Politics & Government

School finance fix could mean millions for Sedgwick County districts

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Wichita and other Sedgwick County school districts stand to gain millions of dollars in state aid next school year if lawmakers restore the state’s old equalization formula.

That may be the easiest solution to a state Supreme Court order to fix inequities between school districts from a legal perspective, but it could prove near impossible to accomplish politically.

Several school districts in Johnson County stand to lose money if the state brings back the old formula. Johnson County lawmakers, who make up the biggest delegation in the state, already are saying they oppose that.

It would also require the state to spend $35.6 million more for the 2016-2017 school year. The state already faces a budget shortfall of about $48 million for this year, after it missed tax revenue estimates by $53.5 million last month.

The Kansas Supreme Court told lawmakers in February that restoring the state’s old equalization formula would address the inequities between school districts, but it left them room to explore other options. The court said it could close schools if lawmakers fail to fix inequities before July.

The Wichita school district, one of the plaintiffs in the school funding lawsuit, would receive $10.1 million more next school year in state aid under the old equalization formula, according to an analysis by the Kansas Department of Education.

Diane Gjerstad, a spokeswoman for the school district, said that about $5.5 million of that new money would go toward property tax relief for Wichita residents, while the rest would go toward schools.

Wichita public schools superintendent John Allison comments on Supreme Court ruling that Kansas school funding is inequitable. (Feb. 11, 2016/Mike Hutmacher/The Wichita Eagle.)

Before it switched to block grants last year, the state provided equalization aid to poorer school districts for capital improvements and to supplement districts’ local option budgets, which are based on local property taxes.

The old formula provided more money to districts that were considered property poor, to “equalize” them with districts considered property rich. Property-poor districts have to tax at a higher rate to raise the same amount of funding as their richer peers. That’s why in many cases additional state aid would go toward property tax relief instead of additional classroom funding.

Derby schools would gain $1.6 million in additional state aid if lawmakers restored the equalization formula, while Goddard and Maize would each get more than $760,000.

‘Winners and losers’

Johnson County lawmakers have bristled at the idea of a large portion of the money going to property tax relief for Wichita residents rather than into classrooms. The state aid that Johnson County districts would lose would likely be offset by an increased local property tax burden for that county’s residents.

The court presents only one certain option to satisfy equity: taking from some districts to give to others. This is a clear illustration of the unfairness of the old school finance formula.

House Speaker Ray Merrick, R-Stilwell

“The court presents only one certain option to satisfy equity: taking from some districts to give to others,” House Speaker Ray Merrick, R-Stilwell, said in a statement. “This is a clear illustration of the unfairness of the old school finance formula.”

The Shawnee Mission school district, which sought unsuccessfully to intervene in the case, stands to lose $3 million in state aid if the state ditches the block grants for the old equalization formula. The Blue Valley School District, which is Merrick’s home district, would lose $2.4 million.

Statewide, 79 districts would experience net losses in state aid if the state returns to the old equalization formula, while 162 districts would see increases. Another 45 districts would have flat funding.

Rep. Ron Ryckman, R-Olathe, the House Appropriations chair, said looking at the analysis that shows some districts losing money “would make it very difficult for legislators to find the green button” and vote in favor of a bill even in the face of the court’s threat to close schools.

“The winners and losers would not be the kids or the schools. … The majority of this equalization goes to property tax going up or property tax being relieved,” said Ryckman, whose own district would lose more than $760,000 in state aid.

Merrick said giving some parts of the state property tax relief “while requiring others to increase property taxes does nothing to get more money into the classroom and to our kids.”

He called the court’s equity test arbitrary and promised that Republican lawmakers would look for a funding solution that enables school districts to direct more money to the classroom.

Funding unpredictable

Gov. Sam Brownback’s office also criticized the court in an e-mail this week.

The Court’s action requires many legislators to vote for a bill that would harm their districts’ students to prevent the Court from closing Kansas schools.

Eileen Hawley, spokeswoman for Gov. Sam Brownback

“The Court’s action requires many legislators to vote for a bill that would harm their districts’ students to prevent the Court from closing Kansas schools,” said Eileen Hawley, the governor’s spokeswoman. “That is unreasonable and a clear example of why the Kansas Constitution places the power of the purse with legislators and not with the courts.”

