Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 19, 2019
REVISED

The Honorable Ken Rahjes, Chairperson
House Committee on Higher Education Budget
Statehouse, Room 149-S
Topeka, Kansas 66612
Dear Representative Rahjes:
SUBJECT: Revised Fiscal Note for HB 2216 by Representative Alcala
In accordance with KSA 75-3715a, the following revised fiscal note concerning HB 2216
is respectfully submitted to your committee.
HB 2216 would create the State Employee Student Loan Repayment Assistance Act to
provide a tax credit of 50.0 percent of the total principal and interest paid by an eligible state
employee during the tax year in which the payments were made for educational expenses incurred
at a Kansas postsecondary educational institution. The Kansas Board of Regents would be
required to certify whether or not a person is an eligible borrower; certify the amount of principal
and interest a person paid as a state employee; and establish rules and regulations for
administration of the Act. The bill includes definitions and eligibility requirements, and would
take effect upon publication in the statute book.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- ($14,688,000) ($14,688,000)
Expenditure -- -- $301,965 $301,965
FTE Pos. -- -- 1.00 1.00
The Kansas Department of Revenue indicates HB 2216 would reduce revenues to the State
General Fund, but does not have sufficient information to produce a reliable estimate. The
Department indicates it would require a total of $301,965 from the State General Fund in FY 2020
The Honorable Ken Rahjes, Chairperson
Page 2—HB 2216

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 and outside
contract programmer services. After the original fiscal note was issued, the Department of
Revenue reduced its estimate of the administrative costs attributable to the bill. 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.
Using internal data and data taken from a College InSight report, the Kansas Board of
Regents estimates the tax credit provided in HB 2216 would reduce individual income tax revenues
by $14.7 million annually beginning in FY 2020 (8,000 state employees with student loan debt x
$3,672 average student loan payments annually x 50.0 percent = $14,688,000). The estimate was
calculated assuming an average student loan debt of $27,720, average interest rate on federal
student loans of 5.9 percent, and a ten-year repayment term which produces an average monthly
payment of $306, or $3,672 annually (www.finaid.org/calculators/loanpayments.phtml). The
Board estimates it would require $72,800 annually from the State General Fund beginning in FY
2020 for 1.00 FTE position and information technology costs to administer the program. Any
fiscal effect associated with HB 2216 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Kelly Oliver, Board of Regents