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Kansas consensus revenue estimate: FY26 receipts revised down to $10.099B; FY27 projected at $10.206B
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Summary
State revenue analysts released a revised consensus revenue estimate showing FY26 receipts of $10.099 billion (down about $127.4 million from the fall estimate) and FY27 receipts of $10.206 billion, citing international conflict, input costs and market volatility as risks while noting Kansas receipts remain largely resilient.
Shirley, presenting the consensus revenue estimate, said the state's total receipts for fiscal year 2026 are estimated at $10,099,000,000, a decrease of $127,400,000 (1.2%) from the fall estimate, and that FY27 receipts are estimated at $10,206,000,000, an increase of $72,700,000 (0.7%) versus the previous fall estimate.
The presenters said the downward revision for FY26 largely reflects receipts through March that ran $162,100,000 (2.3%) below prior projections. "Through the month of March, state general fund receipts were down relative to the estimate by a 162,100,000 or 2.3%, which is the primary explanation of [the] downward revision," Shirley stated.
Analysts noted a mix of risks to the outlook, including the Iran military conflict, market volatility, elevated input prices and higher interest rates, but said Kansas's economy and general fund receipts remain "resilient and largely stable in the face of these risks." The forecast team adjusted short-term assumptions: spring estimates raised inflation and nominal GDP modestly (inflation for calendar 2026 was increased from 2.8% to 3.0%; real GDP growth from 1.9% to 2.0%), and similar upward tweaks were made for the FY27 outlook.
Sector details included rising input costs for agriculture (especially fertilizer), steady agricultural export growth (reported at about 3.25% for 2025 versus 2024), constrained herd expansion despite high cattle prices, and a largely unchanged energy forecast though crude oil and natural gas price assumptions shifted. Shirley said severance-tax revenue gains from higher oil prices were partly offset by a small uptick in Kansas oil production since last fall.
The presenters singled out manufacturing developments in South Central Kansas as a stabilizing force: Boeing's reacquisition of Spirit AeroSystems and ongoing demand for defense aircraft, and reported that Panasonic's DeSoto plant employed about 1,400 people as of February and hopes to add several hundred more toward longer-term targets.
On tax policy, Shirley said the estimates "include the impact of current law and its current interpretation" but do not include fiscal effects of legislation not yet signed by the governor. The forecast did not assume rate reductions under provisions of 2025 Senate Bill 269 during the projection period.
During a question-and-answer period, Adam Proffitt (identified in the session) explained how higher inflation raises nominal GDP relative to real GDP and why the Kansas forecast did not include an adjustment for the Kansas City Chiefs stadium: Commerce must determine STAR bond districts and set a base year before any stadium-related revenues can be modeled, and that information was not yet available. John Hannah of the Associated Press asked whether the higher inflation and nominal GDP forecasts were correlated; Adam answered they are linked because nominal GDP reflects inflationary effects on top of real growth.
Reporters also pressed the presenters on the flat-tax formula in SB 269 and the difference between "total taxes" and "total receipts." Adam said the statutory baseline and inflation-adjusted threshold in SB 269 were not exceeded by the forecasted revenues, so the formula would not trigger a rate reduction in the forecast window. He added that "total receipts" includes interest earnings, agency receipts and transfers (notably a roughly $65 million transfer of budget stabilization fund interest into the general fund in FY27), which explains why total receipts can rise even when total taxes fall.
On longer-term assumptions, the presenters said out-year rows (FY28–FY30) reflect baseline assumptions (commonly a 2% growth assumption) rather than official consensus forecasts. Adam cautioned that school finance figures are formula driven and may reflect changes in FTE/headcount and that cutting K–12 funding could have unintended consequences; he said he did not have the specific line detail for current-year school finance moves at the microphone.
Speaking as state budget director, Adam emphasized the importance of the rainy day fund: "Having a rainy day fund — I think in my professional opinion as a state budget director, I think it's absolutely critical to maintain a healthy rainy day fund," he said, noting Kansas began making deposits about six years ago and is approaching $2 billion.
The session closed after reporters' questions and the presenters adjourned the meeting.
