Category Archives: Legislative proposals: Funding

Wrap-up of the Legislative Session

KSDE has gone into podcasting.

On the KSDE home page, selecting News and then Podcasts will take you to some audio (and video) files from Dale Dennis (Interim Commissioner) and Veryl Peter (Director of School Finance). Look for the files “Legislative Update.”

The most recent update was recorded on May 2. In it, Dennis (with a few comments from Peter along the way) reviews the most significant legislation of the past legislative session. The roughly 25 minute presentation is divided into five segment.

We’re not sure whether these files can actually be used on an iPod or not. We were unable to import them into the iTunes software. You can hear (and see)  the files in the Windows Media player, which comes standard on many computers.

Here are some notes of the presentation.  Most of it is composed of paraphrases rather than direct quotes.

Part 1:

Increase of base aid per pupil

Increase in the weighting of at-risk students

Threshold for getting high-enrollment weighting has gone down

SB 68

Funds non-proficiency at-risk students, and says states must have an anti-bullying policy.

“Highly encourages” character education in all grades. “Gets close” to a mandate.

 

Part 2:

Update your crisis plan.

 
SB 95: No more juvenile detention facilities, but instead ‘psychiatric treatment facilities.” No other change.

SB 109: Lets districts pay new hires before schools open, as long as they are working.

SB 129: Schools must notify law enforcement of any student suspensions or expulsions. Law enforcement will notify drivers services, which will pull drivers licenses of offending students.

All day K:

Governor proposed 5-year phase in. “Everybody thinks all-day kindergarten is a great deal, unfortunately this year the money ran out.” It will not be implemented.

SB 362 KPERS: Lets non-school government employees sing up right away and not wait for a year. (School employees already had this.) Has a 5-year vesting provision. Multiplier .175 is the same. You can use a 3-year average for determining benefits. Now changed to a 5-year average for any who start after July 1, 2009. Normal retirement age is 65 +5 of services or 60 years old with 30 years of service

Part 3

Adds 2 percent COLA for 65+. Employee contribution is now 4 percent. Now, it will be (for 2009 hires) 6 percent contribution. Rate will match what the state contribution is in the future. There is also a $300, one time payment for people who retired in prior to July 1, 1997.

Unfunded liability of KPERS is a problem. Through 2033, this bill will save the state $2.6 billion, at least half of the unfunded liability will be addressed this way.

SB 2185

Covers 5 teacher scholarship programs, especially noteworthy for loan cancellation.

Other:

Idea to hold a second student count during the school year did not pass.

SB 2310

Local option budget is at 31 percent max. You have to have an election to use this. If you have a declining enrollment or COLA levy last year, you may continue what you had last year. This affects only a few districts.

Part 4

Most districts have to have an election to go from 30 percent to 31 percent LOB. They don’t think that having an election is worth the trouble for that one percent.

SB 2368

More about LOB. Allows a district to go to 32 percent with an election. Also: $400,000 for an after-school program, requires local match, 2-hour program, and a summer program. No school can get ore than $25,000 from the state

Teacher mentoring: $1,000 per teachers to serve as mentors to year-one teachers. Includes $500 for mentoring a second-year teacher.

Special ed: Still working on how much supplementary fund districts will get. 

Part 5

Go after every dollar of Medicaid that you can (Medicaid). Funding could go up to $26,500 for special ed. “That isn’t too bad.”

We’ve seen a lot of post audit activity. Recruitment and retention report: not much new. There will be a problem; 33 percent are 50+, 25 percent will be eligible for KPERS in 5 years.

Virtual schools: said we are lax and need to follow the original plan for monitoring. Districts may not give virtual school students to other districts. We will go back to original guidelines within 10 years. The rules were there but we did not monitor them.

There will be a charter school out in the next week to ten days.

An early childhood ed audit is underway.

There will be another audit for voc ed. The focus will be on the cost of individual programs.

Governor Seblius: Pay is Not All That Matters

It’s almost an article of faith among the general population, or at least the political population, that teachers are underpaid. Governor Sebelius caught our attention by some recent comments on the subject of teacher retention:

U.S. Department of Education survey showed one-third of teachers quit due to poor conditions, Sebelius said. They decried the lack of support from administrators, restrictions on how they run classrooms and few professional development opportunities.

“Pay is a factor, sure, and could we provide more salary and benefits, absolutely, but a number of other factors are more important, not the least of which is educational leadership and support,” Sebelius said.

