Legislative Report -March 17th, 2017
Activity picked up this week with the House K-12 Education Budget Committee beginning its discussion about what they want to put into the first draft of their school finance plan. The newly appointed Senate Select Committee on Education Finance held its first meeting on Thursday. In addition, for the first time in recent years, the Chief Justice of the Kansas Supreme Court was invited to give his annual State of the Judiciary address on Wednesday at a joint meeting of the Senate and House in the Hall of Representatives. Then late last night the Senate by a roll call vote of 7 to 33 voted down an amendment by Senate President Wagle on the FY 2017 rescission bill to do a two percent across the board cut to all state agencies, including K-12. The Senate then passed the bill by a vote of 23 to 13. The House passed this rescission bill with no cuts to K-12 so that there is no issue of cuts that would be part of the conference committee on this bill should the House non-concur in the remaining Senate amendments.
But, before we go further, the more exciting news took place early Monday morning when the statehouse was greeted by the 7:00 a.m. arrival of Dighton High School students who then proceeded to meet in small groups of three or four with more than 30 legislators who graciously agreed to share part of their day discussing issues with them. Legislators the students met with included several key leaders: Senate President Susan Wagle, House Speaker Ron Ryckman, House Majority Leader Don Hineman, House Minority Leader Jim Ward, Senate Education Chair Molly Baumgardner, and House Education Chair Clay Aurand. The students had earlier selected their own topic of interest and then prior to their meeting shared via e-mail with the legislator what they would be discussing. SQE has supported this student focused initiative for many years. We have found that it not only gives our rural students the opportunity to better understand our governmental processes, but it also gives our legislators a better understanding of the quality of the student we produce and the resources rural schools must have to meet the needs of their students. Dighton Superintendent Kelly Arnberger did an excellent job of organizing this event that saw the House recognize the students presence in the gallery during the morning session. Should any of your districts decide that you would like to bring some of your students to Topeka next session, please contact me and we will be happy to help plan your event and set up meetings with selected legislators. Again, our legislative friends should be complimented on their willingness to participate in this venture with our students.
Tuesday morning SQE’s held its annual “Coffee, Rolls and Conversation” event at the statehouse. The SQE board of directors and many of our members in attendance had the opportunity to visit with the many legislators who stopped by. I found it interesting that several of the legislators who attended volunteered positive comments about their prior day’s visit with the Dighton students. You may have even seen in your area some of the press coverage about the students visit. Several of our members in attendance were able to then attend committee meetings such as the Senate Financial Institutions and Insurance Committee that was holding hearings on House Bill 2268 and Senate Bill 138 related to working after retirement. The house bill seeks to simplify the process of hiring a retiree; however, it still retains many of the hoops you have to jump through. Our members who attended felt that Senate Bill 138 would be preferred because the working after retirement rules exemptions would be eliminated for the hard-to-fill and special education positions. Employers would no longer be required to submit assurance protocols documenting efforts to recruit permanent replacements and the Joint Committee on Pensions, Investments, and Benefits would no longer be required to review the assurance protocols. Also, all retirees hired under the rules set out in K.S.A. 74-4937(3) that also relates to third-party entities would also be exempted under the provisions of Senate Bill 138. It now appears that the Senate committee will work their Senate Bill 138 early next week to set up a conference committee between the two houses where they will have to work out their differences.
Actual hearings on the bills we are following were few this week. The House K-12 Education Committee held a hearing on House Bill 2379, a proposal that would set up extensive new reporting requirements for school districts regarding transaction-level information that would have to include “the school district number, fund number, full four-digit function code, full three-digit object code, full four-digit building code, transaction date, transaction amount and a brief description of the transaction.” KASB appeared in opposition to indicate that this would amount to an unfunded mandate because of the increased costs to implement. Susan Willis, chief financial officer of Wichita Public Schools, also spoke in opposition and indicated that passage of the bill would impact over 3 million transactions and require thousands of lines of code to be rewritten at great cost in hiring additional personnel, upgrades to equipment and contracting with software consultants. She further cited the lack of a cost benefit to this change as the current system meets their needs and provides the state necessary financial information. Scott Frank from Legislative Post Audit appeared as neutral and provided information about the current process and how it follows what most other states do.
