Legislative Report, 3/15/01, Update on Education Finance
Doug Patterson
Kansas State Representative 28th District
Johnson County
12712 El Monte
Leawood, Kansas 66209
913-897-6905
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State Capital Room 174W
Topeka, Kansas 66612
785-296-7631
DougPatterson@House.State.KS.US
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Committees:
Judiciary
Commerce, Business and Labor
Health and Human Services
KANSAS HOUSE OF REPRESENTATIVES
http://www.ink.org/public/legislative/index.cgi
http://www.ink.org/public/legislative/status/status.cgi
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March 15, 2001
UPDATE ON EDUCATION FINANCE
1. Backround
In the area of real property taxation, which is the primary source of funds for schools, one would feel as if our school districts in Johnson County are well financed. Contrary to popular belief, our real estate taxes do not go directly to our school districts. The county collects real estate taxes and the school portion thereof is paid to the state for allocation to all school districts. So that all students to receive an equal education within the state, the School Finance Plan adopted by the Legislature in 1992 provides that the state will pay to school districts a base state aid per pupil (the ABSAPP@ or ABase@) amount in addition to other specific allowances. Therefore, your real estate taxes go to the state and are allocated to school districts based upon such Base amount per pupil. In 1992, the Base was set at $3,600.00 per pupil. The Base has been increased six times, such that the Base, as of this year, is $3,820.00 per pupil.
The total revenue side of the Kansas budget from all sources (including Federal funds) for fiscal year 2001 exceeds $8.5 Billion. Sources for this revenue include federal dollars. Of this amount, $4.059 Billion ( or 64%)is spent on education, including, K-12 and also technical training, community colleges and other higher education or vocational training programs. The total revenue side of the Kansas budget from state sources only for fiscal year 2001 exceeds $4.4 Billion. Of this amount, $2.966 Billion (or 67%)is allocated toward education. Of that sum, $2.371 Billion is earmarked for the State Aid to local units.
In addition to the above-described Base and other revenues received by school districts from the state, school districts, upon the affirmative vote of constituents, can raise local funds by the imposition of a local tax within the school district. This optional tax is referred to as the Local Option Budget, or LOB. In both Shawnee Mission as well as Blue Valley, voters have approved the LOB up to the current maximum of 25% over the existing levy of 20 mills. In the event the LOB exceeds 25% of otherwise real estate taxes for schools, certain federal monies will be withheld. The federal monies lost would be less than $10 Million state wide, so an increase in LOB does not have a net-negative effect.
While the Base was established in 1992 at $3,600 and now has been set at $3,820.00, in 1999 Kansas spent an average of about $5600 per pupil. If the Base had kept up with inflation, since 1992, as of the year 2000, the Base would equal approximately $4377. Therefore, school districts are urging the Legislature to increase the Base in order to keep up with inflation. In addition, school districts are urging an increase in the LOB, since the federal dollars which would be lost are insignificant when compared to the amount of money an increase in the self imposed with LOB would generate.
On the other hand, all state, local and federal government spending on Kansas elementary education during 1999 through 2000 school year grew from $3.16 Billion to $3.34 Billion. Also, with a broader measurement of all sources for governmental spending on public schools, between 1990 and 2000, state spending on public schools grew 170 percent. This increase, from $680 Million to $2.1 Billion exceeded all other categories of state spending growth in both dollars and percent. The Blue Valley school district expenditures for 1999-2000 were $147.815 Million. Budgeted expenditures for the year of 2000-2001 are $171.167 Million based upon these budgetary amounts. The per pupil expenditures for the school year ending 2000 was $9,256. The budgeted expenditures for the school year ending 2001 is $10,402 per pupil.
Those opposing additional taxes would argue that our school
districts need no additional tax revenues, but need only to review and trim their budgets of excess and unnecessary spending. An overwhelming majority of my constituents do not take this position. They support an increase in the Base, an increase in the LOB and support additional funding for teacher salaries and out-ofBpocket costs.
The Blue Valley and Shawnee Mission school districts seek an increase in the Base equal to inflation. This would mean an increase in the base of approximately $557 per student, up to $4,500 per student. When this type of increase is applied to the entire state, the increase in revenue necessary to fund only this request would approach or exceed $500,000,000.00, i.e., One half Billion Dollars. This equals an approximate 10 percent increase in the entire State General Fund expenditures for this incremental increase alone. Obviously, a significant and dramatic increase in real estate taxes, income taxes and/or an increase in sales taxes would be necessary to raise the Base by this amount. From a practical point of view, even if voters and the legislative delegation from Johnson County supported such a tax increase, the remainder of legislators throughout the Kansas would not be supportive.
During his State of the State speech in January, Gov. Graves suggested an increase in the Base of $50.00 per student as well as an increase in other educational funding. Essentially, Gov. Graves recommended an overall expenditure of $9.15 Billion from all funding sources for the fiscal year of 2002. For education, he suggested that State General Fund expenditures increase by $67.4 Million, or 3 percent, and included $29.9 Million from State General Fund to increase the Base. The amount by which Gov. Graves seeks to increase the Base is less than the $180.00 per student increase recommendation of the Governor=s Task Force on Education which issued its report last fall.
