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Staff: Kansas consensus revenue estimates up $165.9M for FY2026; FY2027 dips due to policy changes
Summary
Legislative staff told the Taxation Committee that consensus revenue estimates increased by $165.9 million for FY2026 and forecast a modest FY2027 decline of about $94 million, driven mainly by federal HR 1 provisions, Apex investment tax-credit timing and reinstated fund transfers, not by weakening economic fundamentals.
Mister Penner, presenting the consensus revenue estimates to the Committee on Taxation on Nov. 21, 2025, said the state revised its FY2026 general fund receipts upward by $165,900,000 — from $10,060,000,000 to $10,230,000,000 — and set an initial FY2027 estimate at $10,130,000,000, a decline of about $94,000,000 or 0.9% year over year.
Penner told the committee the FY2027 decline is primarily the result of policy items. "About $60,000,000 in FY 2026, and about $140,000,000 in FY 2027 was pulled out of the receipts" because of provisions in the federal HR 1 package, including restored expensing and bonus depreciation, he said. He emphasized those are policy-driven effects rather than deterioration of the underlying economy.
Penner outlined other policy drivers. The Apex investment tax credit — though subject to sunset language in statute — continues to affect receipts because taxpayers claim the credit in installments: "the investment tax credit came in years, and each of those years' worth of investment was divided into 5 pieces," Penner…
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