School finance fix in Kansas could cost some Johnson County districts millions in state aid

The Shawnee Mission and Blue Valley school districts stand to lose millions of dollars in state aid next school year if lawmakers restore the state’s old equalization formula.

The Olathe district would lose about $760,000. Several area school districts and some Wichita area districts would receive more in state aid, although some of that money would go toward property tax relief.

Restoring the old formula might be the easiest solution to a state Supreme Court order to fix inequities among school districts, at least from a legal perspective. But it could prove almost impossible to accomplish politically.

Johnson County lawmakers, who make up the biggest delegation in the state, already are saying they oppose the restoration.

It also would require the state to spend $35.6 million more for the 2016-2017 school year. The state already faces a budget shortfall after it missed tax revenue estimates by $53.5 million last month.

The Kansas Supreme Court told lawmakers last month that restoring the state’s old equalization formula would address the inequities between school districts, but it left them room to explore other options. The court said it could close schools if lawmakers fail to fix inequities before July.

The Shawnee Mission district, which sought unsuccessfully to intervene in the case, stands to lose $3 million in state aid if the state ditches the block grants for the old equalization formula, according to an analysis by the Kansas Department of Education. The Blue Valley district would lose $2.4 million.

Before the state switched to block grants last year, it provided equalization aid to poorer school districts for capital improvements and to supplement districts’ local option budgets, which are based on local property taxes.

The old formula provided more money to districts that were considered property poor, to “equalize” them with districts considered property rich. Property-poor districts must tax at a higher rate to raise the same amount of funding as their richer peers. That’s why in many cases additional state aid would go toward property tax relief instead of additional classroom funding.

The Wichita school district, one of the plaintiffs in the school funding lawsuit, would receive $10.1 million more next school year.

Diane Gjerstad, a spokeswoman for the school district, said that about $5.5 million of that new money would go toward property tax relief for Wichita residents, and the rest to schools.

Johnson County lawmakers have bristled at the idea of a large portion of the money going to property tax relief for Wichita residents rather than into classrooms. The state aid that Johnson County districts would lose would likely be offset by an increased local property tax burden for that county’s residents.

“The court presents only one certain option to satisfy equity: taking from some districts to give to others,” House Speaker Ray Merrick, a Stilwell Republican, said in a statement. “This is a clear illustration of the unfairness of the old school finance formula.”

Statewide, 79 districts would experience net losses in state aid if the state returns to the old equalization formula, while 162 districts would see increases. Forty-five districts would have flat funding.

Rep. Ron Ryckman Jr., an Olathe Republican and House Appropriations Committee chairman, said the analysis that shows some districts losing money would make it very difficult for legislators to support that option, even in the face of the court’s threat to close schools.

“The winners and losers would not be the kids or the schools. … The majority of this equalization goes to property tax going up or property tax being relieved,” Ryckman said.

Merrick, who lives in the Blue Valley district, said giving some parts of the state property tax relief “while requiring others to increase property taxes does nothing to get more money into the classroom and to our kids.”

He called the court’s equity test arbitrary and promised that Republican lawmakers would look for a funding solution that enables school districts to direct more money to the classroom.

Shawnee Mission superintendent Jim Hinson said bringing back the old equalization formula is “simply shifting the tax burden.”

“It doesn’t put any additional money into our schools,” he said. “… It requires our patrons to pay millions of dollars in additional tax. It requires patrons of the Wichita school district to pay millions less in tax revenue.”

Al Hanna, interim superintendent of the Blue Valley district, said the district understands the concept of equalization, but it can become a frustration and a burden on taxpayers.

“This would mean an increase in local property taxes to hold our own,” Hanna said. “The ideal solution is one that doesn’t have a negative impact on the school district or the taxpayers.”

Rep. Melissa Rooker, a Fairway Republican whose district includes Shawnee Mission schools, said the governor and legislative leaders make it seem as if the state has only two options: take money from certain districts or defy the court and risk closing schools.

Rooker recommended, instead, that lawmakers develop a plan that holds school districts like hers harmless for one year. Under this proposal, Wichita and other districts could receive equalization aid, but districts such as Shawnee Mission would still receive the money they’re set to receive under the block grant. But that would cost millions more.

“I would have a hard time voting for a bill that costs my district probably more than any other district in the state. How in good conscience do I go and do that?” Rooker said. “And yet, as I told my district, don’t ask me to ignore the needs of 460,000 other children in this state.”

This story was originally published March 4, 2016 at 12:44 PM with the headline "School finance fix in Kansas could cost some Johnson County districts millions in state aid."