Governor Laura Kelly recently vetoed a bill that would have expanded the Kansas Low Income Students Tax Credit Scholarship program by $5 million.
HB 2468 would have authorized the state of Kansas to participate in the federal tax credit scholarship program for contributions of individuals to scholarship-granting organizations and would increase the aggregate credit limit on the state’s Tax Credit for Low Income Scholarship Students Program.
The Kansas Senate voted 27-12 to pass the bill, and the House voted 76-44 in favor, 8 votes short of the two-thirds majority needed to override Kelly’s veto.
“After years of neglect and budget disasters before I took office, we’ve worked hard to make sure Kansas’ public schools are fully funded and back on track,” Kelly said in the veto statement. “We must prioritize meaningful increases in Special Education funding over expanding the private school tax credit program.”
The $5 million increase to the tax credit program comes on the heels of the decade-old program hitting the $10 million cap for the first time.
The program allows individuals and corporations to claim a 75% state income tax credit for donations to approved Scholarship Granting Organizations (SGOs) that provide scholarships to eligible low-income students to attend private schools.
But in 2025, for the first time, students applying for a tax credit scholarship were turned away due to a lack of funds.
“Multiple SGOs in Kansas had to tell donors they couldn’t take their donation last year, and it’s Kansas kids who will suffer,” said James Franko, President of the Kansas Policy Institute, which owns The Sentinel, earlier this year. “Kansas kids trying to find the right educational fit are going to be turned away because donors had to be turned away from the program.”
Franko also said he was unsurprised by the veto.
At this point in Gov. Kelly’s administration, it isn’t a surprise that she’s opposed to offering lower-income children the same kind of educational freedom that her family enjoyed,” he said. “By vetoing the $5 million expansion of Kansas-based school choice — with a State General Fund budget nearing $11 billion — Gov. Laura Kelly is delaying another group of Kansan children from taking advantage of the freedom and opportunity available to wealthy families.”
Franko noted that the scholarship program would not impact school funding.
“It also rings a bit hollow to hear Gov. Kelly talk about a $5 million tax credit increase impacting schools, when it doesn’t,” he said. “But she’s more than happy to give away hundreds of millions to Panasonic and the Chiefs.”
Kelly rejects tax credit scholarship bill over spurious SPED funding claims
The education lobby has, for years, claimed special education is underfunded despite evidence to the contrary.
In early 2024, the Kansas Association of School Boards claimed school districts spent $382 million last year to cover the special education (SPED) shortfall. And the Kansas Department of Education calculations show the state provided $522.9 million, or $128 million less than it says the state should have provided to reach 92% of excess costs of $650.9 million.
As The Sentinel has explained many times, the formula in statute does not count all of the state funding provided for special education.
Some, but not all, Local Option Budget funding is counted, and some, but not all, weightings are counted in determining the general education aid that is provided. The Kansas Department of Education cannot come up with any rationale for excluding some of the SPED funding, and the exclusion may be an error that’s been on the books undetected for many years.
The law says the state should provide 92% of excess SPED costs (total costs less the amount provided for the general education of SPED students, federal SPED, Medicaid reimbursements, and state hospital administrative costs. However, when KSDE data was recast with the formula as if all funding counts, it shows the state covered 101% of excess costs if all the SPED funding is counted.
Further, the State Supreme Court accepted the Legislature’s proposal to increase school funding, which included a one-time increase of $44 million and $7.5 million annually thereafter, and the Legislature has exceeded its promise on special education funding.
