Topeka ? Lawrence school district Superintendent Rick Doll said Friday that the district would probably have to dip into reserve funds for the rest of this year to absorb a $1.6 million cut in state funding that would result from a new school finance system being proposed by Republican leaders in the Kansas Legislature.

“They’ve said that’s what they want us to do, but it’ll make it tight for us,” Doll said.

The new funding scheme, which was unveiled Thursday, would immediately repeal the existing school finance formula, which is based mainly on student enrollment, and replaces it with a “block grant” system that would give districts more flexibility in how they spend their state funding.

That new system would be used for the rest of the current school year, plus each of the next two years.

Statewide, the plan calls for $3.4 billion in total school aid for the rest of this year, or about $22.9 million less than Gov. Sam Brownback recommended in his budget proposal in January. Total funding would rise to $3.49 billion in fiscal year 2016, and $3.55 billion in 2016.

According to spreadsheets produced Friday by the Kansas State Board of Education, the total amount of state funding for the Lawrence district this year would be about $66.6 million, or about $1.6 million less than the school board thought it was gettting when it approved this year’s budget last August.

Total state aid for Lawrence would go up in the 2015-2016 school year to about $70.3 million, but nearly all of the increase would be for increased contributions to the Kansas Public Employees Retirement System, and increased funding for the district’s virtual school.

For the 2016-2017 school year, Lawrence would get another $1.2 million increase, nearly all of which would be for increased KPERS contributions.

Furthermore, because the new formula would no longer be based on per-pupil funding, there would be no automatic increase in funding if the district’s enrollment grows over the next two years. The only provision in the new bill that allows for growing enrollment is an “extraordinary need fund,” with only $4 million for the entire state next year, that GOP leaders said would be used to address “unforeseen hardships.”

Schools would have to apply to the State Finance Council, a group made up of the governor and legislative leaders, to be awarded any of that money.

“Olathe has been growing about 400-500 students a year,” Doll noted. “They would eat that up in a hurry.”

Until this year, Lawrence had been growing by about 250 students a year. But it only grew by about 50 students this year, Doll said, and he expects that trend of slower growth to continue.

Less equalization funding

The main reason for the reduced funding this year, both in Lawrence and statewide, is the result of cuts in so-called “equalization aid.” That’s money the state uses to subsidize the capital outlay and local option budgets of less-wealthy school districts.

That has been a particular bone of contention in the Legislature this year because last year, the Kansas Supreme Court ordered the state to increase its equalization funding to close funding gaps between rich and poor districts.

Lawmakers approved increases in those funding formulas, but the increases ended up costing more than expected due to a quirk in the existing formula.

Mark Tallman, a lobbyist for the Kansas Association of School Boards, explained that equalization is based on a formula that uses a district’s per-pupil assessed valuation. For local option budgets, districts in roughly the top 19 percent in terms of per-pupil property wealth get no equalization aid, while the others get enough subsidy so that 1 mill of property tax in their district produces the same amount of money as 1 mill in the district at roughly the 81st percentile.

What happened last year, Tallman said, was that property values went up in some parts of the state more than in others, and enrollments changed throughout the state.

He said the result, which no one in the Legislature or Department of Education could have foreseen last spring, was that the per-pupil property wealth in the 81st percentile district ended up being much higher than expected, and therefore the bottom 81 percent of districts were entitled to more state aid than lawmakers had budgeted — about $64 million more.

Sen. Ty Masters, R-Andover, who chairs the Senate Ways and Means Committee, said Thursday that one of the intents of the new plan is to lower equalization aid back to where lawmakers thought it would be when they passed the current fiscal year’s budget.

But he said another aim is to correct what many see as an inherent flaw in the formula — the inability to predict how much it will cost — and replace it with a formula over which legislators have more control.