Testimony – H.B. 2344

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Group of Elementary Pupils In Classroom

House K – 12 Education Budget Committee H. B. 2344

 Requiring the Adoption of Local Foundation Budgets and the Levying of Local Property Taxes for the Finance Thereof
Testimony submitted by Schools For Fair Funding
Bill Brady
February 17, 2017

Chairman Campbell, Members of the Committee:

Schools For Fair Funding is a coalition of 40 Kansas school districts comprised of 135,241 students, or 30% of the students in Kansas. Thank you for the opportunity to present our views on HB 2344.

We are testifying as an opponent on this bill due to the issues outlined herein. In judging the constitutionality of any school finance bill, the Kansas Constitution is the guidestar. The Kansas Supreme Court has further defined just what our Constitution requires to guide us. Most recently, in the Gannon case, the Court has provided the most detailed articulation of the requirements. There are two components a bill must provide to pass constitutional muster: It must provide for adequacy and equity.

“To determine compliance with the adequacy requirement in Article 6 of the Kansas Constitution, Kansas courts apply the test from Rose v. Council for Better Educ., Inc., 790 S.W.2d 186 (Ky. 1989), which establishes minimal standards for providing adequate education. More specifically, the adequacy requirement 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….

“To determine compliance with the equity requirement in Article 6 of the Kansas Constitution… school districts must have reasonably equal access to substantially similar educational opportunity through similar tax effort.”

HB 2344 must pass these two tests to meet constitutional requirements.

Adequacy. KSDE runs were not available to us at the time that testimony was due, but we believe that this bill would provide decreased, not increased funding to the majority of school districts and there is no consideration of student or district costs or needs. This bill would not meet the Kansas Supreme Court’s adequacy requirement.

State Level Foundation Obligation, Local Foundation Budget and Local Option Budget. Sections 1 and 2 of the bill create a State Level Foundation Obligation, a Local Foundation Budget and a separate Local Option Budget.

The State Level Foundation Obligation is whatever is raised by the statewide 20 mill levy.

The Local Foundation Budget is a pool of unequalized locally levied funds that equal 20% of a district’s former “weighted” enrollment times $5000. This is akin to a former LOB of 20% computed on a base of $5000. There appears to no equalization mechanism for these local funds. The supreme court has held that if local moneys are to be raised, they must be equalized across the state to meet the constitutional equity test. This could be cured by adding an equalization mechanism that mirrors the former LOB equalization mechanism.

The Local Option Budget is an additional unequalized source of local funding. It is up to 5% of a combined State Level Foundation Obligation, Local Foundation Budget.

Any Local Option Budget is capped at the lesser of any prior LOB resolution or 5%. This could mean massive funding reductions for certain districts. It is impossible to know without KSDE runs.

The Local Option Budget amount is grandfathered in at an amount that a school board “was authorized to adopt.” Since the former formula and LOB statutes have been repealed, there are no current resolutions authorizing ANY LOB for any district.

Additionally, if the bill is meant to refer back to prior adopted LOB, then the bill grandfathers every district’s former Local Option Budget into the new scheme. While most districts had a LOB of 30%, the more wealthy districts were able to implement a 33% LOB. Grandfathering this level of LOB for the more wealthy districts does not pass the constitutional equity test. It does not provide “substantially similar educational opportunity.” These districts are grandfathered to a 3% advantage.

LOB Protest petition and election requirement. Section 3 provides for a district to increase its Local Option Budget only by a protest petition and election process. This procedure was found to be unconstitutional by the Gannon trial court as a violation of the equity test. It does not allow equal access to resources.

Election required. Section 3 of the bill requires an election should a district desire to adopt a Local Option Budget between 4% and 5%. This procedure was found to be unconstitutional by the Gannon trial court as a violation of the equity test. It does not allow equal access to resources.

LOB Levy. Section 4 provides that each district will raise any foundation aid not raised by the 20 mill levy and any LOB. There is no equalization provided. This will cause vastly different mill levies between districts. This clearly does not meet the Kansas Supreme Court’s equity test. The effect of this bill is to transfer increased mill levy requirements for education, a state

The effect of this bill is to transfer increased mill levy requirements for education, a state duty and responsibility, to local districts. The constitution and courts have required that local levies be equalized to avoid wealth based disparities. This bill does not accomplish that task.

State level responsibilities should be paid by…. the state. Unfunded mandates are almost
universally disapproved. This is an unfunded mandate and a mandate that unconstitutionally discriminates against less wealthy districts.

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