Kansas lawmakers face puzzle of school funding and budget fix

Newly elected lawmakers will have a difficult puzzle to solve when they arrive in Topeka next month.

They’ll face a projected budget hole of more than $900 million for the next 18 months. And they’ll need to write a new school finance formula before the current block grant system expires in June.

And at some point, the Kansas Supreme Court will rule on whether the state has unconstitutionally underfunded schools. A decision in favor of Wichita and other school districts suing for more money would make it more difficult to fill the budget hole and increase pressure for a new formula that ensures adequate funding.

“I’m not articulate enough to describe how difficult it will be,” said outgoing Senate Vice President Jeff King, R-Independence, who is retiring from the Legislature.

King predicts this session will surpass 2015 as the longest in the state’s history and says any one of these challenges would be the biggest task of a normal legislative session.

“You can’t separate any of those. You have to really look at them in a package, and I think it makes it incredibly complicated,” said King, a lawyer who represented the state in a previous school finance case. “Because you can’t address the school finance ruling without addressing the formula. You can’t address either of them without addressing the budget.”

K-12 education accounts for more than half of the state’s general fund budget. It won’t be easy to simultaneously fix the deficit and increase school funding if the court rules how King and many other lawmakers expect it to rule.

Wrangling over the budget is also sure to lead to a fight over the state’s tax system, King noted. All of this will happen in a year when freshmen lawmakers account for nearly a third of the Legislature.

Senate Minority Leader Anthony Hensley, D-Topeka, who was in the Kansas House when the Legislature passed the old school finance formula in 1992, said it took two years for lawmakers to reach agreement – and the state did not face a budget crisis then.

“What I’m concerned about is whether we get embroiled in urban vs. rural issues. I’m hopeful we can avoid that,” said Hensley, a public school teacher.

Up to the challenge?

Others say the Legislature is up to the challenge and that the process could be less contentious than in past years.

Alan Rupe, a lawyer representing Wichita and the other districts, said lawmakers and school districts have already begun the conversation about a new formula.

Rupe pointed to June’s special session in which lawmakers worked with Wichita and Kansas City, Kan., school officials to craft a consensus bill to settle a part of the case dealing with whether school funding is equitable.

Rupe said this is the first time that has happened since he became involved with school finance litigation in 1989. He’s optimistic it will happen again after the court rules on the bigger question of whether school funding is adequate. He expects a ruling in January or February.

“I would anticipate and hope that we have the same kind of conversation over the adequacy portion,” Rupe said. “The temperature in the room has gone down considerably, and the ability to have a logical, thoughtful ‘everybody pointed in the same direction’ kind of conversation is much more a reality than it ever has been.”

Rupe joked that this is going to put him out of business. “But that is an absolute good thing when it comes to the next generation of kids,” he said.

Rep. Ron Ryckman, R-Olathe, who will become speaker of the Kansas House next month, agrees that the special session and its bipartisan bill provide a template for how to proceed.

“I believe when we use both our ears and listen to people and find the things that we agree on and build from there, the process works better and the product is better,” he said.

Lost in the system

Lawmakers repealed the state’s old school funding formula in 2015 at Gov. Sam Brownback’s urging. Hensley said the old formula should serve as the starting point for a new one.

He pointed specifically to the extra dollars the old formula allocated for school districts with a high number of at-risk or bilingual children as an idea that should be included in the new formula.

Brownback, on the other hand, said he wants to move away from a system that relies on student demographics toward one that depends on student outcomes.

“The head count system gets gamed,” he said in an interview this month.

“You hear about all sorts of people in the old system saying, ‘Well, on the 20th of September, we have to make sure everybody’s here because that’s our head count day, and after that we don’t care,’ ” Brownback said. “Or they’d say, ‘Students that are low-income weighting, free and reduced lunch, we’ve got to make sure we’ve got a number here because this is going to get us more money here.’ And people figure out how you work the system. And I want to incent the sort of things as much as we can that drives better outcomes for students.”

Mark Desetti, the legislative director of the Kansas National Education Association, the state’s largest teachers union, called that nonsense.

“It’s not like we drag kids off the street that we find wandering around, go down to the orphanage and bring in a bunch of kids or something,” Desetti said. “You want your kids there on the count day because that affects your funding for every other day of the year … but we want the kids there every day, because we want to get them up to higher standards.”

Budget realities

Brownback solicited advice on a new formula from average Kansans. Several of the e-mails sent into the governor’s office told him to simply go back to the old formula.

Some e-mails called on the governor to roll back an income tax exemption for business owners as a way to provide more money for schools, while others said school districts spend too much money on administration. Other e-mails told the governor to legalize and tax marijuana to provide more money for schools.

Even if lawmakers can find consensus about a funding system, paying for it will be a challenge.

Sen. Laura Kelly of Topeka, the ranking Democrat on the Senate budget committee, predicted that lawmakers might delay payments to the state’s pension system in the face of a court order that calls for more school spending immediately.

“I wish there was some way we could wave a magic wand, reset the tax cuts, you know, repeal the Brownback failed experiment and pay our bills. We can’t do that because of the way our taxes work, and so we have to find a patch,” Kelly said, noting displeasure at the prospect of another delayed pension payment.

King said he hopes the court takes the state’s finances into account when it crafts its ruling and allows the state time to gradually phase in a spending increase if it deems one necessary. He said legislators and justices both need to acknowledge the reality of the budget situation.

“The Legislature has to respect and do everything they can to comply with whatever order the court issues, but we don’t print money,” King said.

This story was originally published December 23, 2016 at 9:47 AM with the headline "Kansas lawmakers face puzzle of school funding and budget fix."