Court Orders Additional School Funding

A three-judge panel ruled today the state of Kansas was failing to provide constitutionally suitable funding for public education. The judges ordered the state to increase funding for the 2013-14 school year, but the decision will almost certainly be appealed to the Kansas Supreme Court.

In its order, the panel directed the following:

• First, the state cannot change the school finance formula as it currently exists if the result would be an amount lower than revenues produced by the current formula with a base state aid per pupil of $4,492 which is the amount currently in state law, but general state aid has been significantly reduced since 2009, resulting in an actual projected base of $3,838 this year.
• Second, the state is prohibited from making an appropriation resulting in less revenue to school districts than a base budget of $4,492 per pupil. Complying with this provision would cost approximately $440 million.
• Third, the state cannot use the current practice of “prorating” or underfunding general state aid, which results in a reduction in the base budget per pupil below the current statutory amount.
• Fourth, the state cannot make any changes to the LOB for districts that would “create a wealth based disparity in the distribution of funds or in the ability to use the local option budget of a district.” The state must provide full funding of the LOB equalization formula which would require an additional $91 million.
• Fifth, the state must restore equalization funding for capital outlay. If equalization funding is not provided, the local capital outlay levy is unconstitutional and cannot be used by local districts. Therefore, districts could not collect any capital outlay funding except transfers from other funds. If funded, the capital outlay levy state aid formula would require over $25 million in additional aid.

The decision comes just three days before the 2013 Kansas Legislature convenes. The state is currently facing an estimated deficit of over $300 million next year, based on the November consensus revenue estimate. This is due primarily to the expiration of the special state sales tax next year and the income tax reductions approved last session. Governor Sam Brownback has indicated he will propose several revenue measures to offset the tax reductions next year. On Tuesday, January 15 at 6:30 p.m. the Governor will offer his annual State of the State address. His budget message will be released Wednesday morning.

KASB was not a party to the lawsuit; however, the order of the court generally agrees with school finance positions approved in December by the KASB Delegate Assembly. These include stopping any further cuts to school district funding, restoring base state aid per pupil to $4,492, restoring full funding for LOB equalization and restoring capital outlay equalization.

It is unlikely any decision on a possible appeal to the Supreme Court could be resolved during this Legislative Session. KASB staff will continue to monitor this issue, and provide additional analysis and updates to all members.

Click here to download the full decision. It is 287 pages long and will most likely take additional time to download.

Visit KASB website for more information.