State funding proposal ?fair? but challenging

SteveNoble2011

SteveNoble2011

The proposal Gov. Sam Brown?????back revealed last week to restructure the formula for funding Kansas public schools is more fair to rural districts than previous drafts, according to one Marion County school superintendent.

But the current version still is likely to place rural districts at a competitive disadvantage with their wealthier, urban counterparts.

?I think the worst part of the plan fell away, and the better parts of the plan are still in place,? said Steve Noble of USD 410-Hillsboro. ?I?m OK with a lot of the plan. At least initially, there?s some good things about it.?

One of the best things is that all five of the county?s school districts would see a revenue increase for the next school year, ranging from $144,103 for Goessel, which has the smallest enrollment, to $296,475 for Hillsboro, which has the largest.

While the additional money would be welcomed, Noble said, the increase needs to be seen in the context of the budget cuts Hillsboro and the other districts made each of the past three years.

?That $296,000 replaces one year of cuts for us,? he said. ?Last year alone we cut $300,000 out of the district?s operational funds. The year previous to that we cut about $400,000. The year previous to that, the board cut $500,000.

?That?s nearly $1.2 million in three years we cut out of our budget. So, $296,000 now starts to look fairly small. And this is one-time restoration funding.?

 

Simplifying the system

A chief aim of the Brown?back plan is to simplify the funding formula.

Currently, public schools are funded through a combination of strategies. Among them: the state?s general fund at a rate of $3,780 per student; the local option budget funded with local property-tax dollars up to 30 percent of the district?s operating budget; and a portion of the LOB matched with additional state funding.

The formula is further complicated by ?weighting? a school?s enrollment by figuring in additional factors that make education more costly, such as bilingual education, vocational education, K-12 at-risk students, transportation, declining enrollment and cost of living.

In Hillsboro?s case, Noble said, a full-time equivalency enrollment of 596 students in 2011-12 increases to 953 students once the weighting factors are included.

Impact

Proposed changes

The Brownback proposal would fund K-12 education primarily from three sources.

First, basic state aid would increase from $3,780 per student to $4,492 per student, but the weighting system would be eliminated. So Hillsboro would receive $4,492 times 596 students rather than $3,780 times 953 students.

Each kindergarten student would be counted as a 1.0 student rather than the current 0.5 because of increasing use of all-day kindergarten. Students who take virtual classes would be counted 0.7 rather than the current 1.05.

?The (Brownback) formula claims, accurately, that they are funding all-day kindergarten now, which then would logically say, OK, everybody ought to do all-day kindergarten,? Noble said. ?The thing I want people to understand is…there isn?t really more money for all-day kindergarten.?

USD 410 currently does not offer all-day kindergarten.

?We?re going to have to not do something else to be able to do all-day kindergarten,? Noble said. ?But that?s an issue for another day.?

The second component of the Brownback formula is to create a 20-mill Equalization Fund that will use money from richer school districts to help support poorer districts.

?The state has always captured the first 20 mills and used that as part of its general fund,? Noble said. ?They used that to pay us back, as part of the general fund, the amount per pupil that was in the base state aid.

?The 20-mill fund now becomes solely an equalization fund,? he said. ?They?ll rank the 290-some school districts, richest to poorest?based not on how much money you or I have, but how much the property (within the district) is valued per pupil you?re serving.?

With that approach, Noble noted, the Centre school district is the richest district in Marion County because it consists of many acres of highly-assessed farm land but serves a relatively small number of students.

?It?s valuation of property per pupil?which is fine,? Noble said. ?I think that?s as fair as it can be.?

Another wrinkle of the governor?s plan is that the combination of per-student aid and money received through the 20-mill equalization fund cannot exceed 106 percent of the per-student base aid. If it does, the excess is taken away and redistributed to poorer districts through a Supplemental Equalization Fund.

?Every district in Marion County is in that boat,? Noble said. Hillsboro, for example, would have to give back its excess of $368,461.

?That?s actually a plan I support,? Noble said. ?In the past I?ve argued that we?re not as rich as Johnson County or as Bur?ling?ton or Hugoton or Andover. We need help from those districts to survive.

?At the same time, there are districts poorer than Hillsboro. So I can?t then argue that some of our money ought not to go to them. In a true, fair world, that?s equalization and I?m fine with that.?

The third key component of the new plan concerns the way districts can use property-tax assessments to raise revenue for local schools. The concept, currently called the ?local option budget? is now called ?local effort? in the governor?s formula.

The Brownback plan would no longer use state funds to match a percentage of the revenue raised locally through property taxes. Under the existing formula, USD 410 receives 35 cents from the state for every dollar generated through local taxation. That would end.

But the governor?s plan also frees districts to raise more through local taxation than the current limit of 30 percent of a district?s operating budget.

?You can go to 100 percent taxes on your local effort?taxpayers just have to approve it,? Noble said.

But removing the ?local effort? cap creates a problem for most rural districts, he added, because of the disparity between property valuations.

For example, Noble said, a 1-mill tax increase in the wealthier Burling?ton school district would raise about $500,000 while a 1-mill increase for USD 410 would raise about $30,000.

?You and I would have to pay a whole lot more in taxes to get to the same level of revenue than a Burlington taxpayer would have to pay,? he said.

?The wealthier districts are very happy about this,? he added. ?The concern for me is that they can raise a lot of money, spend a lot of money on kids, which then equates to a lot of money for teacher salaries to recruit and retain the best educators in the state.

?That?s good for them, and that?s great for their kids. But we?ll be at a competitive disadvantage.?

Approval required

Of course, the governor?s proposal must be approved by both chambers of the Kansas Legislature.

?I think the governor?s view, politically, matches those in the majority of the House of Repre?sentatives,? Noble said. ?So I expect something very similar to this (proposal) to come out of the House.

?The Senate still has a slight majority of moderate Republi?cans and Democrats that may not be totally against a bill like this, but they?re going to want to interject some other thoughts into public education.?

Noble said some senators have suggested putting more money into education than the governor?s plan calls for because state revenues are good and the state has saved money through a recent early-retirement incentive for about 6,000 state workers.

?They want to take that savings and put it into education,? Noble said.

The Brownback plan would add about $45 million to the state?s current investment of $3.5 billion in K-12 education?an increase of about 1.4 percent.

?There?s sentiment already coming out of the Senate that says this (proposal) is OK, but we can do a little more for schools,? Noble said.

Effort affirmed

Despite some concerns about the new proposal, Noble credited the governor?s policy team for its effort.

?The governor?s people have worked hard on this,? he said. ?To me, they?ve obviously done their homework on it. They have tried to be as fair as they can to rural districts.

?On the surface, when we get this thing implemented?if it happens?rural districts will benefit initially because they have to heavily equalize things up front.?

That initial equalization is part of a ?hold harmless? provision in the proposal that promises school districts will not receive less money from the state during the transition between formulas.

?This plan says we will never go backward ever again in school funding?and I?applaud (the governor) for saying that because it?s a bold statement,? Nobel said. ?He?s saying every year?s funding will be progressive. You?ll never drop below what you got the previous year.?

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