Sebelius called the national survey results “pretty alarming.” They showed schools have a nearly 17 percent turnover rate.

The governor is onto something here. Pay is one factor in determining a job’s attractiveness. Working conditions are another.  As it is, government-run education is subject to rolls of red tape and special pleading by insiders of various sorts and outside constituencies. Due to the “one size fits all” nature of government, innovation is stifled, and something as basic as teacher pay is subject to rules that hamper individual effort.

The introduction of merit pay, tied with individual student assessments, would make it clear that results, not institutional niceties, matter. Something like the “100 percent solution” ought to be tried in a district with courageous leadership. It’s time for some change.

Source: Gov. Sebelius says teachers need support, KC Community News, April 18

You Just Can’t Please Some People

From the Wichita Eagle:

An unprecedented three-year, $466 million boost to school funding approved last year might have been enough to satisfy the Kansas Supreme Court, but school lobbyists and some lawmakers are far from happy with the deal.”

Johnson County complains that it pays for a greater share of the state’s spending (one third) but receives much less of state money (one tenth), while poor districts complain that it’s hard for them to keep up with Johnson County.

Sounds like an inevitable clash, as the mere existance of a state inevitably involves some areas subsidizing others.

Meanwhile, a lobbyist for the KCK school doesn’t like having to compete for teachers against better-endowed districts: “In a large metro area with over a dozen (districts), hiring and retaining teachers and administrators is difficult if your neighboring districts can offer significantly higher salaries.” He’s probably not alone.

Will this all lead to a call for the state to take over all financing of districts? It might, but that would only shift the terms of the debate, not resolve it.

Source: “Lawmakers, lobbyists still not happy despite $466M boost,” Wichita Eagle, January 29

See also Friction persists on dividing school funds, Lawrence Journal World, January 28

Lock Away Third-Year Spending?

The Kansas Senate approved the idea of using $122.7 million in next year’s budget for the third year of the three-year, $466 million plan the legislature enacted last year. (Of course there is much more to the budget than $466 million; that is just a supplement.)

The idea is both a good one, and of limited value. Good in that it recognizes that there may be a shortfall when the commitment comes due, of limited value because there’s probably no guarantee that it won’t be spent on something else. Then the legislature would have to fill a hole through some other means.

Source: GOP Presents its Wish List, Kansas City Star, January 10.

Will it Be Friday the 14th?

The Arkansas City Traveller says that the Kansas Supreme Court may issue another ruling on Friday the 14th.

The wait for the decision–on the merits of the Legislature’s latest budget, which boosts spending by $541 million–is causing some trouble for school districts, who must wait for the court before finalizing their budgets for the next school year.

New Budget in Place

There’s a new bill for funding schools. But will it last? School funding bill signed by governor

By JIM SULLINGER The Star’’s Topeka correspondent TOPEKA – Gov. Kathleen Sebelius on Friday signed into law the largest increase in state education aid in Kansas history, but the bill still faces scrutiny from the state Supreme Court.

Here’s where some of the extra $466 million (over 3 years) will go:

During the first year of the three-year plan, nine school districts with high concentrations of low-income students will receive an additional $564 per student, compared with the state average of $354. Those districts are Kansas City, Kan., Turner, Leavenworth, Topeka, Wichita, Garden City, Dodge City, Hutchinson and Coffeyville. By contrast, the six school districts in more affluent Johnson County will see an average increase of $221 per student. All members of the Johnson County legislative delegation voted against the plan.

Those interested in policy details will want to know that the bill points out the bill has created a new term to the funding lexicon: high density at-risk.

Senate Rejects All Plans

Too much, too little, or just right? That’s the question that senators pondered as they debated various funding plans. As it turns out, there was no agreement, and thus, no plan.

[Majority leader] Schmidt said the Senate was divided between those who think the plans are too large and would bankrupt the state and those who don’t think enough money is being offered. There are also differences on how the money should be spent.

So how did things shake out?

A majority of Republicans favored the lower-spending Barnett bill, but Democrats and several moderate Republicans voted against it.

Barnett said he would not give up.

“We have 20 Republicans who are willing to spend a large amount of money for schools over four years that does not require a tax increase or state-owned casinos,” he said. “So we’re very, very close.”

Most Democrats said they favored the House-backed plan because it would spend more money for at-risk students and significantly increase the ability of school districts to tap local tax revenue, a key provision for Johnson County lawmakers.

KTN Laments “Spending Spree”

In a recent press release, Karl Peterjohn of the Kansas Taxpayers Network laments “horrific” spending bills being discussed in the Legislature.

