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School Finance Bill – HB2445

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HB2445

The House committee passed out HB2445 on Thursday.  We expect it to hit the floor of the house Monday or Tuesday.

It solves the three lesser equity violations but does not solve the LOB by protest petition and election equity violation.

Here is the money part of it.

Base

  • FY18   $4006
  • FY19   $4170
  • FY20   $4307
  • FY21   $4444
  • FY22   $4581
  • FY23   $4718

For comparison purposes, the State BOE asked for these bases:

  • FY18   $4604
  • FY19   $5090

You will note that while they are attempting to get back to the Montoy last adopted base and update it for inflation, which is what the State BOE asked for, this plan comes up $372 short even after five years.

After the five year phase-in, they plan to apply a CPI adjustment annually. Despite having a CPI adjustment in the statute for many years, it has never followed it in the past. They have simply ignored it.

New Money

FY19   $189,428,148 – SB19 $95,606,000 =  $93,822,148
FY20                                                                                                    $105,500,000
FY21                                                                                                    $105,500,000
FY22                                                                                                    $113,100,000
FY23                                                                                                    $115,500,000
Total new money over SB19                                                       $533,422,148

Only one year, FY19, is appropriated.

You will note that this looks like $533M of new money. It is not.

Inflation is not included in the plan until after the five-year phase-in. Inflation in the system at 1.5% amounts to $70M per year. During a five year phase-in, the plan falls $350M behind just due to inflation.

Because inflation is NOT included for five years, the amount of new money is actually only $183.4M.

It is our opinion that the court will not accept this fix. A $183.4M fix for a $1.5B to $2.0B problem is not close. The state will not be able to meet their burden to show that with this new money schools will get ALL kids to the Rose competencies. We now know that the Rose competencies cost $1.5B to $2.0B due to the Taylor study and the Myers-Picus study.

That being said, we do not oppose HB2445, but we are NOT claiming that it fixes the problem. We do not oppose it because, incrementally, it helps the schools. Think of it as fixing the mess in several steps. This is the first step.

HB2445 as an outlier…

The supreme court rejected SB19 last year because all other evidence pointed to much more money being needed. Last year the comparison was $293M on a $893M problem. The court cited the $293M as being an “outlier” and declared SB19 unconstitutional.

This year, HB2445 is also an outlier… a bigger one. See the chart below.

991456 Cost Study Comparison - Graph with dollars

 

NO to Constitutional Amendment

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FINAL Save Our Schools SOS NO Constitutional Amendment

A Constitutional amendment was filed Thursday afternoon as a mystery. See HCR5029. It has no listed sponsors. You may click on the link above to view the resolution. It will get a hearing on Tuesday and is scheduled to hit the floor Wednesday.

Calls are needed!  Please contact your legislators. 

THE CONSTITUTION PROTECTS ALL KANSANS. 

  • Low enrollment schools are guaranteed equal educational opportunity.
  • Less wealthy urban kids are guaranteed that the more wealthy schools do not get an advantage.
  • Property taxpayers are guaranteed that they will not pay more simply because of the wealth of the district where their property is located.
  • Western Kansans are guaranteed that their schools can continue to exist and not be reliant upon the whim of more populous area legislators.
  • All kids are guaranteed equal access to an adequate education.

Who wants to shuck these guarantees and leave them to political maneuvering?

 

Iola Register Editorial

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  • word blame on toy cubes

Don’t blame education for cuts to other depts.

“What we have learned from the tax cuts is that those savings accrued to individuals and corporations were not used to create new jobs as predicted.

Had the state not cut its budget those contractors would still have jobs keeping our roads and bridges up to snuff, our schools humming along, our prisons and veterans programs on track.”

Read More: Iola Register Op Ed

State of the State

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Kansas State Capitol

This evening, Governor Brownback delivered his final State of the State address.  A transcript of the speech is available here.

The Governor put forth a proposal to comply with the Supreme Court in Gannon V.  The Governor has proposed $600M over 5 years without a tax increase.

While we appreciate that the Governor recognizes that schools have been drastically underfunded, it will take a bit more than $120M per year to restore adequacy and bring 125,000 underperforming students up to the state’s new standards.