2. Recent School Finance Developments
the Senate Education Committee has considered a bill which would increase sales taxes by .2 percent per year for three years. This would take the Kansas State Sales tax (not including local county and municipal sales and use taxes) is from 4.9 percent to 5.5 percent in the year 2003. This measure by the Senate also increases funding for the school finance formula by $22.9 million, or $90 per pupil. It would also increased special education funding by $22 million. All other programs funded under this proposal would total a spending increase of $74.95 million. Over a five-year total, this sales tax increase proposed by the Cent would generate slightly over $1 billion earmarked for education. This tax increase would represent an 11 percent increase in our $9.1 billion the budget. If you=re interested, comparable sales taxes in adjoining states are: Colorado-2.9 percent; Missouri-4.23 percent; Nebraska-5 percent and Oklahoma 4.5 percent.
Governor Graves has now made his Mid March announcement about refinements in his earlier announced school finance program in light of developments on the various House and the Senate bills this year concerning real estate taxes, increases in sales taxes and adjustments to the ALocal Option Budget@ (LOB). The Governor had advised that all sources of revenue or revenue enhancement programs were being reviewed. One significant development was that the collection of taxes and collection of the tobacco litigation funds is off budget by a significant sum and overall collections are down.
3. Governor Graves= Report and Suggestions
On March 13, 2001 Governor Graves announced his education initiative. It represents a considerable change from the plan described in his January State of the State presentation.
Governor Graves= education proposal increases the Base by $60 in addition to the $50 recommendations made in January=s budget recommendation. Therefore, the total Base under his initiative would be $110 per student. It brings the current Base of $3,820 to $3,930. This is a very good beginning! this represents a $112 million increase above the initial $68 million proposal originally suggested. Therefore the governor=s plan brings the total funding increase to $180 million.
The Governor recommends funding a $112 million increase through an increase in sales tax and a new transportation per gallon fuel tax. This recommendation is as follows:
A .2 %increase in general sales tax. Each one percent of sales tax raises $380 million statewide. Thus this .2 % increase will raise approximately $78 million.
A 2 cent a gallon increase in the motor fuel tax. This additional fuel tax per gallon will raise $34 million statewide.
In addition to the Governor=s plan to increase the Base by $50 per student, House Speaker Kent Glasscock is researching and seeking funding for a K-3 program based upon the concept that these years in a child=s education are extremely pivotal. The essence of Speaker Glasscock=s plans would be to direct funds and resources to improve performance levels in the lower three grades. He feels as if improvements at this stage and a child=s life will be a significant indicator and enhancement for improved future performance.
4. CURRENT STATUS
Some legislators not favoring a tax increase, would argue that actual spending authority and actual spending by school districts has increased due to the variety of funding resources available to schools, up and above the Base. The additional funding sources are generally earmarked for special programs such as special-ed. When the Base is used by everyone as the principal gauge for school funding, it is not been appropriate to point out other resources not with in the Base to argue against increases in such Base. Notwithstanding, certain legislators are claiming that, for example, the Blue Valley school district has increased total expenditures by $47 million in 1989 to $147 million in 2000. This would be accurate, and would indicate that the amount per pupil total expenditures for The Blue Valley school district increased from $5,830 in 1989 to $9,256 in the year 2000. If this increase is adjusted, on a per pupil basis, with the inflation factor considered, the total percentage of increase above inflation would be two percent from 1989 to the year 2000. These arguments are very convincing for certain legislators not interested in raising taxes.
5. Where are we headed
Most unfortunately, as of March 14, 2001, I do not believe any tax increase for the funding of education will pass this year, whether the same be by the Governor=s proposal or any other proposal. The overall voter support state wide just hasn=t shown up yet.
6. What to do
Keep writing Legislators.... NOW, feel free to write me again, but I=m already in agreement with the Governor=s proposal and I will support the tax increase to fund this initiative. It will be much more effective for you to contact friends and family out-state and have them correspond with their legislators. The out-state legislators are opposed to these increases.
The correspondents and e-mails from teachers, educators, parents, students and interested citizens to the legislators are extremely important. Be sure to put your address in your e-mail to let legislators know that you are a voter in their district. Please continue your correspondence as well as telephone calls. Your efforts are extremely persuasive. It is at the close of the legislative session that things get done. Your calls coming e-mails and letters are extremely influential in keeping the need to increase school funding on the top of the list.
For a list of addresses and e-mail addresses for legislators, hit the HOT LINKS above.
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Please feel free to forward and if you have e-mail addresses of other interested members of our community, please send them to me for inclusion in this address book
Respectfully,
Doug Patterson
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Paid for by the Committee to Elect Doug Patterson, Dave Imhoff, Treasurer