Senate spending spree blows roof off Kansas capitol

The government school spending spree is erupting in the Kansas senate today. The senate took up the horrific house passed HB 2986 this morning. Over three years Sen. Karin Brownlee said this bill would cost a total of $1.38 billion.Two amendments to lower the spending increases failed. The first would have limited spending growth to $670 million failed on a 17-to-20 vote with three legislators showing their profile in courage and passing! [The three are noted two paragraphs down as McGinn (R) and Haley (D) and Lee (D) –ed.] Then the original house spending plan that would raise school spending over $1 billion over three years was taken up and failed 17-to-23.

Once again unified Democrats and their big spending GOP allies headed up by school district attorney Sen. John Vratil and Wichita school district specialist Sen. Jean Schodorf (they are vice chair and chair of the education committees, does anyone see a special interest there?) easily defeated these slightly smaller spending bills with the votes of their liberal allies.

Sen. Karin Brownlee warned the senate that the house passed H 2986 would “…spend the roof off the dome…,” if this passed. So far, the smallest spending increase amendment to this bill came from Sen. Jim Barnett who had a four year spending hike plan. Barnett’s proposal did not receive a single Democrat vote and the most “moderate,” ie liberal Republicans voted against it: Allen, Brungardt, Emler, Morris, Reitz, D. Schmidt, V. Schmidt, Teichman, Umbarger, Vratil, & Wysong. The three passing were: McGinn and two Democrats: Haley and Lee.

Barnett warned the senate that continuing the spending spree that began in the 2005 regular legislative session and was compounded by the court mandated special session was going to lead this state into major financial mess. He was not alone in these concerns. He was joined by a majority of senate Republicans including excellent comments from senators Brownlee and Wagle.

Sen. Les Donovan joined warned the senate that there are, “…built in (spending) escalators and they are not going away,” and that the cumulative impact is to put the state in a $600 million fiscal hole two years from now.

The left wing and all too bipartisan senate leaders on both sides of the aisle Steve Morris, Tony Hensley, Derek Schmidt, and John Vratil do not care. As I write this, the debate continues and more amendments are being offered. The sausage mill continues to grind.

From this taxpayer advocate’s perspective it is hard to see who is more irresponsible: the usurping Kansas Supreme Court that created the fiscal environment with the lawsuit that continues to fester over the entire state, Governor Sebelius who proposes nothing but controls through her legislative leadership allies Morris/Hensley everything, or left-wing Republicans and Democrats in the legislature. The house plan was increased with the Loyd-McKinney amendment but a more accurate name for this spending spree bill would begin with Governor Sebelius, add the four senate leaders, and then the two house members: Loyd/McKinney. Then the seven members of the black robed legislature/Supreme Court’s names should be included too. All these folks fingerprints dominate this spending spree bill.

The scuttlebutt among some lobbyists is that there aren’t 21 votes in the senate to adopt any school finance bill. I don’t buy it. It looks like there are 21 votes to go on a spending spree that when fully implemented will place this state in such a deep financial hole that it will be decades before Kansans will see any sunlight. This is what Governor Sebelius’ father did when he was governor in Ohio for one term in the 1970’s and created that state’s debilitating income tax. Its deja vu all over again.

The big lie is that gambling is a fiscal solution. It is only a solution if you think that the $323 million of spending from 2005 when combined with $660 million in additional spending (and assuming that the state doesn’t increase spending anywhere else, fat chance) can be funded by the gambling proponents most optimistic guess of $200 million in new money (that a gross not net figure). I guess this is called “Government Math.” Even an increase in state revenues of a couple of hundred million this year will not balance this spending spree.

The government school establishment does not know how to spend this money fast enough. Full day kindergarten is already becoming universal statewide. Then the school districts will begin to expand their pre-kindergarten programs. They still will have truckloads of cash to spend.

The size of the spending spree is demonstrated by the 2005-06 increase that if nothing was added, would increase state spending per pupil by $725 per FTE pupil statewide. That’s almost chump change when the spending in HB 2986 is added to the total. That should add roughly $1,500 more per pupil and assumes that local and federal spending is not increased—which is highly unlikely. That would take average spending from about $10,000 per pupil per year (or $200,000 for a classroom with 20 kids in it) to $12,000 per pupil (or $240,000 per classroom) a year.

