A new state revenue estimate shows the state will receive $72 million less than expected in the current fiscal year and $400 million less than the year before. (Tim Carpenter/Kansas Reflector)
TOPEKA — Kansas is expected to receive about $72 million less in tax revenue next year than initially expected, officials said.
The revised state revenue estimate announced Friday is the first since Gov. Laura Kelly signed a major bipartisan tax cut bill in June, which is expected to reduce state taxes by $1.2 billion over the next two and a half years.
The new estimate included updated projections for general state fund revenues for the 2025 fiscal year, which ends in June.
Officials estimate that the state government will bring in approximately $9.73 billion in revenue in fiscal year 2025, which is a decrease of 4%, or $400 million, from total revenue in 2024. While tax revenue is expected to increase in 2025 will decline, estimates for other revenue sources have increased by more than $12 million.
The revised estimate was created through a consensus process with government officials and three consulting economists from state universities. Kelly and the Legislature will use the revised estimate to inform the annual budget process.
Officials also presented their initial estimates for the 2026 fiscal year, which begins in July 2025, predicting $9.85 billion in revenues, up from the revised estimate for the 2025 fiscal year.
In the spring, when officials last updated the state’s revenue estimates, the state’s revenues and economy were considered “stable,” Shirley Morrow, director of the Kansas Legislative Research Department, said at a news conference on Friday.
“That’s relatively the same,” Morrow said.
However, some risks still exist, she said. These include persistent inflation, high interest rates, potential global geopolitical impacts on commodities and price declines in the agricultural sector that started in 2023.
Over the past year, financial conditions in agriculture have generally deteriorated, she said.
“We are still concerned about the drought, which appears to have gotten a little worse in most of the state,” she said.
According to officials’ spring estimate, the number of open jobs and the number of available workers have gotten closer and jobs in Kansas have grown by 20,500, Morrow said. But the number of vacancies remains greater than the number of unemployed.
