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
Adam Proffitt, Director Laura Kelly, Governor


February 3, 2021


The Honorable Sean Tarwater, Chairperson
House Committee on Commerce, Labor and Economic Development
Statehouse, Room 151D-S
Topeka, Kansas 66612
Dear Representative Tarwater:
SUBJECT: Fiscal Note for HB 2018 by Representative Coleman
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2018 is
respectfully submitted to your committee.
HB 2018 would increase the minimum wage in Kansas by $1.00 annually over the next ten
years beginning January 1, 2022, until reaching a rate of $17.25 per hour in calendar year 2031.
On January 1, 2032, and on January 1 of each subsequent calendar year, the minimum wage would
be increased by 1.5 percent from the preceding year. The current minimum wage is $7.25 per
hour.
The bill would also increase the minimum wage for occupations that receive tips and
gratuities by $1.00 annually over the next ten years beginning January 1, 2022, until reaching a
rate of $12.13 per hour in calendar year 2031. On January 1, 2032, and on January 1 of each
subsequent calendar year, the minimum wage would be increased by 1.5 percent from the
preceding year. The current minimum wage for occupations that receive tips and gratuities is
$2.13 per hour.
The Department of Revenue estimates the bill would have a negligible fiscal effect on State
General Fund revenues. The Department indicates that any increases to income tax collections
would be offset by decreased collections from the effects of employment and production costs.
It is estimated that the bill would increase state agency salaries and wages expenditures by
$762,238 from all funds in FY 2022. This amount includes $669,000 estimated by the Board of
Regents for state universities and $93,238 estimated by the Department of Administration for all
other Executive Branch agencies. The amount reflects half of the annualized amount for FY 2022
because the first minimum wage increase would begin on January 1, 2022. The Board of Regents
The Honorable Sean Tarwater, Chairperson
Page 2—HB 2018

and the Department of Administration indicate the fiscal effect on State General Fund expenditures
is unknown. The Division of the Budget estimates the fiscal effect on State General Fund
expenditures would be approximately $282,000, or 37.0 percent of the total all funds fiscal effect.
To calculate this estimate, the Division used information from the table titled “Statewide Salaries
& Wages” in the FY 2022 Governor’s Budget Report. The bill would affect approximately 3,100
employees in FY 2022, which includes about 3,000 university employees and 64 employees from
all other Executive Branch agencies. According to the Office of Judicial Administration, HB 2018
would not have a fiscal effect on the Judiciary in FY 2022. The Judiciary would not experience
an increase to salaries and wages until FY 2025. The Legislature estimates the bill would have a
negligible fiscal effect in FY 2022.
The Board of Regents estimates salaries and wages expenditures would grow to $25.5
million by FY 2031. For the Judiciary, the Office of Judicial Administration estimates costs would
increase to $1.2 million by FY 2031. The long-term costs for all other Executive Branch agencies
and the Legislature are unknown. The bill would also have a fiscal effect on local governments,
but the fiscal effect is unknown. Any fiscal effect associated with HB 2018 is not reflected in The
FY 2022 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Jeff Scannell, Department of Administration
Dawn Palmberg, Department of Labor
Kelly Oliver, Board of Regents
Debbie Thomas, Judiciary
Karen Clowers, Legislative Services


Statutes affected:
As introduced: 44-1203