A spectator’s guide to the special legislative session

TOPEKA — Kansas lawmakers return to the Statehouse at 8 a.m. Thursday for the start of a special legislative session, the 23rd such session in state history and the second one in 11 years focusing on school funding and the Kansas Constitution.

At stake is one simple question: Will public schools be allowed to open and operate as usual this fall, or will the Kansas Supreme Court effectively close public schools unless or until the Legislature comes up with a constitutional way of funding them?

Passions are running high as the court’s June 30 deadline draws closer. But the issues that got the Legislature to this point, and the policy options confronting them are sometimes so complex, it often seems as though lawmakers — not to mention the journalists covering them — are speaking in an entirely different dialect.

But when the techno-jargon is peeled away, what remains is a situation that ought to be of deep concern for every Kansas taxpayer, parent, educator or patron of a school district.

Here, then, is your spectator’s guide to what’s going on in the special session.

First, the issue

Contrary to what many might assume, this is not about whether schools are getting enough money. That will come later. The immediate issue here is property tax fairness: Whether one homeowner or business should pay substantially higher, or lower, property taxes than someone else simply by virtue of their ZIP codes.

Last month, the Kansas Supreme Court said the current funding formula creates disparities that are so wide that they make the entire funding formula unconstitutional.

This has to do with local option budgets, or LOBs, the additional money school districts can raise on their own in order to supplement the base funding they receive from the state. In Lawrence, the LOB equals roughly 33 percent of base state aid, the maximum amount allowed by law.

People often point to extreme examples to illustrate this point. In the Galena school district in southeast Kansas, one of the poorest districts in the state, 1 mill of property tax raises about $17,000. But in Olathe, one of the wealthier districts, that same mill of tax raises about $1.8 million.

Therefore, in order to have the money needed to pay for one additional teacher — let’s say $60,000 for salary plus benefits — folks in Galena have to pay 3.5 mills, or $40.25 in tax on a $100,000 house (and there aren’t many $100,000 houses in Galena), while a similar person in Olathe would pay only 0.03 mills, or 34.5 cents.
To even out those kinds of disparities, the state uses a pot of money officially called “supplemental general state aid,” but which most people call “equalization aid.”

For the upcoming school year, the Legislature has budgeted roughly $450 million in equalization aid. It gets divvied up based on a formula that almost nobody fully understands and which has changed a couple of times in the two years as lawmakers have tried to respond to various court decisions.

What the court said on May 27 was that the formula being used for this upcoming year still leaves disparities that are too wide. Not only does it result in tax disparities, it said, but those tax disparities result in educational disparities for students.

The court has given the Legislature until June 30, the last day of the current fiscal year, to fix the problem.

Options for the Legislature

One option that seems to have traction, at least among some lawmakers, and one that the court has suggested, is to reinstate and fully fund the old formula that had previously been held constitutional, but which lawmakers repealed in 2015.

In essence, that would mean reallocating all the money in that $450 million pot of equalization aid, plus about $38 million more, so that some districts would get more and some would get less.

But one political problem with that: Johnson County is home to many of the schools that would get less, because they primarily benefited from the formula change made a couple of years ago. The three largest districts there — Olathe, Blue Valley and Shawnee Mission — collectively would lose nearly $5 million.

Johnson County is home to roughly 20 percent of the state’s population and therefore has roughly 20 percent of all the legislators. That makes it hard to pass anything out of the Legislature without support from Johnson County.

In addition, all of those lawmakers are up for re-election this year. And they don’t want to go home after the special session to explain to their constituents why their schools just lost $5 million.

Another option, which many in Johnson County are pushing, would be to include a “hold harmless” provision to make sure no district ends up losing money in the reallocation.

According to the Kansas State Department of Education, that would cost roughly another $11 million, bringing the total price tag close to $50 million.

But there’s another problem. When lawmakers changed the formula, they included a kind of hold-harmless provision, and the Supreme Court said that made the inequities even worse. So there’s no guarantee the court would look favorably on it again.

‘Nuclear’ option

In addition to the two groups just described, there is another group of lawmakers, including a few from Johnson County, who think the Supreme Court overstepped its bounds by striking down the formula and by threatening to close schools if the Legislature doesn’t do what the court wants.

Some of them are dead-set against doing anything and have openly suggested that the Legislature call the court’s bluff.

Others aren’t too sure that’s a good idea. They would rather pass a constitutional amendment limiting the court’s power to order certain remedies in school finance cases, and they may make passage of such an amendment a condition for their voting yes on any formula change.

Constitutional amendments require passage by two-thirds of the members of both chambers, which is a steep hill to climb in the sharply divided Legislature. After that, it would have to be approved by a simple majority of voters in a statewide election, most likely the upcoming Nov. 8 general election.

Options for the court

If lawmakers choose to do nothing, or if what they do in the next week fails, in the court’s opinion, to cure the tax inequities, the court has at least a couple of options at its disposal.

The one that most people fear is that it could issue an order blocking the expenditure of any funds under an unconstitutional formula, effectively shutting down the Kansas public school system on July 1.

In its May 27 opinion, the court said, “without a constitutionally equitable school finance system, the schools in Kansas will be unable to operate.”

But it also suggested another option. In the concluding paragraph, the court said it was continuing to stay the “broad remedial orders” of the three-judge trial court panel.

That would involve striking out all of the changes to the formula lawmakers have made in the last two years, effectively putting the old formula back in place, and then ordering the state treasurer and other officials to disburse those funds accordingly, a move that many lawmakers might take as an even more egregious usurping of legislative authority.