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


January 18, 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 4 by Senator Fagg
In accordance with KSA 75-3715a, the following fiscal note concerning SB 4 is
respectfully submitted to your committee.
Under current law, the sales tax exemption for construction materials at educational
institutions does not apply to the erection, construction, repair, enlargement, or equipment of
buildings used primarily for human habitation. SB 4 would allow this sales tax exemption to apply
to buildings used primarily for human habitation at the Kansas State School for the Blind and the
Kansas State School for the Deaf. The bill would become effective upon publication in the statute
book.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($32,600) ($38,900)
Expenditure -- -- $1,800 $1,800
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 4 would decrease state revenues by $38,900
in FY 2024. Of that total, the State General Fund is estimated to decrease by $32,600 in FY 2024,
while the State Highway Fund is estimated to decrease by $6,300 in FY 2024. This bill also is
estimated to decrease local sales tax revenues by $17,700 in FY 2024. The Department of Revenue
indicates that this bill would have a similar fiscal effect in future fiscal years.
The Honorable Caryn Tyson, Chairperson
Page 2—SB 4

To formulate these estimates, the Department of Revenue reviewed dormitory project plans
from the Kansas State School for the Deaf and the Kansas State School for the Blind. The Kansas
State School for the Deaf plans to remodel the Roth Building east wing dormitory building in FY
2024. The project will include new carpet and the repair and painting of walls. All work must be
done during the school’s summer break in June and July. Both schools have included capital
improvement expenditures for dormitories in their five-year capital budget plan and this sales tax
exemption would lower project costs. According to the Department of Revenue, reissuing sales
tax publications and revising forms would cost $1,800 from the State General Fund in FY 2024.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund as noted above. KDOT indicates that when the state
receives lower State Highway Fund dollars it may be required to make corresponding reductions
to planned expenditures for projects funded under the comprehensive transportation plan.
The Kansas Association of Counties and the League of Kansas Municipalities indicate that
the bill would provide a net reduction to local sales tax collections that are used in part to finance
local governments. Any fiscal effect associated with SB 4 is not reflected in The FY 2024
Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Brendan Yorkey, Department of Transportation
Adela Tan, School for the Blind and School for the Deaf
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties


Statutes affected:
As introduced: 79-3606, 74-50