No easy options for fixing school finance, Kansas lawmakers are told

Rep. Blaine Finch, right, R-Ottawa, who chairs a special committee reviewing the Kansas Supreme Court's latest school finance decision, says there are no attractive options for coming up with another 00 million for public schools, either by raising taxes or cutting other spending.

? Some state officials are suggesting it could take at least another $600 million a year to satisfy the Kansas Supreme Court’s order for adequate and equitable public school funding, and officials told a group of Kansas lawmakers Monday there is no easy way to come up with that kind of money.

That’s because $600 million represents about 9 percent of the entire state general fund budget. To come up with that kind of money, budget officials and state agency directors said, the Legislature either would have to pass another major tax increase, one year after passing a major income tax hike over Gov. Sam Brownback’s veto, or make draconian cuts to other state agency budgets outside the K-12 system.

“I think that the committee has done a good job of putting together what we were asked to do — what are the consequences of quote-unquote ‘compliance’ with the court’s decision — and as we saw today, many of those options are fairly ugly,” Rep. Blaine Finch, R-Ottawa, who chairs the special committee, said during an interview following the panel’s meeting Monday.

Chris Courtwright, an economist with the Legislature’s nonpartisan research staff, said raising $600 million in income taxes would require a tax increase roughly equal in size to the one lawmakers passed during the 2017 session.

He also said it was difficult to predict how much of a sales tax increase it would take because Kansas is already at or near the top of the nation in terms of combined state and local sales taxes, and any further increase could send more retail shopping business across state lines.

The other major source of revenue for the state is a statewide property tax mill levy for schools. Sen. Anthony Hensley, D-Topeka, pointed out that if previous Legislatures had left that property tax rate at 35 mills — or $322 in tax on a $100,000 home — instead of lowering it in the mid-1990s to the current 20 mills, the state would have the additional $600 million that many say it now needs.

That, however, would require passing a 75 percent increase in the state’s property tax rate, something Hensley said he is not proposing.

Because K-12 education now makes up roughly one-half of the entire $6.5 billion state general fund budget, funding that kind of increase would require 18 percent across-the-board cuts in all other state agency spending, officials said.

At an earlier meeting of the special committee, major state agencies were asked to prepare estimates of what that would mean to their budgets, and on Monday several of those agencies responded.

At the Department of Corrections, for example, that could mean closing three state prisons and releasing roughly 2,500 inmates, according to Keith Bradshaw, the head of programs and finance for the agency. As one alternative, he said, the department could close two facilities, release 1,730 inmates and eliminate all funding for community corrections programs.

The court system would also take a major blow because much of its budget goes to pay for salaries, according to Stephanie Bunten, budget and fiscal officer for the judicial branch, and most of what isn’t used for salaries is used to fund things required under state law.

In addition, she said, the Kansas Constitution does not allow the state to reduce a judge’s salary during his or her term in office, so all salary reductions would have to apply to nonjudicial personnel. As a result, Bunten said, an 18 percent cut in the court system would mean closing the court system for roughly 70 working days during the year, or a little more than three months, something she said could affect criminal defendants’ constitutional rights to speedy trials.

At the Department of Health and Environment, officials said an 18 percent cut would result in significant reductions in Medicaid services as well as public health programs such as venereal disease screening.

And at the Department for Children and Families, newly appointed Secretary Gina Meier-Hummel said a cut of that proportion would result in cutbacks in foster care contracts and the closure of eight DCF service centers, just to name a few impacts.

The state’s higher education system would also take a major blow, according to Board of Regents president and CEO Blake Flanders. He told lawmakers an 18 percent cut would mean more than $136 million out of the state’s colleges and universities, including $23.4 million from the University of Kansas in Lawrence.

Flanders noted that some people argue that colleges and universities can make up for budget cuts by raising tuition, but he said that would soon make it hard to recruit students from other states.

“We have to determine, are we going to starve the service and continue to try to operate, or are we going to end the service and start to really contract?” Flanders said. “With this kind of cut, I would expect — I don’t know, but I would expect — that people would start ending services.”

That testimony came on the same day that another legislator, Sen. Dennis Pyle, R-Hiawatha, who is not a member of the committee, issued a statement saying he had pre-filed a proposed constitutional amendment that, if approved, would take away the court system’s authority to decide school finance cases by handing over exclusive authority for public schools to locally elected school boards.

That proposal is a response to the Supreme Court’s threat that it will shut down the public school system on July 1 if lawmakers do not pass a funding system that meets constitutional muster during the 2018 session.

“Our system of government has many checks and balances, this is just adding to that,” Pyle said in a statement emailed to news outlets. “Giving locally elected school boards this authority over their schools will prevent court ordered unilateral school closure by the Topeka establishment. Local school boards need this tool to keep their doors open and to fight further consolidation.”

But Rep. Melissa Rooker, R-Fairway, said she sees little point in debating a constitutional amendment, and she wants to focus on how to provide schools with the funding they need.

“My takeaway is it makes the case for thoughtful, phased-in funding over a multi-year period, because we cannot as a state afford cuts that deep over a small period of time, so that’s what I think we made the case for today,” Rooker said.