Topeka The Lawrence school district stands to lose millions of dollars in spending authority over the next two years under school finance bills now awaiting action in the Kansas House and Senate.
But the bills would also allow districts to increase their Local Option Budgets — additional money districts can raise through local property taxes, above and beyond their base state aid — something Lawrence Superintendent Rick Doll said may be necessary to absorb the cuts in state funding.
"Under the present, evolving circumstances I would recommend that the board consider moving the LOB to 33 percent," Doll said. "Our finance director, Kathy Johnson, is in the process of estimating the impact of all proposed changes on our budget, but this would seem to make sense at this time."
The cuts include an as-yet-unknown amount from a pool of money known as "new facilities weighting" — money the state provides for the first two years of operation of new classrooms and buildings, but which the Legislature is now proposing to eliminate starting next year.
Those cuts would complicate plans in the Lawrence school district, which is embarking on a massive new construction program funded by its recent $92.5 million bond issue.
"New facilities weighting cannot be budgeted until the new facilities (or) classrooms open," Lawrence Superintendent Rick Doll said. "It is fair to say that we have been planning on using these funds to help equip our new classrooms."
The bond plans initially called for building 17 new elementary classrooms and a new 30,000-square-foot College and Career Center that will offer career and technical education programs. But an unexpected increase in enrollment this year prompted the Lawrence school board to add another 12 new elementary classrooms to the mix, bringing the total to 29.
Under the current state funding formula, Lawrence would be entitled to additional money for each student placed in those new spaces for the first two years of operation. But both the House and Senate bills making their way through the process eliminate that funding for any new facilities opened after July 1 of this year.
Responding to the Supreme Court
The main purpose of the finance bills is to respond to a recent Supreme Court ruling by providing $129 million in new "equalization" money. That money is used to subsidize the LOBs and capital outlay budgets of less wealthy districts so they don't have to impose higher property tax rates than wealthier districts in order to raise comparable amounts of money.
Lawrence would get an additional $1 million in equalization aid under the House and Senate bills, a relatively small amount because it has relatively high property valuation for the size of the district. But because Lawrence has already levied the maximum amount allowed in both of those budgets, the increased state aid can only be used to replace money currently being raised from local taxes, not to increase overall spending limits.
To help pay for the $129 million increase statewide, both the House and Senate bills contain offsetting cuts in other parts of the education budget, and those cuts would have a direct cut into the Lawrence district's overall spending authority.
The Senate Ways and Means Committee finished crafting its bill late Tuesday night. But the House Appropriations Committee is set to continue working on its bill this evening. Both chambers are expected to debate their respective bills Thursday evening.
Debate over new facilities money
Senate Vice President Jeff King, R-Independence, said he thinks eliminating the new facilities funding is long overdue.
"New facilities weighting, as you probably know, was put on as an extra provision to help certain school districts that were wealthier in the state as a response to the 2006 decision in Montoy," he said, referring to an earlier school finance case. "There is no policy rationale for that that has been provided with evidence."
But Democrats in the Legislature said that cut is one of many reasons they plan to vote against the bills.
"It messes with a number of communities that are just finishing up new facilities," said Rep. Jerry Henry of Atchison, the ranking Democrat on the House budget committee. "Most of the time you use that new facilities weighting to buy the furniture and the things you need inside the building. So we have a number of other communities calling desperately, saying this probably may allow them not to use their new building."
Detail of other cuts
Lawmakers last year approved a $14-per-pupil increase in the base funding formula for next year, and funding for that remains in both the House and Senate versions. That would bring an estimated $200,836 in new funding to Lawrence. But that would be offset by other education cuts in the bills, including:
• Virtual school funding: Both bills reduce the funding rate from 105 percent of the base per-pupil aid formula to 90 percent, a much smaller cut than originally proposed. That would mean a loss of $990,000 under the Senate plan, and just over $1 million under the House version, which would also stop counting students over age 19.
"At this time I believe we could operate our virtual schools, at least in the short term, at the 90-percent funding level," Doll said. "We would have to make some cuts, though, because the district does not supplement the virtual school budget."
• At-risk weighting: This is additional money that reflects the higher cost of educating low-income students who are at risk of failing or dropping out. Both bills cut funding for at-risk weighting. Lawrence would lose $31,617 per year under both versions of the bill.
• Non-proficient at-risk weighting: Money for students who are deemed at risk of failing or dropping out because of low test scores, but who are not classified as low income. Both bills eliminate that funding, which would cost Lawrence $90,907 per year.
• Transportation funding: The Senate bill would overhaul the formula for calculating transportation aid, resulting in a $213,703 cut for Lawrence. The House bill would keep the current formula but cut funding overall by 5 percent, costing Lawrence $65,792.
The net effect of those adjustments, including the increase in base state aid, would be a loss of $1,126,013 under the Senate plan, and a loss of $1,004,953 under the House plan.
But the district could make that up if it takes advantage of another provision allowing districts to increase their local option budgets up to 33 percent of their base state aid, subject to a mail ballot election. Lawrence's LOB is already at the current maximum of 31 percent.
Doing that would generate an additional $1 million a year for Lawrence. But officials say the school board would have to act soon in order to conduct a mail ballot election in time before the August deadline to adopt a budget for next year.