Governor Laura Kelly Announces Fiscal Year 2023 Budget

~ Governor Kelly keeps her promise to bring fiscal responsibility back to state government ~

TOPEKA – Governor Laura Kelly today announced her fourth budget recommendation. This budget builds on years of work by the Kelly Administration to restore the state’s fiscal prosperity, grow the state’s economy, expand the state’s workforce, and invest in the health and safety of the people of the state of Kansas.

“Fully funding K-12. Closing the Bank of KDOT. Balancing our budget. This is what the people of Kansas elected me to do,” Governor Laura Kelly said. “This budget not only restores state funding for critical services, it cuts the state sales tax on food. I encourage the Legislature to waste no time and send me a clean bill to Axe the Food Tax.”

The Governor’s budget fully funds K-12 for a fifth straight year and makes historic investments in workforce training and higher education to ensure that Kansans are ready to enter the workforce. By expanding Medicaid, the state of Kansas not only nets millions of dollars of enhanced federal matching funds, it allows more people to remain in the workforce and boosts local economies.

Recognizing that some revenues may be one-time only, the budget makes several one-time investments to reduce debt and increase structural balance, including paying off KPERS and other debts accrued under previous administrations, providing Kansas taxpayers with a $250 rebate, and making one-time investments and capital improvements in the state’s public safety, corrections, and juvenile justice systems.

Other highlights of this budget include:

  • Responsibly cutting taxes for every Kansan: Unlike proposals that have focused the greatest benefit of tax reform on a small number of Kansans, cutting the state sales tax on food and providing a rebate for every Kansas taxpayer will ensure tax relief goes to the hardworking Kansans that power our state’s economy.
  • Recognizing the service of law enforcement and other state employees: This budget calls for a minimum 5% pay increase for all state employees and includes funding to help recruit and retain State Highway Patrol officers, nurses, corrections officers, public defenders, Community Corrections, home and community-based service providers, child protection specialists, and others. It also includes funding to enhance pensions and new protective equipment and facility improvements for those working in secure facilities.
  • Sustaining the state’s record-breaking economic growth: Kansas has continued record-breaking economic growth for a second straight year—bringing the two-year total of economic investment to over $7.6 billion. This budget builds on the Governor’s previous efforts to restore the Department of Commerce by fully returning the Economic Development Initiatives Fund to its intended purpose—economic development. In addition to efforts to enhance the state’s workforce through training and apprenticeships, the budget intends to capitalize on broadband development, encourage small business innovation, and develop and renovate new moderate-income housing.
  • Achieving and maintaining school funding: This budget includes adequate school funding to meet the requirements of the Gannon settlement for a fifth straight year, ensuring that as students, parents, and teachers continue to learn and overcome the unprecedented challenges of the pandemic, schools have resources to help keep our kids on track to graduate, earn postsecondary degrees and certificates, and ultimately join the workforce.
  • Fully closing the Bank of KDOT: This budget not only fulfills the Governor’s promise to close the Bank of KDOT, it ends other extraordinary transfers out of the State Highway Fund. These transfers for non-infrastructure programs such as Mental Health Grants and debt service on bonds will now be funded out of SGF, returning needed infrastructure dollars to their original purpose.
  • Promoting workforce readiness and competitiveness: funding for postsecondary education has not recovered to pre-Great Recession levels in over a decade. This budget not only restores higher education funding and freezes tuition at four-year institutions, it includes additional funding for need-based aid, Excel in CTE, and National Guard scholarships so that more Kansans can seek the education and training they need to qualify for in-demand jobs. It also provides capital investment funding to ensure that all institutions remain engines of economic growth with new facilities and technology to increase the state’s competitiveness.
  • Reducing fees and making payments on-time: Under previous administrations, “one-time” and “temporary” measures were put in place that added to KPERS debt, increased fees for vehicle registration, and delayed the final school payment into the next fiscal year. Coming off the recent repayment of the PMIB loan, this budget ends the DMV surcharge, pays off KPERS debt early, and returns the 12th school payment to the current year. It also pays bonds early, improving the state’s structural balance and securing Kansas’ finances in the event of future national or international economic challenges.
  • Strengthening Access to Mental Healthcare: With the lifting of the moratorium at Osawatomie State Hospital, this budget continues the work of ensuring mental health access closer to home by providing funding for regional crisis services and hospital beds, suicide prevention grants for local agencies, and expanding access to mental health teams in the state’s schools. It also provides new substance use treatment options for those in state hospitals and corrections facilities.
  • Promoting healthcare affordability: expanding Medicaid is not only a good deal for the state of Kansas, it helps Kansans remain in the workforce and keeps local health providers in business. Our healthcare providers are essential to keeping local economies strong. This budget also funds enhanced post-partum Medicaid coverage for up to 12 months, improving mental and physical health for mothers and young families.
  • Protecting the state and safeguarding our future: After the state experienced significant natural disasters in recent years, this budget provides funding for staff and one-time funding for upgrades of facilities and equipment for our National Guard and state health and environment lab.
  • Fully funding the state water plan: for too many years, the state’s radical tax policies led the state to defund efforts to protect one of our most valuable resources: water. This budget fully funds the State Water Plan Fund for the first time since FY 2008—providing irrigation technology and other water-saving resources that will promote the resilience and abundance of our rural communities and ag industry for generations to come.

Saving for tomorrow: Until this budget, Kansas has been unique among states to have either a small or non-existent budget stabilization fund. This budget ensures that Kansas has a real “Rainy Day Fund” in case national and international events threaten to harm our sustained economic growth.

View the Governor’s full budget recommendation here.