income tax refunds and homestead tax refunds and applies
those amounts to debts owed to state agencies, municipalities, district courts, and state agencies in
other states. Debts include, but are not limited to child support, taxes, educational expenses, fines,
services provided to the debtor, and court ordered restitution. As the dollar amounts of refunds
are increased, the amount available for possible debt setoffs is also increased. However, the
Department is unable to make an estimate of the amount of additional debt setoffs that would be
intercepted as a result of the bill. Any fiscal effect associated with HB 2529 is not reflected in The
FY 2025 Governor’s Budget Report.

Sincerely,

Adam C. Proffitt
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Tamara Emery, Department of Administration


Statutes affected:
As introduced: 79-32