Kansas Gov. Sam Brownback discusses the school finance case. (Bryan Lowry/The Wichita Eagle)

Rep. Jim Ward, D-Wichita, on the other hand, said the large difference in what Wichita schools receive under the old formula compared with the block grant shows that the block grant “treated Sedgwick County schools … as second class citizens.”

The old formula responded to market forces, bouncing up and down based on a variety of factors, including property tax values and the number of students in a district. Supporters say this protects school districts from being adversely affected when the local economy takes a hit.

However, this also made funding unpredictable. Critics say that hampered the state’s ability to budget. The block grants, on the other hand, keep funding steady.

Gjerstad said the block grants have been difficult for many school districts because the stable funding ignores that “communities are dynamic.”

‘Supporting all schools’

Shawnee Mission superintendent Jim Hinson said bringing back the old equalization formula is “simply shifting the tax burden.”

“It doesn’t put any additional money into our schools. … It requires our patrons to pay millions of dollars in additional tax. It requires patrons of the Wichita school district to pay millions less in tax revenue,” Hinson said.

Gjerstad pointed out that Sedgwick County ranks right behind Johnson in overall tax revenue it provides to the state.

We are the state of Kansas, and we ought to be supporting all schools.

Diane Gjerstad, a spokeswoman for the Wichita school district

“We pay a large portion of taxes down here, and both of these counties support schools within our county and throughout the entire state,” she said. “And that’s important because we are a big community. We are the state of Kansas, and we ought to be supporting all schools.”

Together, the two counties account for more than a third of the seats in the 165-member Legislature.

Johnson County’s 34-member legislative delegation includes conservative and moderate Republicans, who often split on school issues.

“This is the one thing that would unify the Johnson County delegation,” said Ward, predicting that neither conservatives or moderates would vote for a plan that gives less state aid to Johnson County schools.

Sedgwick County lawmakers have a moral duty to push for equalization to bring more money to Wichita and surrounding districts, Ward said. He predicted the county’s 32-member delegation, primarily made up of conservative Republicans and liberal Democrats, would not stand united.

‘No perfect solution’

Senate President Susan Wagle, R-Wichita, stood with the governor and Merrick on the issue Wednesday.

“The legislature enacted the block grant funding system because of the inherent bias in the old school finance formula. The old equity system is unfair and favors larger districts,” Wagle said in a statement. “We are currently weighing our options as a legislature and I have no doubt that our solution will result in a fair student and classroom focused funding formula.”

Rep. Mark Kahrs, R-Wichita, said he supports trying to equalize funding but opposes spending more state money. The governor’s budget director floated the idea of using existing education money to equalize funding at a forum in Johnson County last week.

Kahrs said Wichita schools would still benefit from that approach. The Department of Education has yet to analyze how much each district would receive or lose under this idea.

Sen. Ty Masterson, R-Andover, who chairs the Ways and Means Committee, said he is open to exploring new ways to equalize funding.

“You have to try and do what’s best in general,” he said when asked about balancing the needs of the districts. “There’s no perfect solution.”

The Legislature could also defy the court, which could prompt a constitutional crisis.

‘Door number 3’

Rep. Melissa Rooker, R-Fairway, a moderate whose district includes Shawnee Mission schools, said the governor and legislative leaders make it seem as if the state has only two options: take money from certain districts or defy the court and risk closing schools.

It’s being framed as an either/or proposition and it isn’t. … We have door number 3. We’re not limited.

Rep. Melissa Rooker, R-Fairway

“It’s being framed as an either/or proposition and it isn’t,” she said. “… We have door number 3. We’re not limited.”

Rooker recommended that lawmakers develop a plan that holds school districts like hers harmless for one year. Under this proposal, Wichita and other districts could receive equalization aid, but districts such as Shawnee Mission would still receive the money they’re set to receive under the block grant.

That would cost about $12 million on top of the total cost of equalization, based on an Eagle analysis of the Department of Education’s data. That would be difficult in the face of the widening budget hole.

“I would have a hard time voting for a bill that costs my district probably more than any other district in the state. How in good conscience do I go and do that?” Rooker said. “And yet, as I told my district, don’t ask me to ignore the needs of 460,000 other children in this state.”

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