The legislature has been warned that financing HB 2986 would require draconian hikes in any one of the state’s major revenue sources: 22% hike in state personal income tax rates (taking us close to a max rate of 8 percent), more than doubling by over 21 mills in the statewide property tax, or at least a 38% hike in the state sales tax rate. What would be most likely is a combination of all three and perhaps adding some other excise tax hikes to the mix.

Kansas’ already obscenely high tax rates would be made even higher. The departure of businesses and productive people will grow. The governor has a key supporter, Phil Ruffin, who is already a billionaire according to Forbes Magazine’s billionaire issue. To help fund this spending spree with slots/casino’s at his racetracks he would be able to move a good ways up the Forbes list into the multiple billionaire category. Forbes reports that Ruffin lives in Nevada where the sales tax is a fraction of Kansas, there is no statewide property or personal income taxes.

The irony is that a large chunk of this new spending will not be used to raise the salaries of Kansas’ best public school teachers. The government school spending lobbies plan is to expand the number of employees (see the Augenblick and Myer report that is the basis for the court’s school finance edicts). [Peterjohn has a point here; it’s better to pay good teachers more than simply expand the number of school employees. — ed.]

This is a political play for more power. More employees means more union dues and that means more political power. Ultimately, the state grows and dependency upon government will grow. Kansas union leaders will soon be getting the same mid-six figure pay that national union heads like the National Education Association currently enjoy.

This spending hike is a negative productivity plan since it will take more people to perform the same schooling that has occurred in the past. Don’t get me wrong, school employees will certainly get paid more. Superintendents will be able to trade in their Jaguars for Rolls-Royces (this is not hyperbole, there already is a superintendent driving her Jag). If teachers get 10 percent hikes principals will get a bigger percentage as will their bosses. More staff will be needed. Kansas will follow the build the government school bureaucracy model.[There’s nothing wrong with a CEO–the closest thing the private sector has to a superintendent–driving a Jag. On the other hand, the superintendent operates in a very different environment, one in which competition is severely restricted through an absence of meaningful school choice models–ed.]

If the Kansas City (MO) school lawsuit experience in the 1980’s was a tragedy that cost taxpayers a couple of billion the school spending debacle in 2006 should be called a farce. Except Kansas is larger so it will be a lot more expensive. All additional efforts to provide more performance and school accountability for state spending were removed on the house floor and the efforts to re-insert these provisions on the senate floor were terminated by the liberal senators.

Since Kansas is already spending a higher percentage of its state budget for the public school establishment, the idea that taxpayers are short-changing any public school is absurd. Over 50 percent of the state’s $5.2 billion plus Gen. Fund budget already goes for public schools. When colleges are added in the figure is now approaching 70 percent. This new spending is likely to make the former figure close to 60 percent and the latter percentage around 75 percent.

Since the efforts to stop the school finance lawsuits have largely been sidetracked in the legislature the future for Kansas enterprise is high in uncertainty, increasing risk, and more automatic tax hikes. There are enough state reserves due to the 2003 Bush tax cuts that have helped grow state revenues so that no tax hike (besides the automatic property tax appraisal/income tax inflation) will be necessary in this election year of 2006 but wait till after November.

The property appraisal notices went out this month and Kansas property owners will be paying large increases. Again. This is now an annual event. One mill of the statewide property tax has now grown to over $30 million per year. In the 1990’s this figure was in the just over half this amount.

None of the statewide property tax collections for schools show up in the state’s official revenue figures. I’ll let you do the math and multiply the $30 million by the 21.5 mill statewide mill levy and add this to a 2007 state budget that will soon be pushing $6 billion for the General Fund and blow by $12 billion for the All Funds budget (Medicaid costs are soaring at double digit rates too). In 2002 the state budget reached $10 billion for the first time.

The fiscal decline of Kansas will lead to an overall decline for this state. We are a spending model for the rest of country: watch Kansas and do the opposite. Please feel free to forward this to anyone with an interest in the fiscal health of this state.

Karl Peterjohn

Will $610 Million Do?

The Kansas City Star says that Kansas House narrowly passes education plan. (HB 2986)

TOPEKA — A $610 million school spending plan pushed by a coalition of House Democrats and Republican moderates was narrowly approved today by the Kansas House.

Senate leaders said they plan to vote next week on a $660 million plan proposed by the Senate Education Committee.

Will the state actually be able to afford the package? That’s one question being asked by some members of the House. Other questions not asked: will the legislature be able to muster a tax increase if required? Or cut spending elsewhere? The plan may (or not) satisfy the Kansas Supreme Court, but then again, the Court has the luxury of not taking other budget priorities into account.

