Updated school finance information: funding increase, inflation adjustments, share of personal income and general state budget

Updated school finance information: funding increase, inflation adjustments, share of personal income and general state budget

Kansas school district expenditures hit a new high last year – but not after adjusting for inflation

The most recent update from the Kansas State Department of
Education shows that total school district expenditures last year (20187-18)
were $6.49 billion, or about $410 million more than 2017. About $325 million of
the increase was state aid, and $130 million of THAT was to restore
contributions for the Kansas Public Employees Retirement System that has been
reduced the previous year.

Local funding increased by $94 million, party because an
error in drafting the 2017 school finance bill reduced state aid for local
option budgets, requiring more local funding, and party because of increased local
funding for capital outlay and school bond payments.

Although $6.49 billion in total expenditures was the highest
ever for Kansas school districts, when adjusted for inflation, it remains below
the 2009 level. Total expenditures in 2018 were $124.3 million below
inflation-adjusted 2009. That means total spending is less than it was a decade
ago. (KASB adjusted for inflation using the Kansas consensus revenue estimate for inflation for 2018.)

Total expenditures include all dollars flowing through
school district budgets.

KASB also tracks the total of school district general fund
and local option budgets, plus special education state aid, which provide a basic
state and local “operating” budget for educational programs. The final legal
maximum budget reports posted by KSDE show these funds totaled $4.34 billion in
2018, up from $4.15 billion in 2017. That nearly $200 million increase was
mainly due to higher base state and weightings as the Legislature responded to
the Supreme Court’s decision on school finance.

When adjusted for inflation, general fund, LOB and special
education in 2018 were $460 million below 2009. In fact, these funds in 2018 were lower than
the 2007 level. The Legislature acknowledged this gap in its response to the
Kansas Supreme Court in the Gannon school finance case. The Court ruled that
the Legislature’s $500 million-plus, five-year school finance plan passed this
session would be acceptable, but only if adjusted for inflation over the time
it is phased-in.

School district general fund levels and special education is
determined by the state through base aid, weighting factors and appropriations.
The state also caps the amount of local option budgets.

Total expenditures include bond and interest payments
approved by local voters, capital outlay funds raised by local mill levies
(plus state aid for both programs); KPERS contributions which were underfunded
in previous decades and now are increasing more rapidly as the Legislature
tries to catch up; all federal funds; most food service costs; and other any
local revenues like student fees for meals, materials and transportation. Most
of these funds cannot be use for regular operating costs like teacher salaries.

A 10-year history of total expenditures statewide and for
individual districts is available at KSDE’s Data Central School Finance Reports
Select Total Expenditures from the drop-down menu.

Per pupil funding remains below 2006 and 2007 levels after adjusting for inflation

The latest information provided by the Kansas State
Department of Education show that both total school district expenditures and the
combined general fund, local option budget and special education state aid
reached new high levels last year, following significantly increased state
funding. However, when adjusted for inflation, both remain below previous high

Because student enrollment has also increased in recent
years, per pupil funding has increased less and remains farther behind
inflation than overall spending. On a headcount basis (counting each enrolled
student as one student), total expenditures per pupil was $13,106 in 2018. That
remains below the level of $13,356 in 2007. General fund, local option budget
and special education aid per headcount student was $8,771, lower than the 2006
level of $8,989.

In other words, even after substantial increases in funding
last year, per pupil purchasing power is still less than it was 11 to 12 years

In fact, total expenditures per pupil in 2018 was $962 below
inflation-adjusted 2009, or a total of $476.5 million. General fund, LOB and
special education aid operating funds were $1,444 per pupil below inflation-adjusted
2009, or a total of $715.3 million. That is a major reason the Kansas Supreme
Court ruled that the Legislature’s $500 million-plus school finance proposal
would be acceptable, but only if adjusted for inflation over the time it is

In addition, the number of students with greater learning
challenges due to poverty and disability has grown faster than the regular
enrollment, and educational expectations on schools has also increased.

Note: KASB uses “headcount” enrollment to calculate a per
pupil amount because until 2018, the full-time equivalent number reported by
KSDE counted all kindergarten students as half-time students, even if they were
attending full-time. The FTE number continues to count only preschool students
funded by the state, not those funded by local districts. Because of the growth
in such students, KASB believes the headcount number provides a more consistent
comparison over the years and a more accurate count of the number of students
the district is educating. Federal reports also use headcount.

School funding remains low compared to previous share of Kansans’ total personal income 

Kansas personal income is the total income the people living
in the state receive from wages, proprietors’ income, dividends, interest,
rents, and government benefits. Comparing educational expenditures to that
amount is an indicator of how much of people’s income is going to support
public schools.

With increased state aid and more local revenue authority, in
2018 total school district expenditures increased to 4.51 percent of state
personal income from 4.39 percent the previous two years. It was the highest
level since 2011 (4.58 percent), but still well below the 20-year average from
1990 to 2010 (4.74 percent).

School district general funds, local option budgets and special
education state aid were 3.02 percent of state personal income, up from 2.99
percent in 2017, but far below the 1990-2010 average of 3.65 percent.

This means that Kansans are currently spending or investing
a lower percentage of total annual income to support public education than in
previous decades, even after significant increases in funding last year.

Note: The 2018 levels are based on estimates of Kansas
personal income growth projected by the state Consensus Revenue Estimating
process. The April CRE projected Kansas personal income would increase 3.9
percent from $138.6 billion in 20127.

The share of state general funding spending going to K-12 state aid has remained stable for 25 years

Despite increases in state aid approved for 2018 and 2019,
K-12 funding is not taking a larger share of the Kansas state general fund

From the passage of the School District Equalization Act to
the 1992 School District Finance and Quality Performance Act, the state
constantly allocated about 40 percent of the general fund budget to K-12 aid.
The 1992 law, fully implemented in 1994, raised state aid to reduce and
equalize local property taxes for schools. As a result, K-12 aid increased from
approximately 40 percent of the state general fund to approximately 50 percent.

Since 1994, K-12 aid has averaged 49.7 percent of the state
general fund. In 2018, it was estimated to be 50.5 percent; in 2019, state aid
is predicted to be 49.7 percent of SGF.

In other words, despite several decades of school finance
litigation including the recent Gannon case, and increased state aid as result
of these cases, school district aid is not taking a larger share of the state general
fund budget.