Ways and Means staff brief committee on House Bill 2007; staff walk members through new budget summaries and major adjustments

Staff from the Kansas Legislative Research Department (KLRD) briefed the Ways and Means Committee on the content and structure of new budget-summary documents and walked members through House Bill 2,007, the House appropriations adjustments to the state budget.

Shirley Morrow, director of the Kansas Legislative Research Department, opened the briefing by explaining how to read the new budget summaries, which show 2024 actuals, the 2025 revised estimates, agency requests for 2026 and the legislative starting point for 2026. "What we're calling now the budget summaries, not the budget," Morrow said, asking members to use the narrative descriptions and numbered line items in the packet to reconcile apparent deletions that in some cases represent transfers to colleges and universities rather than permanent cuts.

Dylan Deer, fiscal analyst with KLRD, gave the committee a fiscal overview of House Bill 2,007, saying the bill reflects both large deletions from initial agency requests and partial restorations by the House Appropriations Committee. Deer summarized revenue and expenditure adjustments in HB 2,007, noting that the House LBC deleted roughly $290 million and $1.1 billion in two line items from agency requests and then added back about $165.3 million for FY2025 and $194.8 million for FY2026. He described the LBC profiles as planning documents, saying, "these profiles are planning documents only," and emphasized they do not assume recessions or major growth and that the Senate will next consider revisions.

Deer also described projected balances in the multi-year profile. He said adjusted expenditures run roughly in the $10.6 billion to $11.2 billion range in the planning years and that the ending balance moves down in later years; he noted the presentation does not assume any draw on the Budget Stabilization Fund.

Staff highlighted several specific programmatic changes and points members flagged for follow-up:

- ARPA interest: Staff said roughly $47 million of ARPA interest earnings are included in the package; those dollars, they said, are treated differently from principal ARPA awards and are more flexible for state use.

- FMAP/caseloads: A drop in enhanced FMAP (federal matching) increases the state's share of Medicaid by roughly 0.68 percentage points, which KLRD staff quantified as about $30.4 million in fiscal impact in the near term.

- Workforce and hospitals: HB 2,007 includes large additions for contract nursing at state hospitals: about $30 million added for Larned State Hospital in FY2025 and $8 million per year for Osawatomie State Hospital in FY2025 and FY2026. The bill also includes language limiting contract nursing at Larned in FY2027.

- Aging and disability services: The package contains a $29.3 million SGF add tied to a $20-per-day increase (per Medicaid resident) for nursing facilities, plus roughly $8.7 million in FY2026 to add 320 Intellectual and Developmental Disability (IDD) waiver slots.

- Behavioral health and children: KDHE received a $10 million SGF addition for adult inpatient behavioral-health capacity and separate dental and pediatric rate adjustments (combined increases described in staff materials).

- Higher education and two-year colleges: The House adjustments include multiple items for community and technical colleges and the Board of Regents, with line items for apprentice programs, student success initiatives and capital grants for community colleges; staff noted some previously authorized campus restoration dollars were shifted among fund sources.

- Statewide adjustments: House bill language assumes deletions for assumed vacant positions and a 1.5% across-the-board state-operations reduction (excluding aid to local units, K— districts, debt service and certain other items). Staff also summarized a state employee pay-plan proposal that applies differential increases based on market position.

- Full-time equivalents (FTEs): KLRD counted about 64 new FTEs added for FY2025 and about 127 added for FY2026 in the House package; staff said the cost of those positions includes salary and additional equipment and commodity costs.

Committee members asked how to track line items that appear "zeroed out" in one place but are funded from another source in the bill. Luke Drury, senior fiscal analyst with KLRD, said those reprogrammings are documented in the budget committee reports and in special-revenue fund tables the staff will make available. He pointed the committee to the bill explainer and the budget committee reports as the best sources to trace whether an apparent deletion was reallocated to the State Water Plan Fund, EDIF, or another fund.

Senators raised follow-up concerns including the difficulty of reconciling agency-collapsed requests (for example, the Department of Agriculture combining multiple State Water Plan projects into buckets) with line-by-line appropriations; the short calendar the committee will use for hearings; and the limits on in-person public testimony (staff said testimony will be received in writing due to time constraints).

Deer closed by reminding members that the package as presented reflects the House position and that the Senate may alter it: "Of course, you're not locked into any of this. Now it's the Senate's turn, to take a crack at it and make what adjustments they wish," he said.

Committee staff provided follow-up commitments to publish special-revenue fund tables, make committee reports available, and provide line-item clarifications on request. The committee set a schedule for heavy hearing days in the following weeks and directed members to submit written questions and to use the provided materials to prepare for agency hearings.

Ending: Staff made documents available to members and urged senators to compile questions for upcoming hearings; committee leaders warned the schedule will be compressed and public testimony limited to written submissions.