It’s only 30 days and counting until the April 30 deadline when a plan for school funding must be presented to the Kansas Supreme Court.
There are three things we can safely predict:
There will be a plan in place by April 30, and it will be a far more generous plan —between $600 million and $800 million in additional funds for schools, phased in over five years. The $500 million Republican plan just announced is only a starting point in negotiations with Democrats and moderate Republicans who will demand more.
Second, the chances are zero that a proposed constitutional amendment to deny the right of the court to override the Legislature’s appropriations for schools could pass the Legislature, even though some key legislators are pushing hard for the change.
And finally, you can bet the farm that taxes will not increase this year with elections right around the corner.
Because the court will expect a good-faith down payment, the Legislature will have to demonstrate it has funded at least $300 million more for schools in the next school year to impress upon the court that lawmakers mean business.
How, you may ask, will the state come up with $300 million in the next fiscal year without raising taxes? Here’s where the money could come from:
1. Kansas will see an annual revenue windfall of about $140 million as a result of the recent federal tax reform. This has not been widely broadcast, but it is real. That leaves $160 million yet to be found.
2. Tax revenues this year are running about $250 million ahead of estimates. Not all of that will stick because of the number of payments made at year’s end to receive tax deductions one last time before the new tax laws take the deductions away. Nearly all of that year-end money is counted as 2018 revenue, resulting in an inflated increase. No one will know until early May what the real overage is, but to be conservative, let’s assume $100 million of that is real. That leaves only $60 million more to be raised in year one.
3. The ending balance — the state’s reserves — will be ample, according to estimates, allowing the state to withdraw at least $60 million for school funding and still leave a couple hundred million bucks for a rainy day fund, or to help cover necessary expenditure increases in other state services.
4. One wild-card option under serious discussion is selling the Kansas Turnpike to a private entity, which could bring in billions of dollars.
The more difficult challenges will come in the following four years, when new sources of revenue will have to be found. Unless something like a turnpike is sold, there just is no way to sustain the state’s budget with large increases in school spending without raising future taxes. Which taxes are to be raised is another matter. Legislators in the future will have to make those tough decisions, long after this big election, which includes electing a new governor. We refuse to project that far ahead. As Scarlett said in “Gone with the Wind,” we’ll think about that tomorrow.