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Lawrence public schools stand to lose $1.7 million a year in annual budget authority due to changes in the school finance formula approved by Kansas lawmakers.
That was the report Monday night that district finance officials gave to the Lawrence school board.
But the district could make up part of that loss - about $1.4 million of it - by taking advantage of a provision allowing it to raise its local option budget, or "LOB" authority, from 31 percent to 33 percent of its base state aid, effectively shifting part of the burden of funding Lawrence schools from the state to local property tax payers.
"If this all holds true, you can count on a recommendation from us to go to a 33-percent LOB," Superintendent Rick Doll said. "And I just want to say that publicly so the board and the community can start to think about that."
The changes in the school finance formula were included in a bill that was meant to address a recent Kansas Supreme Court ruling. But in addressing the court's ruling, lawmakers also changed parts of the formula. They also added several controversial policy measures including the repeal of tenure rights for veteran teachers.
"Who would have thought that a court order to equalize funding would lead to this mess," board president Rick Ingram asked rhetorically.
The net loss for Lawrence is almost entirely the result of changes in the way local option budgets are calculated. Under the bill passed by the Legislature, virtual school students would no longer count as part of a district's total enrollment when calculating LOB authority.
That would result in a net loss to Lawrence of about $2 million a year because Lawrence has one of the largest virtual school programs in the state, with almost 1,400 students.
Supporters of that change argued that most virtual school students don't actually live in the districts where they enroll because virtual schools can enroll students from anywhere in the state. So, while the districts receive base state aid to fund the virtual programs, supporters of the change said districts like Lawrence should not profit from it by including virtual students in their LOB calculations.
But Doll defended the current funding system, arguing that the base money the district receives goes to pay the direct cost of virtual education, while the additional LOB money generated by those students helps pay the administrative costs associated with them.
"It is spent on virtual kids because we support Keith (Wilson, principal at Lawrence Virtual School)," Doll said. "Everybody here at the district office supports Keith. Everybody here supports those virtual kids."
If Lawrence raises its LOB to 33 percent of its general state aid, that would generate about $1.4 million in new revenue. But that would still leave Lawrence with a net reduction of $343,134.
Assistant Superintendent Kyle Hayden cautioned that those estimates are based on the district's current enrollment, and they assume no increase in enrollment next year.
"I don't think this is what the court was expecting, or will look upon very favorably," board member Shannon Kimball said. "Taking money away from some students to give to other students is not really what they had in mind."
Kimball also criticized the amendment that repeals teacher tenure rights, which gives veteran teachers the right to an administrative due process hearing before they can be fired or non-renewed for the following year.
"I think it's very troubling that legislators who were shepherding this through the process decided to do away with 50-plus years of public policy in this state without giving it a public hearing," she said. "I think it shows a profound disrespect both for the constituents across the state and the process."
The Lawrence district has already begun negotiations with its teachers union on a contract for next year. But union officials have said if that provision becomes law, they will seek to add "additional items" to the list of issues being discussed in those talks.
Doll would not comment on how the district would respond, saying it is too early to discuss the issue because Gov. Sam Brownback has not yet signed the bill into law.