Here’s the breakout of the House plan:

Basic state aid: Increased $50 per student in each of three years. Current level is $4,257 per student. Cost: $77.2 million

■ At-Risk state aid: Increases from $822 currently to $2,125 in the third year of the plan. Cost: $173 million.

■ All-day kindergarten: Cost: $15.4 million the first year, $23 million the second and $30.8 million in the third.

■ Special education: State subsidy increases $30 million the first year, $25 million the second and $25 million the third.

■ Aid for large school districts: Increases $14.2 million in each of the three years.

(Which definition of “at risk” would apply? Test scores or socioeconomic status?)

One wonders where the money for “small districts” is: isn’t everyone entitled to more? That seems to be the operating pattern here.

Also, in a nod to Johnson County, the limit on LOB (local funding) increases, going up two consecutive years from 27 percent today to 33 percent in the second year. With the court’s blessing, it could be eliminated after that–a step towards local control but away from equality of spending.

Meanwhile, the Wichita Eaglereportss on what funding that plan through tax increases would mean one of the following:

■• Sales tax increase of 2 cents on each $1 of retail sales, or

■21.88 mill increase in property taxes, or

■ 21.9 percent income tax surcharge, equivalent to an additional $641 for someone earning $75,000 a year.

To put that into perspective, the statewide sales tax is 5.3 percent. Local governments are allowed to level their own sales tax add-ons; as this 14-page PDF document (Sales and Use Tax Jurisdiction Code Booklet) from the Kansas Department of Revenue points out, many local governments use this provision. The move would push sales tax rates in a handful (or two) of areas into double digits: that is, over 10 percent.

It’s hard to overstate the importance of education. But maybe it’s possible to overpay for it.

No Budget in Sight

So what budget package will emerge from the Legislature? The Wichita Eagle says All Bets off for school funding bill.

“You’re going to have a lot of ‘no’ votes on this plan for a multitude of reasons,” said Rep. Kenny Wilk, R-Lansing. “This is a hard time.”

The article points out that the House package has taken a “let’s fund both” approach to defining at-risk. Extra money would be allocated to districts based on poverty numbers and on reading scores.

Be Careful What You Wish For

A school finance plan is emerging in the House: another $610 million for schools. It appears to be a win for the “all you need is more money” crowd:

The new plan would direct most of the new money to at-risk students who qualify for the federal free school lunch program for low-income children. It is hoped this will satisfy a Kansas Supreme Court order requiring lawmakers to increase education funding.

The new plan also mirrors many of the recommendations in a January audit of school costs initiated last year by the Legislature. That audit suggested the state needed to spend an additional $400 million on public schools.

Oddly enough, some backers of the plan object to one provision that would allow schools to get even more funding:

Rep. Ward Loyd, a Garden City Republican, said the main sticking point in negotiations with Democrats was a provision in the new plan that allows school districts to dramatically increase local levels of spending over the next two years then completely eliminates the current limit on local spending in the third year.

It’s that equality thing: if Dodge City or Wyandotte County (say), can’t raise as much money as Johnson County, then JoCo shouldn’t be allowed to increase their taxes, as wise or foolish as that may be.

We wonder how many of those same people complain about the State Board of Education trampling on the idea of “local control.”

Under My Thumb

The Topeka Capital-Journal adds some color to other reports that the Senate education committee has endorsed a $660 million (extra) plan for schools.

Sen. Ralph Ostmeyer, R-Grinnell, cited as “a token fiscal conservative” on the committee, said of the plan “It’s too expensive.”

Perhaps. But the reason isn’t simply that the dollar amount may strain the budget. It’s that money spent in less than the best fashion is “too expensive.” And in this case, pouring more money into a district-centered approach, rather than a child-centered approach is “too expensive.”

Sen. Barbara Allen, R-Overland Park, spoke about the controversial proposal to raise the cap on the LOB: “I don’t know why the rest of the state wouldn’t want us to tax ourselves.”

Why indeed–though a misguided desire for “equality” may be one reason.

Sen. John Vratil, R-Leawood, meanwhile, seeks the big coalition approach to dealing with “at-risk” students. One viewpoint is that “at-risk” money should be based on a district’s poverty rates. Another is that the money should be based on the number of students doing poorly on tests. Vratil says “Why not give money to both groups.” His idea was not accepted by the committee.

Finally, Senate President Steve Morris, R-Hugoton, is calling for more money, with this argument: “We really don’t have a choice. We’re under the court’s thumb,” Morris said.