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CONTACT MELISSA

In Topeka: 
State Capitol Room 352-A
Topeka, KS 66612
melissa.rooker@house.ks.gov
785-296-7686

At home in Fairway
4124 Brookridge Drive
Fairway, KS 66205
melissa@melissarooker.com
913-961-1555

Dear Friend:

As predicted, the end of session proved to be a wild ride. We created a self-inflicted wound by passing House Sub SB 423 on the last day of regular session without knowing there was an error embedded in the language of the bill. We returned on April 26th knowing we needed to fix the “$80 million mistake.”
 
To that end, I drafted HB 2798 and a colleague on Appropriations introduced it when they met on April 25th. We also introduced it in Senate Ways & Means to cover all bases. This bill was a clean repeal of the policy provisions leading to the trouble – the 15% minimum and the transfer of at-risk & ELL funds from the Local Option Budget (LOB).
 
Several other plans were also introduced – HB 2797 sought to repair the problem language while keeping the policy provisions in place, HB 2799 took the same clean repeal but added $135 million in new spending, and HB 2796 was a compromise between repairing the problem language and repealing the problematic policy provisions altogether. The Speaker chose to make the compromise bill (HB 2796) the bill he moved forward for consideration. That language was inserted into SB 61 and became known as House Substitute for Senate Bill 61 (H Sub SB 61).
 
The Good:
H Sub SB 61 was signed by the Governor on Monday, and briefs have been filed with the Kansas Supreme Court. This plan should give schools the certainty of a five-year funding plan because it is highly unlikely the court will close this case until the legislature has lived up to the entirety of our agreement, thus guaranteeing that schools can count on the level of funding in the bill.
The 2017 bill provided nearly $300 million over two years and the 2018 plan adds another $535 million over the next five years, with total new funding between 2018-2023 of $823 million. We addressed three key equity issues cited by the court in October:
  • 10% minimum At-Risk funding floor removed
  • Expanded use of Capital Outlay funds for utilities and hazard insurance removed
  • Local Option Budget changed to be calculated using current year percentage rather than prior year
We increased Special Education funding:
  • $44 million in FY19 (already added $12 million more for FY18)
  • $7.5 million added each year thereafter 2020-2023
The bill also:
  • Increases funding for teacher mentoring programs
  • Pays for annual ACT/Workkeys tests for all students
  • Enhances transparency and accountability through additional data collection and reporting
  • Provides a schedule of audits to analyze the effect our investment on student outcomes, and provide the data necessary to make evidence-based decisions about the school finance formula in the future
  • Identifies wrap-around services provided to K-12 students through state agencies other than the Department of Education
This bill does not contain a non-severability clause – meaning that this time, unlike previous school finance plans, the court will have the ability to strike portions they do not find constitutional without having to strike the entire formula.
 
For all of these reasons, I chose to support the bill. It passed the Senate 31-8 and the House 92-27. We are building on the groundwork done last year and can be proud of the many beneficial components of the plan overall, as described above. In addition, in the budget we just passed, mental health services, higher education and early childhood programs like Parents as Teachers received a boost in funding, all of which help enhance the educational outcomes of our students.

This piece of legislation is a textbook example of the need to remain flexible, willing to compromise and accept that making progress towards your perfect solution is an important part of the legislative process. You have heard this from me before, but it bears repeating - it takes 63 House members and 21 Senators to pass a piece of legislation, and the approval of the governor to make it law. Leadership can exert their influence in a variety of ways but ultimately, even they only have one vote to cast just like the rest of us. The progress made in the past two years regarding school finance is worth celebrating, even as we honestly assess the work that likely remains.

The Bad: 
Concerns remain regarding overall adequacy of funding, one of the key components of the court’s decision. The plaintiffs are arguing for $500 million more immediately, and $1.5 billion more over the next few years. (They base their numbers on the Taylor study done this year, yet overlook the significant differences in the formula used in Dr. Taylor’s work.)
 
I have long supported increasing funding for public schools to bring them into constitutional compliance. However, reading the plaintiffs’ brief yesterday I was struck at how tone-deaf it seems compared to what our schools are telling us. 
 
Through countless hours of testimony in the House K-12 Budget Committee, we heard from superintendents representing a wide variety of districts across the state. The universal request was for budget certainty, long-term investment and stability in terms of policy. They described the difficulty they have planning new initiatives, hiring and training new personnel, and making the changes necessary to keep up with constantly changing expectations when funding is so uncertain. They testified repeatedly that the closer to June 30 it gets, the harder time they have spending new dollars in the upcoming school year. Their message was clear – phase-in funding over time so they can prepare to be effective, efficient and successful with their use of those funds. 
 
Furthermore, Special Education funding is required by longstanding existing statute to be funded at 92% of excess costs, but will still be $40 million short of that requirement in 2019, even with the increases in the new bill.

Somewhere in here is a point of constitutional compliance that meets common sense. I remain optimistic that we can appropriately resolve the differences that remain regarding adequacy.

