Analyses of Equity Fix Bills

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Two bills were introduced on the equity fix, one in the House (HB2731-Ryckman) and one in the Senate (SB512- Masterson.)

Both bills have had hearings and committee discussions. One question asked is why did no school districts testify in favor of these bills. Legislators are critical that nobody supported the bills, especially those who would gain. There are reasons….

The House bill was introduced last Friday with a hearing on Tuesday. Testimony was due to the committee on Monday. The Senate bill was available on Monday with a hearing on Wednesday. There can be NO real reflection on legislation in these time frames, either by legislators or schools. The quick legislative timeframes stifle meaningful input.

The reason for no support for these bills from the schools is that these are bad bills. How so?

1. Both bills do return back to the old equalization formula, which was the safe harbor
articulated by the Supreme Court.

This is the only good part of the bills. If the bills stopped there and were funded, the schools would be more supportive. But the bills had more. Like in the past. The practice of putting some sweetener in a bill along with the bad stuff serves up a choice that appears to be take-it-or-leave-it. Many legislators have fallen to taking the bad with the good simply because that is expedient or that is what leadership tells them must be done. A more reasoned legislative approach would be to insist that the good stuff remain, the bad stuff be removed.

What is the bad stuff?

2. The House bill funds the equalization by eliminating the extraordinary needs fund and process from the Block Grant.

This was touted by the proponents a year ago as the safety valve that was necessary to allow for extraordinary enrollment growth or valuation declines. It was their answer to the harmful effect of the “freeze” in funding. The state even touted this wonderful relief feature in its brief with the Supreme Court. Now, pooof, its gone. While it was an inadequate relief valve, it was at least SOME relief valve. Going forward there would be nothing.

3. While the House eliminated the extraordinary need process, they do NOT eliminate the .4% surcharge that all districts pay to fund the process.

They keep the .4% to pay for about $17M of the cost of equalization. This harms adequacy. At least before, you could argue that some districts got this extraordinary needs money to address adequacy. The remaining $22M of the $39M would have to be new money.

4. The Senate bill funds the equalization with a 1.45% decrease in block grant funding.

No new money. It even names that 1.45% percentage in the bill. (Actually, the printed bill says 1.55% but it was amended in committee down to 1.45%. The next printing of the bill will show this.) The bill, as drafted, keeps the extraordinary needs process and the .4% surcharge.

5. Both bills only address the problem for FY17 and do not address the problem for FY15
and FY16.

The Gannon I decision (March 7, 2014) said the equity problem must be remedied by July 1, 2014, for FY15 and subsequent years. The remedy, to comply with Gannon I, needs to backdate for all three years. The trial court decision did this for these years. The Supreme Court in Gannon II (February 11, 2016) simply withheld judgment on the trial court remedy while the legislature attempts to fix it. The Supreme Court did NOT say “prospective only.” School needs for those years did not vanish. District taxpayers for those years had higher mill levies to make up for legislative take-a-ways. The remedy needs to be effective at the time the Gannon I court said it had to be effective, which is FY15 and forward.

6. The Supreme Court, in Gannon II (February 11, 2016), said that the legislature needed
to fix equity by July 1 of this year but that any “funding system it enacts must be demonstrated to be capable of meeting the equity requirements of Article 6-while not running afoul of the adequacy requirement.”

This is the court’s language. This means that the legislative solution cannot hurt adequacy. This rules out taking money already going to the schools and shifting it to cure equalization. Any attempt to do this should be voided by the Supreme Court. If legislative leaders ignore this, we will certainly see a special session or school closures until a special session addresses it without hurting adequacy.

The Masterson approach of simply reducing all block grants to pay for this violates the adequacy requirement.

The Ryckman approach of stealing the extraordinary needs funding and process violates the adequacy requirement.

Gannon I equity test: “School districts must have reasonably equal access to substantially
similar educational opportunity through similar tax effort.”

Gannon I adequacy test: “We hold its adequacy component is met when 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 and presently codified in K.S.A. 2013 Supp. 72-1127.”