Doubling or even tripling Kansas’ statewide property tax for education wouldn’t be enough to pay for a $2 billion school funding increase proposed in a new study commissioned by lawmakers.
The study shocked lawmakers last week when it recommended increasing funding for schools by $1.7 billion to $2 billion on the high end, or by more than $450 million on the low end. Any increase would be phased in over five years.
Lawmakers are trying to decide how to respond to a Kansas Supreme Court decision that schools are inadequately funded. The Legislature has until April 30 to tell the court what it plans to do.
Senate President Susan Wagle, R-Wichita, said complying with the court would require either tripling property taxes going toward education, raising income taxes to “levels of New York” or setting sales tax rates higher than in California.
“The bottom line is that Kansans cannot afford what the court is demanding, and we cannot afford what the new study is recommending,” Wagle said in a statement.
The study predicts a $2 billion boost would bring high school graduation rates up to 95 percent and enhance student performance in reading and math. Kansas set a long-term goal of a 95 percent graduation rate earlier this year.
New figures released Monday showed that shooting for a 90 percent graduation rate would lower the high-end estimates to $1.4 billion and $1.6 billion. Both figures would still represent massive funding increases for schools.
Few, if any, lawmakers embrace the $2 billion figure outright.
“Bankrupt the state. That’s what you’d have to do,” said Rep. John Whitmer, R-Wichita.
Some suggest searching for a compromise on a lower figure, or stretching out a large increase over many years.
“It’s got to be a sufficient level of funding that will address the court’s concern about the 25 percent of students that are not meeting proficiency standards, and that’s really their biggest concern when it comes to the adequacy issue,” said Senate Minority Leader Anthony Hensley, D-Topeka.
If lawmakers choose to pursue a figure on the high end, it’s unclear exactly how much Kansas itself would have to pay. The study included all funding sources for schools, including the federal government. The document doesn’t say how much of the total might come from federal sources.
Even if Kansas paid only a fraction of the increase, the tax increases needed would be significant.
Kansas has a statewide 20 mill levy for education. A mill represents $1 of tax on every $1,000 of assessed value. The levy for education now raises more than $600 million a year.
Doubling the mill levy would raise another $600 million — only about a third of the $2 billion total. On the other hand, it would raise more than enough for the low-end, $450 million estimate included in the study. That amount of money would be enough to raise high school graduation rates to 95 percent, the study predicts, but would not otherwise improve student performance.
Over the past few years, lawmakers have largely left property taxes alone while raising income and sales tax rates. But they have already had a hearing this year on raising property taxes.
House Bill 2740 would raise the state’s mill levy for education to 38 mills by 2020. The idea faced strong opposition during a hearing earlier this month from business and agricultural groups.
Many lawmakers are also loath to raise property taxes, especially during an election year.
“What’s going to be the will of the body to raise a significant amount of taxes this year? Little to none, little to none. So if there’s an appetite to kick in more of the larger amounts, it’s going to come at the detriment to a lot of other agencies and people,” said Sen. Gene Suellentrop, R-Wichita.
If lawmakers wanted to pay for a large increase for schools through cuts to other parts of government, the necessary reductions would be massive. Earlier estimates from state agencies showed that 18 percent across-the-board cuts would free up about $600 million.
Before the legislative session began in January, Republican leaders signaled little support for tax increases. At that time, they balked at a $600 million increase for schools sought by some people.
Wagle said in December that her senators were “dead set” against any taxes to comply with the court.
House Speaker Ron Ryckman, R-Olathe, said Friday the “big picture requires lawmakers to prioritize important issues to taxpayers” such as health services, cybersecurity and highways.
Republican senators are to set to meet Tuesday to discuss the report. The gathering may provide the first glimpses of how lawmakers want to proceed.
The possibility of a large tax increase or deep cuts has some interested in negotiating with Schools for Fair Funding, a group that represents school districts that are suing the state for more money.
“We could end the court suit very quickly. I believe the Supreme Court, if the plaintiffs are onboard, we could resolve this issue within days,” said Rep. Ed Trimmer, D-Winfield.
Attorneys for the plaintiff districts had previously suggested $600 million in new funding may be enough to satisfy the court. That figure now appears relatively modest compared with the study’s upper-end recommendations.
Rep. Melissa Rooker, R-Fairway, said the Legislature’s approach should be informed by data and that the study provides a lot of data.
“So is this feasible?” Rooker said. “We’ll find out in the next couple weeks, won’t we?”