Legislative Update Wk #11 - March 28, 2025
- Reily Goyne
- Mar 28
- 7 min read
By Reily Goyne, AIA Kansas Advocacy Manager
General Statehouse Update
Conference committees met and both chambers worked to pass priority bills before the end of the session. Legislators went home late on Thursday, March 27, and will return for the veto session on Thursday, April 10.
The 2026 Budget Passed; Spending Cuts
The Senate Ways and Means and House Appropriations Committees met this week to negotiate the state’s budget for Fiscal Year 2026. The result is a 486-page compromise representing a $25.6 billion budget for FY 2026, $10.6 billion of which is the State General Fund (SGF) revenue.
Due to last year’s tax reduction package, the state is expected to bring in less revenue in the next few years. Coupled with the reduction in pandemic-related federal funding, this year's challenge was balancing the budget by reducing spending. The approved budget reduces SGF spending by $210.5 million from FY 2025 to FY 2026 and reduces all expenditures by $1.5 billion. The House passed the budget 89-36 on Thursday, March 27 afternoon, and the Senate passed it 24-16 later that evening.
The state budget is available in SB 125, and the 175-page bill explainer is here.
Major tax changes fall apart
In another corner of the statehouse, the Senate Assessment and Taxation and House Taxation Committees met to negotiate the differences between each chamber’s position on tax relief. The priority was to reduce property taxes, as many promised during the 2024 campaign season.
House and Senate Tax negotiators compromised on four bills, including a constitutional amendment.
SB 35 eliminates the state 1.5 mill property tax levies that fund state educational and institutional buildings and replaces the levies with transfers from the State General Fund. It passed the House 96-26 on Wednesday, March 26, and passed the Senate unanimously on Thursday, March 27.
SB 269 is an “income tax buydown”, which reduces state income tax rates based on the balance of the Budget Stabilization Fund (also referred to as the “rainy day fund”) and the amount of revenue collected over the FY 2024 amount, adjusted for inflation. Individual income tax rates would be reduced first by decreasing the lower bracket until it reaches 4% and then decreasing the upper bracket until it reaches 4%, effectively working toward a flat income tax rate. It passed the House 84-38 on Wednesday, March 26, and the Senate 30-10 on Thursday, March 27.
However, the two biggest tax-reduction measures were unsuccessful, setting up the tax committees for veto session negotiations when they return on April 10.
HCR 5011 is a constitutional amendment that, if passed, would go on the ballot in 2026 for voters to decide if they wanted to cap property valuation increases at 4%. Since this is a constitutional amendment, it needs a two-thirds majority of both chambers and does not need the Governor’s signature. The Senate debated it on Wednesday, March 26 where it fell one vote short due to five Republicans joining all nine Democrats in opposing it. The next day, Sen. Brenda Dietrich (R-Topeka) called for a motion to reconsider, and the Senate passed it with the minimum number of votes: 27-13. Later on Thursday, the House overwhelmingly defeated the resolution 37-88.
The final bill, HB 2125 (proposed language unavailable), sought to limit the growth of local budgets by allowing voter input through an election if the proposed budget exceeds a certain growth percentage over the previous year’s budget. Senate President Ty Masterson (R-Andover) chose not to bring HB 2125 to the Senate for a vote after the House defeated HCR 5011.
VICTORY - SB 227 Passes Senate; Goes to Governor
SB 227, introduced and heard in Senate Commerce, received a nonconcurrence and was assigned to the Senate Tax members for a conference committee. The bill languished in the tax conference committee, and it was clear they were not going to advance the bill.
Stakeholders lobbied Senate leadership to act on the bill. Senate Commerce Committee Chair Larry Alley (R-Winfield) made the motion to concur with the House amendments, which passed with a vote of 31-9. It is on its way to Governor Laura Kelly for her signature or veto.
SB 227, as amended, expands the state historic tax credit to 40% for all projects except those from $5,000 to $50,000 in Qualified Rehabilitation Expenses in cities with a population larger than 50,000, which will still have a 25% tax credit. Any qualified taxpayer delinquent on state taxes will have that amount subtracted before being issued the remaining tax credits.
Affordable Housing Tax Credit Negotiations Stalled
The Senate Commerce and House Commerce, Labor, and Economic Development Committees met multiple times to discuss HB 2119 and the fate of the state’s dollar-for-dollar match to the federal Low Income Housing Tax Credit.
The House’s version of the bill eliminates the Kansas Affordable Housing Tax Credit, while the Senate Commerce Committee amended it to eliminate the 4% tax credit match and keep the 9% tax credit dollar-for-dollar match. The Senate Commerce Committee’s version would reduce the annual allocation from around $25 million to $8-9 million.
A compromise on the bill could not be reached, but further discussions are likely in the veto session beginning on April 10.
If no compromise can be reached during the veto session, the Affordable Housing Tax Credit will continue in its current form for another year.