YEAR INFLATION Funding per Governor’s Plan Needed to achieve KS BOE $600M plan
FY2019 $60M $120M $180M
FY2020 $60 M $120M $180M
FY2021 $60M $120M $180M
FY2022 $60M $120M $180M
FY2023 $60M $120M $180M
TOTALS $300M $600M $900M

The justices were quite clear in their ruling that Kansas must meet the needs of ALL students.  Schools simply can’t reach the 25% of underperforming students (a number that is much higher in high poverty districts) at $120M per year over a five year period.

The Governor also proposed a constitutional amendment to “end litigation.” What that constitutional amendment will look like is still unknown.  However, Kansans understood the value of public education and included it in our constitution in order to protect ALL Kansas students.  Who does Article 6 of the constitution protect? It safeguards that low enrollment schools are guaranteed equal educational opportunity. It ensures that less wealthy urban kids are guaranteed that wealthy school districts do not gain an advantage.  Property taxpayers are guaranteed that they will not pay more simply because of the wealth of the district where their property is located. Western Kansans are guaranteed that their schools can continue to exist and not be reliant upon the whim of more populous area legislators. All kids are guaranteed equal access to an adequate education regardless of their zip code.

We should not throw away our student’s constitutional rights to the whims of political maneuvering.

A number of public education advocacy organizations are opposed to a constitutional amendment.  You can view their opinions here.

What does it take to fix school finance?

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Teacher Helping Pupils Studying At Desks In Classroom

A. Increase funding at least $600M to achieve adequacy. This is the balance of the amount needed, in addition to the $293M provided by SB 19, to reach the State Board of Education requested an amount of $893M.

The system must be “reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose…” The State Board has determined that this funding request will meet this test.

B. Fix four equity violations identified by the Supreme Court.
“[S]chool districts must have reasonably equal access to substantially similar educational opportunity through similar tax effort.”

1. Remove the expansion of capital outlay authority that allowed utilities and property and casualty insurance as permissible capital outlay expenditures.

2. Remove the protest petition/election process for increases to LOB, allowing all districts to raise the same percentage of LOB simply on a local board of education vote.

3. Remove the delay of LOB equalization funding caused by equalizing on the prior year LOB. LOB equalization needs to be paid on the current year LOB budget.

4. Remove the 10% at-risk floor which provided at-risk funding to only two districts for students they do not have.

C. Avoid new parochial equity-busting changes to the system.

“[S]chool districts must have reasonably equal access to substantially similar educational opportunity through similar tax effort.”

Download: 991386 What does it take to fix school finance

Increase Needed to Achieve Adequacy

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991385 Increase needed for Adequacy

1. More funding is needed.

“And we clearly held in Gannon IV that the Kansas public education financing system was unconstitutional—when only 75% of all public school K-12 students were at grade level or above in the basic skills of both math and reading, and a significant group of harder-to- educate students were being left even further behind because of inadequate funding….We expressly noted that student proficiency levels were not only low but also appeared to have steadily regressed after the 2011- 2012 school year through 2015-2016….”

“Accordingly, we concluded more funding was needed to raise performance to at least reach the min
standards….”

2. How much more?
S.B. 19 as outlier. Finally, we further note other calculations in the record of “new money needed” for fiscal year 2018 and fiscal year 2019 are considerably higher than the $292.5 million presented by the State.”

“At the high end is $1.7 billion as calculated by the plaintiffs by averaging the legislatively ordered cost studies performed by A & M in 2002 and the LPA in 2005-2006 and then adjusting for inflation.”

“And next highest is approximately $893 million as presented to the governor by the Kansas State Board of Education (SBE) in its budget for fiscal year 2018 (base of $4,604 for around $565 million) and fiscal year 2019 (base of $5,090 for approximately $328 million).” “The next highest is $819 million as calculated by plaintiffs using the panel’s fiscal year 2014 proposed base of $4,980 in fiscal year 2018 and continuing to adjust for inflation by increasing that base to $5,055 in fiscal year 2019.” “The fact these wide-ranging calculations have been presented does not alone resolve the issue of adequate funding. The magnitude of the difference between those calculations and S.B. 19’s, however, emphasizes the need for the State to truly demonstrate the validity of its
funding approach and the financial figures that approach produces.”

The reasonable conclusion is that at least $600M more is needed unless the state can “truly demonstrate” that some lesser amount will dramatically increase achievement to constitutional levels for the 25% of the students in Kansas who are failing.

