Governor Kelly Announces Fiscal Year 2025 Budget

Governor Laura Kelly has announced her annual budget, which is balanced and continues to fully fund Kansas' K-12 public schools, cuts taxes and makes historic investments in child care and higher education.

"I'm a fiscal conservative, which is why, once again, I'm proposing a budget that's balanced, pays off debt and includes tax cuts for working families and retirees," Governor Laura Kelly said. "This budget also delivers on my commitment to continue fully funding schools, investing in our workforce and child care system, and giving law enforcement the resources they need to keep Kansans safe."

The budget:

Cuts property, retirement and sales taxes for Kansans: Governor Kelly's bipartisan tax plan announced earlier this week will save Kansans more than $1 billion over the next three years. The plan eliminates the state tax on Social Security, exempts the first $100,000 in state property taxes for all homeowners, increases the standard deduction for personal income taxes, immediately axes the state sales tax on food, diapers and feminine hygiene products, doubles the tax credit that parents can claim to help pay for child care and includes a back-to-school state sales tax holiday.

Expands Medicaid to 150,000 Kansans: Governor Kelly's budget brings more than $1 billion in taxpayer dollars back to Kansas that is currently sent to other states. Medicaid expansion will provide access to affordable healthcare for 150,000 more Kansans and cut healthcare costs for everyone else. Through one-time federal funds and a delayed hospital surcharge, Medicaid expansion is revenue neutral – meaning it comes at no additional cost to Kansas taxpayers.

Makes the largest single-year investment in early childhood care and education: The budget provides more than $56 million to expand child care slots and support the child care workforce. That includes nearly $30 million to construct new child care facilities and $5 million for a pilot program in northwest Kansas that will provide a model for how public-private partnerships can improve child care in rural Kansas.

Fully funds Kansas' public K-12 schools for the sixth year in a row: Governor Kelly's budget fully funds K-12 public schools for the sixth consecutive year and puts Kansas on track to fully fund special education within five years so that every district has the statutorily required resources to educate all students.

Makes an historic investment in higher education: Marking a new high since Governor Kelly took office, her budget invests over $230 million to support postsecondary institutions' efforts to drive workforce development and lower costs for Kansas students. $14 million for need-based aid is added so more low-income students can access higher education. Institutions throughout the state will receive one-time funding to enhance their core programs, including $75 million for the construction of the University of Kansas Cancer Center, $25 million for the K-State University Ag Innovation Initiative and $15 million for nursing education at Fort Hays State University.

Continues to repair Kansas' foster care system: This budget invests over $10 million in families and adoption services, including through continued efforts to build a Comprehensive Child Welfare Information Service that provides reliable and timely data to improve services for Kansas children.

Uses one-time revenues to pay off debt and finish long overdue projects: Continuing the administration's efforts to safeguard and enhance the state's financial position well into the future, this budget uses one-time resources to invest close to $1.3 billion in one-time expenses, including $500 million to retire debt and save Kansans millions of dollars in future interest payments.

It also puts more than $500 million toward long-overdue projects like KHP Training Academy upgrades and a new Hutchinson Correctional Facility to replace the facility built in 1912.

Safeguards our water: Governor Kelly's budget appropriates $53 million for water infrastructure and other projects, including the new funding level of $43 million now required by bipartisan House Bill 2302. The budget includes an additional $10 million for grants to rural communities in desperate need of improving local infrastructure in order to preserve local access to clean water. Altogether, this year's budget will bring the three-year investment in water in Kansas to over $250 million.

Expands affordable and moderate-income housing: The governor's budget invests more than $50 million in expanding affordable and middle-income housing. That includes one-time matching grants to local communities to address housing insecurity and to help Kansans find permanent housing, continued investment in moderate-income housing and funding to expand the workforce needed to build housing throughout the state.

Improves public safety: The governor's budget includes critical investments in the Kansas Highway Patrol, including improvements to its training academy, the construction of a new communications center, and funding for equipment and differential pay.

One-time funding for the Department of Corrections includes funding for a behavioral health center at the Topeka Correctional Facility and public matching funds for the Lansing Career Campus to help individuals achieve employment upon reentry and avoid reoffending.

There are also additional investments being made into the Kansas Bureau of Investigation to supplement the agency's fight against the fentanyl crisis and expand its Child Protection Initiative.

Improves mental and behavioral health: In addition to Medicaid Expansion, which would increase access to mental health services, this budget puts $1.5 million towards Family Treatment Court to provide support for Kansas youth or parents with substance use or co-occurring mental or behavioral health issues. The budget also continues Governor Kelly's efforts to expand access to mental health in schools by adding an additional $3 million for the Mental Health Intervention Pilot Program. This will bring the total funding to the program up to just more than $17 million, potentially expanding the program to over 100 school districts.

Makes investments to attract and retain state employees: To ensure the State of Kansas has the workforce necessary to deliver services effectively and efficiently, Governor Kelly's budget implements a five percent pay raise and increases the minimum wage to $15 per hour for state workers to adjust for the job market and be competitive with private-sector employers.

Fiscal Year 2025 runs from July 1, 2024 to June 30, 2025.

Governor Kelly's full budget proposal can be found here.

(Information courtesy Office of the Governor.)