A bright spotlight focused this week on the deep, ongoing financial challenges that face public schools in Kansas plus other important functions of state government.
It’s clearer than ever that the Legislature and Gov. Sam Brownback will be dealing with the state’s fiscal ills well into 2017. Specifically, the House and Senate members elected this November must be prepared to repeal previous income tax cuts and generate revenue that can make up for years of underfunding essential services.
▪ The Kansas Supreme Court held a hearing during which supporters of several school districts, including Kansas City, Kan., argued that the state needs to spend more money to provide an “adequate” education for all students.
That added cost could reach $500 million or more a year, on top of the current $4 billion K-12 budget.
▪ A state research agency released a memo showing that Kansas could be nearly broke — with less than $6 million in the general fund — when the current fiscal year ends June 30, 2017.
That dire news comes even though Brownback and the Legislature over the last three years have diverted hundreds of millions of dollars from the highway fund, postponed a large payment to the state’s pension fund, cut higher education funding by tens of millions of dollars and trimmed spending throughout state government.
Overall, the Kansas budget remains on life support.
That’s an excellent reason all eyes are focused on the eventual outcome of the Supreme Court case argued this week in Topeka.
A court panel already has ruled Kansas schools are inadequately financed under the state Constitution. Many educators are cautiously optimistic that the higher court will rule in their favor, although the amount of extra money ordered to be paid by the state is still uncertain.
Special attention on Wednesday was paid to the needs of students who are minorities, come from low-income households or have English as their second language. Schools say it would make good sense to funnel additional money to programs to help raise academic achievement for these students.
However, Kansas schools should not be forced to cut back much on programs that help academically gifted children — a possible remedy broached at the court hearing — because that could wind up hurting the education of a different segment of students.
The income tax cuts approved by Brownback and the Legislature in 2012 are crucial to keep in mind as the state’s financial ills are reviewed.
The cuts have reduced state revenues an estimated $650 million a year, which is close to the amount of extra funds the Supreme Court might order to be spent on K-12 schools.
A large part of those receipts — an estimated $250 million annually — used to come from owners of LLCs who no longer have to pay income taxes. Some legislators tried to repeal that unfair LLC tax exemption in the 2016 session.
However, that move failed, partly because moderate Republican and Democratic members think a full repeal of the 2012 tax policies will be required to put the state on firmer financial footing.
The 2016 elections so far are headed in that direction. Fourteen conservative GOP lawmakers were defeated in the August primaries, including seven in Johnson County. More supporters of Brownback’s failed tax policies could fall in November elections.
Still, repealing the past tax cuts in 2017 will not be a slam dunk, even with a broadly revamped Legislature. Brownback also could veto whatever solution the lawmakers pass.
Finally, even if tax-related changes are put in place next year, they likely would not produce much in extra revenues until 2018.
That brings us back to the words of warning contained in the report from the state’s nonpartisan Legislative Research Department.
The $5.6 million prediction for reserves in the end-of-year general fund is already on shaky ground. Kansas has missed its revenue estimates for the first two months of the fiscal year.
The precarious fiscal situation will increase pressure on Brownback to propose even more budget reductions later this year or in January. Earlier this summer, state agencies and universities were warned they could be hit with another wave of cuts.
State officials — Brownback, lawmakers and Supreme Court justices — are ultimately in charge of deciding how much tax funds should be allocated to provide solid public services to 3 million Kansans.
It’s abundantly clear that the state isn’t raising enough money to fund current programs. And after years of budgetary shell games, Kansans have to make a decision: Do they want higher taxes? Or to keep cutting?
That deserves to be the main topic of conversation for Republican and Democratic candidates in legislative races this fall as they talk to voters about what the state’s future should look like.