What Gov. Kelly’s budget recommends for Kansas education

Gov. Laura Kelly’s budget released Thursday would fund base state aid per pupil and equalization programs as outlined in the Gannon school finance lawsuit settlement for K-12 education, but does not redirect savings in general state aid to boost special education aid as requested by the State Board of Education. 

School finance changes 

Under the law passed last year by the 2019 Legislature, base state aid per pupil will increase from $4,436 this school year to $4,569 in Fiscal Year 2021, $4,706 in 2022 and $4,846 in 2023. After that, the base is to be adjusted by the prior year change in the Midwest Consumer Price. 

Because new estimates made in November project slightly lower enrollment for both weighted and unweighted students, enrollment multiplied by the base amount requires less state funding than previously approved, by about $35.6 million this year and $32.5 million next year. 

The State Board suggested using that saving to enhance special education funding, which is currently about $163 million below the target of 92 percent of excess cost in state law. Instead, the governor essentially uses the savings for other budget priorities. 

The governor’s budget does increase special education aid by $7.5 million this year and $7.5 million next year, as provided in the Gannon plan accepted by the Kansas Supreme Court. 

Also in the budget: local option budget state aid is increased $9 million in the current year over last year and a further $10 million next year; capital outlay aid increased by $8.2 million this year and $2.6 million next year; and capital improvement (bond and interest aid) is increased by $5.9 million this year and $5 million next year. Each of those amounts are based on the November revised estimates for school finance equalization programs. 

KPERS funding changes 

Like last session, Kelly is proposing significant changes in funding the Kansas Public Employees Retirement System for state and school employee group. 

First, the governor proposes a one-time transfer of $268.4 million in the current year to pay off KPERS “layering payments.” These payments were created when the Legislature delayed KPERS school contributions in 2017 and 2019 (last year) to address state budget issues. Basically, the state reduced payments in those years below the scheduled amount but promised to pay the same amount, plus interest, spread over a 20-year period. This action would save $209 million in interest and eliminate $25.8 million in annual payments. 

The governor is also proposing to fully pay off $264.3 million borrowed from the state’s long-term investment pool and $69.8 million in economic development bonds. This would retire over $600 million in debt this year, taking advantaged of higher than expected state tax revenues. 

However, Kelly is also proposing a new KPERS “reamortization” plan that would structure KPERS liability from a 15-year period to a 25-year period. This proposal would lower the required employer contribution rate and reduce state general fund costs by $131 million in 2021, increasing to $163 million in 2024. But it would also increase the long-term cost by $4 million. 

A somewhat similar proposal by the governor last year was rejected by the Legislature. 

School Mental Health Intervention Teams 

The only significant increase in K-12 funding not related to the school finance formula would raise school mental health funding from $9 million in the current year to $14 million next year, making the program a competitive grant program administered by the Department of Education. The enhanced funding would allow qualified mental health organizations to provide services in more locations throughout the state. Instead of separate appropriations for school liaisons and service providers (including the Medicaid match), the governor’s recommendation would have the Department of Education administer the grant program with a single line-item appropriation in order to efficiently provide funding where the Department deemed appropriate after receiving and reviewing the grant proposals. 

All other programs, including early childhood programs under the Department of Education, are funded next year at the same level as the current year. 

Higher Education 

The governor’s budget includes an increase of $5 million in need-based student aid for higher education in 2021; an increase of $14.8 million for the higher education block grant, including aid to community and technical colleges; Washburn University and the state university system for 2021, and an increase of $4.5 million this year and $8.5 million next year for high school students taking postsecondary career and technical education courses. 

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