Kansas Housing Investor Tax Credit Fix Stalled
HB 2096, which fixes a technical drafting error in the Kansas Housing Investor Tax Credit Act, was passed by the House 111-6. However, the Senate Tax Committee did not advance it.
The Joint Rules of the House and Senate allow legislation that has passed one Chamber to be included in a Conference Committee Report and advance to both Chambers for a vote.
If you have a project with Housing Investor Tax Credits, contact your Senator (find them here) and urge them to ask Sen. Caryn Tyson (R-Parker) to advance HB 2096. If you would like assistance, contact Reily Goyne or Terry Humphrey.
Bills to Watch
SB 30 was replaced with the contents of SB 229, requiring the adoption of new occupational licenses and material changes to existing licenses to be approved by the legislature. These requirements do not apply to the State Board of Technical Professions, which licenses architects. It passed the House 86-38, and the Senate has yet to act on it.
SB 35 discontinues the state 1.5 mills property tax levies for the Kansas educational building fund and the state institutions building fund, financing it through the state general fund. The House passed it 96-26, and the Senate passed it 40-0. It is on its way to the Governor.
SB 77 requires state agencies to provide public notice of revocation of administrative rules and regulations. It passed the House 123-0 and is awaiting action by the Governor.
SB 227 increases the state historic rehabilitation tax credit to 40% for all projects over $5,000 in qualified expenses except those projects between $5,000 and $50,000 in qualified expenses in cities over 50,000 people, which will receive a 25% credit. The Senate concurred with the amendments made by the House with a vote of 31-9, and it's now on its way to the Governor.
SB 283 eliminates the Kansas Affordable Housing Tax Credit and sunsets other income tax credit programs. It had a hearing on Wednesday, March 5, and Thursday, March 6 in Senate Assessment and Taxation.
HB 2088 requires local governments to approve or deny building permits for single-family residential developments within 60 days of receiving a completed application. This does not apply to phased permitting processes or any zoning appeals. The House passed it 83-40, and it's on its way to the Governor.
HB 2099 permits periodic inspections by the City of Topeka for code violations of private residential rental housing where the property owner is receiving governmental rental subsidies. It was added to HB 2116, which standardizes contract provisions for second- and third-class cities and counties with a population below 35,000. Neither the House nor the Senate have yet to act on the conference committee report.
HB 2119 was amended by the Senate Commerce Committee to eliminate the 4% match and keep the 9% match in the Kansas Affordable Housing Tax Credits. Negotiations between the Senate and House are stalled.
HB 2183 was replaced with the contents of SB 222, prohibiting judicial deference to agency interpretations of statutes, regulations, and rules. The Senate passed it 30-10, but the House has yet to act on the bill.
HB 2280 was replaced with the contents of HB 2274, which waives licensing fees for military spouses, regardless of whether the service member is on active duty. It passed both chambers unanimously and is on its way to the Governor.
HB 2291 establishes a regulatory sandbox program within the Attorney General's Office. Innovative businesses that do not fit within the existing regulatory framework are eligible to apply, but cannot waive licensing statutes, rules, or regulations. It passed the Senate 31-9 and is awaiting the Governor's action.
Historic Tax Credits Used For Cottonwood Falls Lofts
A huge crowd turned out Tuesday for the Open House for the Cottonwood Falls Lofts in Cottonwood Falls, Kansas. The old grade school has been transformed into ten new apartments that are 90% leased. The developer utilized Kansas Historic Tax Credits to help make the project successful. The school was built in 1904 and expanded in 1915 and retains its original classrooms and corridors.
Government Affairs Committee
If you are interested in joining this committee and staying on top of what is happening at the statehouse, please contact Reily Goyne.
April 18 at 10:00 AM
Register here for the virtual meeting
Cities and counties have advisory boards and commissions making decisions for their communities, and these groups are a great way to get involved in your community. Below is a list of boards with vacancies in the largest Kansas cities. Visit your city's website regularly to see any future openings, or email Reily Goyne if you would like assistance identifying opportunities.
Historic Resources Commission
Lawrence-Douglas County Metropolitan Planning Commission
Downtown Business Improvement District Advisory Board
Historic Resources Board
Manhattan Urban Area Planning Board
Board of Code Review
Board of Housing Commissioners
Historic Preservation Board
Public Art Committee
Affordable Housing Trust Fund Review Committee
Board of Zoning Appeals
Topeka Sustainability Advisory Board
Landmarks Commission
Board of Code Standards and Appeals
Delano Design Advisory Committee
Wichita/Sedgwick County Access Advisory Board
About AIA Kansas
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The organization provides services and programs to meet the professional development needs and interests of Kansas architects and to develop public awareness for the value of architects and architecture.
Our 700-plus members are leaders in building healthy, sustainable communities that will serve our citizens into the future.
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