Feel free to download and share with parents and community leaders: 991385 Increase needed for Adequacy

Gannon V Victory

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Group of Elementary Pupils In Classroom

The Supreme Court issued Gannon V this afternoon declaring SB19 and the school finance system unconstitutional again, both on adequacy and equity grounds. The court did not require a legislative response this fall and gave the legislature until April 30, 2018, to take another swing at it.  This is a good decision!

Here is a link to the full opinion:

http://www.robblaw.com/PDFs/2017-10-02%20Gannon%20V%20Decision.pdf

The court first traced the history of the cases on school finance and the specific history of the Gannon case. It then detailed the adequacy and equity violations.

Adequacy.

It was the state’s burden to show that through SB19 “the public education financing system provided by the legislature for grades K-12-through structure and implementation——-is reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose.”  The state did not meet this burden.

The court once again found that it was proper to take judicial notice of appropriate matters rather than forcing a new trial for a trial judge to “find the facts.” This allows the case to keep moving rather than sending it back to square one.

The court then found that the “structure” of the new formula, which is, in essence, the old formula, is acceptable. This is a wonderful finding. While we knew the old formula passed constitutional muster, it was unclear that a simple return to that formula would suffice. It does. The court said that items we had raised in our brief concerning the underfunding of parts of the formula (sped, professional development, mentor teacher program) do not relate to the “structure” of the formula. We can positively assert that the “formula” is structurally sound… it is just underfunded.

The court then spent a good amount of time explaining that the state had not “shown its work” in justifying why SB19 purportedly fixed anything. The court was extremely critical of the legislative sole reliance on a four page Kansas Legislative Research memo setting forth a purported “successful schools” approach to justify the base in the new formula.

Recall that the legislature concocted its own version of a successful schools approach and then attempted to fund the rest of the districts on what these schools were spending. The court, however, said “Simply put, merely performing “better than expected”— while perhaps a test for efficiency– is not our Kansas test for constitutional adequacy.” The court highlighted the failure rates in these 41 “successful schools” and said:

“Stated simply and starkly, the State’s “successful schools” model does not contain enough schools or districts meeting student performance standards——much less constitutional standards of adequacy——to warrant that label.”

“Given these flaws, we must conclude the State has not established any valid figure through its calculations-based upon the schools it calls successful-to show S.B. 19 is constitutionally adequate. In short, the State has not met its burden: to show that the public education financing system provided by the legislature in S.B. 19 for grades K-12 is reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose….”

The court restated its Gannon IV conclusion that more money was needed.

“Accordingly, we concluded more funding was needed to raise performance to at least reach the minimum standards….”

The court focused on the state’s failure to show how the funding levels in SB19 fixed anything.

“But as the State currently professes to provide adequacy, it does not indicate why, how, or by how much, any of these levels are going to be improved by its proposed level of funding in S.B. 19….”

Very notably, the court rejected the state’s attempt to claim that simply fixing at-risk spending was all that the case was about. It is about ALL kids. The court said:

“(W)e must also expressly reject the State’s occasional contention throughout its brief that in Gannon IV we were concerned exclusively with the underperforming subgroups and that only their performance caused by inadequate funding was the basis for the Article 6 violation.”

The court then commented on the increased reliance on the LOB and the election/protest petition process. The court points out that by increasing reliance on local funding to replace diminished state funding may initially be a legislative decision but it is subject to review by the court on equity grounds.

The court did NOT set out a “number” for new money needed for compliance. The court did say the following:

“Finally, we further note other calculations in the record of “new money needed” for fiscal year 2018 and fiscal year 2019 are considerably higher than the $292.5 million presented by the State. At the high end is $1.7 billion as calculated by the plaintiffs by averaging the legislatively ordered cost studies performed by A & M in 2002 and the LPA in 2005-2006 and then adjusting for inflation. And next highest is approximately $893 million as presented to the governor by the Kansas State Board of Education (SBE) in its budget for fiscal year 2018 (base of $4,604 for around $565 million) and fiscal year 2019 (base of $5,090 for approximately $328 million). The next highest is $819 million as calculated by plaintiffs using the panel’s fiscal year 2014 proposed base of $4,980 in fiscal year 2018 and continuing to adjust for inflation by increasing that base to $5,055 in fiscal year 2019. The fact these wide-ranging calculations have been presented does not alone resolve the issue of adequate funding. The magnitude of the difference between those calculations and S.B. 19’s, however, emphasizes the need for the State to truly demonstrate the validity of its funding approach and the financial figures that approach produces.”

