Kansas Commerce budget reviewed as lawmakers question reappropriations, FTEs and program authority

At a legislative committee hearing, analysts from Legislative Research and the Kansas Department of Commerce outlined the agency's fiscal 2025 and 2026 budget proposals and answered senators' questions about reappropriations, staffing levels and several programs that the Legislature has targeted for reduction or restoration.

The agency's FY2025 request totals about $290.1 million, including $59.2 million from the State General Fund (SGF), a 4.6% increase above the approved amount, Legislative Research senior fiscal analyst Shardae Kane told the committee. Kane walked the committee through the agency's numbered adjustments, citing reappropriations, ARPA-funded projects, and EDIF items among the largest changes.

Why it matters: the Commerce Department manages business recruitment, workforce services, broadband and tourism programs whose funding and staffing levels affect economic development, grant programs and broadband deployment across Kansas. Several senators pressed for detail on which programs are statutory, which were added as one‑time enhancements, and how reappropriated funds would be spent or returned to the SGF if not carried forward.

Key budget figures and committee actions

- FY2025: agency request $290,100,000 (including $59,200,000 SGF). Kane said this is an increase of $12,800,000 (4.6%) over the approved amount. Major FY2025 changes she listed include a carryover of roughly $300,000 SGF in reappropriations; EDIF reappropriations of about $5,900,000; deletion of about $32,900,000 in ARPA-related projects (including $6,000,000 SGF) described as largely one-time FY2024 projects; and a $13,200,000 deletion of special revenue EDIF funds tied to Apex projects.

- The Legislative Budget Committee (LBC) recommended deleting 7.5 FTE positions that the agency had requested (the request included 7.5 additional FTEs). Kane said the LBC also deleted $5,900,000 intended as reappropriations; the House blue shorthand later showed a partial restoration and other adjustments.

- House changes noted on the committee's blue shorthand included deleting $3,000,000 EDIF for the Sunflower Summer program, deleting 7.5 FTEs, adding $5,800,000 SGF for a Bombardier defense project and restoring $3,000,000 EDIF toward the reappropriations (i.e., reducing the earlier $5.9 million deletion to a $2.9 million deletion).

- FY2026: the agency requested $190.4 million (about $800,000 SGF), a decrease of $80.7 million (29.8%) below the agency-approved amount. Kane said the LBC deleted all enhancement requests the agency had proposed for FY2026 and removed $4.3 million EDIF for various FY2026 programs.

Program highlights and questions from senators

Department testimony and written materials emphasized recent Commerce accomplishments and program portfolios. Rachel Willis, Director of Legislative Affairs for the Department of Commerce, told the committee, “This continues to be an exciting time for economic development in Kansas,” and highlighted several points:

- Business development: Willis said the department facilitated 269 economic development projects in 2024 accounting for about $3.5 billion in committed capital investment and roughly 5,000 jobs, with an average reported wage of about $66,000.

- Broadband: the Office of Broadband Development manages nine programs and, according to Willis, had 86 active projects at the time of testimony. Willis said the state has provided $25 million in broadband funding to date and dedicated more than $60 million in IKE transportation dollars for deployment; Commerce staff funding in the budget supports implementation and oversight.

- International and tourism activity: Willis said Commerce’s international division conducted 11 trade missions in 2024 and that the department supports more than $13 billion in Kansas exports. She also highlighted tourism statistics included in the packet: about 37.9 million visitors, $13.2 billion in total economic impact, $1.5 billion in government revenue and roughly 90,000 jobs tied to tourism (about 65,000 direct and 25,000 indirect or induced).

Senators pressed for specific back-up data and authority for programs. Key exchanges included:

- Reappropriations: several senators asked for the exact amounts and account-level detail for reappropriated funds that the agency sought to carry from FY2024 into FY2025. Kane said the reappropriations are existing balances from FY2024 appropriations the agency had not expended and that, without reappropriation language, those dollars would revert to the SGF; she offered to provide the specific dollar amounts by email.

- FTE counts and vacancies: Senators noted a discrepancy between Legislative Research figures and the agency's reported actual FTEs. Kane's packet listed agency FTEs that differ slightly from the Department's reported snapshot. Willis said the Commerce payroll snapshot showed about 324 total positions with roughly 30 current vacancies, 13 of which were in workforce centers. Willis and Kane agreed to provide a dated FTE breakdown to the committee by email.

- Program authority and origins: senators asked whether specific programs are statutory or were added by legislative or executive request. Kane said some programs are in statute and others were added as enhancement requests or retained after prior requests; she offered to send the department's performance-based budget (PBB) link and to research statute versus enhancement origins for particular programs.

- Rural programs: senators asked about Rural Opportunity Zones and the Rural Champions program. Willis described the Rural Opportunity Zones program as having two components (an income tax credit and a student-loan repayment program). She said the department’s request includes funding to administer the program and to support the student loan repayment portion; Willis and senators asked for a breakdown of administration versus direct student loan payments.

- Heal and emergency HEAL: Willis described HEAL as a program aimed at helping historic downtown buildings with infrastructure and facade repairs; emergency HEAL was described as a short-term fund for urgent building repairs (fire or major water damage) intended to preserve adjoining structures. Willis said Commerce and the House discussed addressing emergency HEAL needs through the regular HEAL program and agreed to reductions accordingly.

- Drone program: a senator asked about a House-approved $1 million line item tied to a drone program. Willis said the drone funding was not a Commerce enhancement request but came from an outside entity and was placed in the Commerce budget by the House subcommittee/appropriations process. She said Commerce did not originate that enhancement and that the agency would not object to its removal.

Requests for follow-up and next steps

Committee members asked Commerce and Legislative Research to provide several written follow-ups: an itemized list of reappropriations and their account balances; a dated FTE roster showing filled and vacant positions; details tying international trips and trade missions to measurable leads or investments; and a breakdown of Rural Opportunity Zones funding between administration and student loan repayment. Willis agreed to provide those materials and to return for a subsequent meeting; the committee scheduled an additional session to continue the review.

Votes or formal motions: none recorded

No formal committee votes or motions were recorded in the transcript. Committee discussion focused on budget figures, line‑item deletions and restorations proposed by the Legislative Budget Committee and the House shorthand, and on requests for additional documentation.

Ending

The committee recessed after agreeing to receive the requested documentation by email and to continue deliberations at the next scheduled meeting. Willis and Legislative Research staff said they would supply the requested account-level figures, FTE detail and program authority documentation.