Final FY2025 receipts beat estimates; SGF reappropriations total $517.3 million and budget outlook shows tightening in FY2027

Kansas Legislative Research Department analysts reported to the Legislative Budget Committee that final fiscal-year 2025 state general fund (SGF) receipts exceeded the approved estimate by about $132.3 million (a 1.3% surplus). KLRD said individual income taxes were the primary driver, exceeding estimate by about $225.7 million.

Edward Penner (KLRD) told the committee that part of the apparent gap between tax receipts and total receipts was explained by a statutory transfer mechanism that moved ~ $124.3 million (50% of certain excess tax receipts) into the Budget Stabilization Fund. Penner said the balance of that fund, as of Aug. 15, was about $1.907 billion.

KLRD noted an operational effect from the recent tax changes: a larger-than-anticipated number of individual refunds were work‑listed and paid into FY2026 instead of FY2025, delaying some refund outflows to the next fiscal year. Penner said that reduced the FY2025 refund total and correspondingly increased FY2025 net receipts; the delayed refunds will lower FY2026 receipts accordingly.

KLRD also provided a list of SGF reappropriations that carry forward into FY2026. Total SGF reappropriations are preliminarily $517.3 million; KLRD enumerated agency-specific line items such as $34 million for a Department of Commerce MRO program where contract signing was delayed, multiple university capital and demolition projects, regional hospital construction carry-forward (South Central regional mental-health hospital construction: $70.1 million in the SGF account), and other projects requiring multi-year planning and procurement cycles. KLRD said it will provide a final reappropriations list as agencies complete budget preparation.

KLRD and legislative staff provided a draft SGF profile that included FY2025 actuals, the reappropriations carryover and projected caseload increases. That profile showed a projected SGF ending balance of about $2.9 billion in FY2025 falling to $1.9 billion in FY2026 and a projected negative ending balance in FY2028 absent new receipts or expenditure changes. KLRD cautioned the profile remains draft pending fall consensus caseload revisions and final agency adjustments.

Why this matters: FY2025’s stronger-than-expected receipts improved the near-term balance, but reappropriations and projected caseload growth mean the state must monitor receipts and consider policy or budget actions to avoid mid‑cycle cuts in later years. The Budget Stabilization Fund balance provides some buffer but not an automatic resolution for multi‑year structural gaps.

Ending: KLRD said it will update the November revenue estimate and the fall consensus caseload; legislators asked KLRD for further breakdowns of reappropriations and agency-level impacts to inform the 2026–27 budget process.