We think that the State BOE request is still the best evidence as to what increase is needed. The State BOE need was $893M. The legislature funded $293M. They are still $600M short.

Equity.

The court found in our favor on all four major equity concerns. It did not void these provisions for this year but called them unconstitutional moving forward. Gone are:

  • Expanding capital outlay for property and casualty insurance and utilities
  • Reinstating a protest petition/election procedure for increasing LOB
  • Equalizing LOB on previous year’s LOB
  • Setting a 10% floor for at-risk to benefit two districts

The court found that each of these provisions violated the equity test and found them unconstitutional.

As to the expanded capital outlay to insurance and utilities the court said;

SB19’s expansion of capital outlay spending categories “clearly underscore(s) the disparity that results not only from the capital outlay equalization formula but also, and more importantly for this discussion, a disparity that is exacerbated by allowing a shift of more types of expenses to be paid from that fund…. [The capital outlay amendments] exacerbate wealth-based disparities, resulting in unacceptable levels.”

As to the protest petition/election LOB process, the court said:

“The panel’s finding—a correlation exists between a district’s wealth and its ability to gain voter approval of a board resolution that is certain to raise mill levies—is supported by the LOB election history contained in the record on appeal…. These results indicate that reinstating the protest-petition process will exacerbate wealth-based disparities among the districts—except, of course, for those 38 districts already at the 33% maximum LOB authority…. As such, we conclude S.B. 19’s provision reinstituting the LOB protest-petition process for all increases violates the equity requirement of Article 6. In short, many districts are effectively denied an access reasonably equal to the one afforded these other districts—access that is needed in order to make a similar tax effort, e.g., impose a comparable mill levy. So it logically follows that because of this lost access they cannot as readily avail themselves of the advantages that would flow from that tax effort, i.e., a substantially similar educational opportunity.”

As to equalizing LOB on previous year’s LOB the court said:

“Unfortunately, S.B. 19’s LOB lookback provision does not limit this disparate effect of local funding. Rather, it widens the gap between property-poor and property-wealthy districts…. S.B. 19 withholds some equalization funds, and this lookback provision therefore affects only property-poor districts…. As such, S.B. 19, § 17(b) exacerbates wealth-based disparities and violates Article 6….”

Finally, as to the 10% at-risk floor (the Blue Valley and DeSoto $2M for at-risk kids they do not have) the court said:

“In other words, this provision of S.B. 19 uses a wealth-based standard…. In sum, we cannot discern from the legislative record how the legislature determined that a 10% cutoff could be justified, e.g., from an actual cost basis—both as to the districts that benefit from this alternative calculation and as to those that may be excluded despite the costs of educating underperforming students who do not qualify for the free-meal program…. On the record before us, the State has failed to meet its burden of establishing that S.B. 19, § 23 complies with the equity standard of Article 6.”

The remedy.

The court requires that the legislature fix these matters by April 30, 2018. The court went on to stay its decision until June 30, 2018, which allows time to judge the April 30 remedy and issue Gannon VI decision prior to June 30. The court then did two things to show it was serious about this timeline.

First, the court said:

“With that regrettable history in mind, while we stay the issuance of today’s mandate through June 30, 2018, after that date we will not allow ourselves to be placed in the position of being complicit actors in the continuing deprivation of a constitutionally adequate and equitable education owed to hundreds of thousands of Kansas school children.”

Second, the court actually set the briefing schedule on the constitutionality of the bill that the legislature must adopt by April 30.  Initial briefs are due to the court April 30, Response briefs are due by May 10 and oral arguments to the court will be on May 22. (Mark your calendars!)

The decision brought three concurring and dissenting opinions of the seven justices. Justices Johnson and Rosen agreed with the decision but would have required a legislative response by December 31, 2017. Justice Biles is ok with the April 30 deadline but would have stayed the equity pieces for THIS year instead of waiting a year.

Gannon V is a great decision. It went for Kansas children on all issues that count. The only downside was the timing of the remedy.   Should the next legislative attempt fail, count on a special session for sure next summer.