Governor’s FY27 budget proposes $50.6M for special education, new water roadmap and hospital staffing funds

Adam Proffitt, director of the Division of Budget, presented the governor’s fiscal 2027 budget recommendations to the Committee on Appropriations and described priorities informed by a statewide "people's budget" listening tour. He said the proposal focuses on funding core services, maintaining structural balance and building on recent fiscal gains.

Proffitt highlighted fiscal improvements the state has achieved and framed the FY27 proposal within a conservative revenue outlook: fall consensus revenue estimates show total taxes (SGF) growing about 1.3% in FY27, and the governor’s budget proposes approximately $10.8 billion in SGF spending for FY27 (about a 1.6% increase over FY26 approved, including one‑time items).

Key proposals he discussed include:

- Special education: The governor recommends an incremental $50,600,000 SGF for FY27. Proffitt said that addition would raise the state’s share of excess special‑education costs toward 70% but would still fall short of the 92% statutorily described target without additional federal support. He urged federal action, saying the state cannot reach 92% without an increase in federal funding and presented tables showing federal support has been essentially flat while state funding increased substantially since 2015.

- SNAP and HR 1: Proffitt said HR 1 shifts some SNAP administrative costs to states. The governor recommends $12,100,000 SGF in FY27 to cover the partial fiscal‑year impact and $4,000,000 SGF across FY26–FY27 to implement new work‑requirement administration; Proffitt pledged written follow‑up on the staffing and program details.

- FEMA/EMPG costs: Due to shifting FEMA guidance on covered periods, the governor recommends $5,000,000 SGF to backfill emergency‑management performance grant expenditures that were incurred but are not covered under the new timeframe.

- Water: The proposal again recommends full statutory funding for the State Water Plan Fund and calls for developing a 10‑year roadmap and identifying a sustainable revenue source to support long‑term water programming.

- Waivers and community supports: The governor requests $3,600,000 SGF ($9,000,000 all funds in FY27) to implement a new community support waiver to relieve pressure on the IDD waiver and $2,800,000 SGF to avoid a wait list for the Technology Assistance waiver for children who require life‑sustaining equipment.

- State hospitals and behavioral health: Proffitt proposed $30,900,000 all funds to complete the South Central Regional Mental Health Hospital (adding 104 beds), $3,000,000 SIBF for child behavioral beds at KNI (15–30 beds) and contract‑staffing SGF for Larned State Hospital ($32,200,000 each in FY26 and FY27) and Osawatomie (FY26 $7,000,000; FY27 $5,000,000) to maintain safe operations while working toward state staffing.

- State employee pay: A 2.5% pay adjustment for executive‑branch employees is proposed at an estimated $33,000,000 SGF ($88,000,000 all funds) with standard exclusions (elected officials, certain teachers and employees on career‑progression plans). Proffitt said GVR volumes 1 and 2 and bill language are ready for committee introduction.

In Q&A, members pressed for details on SNAP error‑rate exposure (a projected FY28 penalty risk discussed by members), the scope of proposed lapses and reappropriations, counts of waiver slots expected to free up, and staffing assumptions for Larned and Osawatomie state hospitals. Senator Owens warned that lapsing juvenile‑justice funds could harm local services; Proffitt responded the administration’s intent is not to reinstate incarceration but to right‑size fund balances and said he would revisit proposals if a demonstrable expenditure plan exists.

Proffitt offered to provide follow‑up material and spreadsheets to the committee by Friday on SNAP implementation costs, reappropriation details and waiver‑slot estimates. The committee adjourned after the Q&A.