Measuring the increase in Kansas school funding from the Gannon decision

Measuring the increase in Kansas school funding from the Gannon decision

 

As the Kansas Supreme Court considers whether the Legislature has addressed its order in the Gannon school finance case, many ask how much school funding has been increased as a result of that lawsuit, and how it compares to previous levels of funding.

The state’s attorneys in briefs and oral arguments say the state has added $1 billion in school funding in response to the court. That’s a reasonable statement, with some important notes. First, the new funding is spread over six years. Second, the additional funding is calculated to restore school general operating budgets to the purchasing power of 2009, the last time funding was presumed to be constitutionally adequate. Third, not all this increase is provided by the state – some is local option budget funding approved by local boards and voters – and this amount does not include all school funding. For example, it doesn’t include KPERS contributions, capital outlay, bond payments, federal aid and other local revenues like student fees.

The $1 billion calculation includes three parts. First, state foundation aid, which is the base amount per pupil multiplied by weighted enrollment, and funded by state appropriations, the 20-mill state school levy, and some other local revenues. Second, special education state aid, which must be used to pay for services to special education students. Third, the local option budget, which is funded by local property taxes and, depending on the property wealth of the district, state LOB aid.

Under the bill approved by the 2019 Legislature, state foundation aid will increase nearly $200 million over the current year to almost $3.1 billion, or 6.9 percent. That follows an increase of $139 million from 2017 to 2018 and $88 million from 2018 to the current year. In addition, state foundation aid is expected to increase $103 million in 2021, $108 million in 2022 and $110 million in 2023.

That means the increase from 2017, when the Legislature began responding to Gannon, to 2023, when the Legislature response is fully implemented, should be $747 million, an increase of 28 percent over six years. (The amounts could change depending on actual student enrollment and weightings.)

The Legislature has also increased special education state aid by $65 million since 2017 and committed to increase funding by $7.5 million each of the next four years, for a total increase of $95 million, to $520 million.

Finally, the Legislature has increased school district authority for local option budgets. LOB funding approved by local districts has increased by $55 million since 2017, and based on estimates of increased state aid, total LOB (both state aid and local property tax) is expected to increase $116 million over the next four years, to $1.24 billion. This, too, could change based on how much LOB authority local boards actually use.)

As a result, combined foundation aid, LOB funding and special education will have increased approximately 1.03 billion, or 24.8 percent over six years – an average of 4.1 percent per year.

However, this six-year period of growth comes after eight years when school funding consistently increased less than the consumer price index or was actually reduced.

As the chart above shows, these funds were basically flat statewide from 2002 to 2005, increased by nearly $1 billion between 2006 to 2009 following the Montoy school finance case, were again basically flat from 2010 to 2017, and will increase approximately $1 billion from 2018 to 2023. (Details are provided in the table below.)

However, when adjusted for inflation, funding declined slightly from 2002 to 2005. The increase from 2005 to 2009 was reduced by the inflation to about $800 million. Funding then declined by almost $600 million from 2009 to 2017, eliminating most of the Montoy increase. Estimated inflation from 2017 to 2023 will reduce the value of the $1 billion increase, so the inflation-adjusted total in 2023, $4.69 billion, will still be over $100 million less than the inflation-adjusted total of 2009, $4.81 billion. (Note: the change in consumer price index from 2018 to 2023 is based on the Kansas Consensus Revenue Estimate released in April of 1.9 percent in 2019, 2.1 percent in 2020 and 2021, and then assumes 2.0 percent in 2022 and 2023. These percentages could be higher or lower.)

The question for the Kansas Supreme Court is whether this new funding “substantially” complies with the goal of restoring school funding to constitutional levels in 2009 based on the Montoy case, cost studies and Legislative action approved by the court.