On Monday, legislators will be back in Topeka with challenges awaiting.
Of first order will be a school finance plan to replace block-grant funding, which was declared unconstitutional by Supreme Court justices. That’s a must ahead of constructing a budget for the next two fiscal years, 2018 and 2019.
A modicum of good news surfaced last Thursday when economists and other financial wizards met in secret to decide the economy had improved enough to lower the projected revenue shortfall for the next two years.
For several months it has been pegged at $1.1 billion. Now, it’s $889 million, an improvement of $211 million. That’s nothing to sneeze at, but the deficit still is gigantic.
School finance must be resolved ahead of budget consideration for two very important reasons: To determine how much additional revenue will be needed and whether that figure will satisfy the court. In their ruling, justices said not enough funding was directed to education. They also said once a decision was reached, no later than June 30, they would decide whether they thought it met constitutional muster.
School finance discussions before the session break centered on a return to the formula in effect from the mid-1990s, until Gov. Brownback, and his cadre of ultra-conservatives, replaced it with block-grant funding.
They bragged about putting more money into education, a fairy tale perpetuated by revenue flowing through districts to special education, not traditional classrooms, and KPERS.
The new formula under consideration would put an additional $150 million in education funding. Many school officials think that’s still too parsimonious, and suggest two or three times that much would barely provide adequate educations for Kansas kids.
The point being, public school should be funded sufficiently to prepare each student to do one of three things after being graduated from high school, go to a work-a-day job, learn vocational skills to better take on a job or enroll in a college or university.
THE NEXT hurdle will be how to fill the revenue portion of the two-year budget.
Talk about the income tax cuts of 2012-13 has reached the point of redundancy, but they remain very much at the top of the list of things that should be reversed to fill out budget revenue.
Restoring tax liability of LLCs would be a start, but hardly sufficient to fill the gap. Reworking the income tax code, at least to where it was before the cuts, would be helpful. Mention was made before the break of a flat tax, but, to the advantage of the state’s low- and medium-income citizens, it found no traction.
The alternative is unacceptable, continuing to sweep money from the “Bank of KDOT,” selling state assets or rely on internal borrowing.
The better approach is to accept the state has fiscal responsibilities, education funding being at the top, and generation of revenue should fall to income tax assessment.
Sales tax, a second leg of the taxing stool, already is meeting more obligations than it should, and property taxes doesn’t fly well within the test of fairness, with agricultural valuations depending on the whims of the marketplace.
An exception might be considered for school funding. Property tax levies for schools, particularly those in rural areas, are less, some considerably so, than they were before a statewide levy was installed to fund state aid.
The levy today is 20 mills, just over half of what it once was. The statewide levy began at 35 mills, edged up to 37 and then dropped bit-by-bit during robust economic times.
Some restoration probably is in order, although it could be a millstone where cities and counties took advantage of lower school levies to increase theirs to an overall wash.
The month of May will be an interesting time in Topeka as legislators figure how to move the state, and its budget, forward.
Our representatives Kent Thompson and Adam Lusker and Sen. Caryn Tyson should be creative, but also arrive at solutions that are fair and equitable to all citizens.
— Bob Johnson
