New school funding bill would add $76 million in state aid, raise local property taxes

Kansas Statehouse in Topeka, February 2014.

? A new school finance proposal that will be the focus of discussions for the next several weeks would add a little more than $75 million in new state funding for public schools, including about $2.8 million in new state aid for the Lawrence school district.

That’s only a small fraction of what many lawmakers and the Kansas State Board of Education have said they think is needed to bring school funding up to a constitutional level of “adequacy.” In its budget request, the state board sought an increase of $566 million for the upcoming school year, plus another $328 million for the 2018-2019 school year.

Meanwhile, during a Department of Education briefing Wednesday afternoon with school officials around the state, the complexities of the bill caused one superintendent to cry out in frustration.

“For crying out loud, what kind of formula is this?” Pittsburg Superintendent Destry Brown asked in response to the complex method used simply to count students.

While many districts like Lawrence would gain funding under the House plan, 107 of the state’s 286 districts would lose money, primarily because of declining enrollment in some parts of the state.

One of those losing money would be the small Meade school district in southwest Kansas, where superintendent Kenneth Harshberger said the House bill would cut his budget by about $100,000 in the first year.

The bill would also require Lawrence and many other districts around the state to raise more money through local property taxes, especially if they want to take full advantage of all of the options provided under the bill that allow districts to raise additional money for local enhancements and extracurricular activities.

All told, according to the Department of Education’s analysis, the Lawrence school district would get up to $4.7 million in new spending authority for general operations, if the school board takes full advantage of all of the options in the bill. But roughly one-third of that would come from new property taxes.

Deputy Education Commissioner Dale Dennis said he had not yet calculated how much local property taxes would need to increase statewide under the plan.

The plan was formally introduced into the House on Wednesday as House Bill 2410.

The bill is similar to the old formula that lawmakers discarded in 2015. It establishes a base, per-pupil amount of funding that it calls “foundation aid” for each district, with additional weightings given for at-risk and bilingual students, along with other factors. But it also gives districts the option of raising additional money locally for program enhancements and extracurricular activities.

Under the old formula that was repealed in 2015, districts were allowed to raise additional local taxes to fund enhancements, known as a “local option budget,” or LOB. Over the years, though, when state funding was either cut or failed to keep pace with rising costs, many districts, including Lawrence complained that the LOB really wasn’t optional anymore because all of that money was needed to maintain basic services.

Under the new proposal, districts would be required to continue raising local taxes to provide money on top of what the state provides, but it would be considered the local share of “foundation aid.” Beyond that, districts would have very limited authority to raise additional money under what would be called “local enhancement budgets” and “local activities budgets.”

The state’s share of foundation aid would be $4,170 per student, while local districts would add another $1,150 per student, for a total of $5,320. Districts could then levy taxes for another $288 per student for its enhancement budget, and $212 per student for an activities budget.

Those local property tax levies would be subsidized with additional state aid so taxpayers in lower-wealth districts would not have to pay higher tax rates in order to generate comparable levels of funding that wealthier districts could generate, a process known as “equalization.”

On a statewide basis, according to the Department of Education’s estimates, the state would pay $3.157 billion on public schools next year under the new plan. That compares to $3.081 billion it is spending this year, an increase of $75.6 million. When the state last used a per pupil funding formula in the 2014-2015 school year, districts received $3,852 in base state aid compared to the $5,320 in the proposed plan. However, in the old formula all the base aid came from state funds, where in the proposed plan a portion of the base aid will come from local property taxes. The old formula instead allowed school districts to levy local option budgets, which were not included in the per pupil amount. The proposed formula eliminates the local option budget provision. Those differences make it difficult to compare the per student funding amounts in the old plan and the proposed plan.

As the bill is currently drafted, the Lawrence school district would be entitled to $59 million in general state aid, an increase of $2.8 million over what it receives now.

It could also receive as much as $25 million in what current law would call “supplemental” funding, mostly through additional local property taxes, an increase of $1.7 million over the current funding system. That increase, however, would come almost exclusively from new local property taxes.

The Department of Education’s analysis was released shortly after the bill’s introduction.

Rep. Larry Campbell, R-Olathe, who chairs the House K-12 Education Budget Committee, described the bill as only a “starting point” for discussions. He said he plans to hold extended, detailed hearings on the plan Thursday and Friday of this week, and possibly extending into Monday of next week.

The committee then plans to start working on amendments to the bill, with the hope of advancing a plan to the full House before lawmakers adjourn for a three-week break on April 7.