TOPEKA — Legislators got their first look at Gov. Laura Kelly’s proposed budget for fiscal year 2027 on Wednesday, finding a plan that prioritizes funding for schools and special education, expanded mental health services and creating a 10-year water plan.

Budget director and administration secretary Adam Proffitt presented the spending blueprint virtually at the joint meeting of the Senate and House budget committees.

The governor’s budget was set after Kelly completed a statewide tour to hear from Kansans, Proffitt said.

“Last fall, I spoke directly with Kansans, who were clear about the priorities they wanted reflected in my budget: fully funded public schools, investments in health care, and action to address our water challenges,” Kelly said in a news release. “My budget delivers on Kansans’ wishes while remaining balanced and ensuring that we protect Kansas’ fiscal foundation.”

The governor’s budget used a projected 1.7% revenue growth for the upcoming fiscal year, which begins July 1, as a basis, Proffitt said. The recommended budget total of $10.8 billion comes in 1.6% higher than last fiscal year’s approved budget, he said.

Proffitt said $35 million of the increase comes from one-time expenditures, and if those expenditures are removed, the budget increase would be 1.3%, the amount total tax collections are expected to grow during the upcoming fiscal year.

Diving into budget details, Proffitt said a few spending increases are tied to the One Big Beautiful Bill Act, which shifted some costs to the states. For instance, the state will pay a higher portion of administrative costs for the Supplemental Nutrition Assistance Program, which the governor accounted for by including $21 million in the budget, he said.

Legislators at the hearing questioned whether the budget included paying a penalty for the state’s high SNAP error rate, which could be between $20-40 million, depending on the rate, but Proffitt said the penalty won’t be assessed until fiscal year 2028.

That gives the state time to get the error rate below 6%, which would carry no penalty, he said.

The error rate measures mistakes that have been made in allocating dollars for recipients, and can include data entry mistakes and incorrect calculations. The federal goal is a rate below 6%. Kansas had a 9% rate for 2025.

The federal law also had more stringent work requirements for SNAP recipients, which increased administrative costs at the state level an estimated $4 million, Proffitt said.

EDUCATION

Kelly recommended full funding for K-12 general education for two full years, Proffitt said, which provides predictability to school districts.

The school funding formula sunsets at the end of fiscal year 2027, and Proffitt said the governor’s budget extends the current school finance formula into 2028.

The governor recommended spending $2.5 million to eliminate the co-pay for 34,000 students who receive reduced lunches.

“The governor is recommending an incremental $50.6 million of (State General Fund) to fund special education for fiscal year 2027,” Proffitt said, adding that is 70% of excess costs, which is still well below the 92% required in statute.

The state has not funded special education to the 92% level in 15 years, he said.

“Funding for special education is really a shared responsibility between the federal government and the state government,” Proffitt said. “The governor is calling on the feds again to meet their obligation and increase their level of funding here in Kansas for special education. We simply cannot get to 92% without more federal support.”

WATER FUNDING

“Water remains among the top priorities in the state, not just for the administration but obviously for many in the Legislature,” Proffitt said. “It’s one of the most critical resources we have in the state, and we know we have a tall order ahead of us to make sure it’s available for the next several generations.”

The governor’s budget recommends full funding at $8 million for the state water plan fund, and Kelly wants to work with the Legislature to develop a long-term water roadmap, Proffitt said.

HUMAN SERVICES

Kelly asked for $12.6 million to fully fund a new Community Support waiver, which is expected to eliminate some of the stress from the current intellectual and developmental disability waiver, Proffitt said.

In addition, Kelly’s budget outlines an additional $10 million to address increased demand on the technology assistance waiver, which helps individuals younger than 21 who need life-sustaining medical equipment and technology.

Kelly’s budget includes $15 million to support increased Children’s Health Insurance Program caseloads. Her budget includes dollars for contract nursing at Larned State Hospital and Osawatomie State Hospital, about $37 million for both.

The state hospital system has been scrutinized closely over the past couple of years, Proffitt said, and the governor recommends a budget allocation of $38.9 million to strengthen the system.

“We recognize that there is both a capacity issue across the state hospital system but also staffing issues,” Proffitt said.

He said the budget includes:

Nearly $31 million that would fund the new South Central Regional Mental Health Hospital, which would get the facility open in fiscal year 2027 and add 103 beds to the state’s capacity.

$3 million in capital improvements at the Kansas Neurological Institute in Topeka to create 15-30 behavioral health beds for children.

$5 million for one-time funding to support six local hospitals with behavioral health beds.

The House proposed a budget bill, House Bill 2434, this week, breaking tradition with past years when the governor’s budget is taken into consideration before they put together their budget.

• Morgan Chilson is a reporter with the Topeka-based news service Kansas Reflector.