Topeka Kansas Attorney General Derek Schmidt urged state lawmakers today to heed the Supreme Court's school finance ruling, saying the surest way to resolve at least part of the case is to restore full funding of certain aid to poor school districts.
“My counsel would be, find a way, between now and July 1, before you go home, to provide that equalization aid,” Schmidt told the House Appropriations Committee.
Earlier this month, the Kansas Supreme Court upheld part of a lower court decision, saying the Legislature had violated the Kansas Constitution when it cut funding that goes to subsidize the capital outlay budgets and local option budgets of lower-wealth districts.
The state currently funds only about 78 percent of the LOB equalization aid, which means the state has to distribute that money on a pro-rated basis and districts receive only a portion of what they're entitled to. The Kansas State Department of Education says current funding is about $104 million short of what it should be.
In Lawrence, that amounts to about $1 million a year, a relatively small amount because Lawrence has relatively high property valuation for the number of students it has. But the poorer a school district is, the more it gets short-changed, resulting in what the court agreed are wealth-based disparities that violate the Kansas Constitution.
For capital outlay budgets — money used for big-ticket items like computers, equipment and building repairs — the state has not provided any equalization aid since 2009.
But some Republicans expressed concern that the additional money for those two formulas — estimated at $129 million a year — would go mainly for property tax relief and would not necessarily put more money into classroom education.
That's because state law limits how much districts can raise in each fund. So if the state doesn't pay its full share, Schmidt explained, local districts either have to raise their property tax levies to make up the difference or cut their budgets in those areas.
“With that in mind,” asked Rep. Marvin Kleeb, R-Overland Park, “do you see ways that we could actually have this money go to education, go back to those school districts, and put equity back to the students, helping those students out, rather than just tax relief?”
Schmidt advised against taking that approach.
“If you're going to have a system that relies at least in part … on local property tax effort, then the Constitution requires that that effort be equalized,” Schmidt said.
If the Legislature does anything less than restore full funding, Schmidt said, then those issues will be remanded back to the three-judge trial panel for further review. And if the Legislature does nothing, he said, that could result in the panel enjoining the entire local option budget mechanism, which state officials say would cost local districts more than $1 billion, or about 25 percent of their total operating budgets.
And even if the Legislature does resolve the equity issues for LOBs and capital outlay budgets, Schmidt reminded lawmakers that the larger issue — the adequacy of overall funding for public schools — is still an open issue because the Supreme Court remanded that back to the three-judge panel to be reconsidered under a different standard.
“This is a case that is still in active litigation,” Schmidt said. “This case is not over.”