Issues: Taxes & Fiscal Responsibility
When Governor Laura Kelly was elected in 2018, the state’s budget was a disaster. The previous administration's poor fiscal management created a budget crisis and threatened the state’s ability to provide essential services to Kansans. From day one, Governor Kelly prioritized balancing the state’s checkbook and rebuilding its ability to deliver the services Kansans rely on. Through careful fiscal management, the governor has balanced the budget and made historic investments in critical programs that have spurred economic development and improved Kansans’ lives.
Thanks to Governor Kelly’s responsible budgeting, she has cut taxes multiple times without endangering the state’s long-term fiscal health. Governor Kelly axed the state food sales tax to zero, reduced state property taxes, and eliminated the state tax on social security income.
Highlights:
Fiscal Responsibility
Thanks to Governor Kelly’s financial management:
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The state’s financial ratings have been upgraded multiple times.
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Debt has been paid down, including over $2.1 billion in early debt retirement.
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Nearly $225 million for new projects has been paid in cash, saving Kansans $90 million in interest that would have otherwise accumulated through bonds.
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Kansas’ public schools have been fully funded six years in a row.
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The state’s rainy-day fund has been built up from $0 to over $1.5 billion for any inevitable emergencies Kansas may face.
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The irresponsible practice of using the State Highway Fund to make up for budget gaps has ended. This decision effectively closes what was known as the “bank of KDOT,” and ensures Kansas has the funds to maintain the state’s highways, roads, and bridges.
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Before Governor Kelly took office, S&P Global downgraded Kansas’ credit rating four times from 2014 to 2017. In 2023, S&P announced it had improved its credit outlook for the State of Kansas to ‘positive’ from ‘stable,’ citing Governor Kelly’s efforts to close the Bank of KDOT, balance the state budget, pay off KPERS debt, and achieve record-low unemployment rates.
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Under Governor Kelly’s leadership, the state’s tax-supported debts have been reduced by 25%. Kansas has retired over $2 billion in state debt early, creating $2.3 billion in savings.
Tax Relief
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Governor Kelly led the effort to axe the food tax in Kansas. In 2022, she signed into law legislation cutting the food sales tax in Kansas to 0%, saving taxpayers upwards of $500 million a year. This will save an average Kansas family $500 or more a year on their grocery bill.
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Thanks to Governor Kelly’s strong fiscal leadership, the state found itself with a historic ending balance and rainy-day reserves in 2024. Governor Kelly worked with the Legislature to pass bipartisan sustainable tax legislation, which provides nearly $2 billion in tax cuts for Kansans over the next five years. The bill reduces property and income taxes, immediately eliminates the state tax on Social Security income, and increases the standard deduction and Child and Dependent Care Tax Credit.
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In total, the Kelly administration has provided Kansas with approximately $1 billion in annual tax cuts.