Will Laura Kelly, ‘the education governor,’ have to cut K-12 school funding in Kansas?

As a candidate, Laura Kelly promised to be “the education governor” for Kansas. In office, she signed legislation that led the state Supreme Court to rule that school funding levels were constitutional for the first time in a decade.

But faced with a severe budget shortfall, the Democratic chief executive must decide whether to make painful cuts to K-12 schools, which make up more than half the state’s spending, after years of pushing for more funding.

“I don’t know if she has any choice but to cut funding for K-12 education,” said Senate Minority Leader Anthony Hensley, a Topeka Democrat and one of the governor’s closest allies. “But I think we have to give her some leeway and see what kind of recommendations she’ll come up with.”

The coronavirus pandemic and the lockdowns to fight it have closed large chunks of the state’s economy. More than 160,000 residents have lost their jobs and with it the income the state would normally tax.

The swift economic collapse is expected to reduce tax revenues by $1.2 billion over the next 14 months, according to an official forecast released Monday. Projections show a state budget shortfall of $653 million in the fiscal year that begins July 1 that Kelly and the Legislature must close.

On Tuesday, the governor didn’t rule school cuts in or out.

“We will do everything in our power to avoiding making cuts to those essential services,” Kelly said during her daily briefing.

‘Nothing safe’

The state’s sobering financial picture marks a sudden end to an era of relative prosperity that included low unemployment, growing tax revenues and lofty goals for the future.

As recently as January, Kelly reminded lawmakers in her State of the State address that she had promised to be “the education governor”— a callback to campaign promises to fully fund schools. She said then she considered progress on public education “our most important accomplishment to date – but we have more to do.”

When a reporter reminded Kelly of the moniker on Tuesday, she responded that she hopes to remain so.

But avoiding cuts to education may be all but impossible. Education accounts for 63 percent of state’s $7.7 billion general fund budget.

Rep. Troy Waymaster, a Bunker Hill Republican who chairs the House Appropriations Committee, called the budget situation “dire.”

“When you have K-12 education with over half of the state budget, I don’t think anything’s safe, given the situation that we’re in,” said Waymaster, who is also running for Congress in the First District. “I think we’re going to have to look at everything.”

House Minority Leader Tom Sawyer, a Wichita Democrat, said the shortfall can be closed without K-12 cuts, but “it won’t be easy.”

“The importance of protecting that funding cannot be overstated,” Sawyer said, adding that he’s hopeful Kansas will receive federal aid to help balance the budget.

On Tuesday, education leaders across Kansas braced for the prospect of pandemic-induced cuts less than a year after the state Supreme Court ruled public schools were both adequately and equitably funded following a 10-year legal battle over state aid known as the Gannon lawsuit.

The court repeatedly faulted the Legislature for underfunding schools. Over several years, lawmakers ultimately raised annual state spending on K-12 schools by more than $1 billion. Justices ruled schools were constitutionally funded after Kelly signed a final $90 million increase in 2019.

Kansas cut schools a decade ago amid the depths of the Great Recession, but never fully restored the reductions. That paved the way for Gannon.

This time, the Supreme Court is retaining jurisdiction in the Gannon case, meaning the justices could intervene if Kelly or the Legislature cuts school funding.

“From the standpoint of just, ‘Do our schools have the funding they need to keep them out of court and to meet the needs of our students?’ -- obviously this is a very concerning time,” said Mark Desetti, a lobbyist for the Kansas National Education Association, a teachers union.

Cuts to pensions?

Still, districts must now envision a possible future where some of those gains are rolled back amid uncertainty about when educational life will return to normal. Teachers don’t know when – or how – they’ll be able to return to their classrooms this fall.

Charles Foust, superintendent of Kansas City, Kansas Public Schools, said the district, with nearly 24,000 students, will examine what is sustainable if confronted with cuts.

“Asking, what is essential and what is not essential,” Foust said. “We don’t know what the cuts might look like but this is going to be interesting.”

Wichita Public Schools chief financial officer Susan Willis said the impact to school funding will depend on many factors, including how federal aid will soften the economic blow.

“This situation shows the value of having adequate cash reserves, which will allow Kansas to weather this financial downturn a bit better than those states without any reserves,” Willis said in a statement.

While Kelly and the Legislature have few easy choices, pensions may be one area where cuts could be made to K-12 funding without immediately harming classroom instruction.

Mark Tallman, a longtime lobbyist for the Kansas Association of School Boards, said part of the recent funding increases for education have gone to correct historic underfunding of the state’s pension system, called KPERS.

The payments don’t affect how much retirees receive in benefits, but they do impact the long-term health of the state’s pension system, which produces much of its revenue through investments.

“One thing that could be considered — although no one ever wants to do it — is whether we need to back off on the KPERS right now in some fashion,” Tallman said.

Kelly has twice proposed refinancing KPERS to lower the state’s annual payments to the system, which would save the state about $223 million a year for 15 years. But Republicans have previously scoffed at the idea because it would ultimately cost the state an additional $4.4 billion over 25 years.

Senate President Susan Wagle, a Wichita Republican running for U.S. Senate, said the best way to close the revenue shortfall and help schools is by beginning to safely reopen the state while continuing to practice social distancing. Kelly has said she wants to begin easing restrictions but has warned opening up too quickly will invite a second wave of coronavirus cases.

The Legislature will begin the task of wading through the financial wreckage on Friday, when budget committees are set to meet virtually. The full Legislature is currently set to return Monday, though legislative leaders could push that back.

“We have a lot of hard decisions ahead of us,” said Sen. Dinah Sykes, a Lenexa Democrat.

The Star’s Sarah Ritter contributed reporting

This story was originally published April 21, 2020 at 4:42 PM.