Archive for Saturday, March 4, 2006

School funding plans crash into budget reality

March 4, 2006

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After a weeklong celebration over the drafting of bipartisan school finance plans, the Legislature woke up Friday with a big hangover, as rank-and-file members realized the proposals would cause serious budget problems.

Both a $660 million Senate plan and a $500 million House plan would phase in the funding increases over three years, to avoid a tax increase. But the plans appeared in serious trouble, because the leaders who drafted them haven't said how they would finance the second and third years.

The state can rely on its cash reserves for the first year of either plan, but without additional revenue, a budget shortfall would appear next year and, if ignored, grow dramatically over two years. Under either plan, the gap would balloon past $600 million.

Gov. Kathleen Sebelius and legislative leaders said the problem hasn't been a secret. Senate leaders have been working on a bill to expand gambling as their solution, and Sebelius backs the idea.

"They should have been talking about this for the past six months," Senate Majority Leader Derek Schmidt, R-Independence, said of other lawmakers. "I just think seeing this in black and white has focused some minds that previously were not focused."

Complaints from rank-and-file members belied the harmony legislative leaders had touted while negotiating among themselves and with Sebelius.

Discontent with the proposals crystalized Friday, when House Majority Leader Clay Aurand offered his own proposal, a one-year plan that would provide $120 million in new state funds and require local school districts to set aside nearly $340 million in local property tax revenues.

"We were so focused on the first year and that we had money to do it, that we forgot to focus on what happens with the budget in the second and third years," said Aurand, R-Courtland. "At this point, there's no way to fund the second and third years, and until there is, probably most of us feel it's irresponsible to spend money that we don't have."

Still, Sebelius said during a news conference that she remains confident that most legislators see the need to approve a school finance plan. She added that a multiyear plan still makes sense.

"I think it's not a surprise that there will be some legislators who won't be enthusiastic about passing a school plan - any school plan," Sebelius said.

Both the House and Senate leaders' plans are a response to state Supreme Court orders issued last year in a six-year-old lawsuit. And some conservative Republicans want the Legislature to debate proposed constitutional changes to rein in the judiciary before addressing school funding.

"We're literally crafting everything right now to satisfy the court," said Rep. Frank Miller, R-Independence. "We need to do what's right."

Last year, under pressure from the court, legislators increased spending on public schools by $290 million, or more than 10 percent, to more than $3 billion. But the justices deemed the action acceptable only for "interim purposes."

The Senate plan provides an additional $180 million in state aid to public schools in its first year. It also requires school districts to set aside $70 million in property tax revenues, for a total increase of more than $250 million.

The House plan commits $175 million in new state dollars to schools in its first year, without any requirement for local school districts to set aside property tax revenues.

Generally, the House plan favors larger, urban districts more than the Senate plan does, though under both, some districts receiving the most extra aid per student are rural.

Sebelius said that she would push for legislators to fund all-day kindergarten programs statewide and to find ways to make sure districts spend their new funds wisely.

Meanwhile, education officials debated whether money set aside from local property taxes could be considered new dollars to public schools.

But such issues were overshadowed by the discussion about the state's financial future.

"Pretty simply, it looks like, based on the numbers, we're spending more money than we expect to get in, which is setting ourselves up for a tax increase or some other way to fund government," said Sen. Les Donovan, R-Wichita.

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