While most equity concerns raised by the court were addressed, others remain (or were created):
  • Gannon V cited the protest petition to raise LOB above 30% as an equity concern, yet that requirement remains in the law. 
    • It should be noted that SB 423 changed the protest petition requirements to conform to existing (court approved) requirements for capital outlay protests. Additionally, research shows all districts currently above 30% have held an actual election, which is a higher bar than a protest petition. It remains to be seen if the court will ease their criticism of this provision and allow it.
  • We stepped on our own toes by creating equity concerns in the new law by:
    • Requiring all districts to have a minimum 15% LOB.
      • This limits local control and because the state says it’s now required, the state seeks to “count” this local money as state effort, which the court addressed specifically:
        • Gannon V, pg. 41: “So the greater reliance on LOB-generated funds, and the less the reliance on BASE-generated funds, the more the specter of unconstitutional structure looms.”
      • LOB is a property-wealth generated source of revenue. The court sees a problem placing a statewide value on the effect of this source of revenue, as each individual district raises a different amount of money from their LOB because of differences in property values – even requiring a uniform percentage will not erase the differences in the value of each mill across all 286 districts: 
        • Gannon V, Pg. 40 “In a more general contrast to the BASE, LOB-generated funds do not provide the same fixed amount to every student regardless of their locale. The individual districts that levy those discretionary mills not only retain those funds, but the amounts of those funds can also vary widely among the districts because of differences in property wealth.”
      • The court has noted that even when equalized, LOB funding is not consistent across all districts:
        • Gannon V, Pg. 40 “Not even supplemental general state aid ensures that every student receives the same amount of LOB funding. So for the State to argue that every student in every district is the beneficiary of the same ‘effective base,’ i.e., BASE plus LOB generated funds, is simply incorrect.”
  • Requirement that the percentage of LOB-generated funds derived from the value of the at-risk and ELL weightings for each district be spent exclusively on at-risk and ELL programs.
    • Districts receive these weightings due to the number of students who qualify for them. The at-risk weighting uses the poverty proxy of students who qualify for the federal free lunch program. Encumbering funds based on a percentage of this weighting creates a significant wealth-based disparity. The court has previously found the expanded use of capital outlay funds unconstitutional for this specific reason.
      • Gannon V, Pg. 59 “And, as the plaintiffs argue in their second point, wealth-based disparities arise from SB 19 because of the varying ability of districts to take advantage of this shift of certain expenditures to capital outlay funds, and that variation is tied to wealth.”
    • In Gannon V, the violation of equity pertained to the increased flexibility of wealthy districts to utilize their capital outlay funding to offset general fund obligations. The new violation of equity likely will be the reverse – the higher a district’s poverty rate, the less flexibility they will have over funding decisions.
      • Gannon V, Pg. 60 “In the meantime, wealthier-property districts retain more flexibility – with full flexibility being enjoyed by those receiving no aid whatsoever.”
    • During debate, I attempted to strip this provision out of the law, and here’s an example of why:
      • Blue Valley will have about $1 million of their LOB targeted specifically to at-risk & ELL programs, leaving $50 million to be spent without any strings attached.
      • KCK will have $13 million of their LOB encumbered specifically to at-risk & ELL programs, leaving $37 million to be spent without any strings attached.
      • On this point, the court has been crystal clear:
        • Gannon V, Pg. 61 “Nevertheless, given the potential inequities that arise from local funding based on property taxes, the legislature must always be cognizant that capital outlay and LOB statutory changes raise equity concerns. Indeed, in previous situations where the legislature has exacerbated wealth-based disparities while attempting to cure past inequities that violate our constitution, we have rejected the legislative change.”
The Ugly Truth
The court has already been extraordinarily patient with the legislature, issuing five separate decisions over the past eight years, and I expect their patience has come to an end:
  • Gannon V, Pg 77 “We decline to allow inadequacy to keep cutting its swath. With that regrettable history in mind, while we stay the issuance of today’s mandate through June 30, 2018, after that date we will not allow ourselves to be placed in the position of being complicit actors in the continuing deprivation of a constitutionally adequate and equitable education owed to hundreds of thousands of Kansas school children.”
Furthermore, the court is unlikely to accept the particular provisions of this formula outlined above as equitable:
  • Gannon V, Pg 78 “In being ‘mindful of the connection between equity and adequacy’ when considering cures, Gannon IV, 305 Kan. At 917, the State should remain cautious of challenges arising from an increased reliance upon LOB-generated funding (and less upon BASE-generated funding) as it seeks to make suitable provision for the finance of the educational interests of the state.”
In spite of the weaknesses in our legislation noted in this newsletter, there is a fairly direct path to resolution in this case. The court can simply strike down the equity provisions they find unconstitutional – in past versions, the inclusion of a non-severability clause meant the court had to take an “all or nothing” approach. This is a significant difference.
 
Adequacy of funding will be the key question. Options may include asking us to expedite the timeline to move the same level of funding to schools a little more quickly, or they may yet call on us to provide a greater amount of funding. In either case, improving state revenues and responsible fiscal decision-making this year should give us some room to respond. Problems arise if the court agrees with the plaintiffs regarding the immediacy of adding hundreds of millions of dollars by June 30 (about six weeks from now). 

As outlined in their Gannon V decision, the court has promised a ruling no later than June 30, 2018. While the briefing schedule was adjusted slightly, oral arguments remain scheduled for 9 am on May 22nd. I will be there as I have at all phases of this litigation.
 
Stay tuned for updates on the relationship between school finance and the recent debates on tax cuts and a proposed constitutional amendment.
Please don't hesitate to contact me with questions or ideas about these or other legislative issues. It is my honor to serve you.

Sincerely,


Rep. Melissa Rooker
Kansas State Representative, District 25
Serving Northeast Johnson County
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Melissa Rooker,