Legislative leaders may push rewind on funding formula

Multiple media reports on Monday indicated Kansas Republican legislative leaders may want to rewrite the 2018 K-12 funding formula that was conditionally accepted by the Kansas Supreme Court. The Court said the 2018 law was structurally sound and would fix inequities identified in the Gannon school funding lawsuit if inflationary adjustments were added in Fiscal Years 2019-2023. In recent days, lawyers for the plaintiffs indicated they would settle the case if lawmakers added the inflation adjustments, which are estimated at roughly $360 million.

Speaker of the Kansas House Ron Ryckman and Senate Majority Leader Jim Denning indicated Monday they didn’t think the legislature would have the money to comply with the inflationary adjustments.

Jonathan Shorman, writing for the Wichita Eagle, broke the story Monday afternoon. He wrote that Ryckman, R-Olathe, and Denning, R-Overland Park, and other area lawmakers met Monday morning with leaders of the Blue Valley USD 229 school district for a pre-session legislative discussion.

“Participants in the meeting said they came away with the impression that Ryckman and Denning believe the Supreme Court’s demand for inflation money may force lawmakers to change the underlying school funding plan approved this spring, or potentially begin fresh,” the Eagle story said.

“’Both Ron and Jim Denning made it very clear that there’s a very good possibility that they would start from ground zero with a school funding formula, as opposed to putting in the inflationary factor,’ Rep. Jan Kessinger, R-Overland Park, said,” according to the Eagle.

On December 2, KASB’s Delegate Assembly adopted the organization’s 2019 legislative policy positions, which include support for inflationary adjustments to the funding formula.

“The Kansas Supreme Court’s rulings in Gannon V and Gannon VI are opportunities to take the next steps to reinvest in Kansas K-12 education, redesign schools to help more students succeed, and improve measurable results for high school completion, postsecondary participation and workforce skills as defined by the Kansas State Board of Education’s Kansans Can Vision,” the policy says. “The structure of the 2018 school finance law has been accepted by the Court. The Legislature should now address the Court’s adequacy concerns by adding inflationary adjustments for Fiscal Years 2019-2023.”

State revenues, which are beginning to recover from income tax cuts orchestrated by former Governor Sam Brownback, should allow the state to have an ending balance of $900 million at the end of the current fiscal year (June 30, 2019). Ryckman and Denning, however, cite this legislative report that projects a budget deficit of $478 million by 2023. State law prohibits the legislature from running a budget deficit, so cuts or revenue adjustments would theoretically have to be made to avoid a negative ending balance in 2022.

The scenario cited by Ryckman and Denning, however, posits several outcomes that have not been pursued by the Legislature for several years, including fully funding the KPERS state retirement system, protecting state highway funds from transfers to the state general fund, and reinstatement of the Local Ad Valorem Tax Reduction Fund (LAVTRF) that shares state revenues with counties and other local governments. The LAVTRF has not been disbursed since FY 2003.

Governor-elect Laura Kelly is expected to present her budget plan for at least the next two years early in the 2019 Legislative session.

Brad Cooper, writing in the Sunflower State Journal, quoted Ryckman as saying the legislature “would need to re-examine the bill from earlier this year that put $522 million into education over five years.

“Ryckman said lawmakers will work on new funding formulas that will allow them to fund schools and pay for other core taxpayer services. He also allowed for the possibility that the current formula would remain in place.

“‘The Legislature will look at the entire budget, which includes K-12 spending, mental health, corrections and highway funds. That’s the process,’ he said… We’re going to go back and look: What was the rationale for last year’s bill; why didn’t you try this; why didn’t you look at this; did you include this; have you talked about this?’ he said… It’s all open again to look at. That’s what the process is.”

“Ryckman added, ‘We’re going to look at all options. We want to do what’s best for kids and how we target money to get the outcomes we need.’”

“What I told the group is that I don’t want to make a commitment that the state can’t fulfill,” Denning told the Eagle on Monday. “And you can put anything in statute to get out of town and then when the state can’t produce that kind of funding, then you get accused of breaking your promise,” Denning said.

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