January 18, 2026
The Kansas Legislature convened on January 12, 2026, with Governor Laura Kelly delivering her final State of the State address the following day. She highlighted accomplishments from her seven years in office, crediting bipartisan cooperation for restoring fiscal stability and improving quality of life for Kansans.
Governor Kelly’s 2026 Priorities
Kelly outlined her priorities for the 2026 Session, including mental health, water sustainability, and education funding. The Governor also outlined a bipartisan proposal to ban student cell phone use during the school day, citing links to rising anxiety, depression, suicide risk, and classroom disruption. Finally, she reaffirmed her commitment to increasing special education funding and expanding free school meals for students currently paying reduced prices.
Budget Discussions Begin
Budget discussions began last Tuesday as appropriations and tax committees received updated Kansas consensus revenue estimates. While fiscal year 2026 revenues were revised upward due to stronger-than-expected tax collections, fiscal year 2027 projections declined slightly, signaling the need for caution.
The Governor’s proposed fiscal year 2027 budget includes $10.8 billion in State General Fund spending, a 1.6% increase over fiscal year 2026, with expenditures exceeding revenues by $641.6 million—a gap the administration says will shrink as the State moves toward a structurally balanced budget. Key items include increased special education funding, investments in state hospitals and mental health facilities, higher administrative costs for food assistance due to federal changes, and a 2.5% pay increase for most executive branch employees.
Legislative leaders emphasized that the proposal represents a proposed base budget, with final decisions resting with lawmakers.
Property Tax
House and Senate Leadership criticized the Governor for not addressing property tax relief in her State of the State address, calling it their top constituent concern. The Legislature considered property tax bills in 2024 and 2025, but did not reach a compromise on proposals that would have a significant impact.
The Senate Tax Committee spent three days discussing a proposed constitutional amendment to cap annual residential assessed value increases at 3%, while allowing local governments to continue setting mill levies. Supporters argue the cap would provide predictability for homeowners, while opponents warn it could shift tax burdens to other property types without guaranteeing lower taxes. If approved by the Legislature and voters in August 2026, the amendment would take effect in January 2027. Senate Chair Caryn Tyson reported the committee will work on the bill on January 27.
Incentive Review
Several committees also received briefings from Legislative Post Audit this week on the effectiveness of state incentive programs. Auditors reported unclear program goals, unreliable data, and limited evidence that incentives generate sufficient returns to offset costs. Reviews found that few STAR Bond attractions met tourism goals, multiple incentive programs failed to produce positive fiscal impacts, and Rural Opportunity Zones had a limited effect on slowing rural depopulation. The audits recommended clearer statutory purposes, stronger data collection, and improved oversight.
The STAR Bonds, aviation (HB 2464) and angel investor tax credit (HB 2466) programs are set to expire if not renewed this year. With these findings, legislative renewal of these programs could be more difficult.
This Week
With a true 90-day session calendar, when lawmakers return from the MLK holiday, lawmakers will already be on day nine, and pressure to get work underway will intensify. A few highlights for this week:
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