Kansas' 2025: The Sunflower State Innovates…For the Most Part

When states compete for investment, they face a choice: create conditions where innovation thrives, or pile on regulations that constrain growth. Kansas' 2025 showcased both approaches. Lawmakers passed forward-thinking policies that position the state as a hub for digital infrastructure and business innovation, but they also advanced measures that demonstrate how government overreach can undermine economic opportunity and consumer freedom. As the year closes, it's worth examining what Kansas got right, where it stumbled, and what these decisions mean for the state's economic future.

The Wins: Kansas Embraces the Future

Kansas made significant strides in 2025 by enacting policies that signal to businesses: “we're open for innovation, and we're willing to compete.” From data center incentives to regulatory sandboxes, state leaders demonstrated an understanding of what drives 21st-century economic growth.

A Bold Bet on Data Centers

In April 2025, Kansas passed Senate Bill 98, launching the state's Data Center Incentive Program. The law authorizes a 20-year sales tax exemption for companies investing at least $250 million in qualified data center construction or remodeling projects that employ at least 20 people.

This isn't a giveaway. The exemption is tied to substantial capital commitments and job creation thresholds, and it includes a claw-back provision if companies fall short on investment or employment targets. That protects Kansas taxpayers while signaling to tech companies that the state is serious about competing for high-value digital infrastructure.

Why does this matter? Data centers are modern economic engines. They create high-paying tech jobs, generate tax revenue, attract ancillary tech businesses, and drive infrastructure improvements. They also enable innovation across industries, from healthcare to finance, by providing the digital backbone that modern services require.

Kansas' willingness to compete for data center investment positions the state to capture similar economic benefits: job creation, tax revenue, and infrastructure upgrades that benefit all residents. SB 98 is exactly the kind of policy that attracts capital and signals that Kansas is ready to compete in the digital economy.

Regulatory Sandboxes: Testing Innovation Without Red Tape

Kansas took another major step forward in 2025 with House Bill 2291, which created the Regulatory Relief Division within the Office of the Attorney General to administer the General Regulatory Sandbox Program.

The program allows businesses to apply for temporary waivers from certain state laws and regulations to demonstrate innovative products or services without obtaining certifications or registrations that might otherwise be required. Approved applications provide limited market access in Kansas for 24 months, with a possible 12-month extension.

Kansas became the 15th state to implement the regulatory sandbox model, joining a growing coalition of states that understand a simple truth: innovation often outpaces regulation, and rigid rules can kill promising ideas before they ever reach consumers. Sandboxes allow innovative businesses to operate temporarily free from outdated regulations, helping new products and services gain traction while regulators and industry learn together.

This is smart policy. It balances consumer protection with economic dynamism, and it sends a message to entrepreneurs: Kansas is a safe place to test new ideas.

Strengthening Business Agreements

Kansas also passed Senate Bill 241 in April 2025, giving employers clearer standards for drafting enforceable non-solicitation agreements. The law strengthens protection for customer relationships and workforce stability while maintaining reasonable requirements.

Non-solicitation agreements prevent former employees or partners from poaching a company's clients, customers, suppliers, or employees. SB 241 creates clear legal pathways for protecting these relationships and requires courts to modify overly broad contracts instead of voiding them outright.

This is deregulation done right. It brings clarity, reduces litigation risk, and allows businesses to operate with confidence. Bills like SB 241 are a step toward the kind of regulatory environment that attracts investment and supports growth.

The Setbacks: When Government Overreaches

Despite these wins, Kansas lawmakers also advanced policies in 2025 that demonstrate the risks of government overreach: whether in the form of misguided regulations and nanny-state restrictions.

The Nanny State: Food Stamp Restrictions

In February 2025, Kansas passed Senate Bill 79, directing state authorities to request a federal waiver that would allow Kansas to ban food stamps from being used to buy candy and soft drinks through the Supplemental Nutrition Assistance Program (SNAP).

This move was widely viewed as anti-business and anti-consumer choice – and for good reason.

Choice is the cousin of freedom, one of the central tenets of American ideals. Kansans don't need their state government telling them what they can and cannot buy with their food assistance. SB 79 is nanny-state overreach, pure and simple. It restricts consumer freedom, creates administrative burdens for retailers, and sends a troubling message: the government knows better than you do.

This kind of paternalism is the opposite of pro-business policy. It adds compliance costs for retailers, reduces consumer flexibility, and signals that Kansas lawmakers are willing to micromanage personal decisions. That's not the kind of environment that attracts investment or fosters economic dynamism.

What Kansas' 2025 Teaches Us

Kansas' 2025 is a study in contrasts. When the state embraced innovation—through data center incentives, regulatory sandboxes, and business-friendly contract laws—it positioned itself to compete for high-value investment. When it turned to government overreach—nanny-state restrictions, crony stadium deals—it undermined the very principles that drive economic growth.

The lesson is clear: capital and innovation flow where they're welcomed, not micromanaged. States that reduce barriers, trust markets, and create conditions for experimentation will attract investment. Those that pile on regulations, pick winners and losers, and restrict consumer choice will fall behind.

Kansas got more right than wrong in 2025. Senate Bill 98's data center incentives, HB 2291's regulatory sandbox, and SB 241's contract clarity are all proof points of what pro-business leadership can accomplish. The defeat of SB 212's prescription drug pricing board was another win for market-based solutions.

But the nanny-state overreach of SB 79 and the crony capitalism of the STAR Bonds expansion are reminders that good intentions don't guarantee good policy. As Kansas heads into 2026, lawmakers should double down on what's working: creating conditions where businesses can invest, innovate, and deliver value to consumers. And they should resist the temptation to micromanage personal choices or subsidize billionaires with taxpayer dollars.

Because at the end of the day, what's good for business is good for Kansans—and the policies that respect freedom, competition, and innovation are the ones that will deliver prosperity for all.