The K-12 Education Budget Committee spent the rest of the week discussing the individual components that should be included in the first draft of the school finance bill. Chairman Campbell intends to introduce today or by Monday a bill with the items that he feels his committee has reached some consensus on, then hold hearings and let his committee amend the bill as they address those issues where there is not agreement. Chairman Campbell had Rep. Aurand, the House Education Chair, continue to lead the committee discussion topic by topic. This included: at-risk, all day Kindergarten, pre-K, facilities weighting, ancillary facilities weighting, declining enrollment, accountability, tech-ed, bilingual, special education, transportation, etc. It appears that there was agreement that the U.S. census should not be used to determine at-risk funding although other options were considered. It seems that whenever the legislature considers this issue “free lunch”, as imperfect as it is, usually ends up as the proxy for poverty. Initial reaction is that most of the old formula weightings will be in the plan. There will no doubt be continued debate on accountability and many other issues going forward, not the least of which is the major decision regarding the amount of money needed to meet the court’s Gannon IV adequacy requirement without disturbing equity.Read More
Legislative Report -March 10th, 2017
Legislators returned to Topeka this week fresh from their week-long turnaround break only to find their workload enhanced by last Friday’s Kansas Supreme Court decision in the Gannon case (Gannon IV). The current FY 2016 budget is still not resolved. While the House passed the rescission bill with no cuts to education or other state agencies, the Senate has yet to act. The failure of the Senate to override the Governor’s veto of the tax bill leaves us in a temporary stalemate with the question of which house is going to try next to put together a tax package that either makes it through the second floor without a veto or can muster the necessary two-thirds vote in both houses to override the Governor. It appears that the House may be the first to try again to put together the tax package that is needed to stabilize the FY 2018 and FY 2019 budgets. Once that issue is resolved we expect the legislature to direct its full attention to crafting the new school finance formula bill to meet the requirements of the Gannon IV decision.
Two important issues of concern to us appear to be resolved for this session: House Bill 2143 (procurement) and House Bill 2142 (unified school district employee health benefits program). Earlier this session, after the House K-12 Education Budget Committee held hearings and additional informationals on both of these issues Chairman Campbell asked Sarah Shipman, Secretary of Department of Administration, to form stakeholder working groups on both issues to see if agreement could be found on ways to implement any parts of these recommendations contained in the Governor’s budget proposal that were taken from the Alvarez and Marsel efficiency recommendations. Secretary Shipman issued her reports to the committee this week. In the report on House Bill 2143 (procurement) she listed several areas of stakeholder agreement that included: the goal of putting any savings into the classroom; there is already a lot of good cooperative work being done in the state; a need for better support systems for the smaller school districts lacking the capacity to do sourcing; and, the need for the process to be flexible. Areas of shareholder concern included: the mandate to purchase from a state contract even if it impaired a local district; the bill did not consider existing procurement procedures used by districts for price improvement; the political reality of the need to support local tax paying businesses who also support local school districts; and, that there were no incentives to drive participation. The working group recommended that consideration be given to creating an advisory board that would oversee cooperative purchasing within the state with representation from the state, USDs, and universities to identify and pursue specific sourcing categories. In addition, they suggested that an incentive plan be implemented where USDs that choose to participate in the sourcing efforts are awarded a percentage of the savings.
Secretary Shipman’s report on House Bill 2142 (employee health care) also listed areas of stakeholder agreement that included: health care costs are increasingly difficult to manage; a larger pool drives down administrative fees and vendor profits; significant changes are expected due to the Affordable Health Care Act; a more extensive study needs to be done; and, health insurance is a critical component of district compensation. Shared concerns included: impact consolidation would have on school staff and compensation issues; limited access to providers, particularly in rural areas; only two options exist in the State Employee Health Plan (SHEP); LPA data that may have amplified savings estimates; and, geographical differences. The shareholders recommended that detailed assessments of the current spend, plan design, networks, etc. across the districts be completed to better understand the impact of any plan consolidation across the districts. In addition, the state should evaluate changes to the current SHEP non-state offerings to attract more districts. Only two plans are offered now and the statutorily imposed employer contribution rate for family plans is higher than current contributions at most districts. Upon conclusion of the report and after committee questions Chairman Campbell announced that neither House Bill 2142 nor House Bill 2143 would be considered by his committee and that he would report to the House Appropriations Committee that the savings represented in the Governor’s budget by the passage of both bills would not be forthcoming. Governor Brownback used projected savings of $47 million in FY 2018 and $89 million in FY 2019 based upon the passage of both bills to fund his budget, money that will now have to be made up elsewhere.
The K-12 Education Budget Committee also held two other informative sessions during the week. The issue of at-risk funding was reviewed on Monday with Dale Dennis providing more detailed information about the state’s past decision to use USDA free lunch criteria as the basis for determining at-risk funding. Currently, the state pays about $2.49 million in matching funds to access the $189.2 million in federal funds for the free lunch program. The feds require the state to verify at least 3 percent of the income applications. He also reviewed the difficulties associated with obtaining correct income information from parents who may report only their net income and not the full amount and the legal restrictions school districts have on obtaining parent tax information. Scott Frank from the Legislative Division of Post Audit also reviewed prior audits related to the use of the free lunch proxy and the alternative use of the U. S. Census poverty count to determine the number of at-risk students. In general, he indicated that the census number tends to understate, particularly in rural areas, while free lunch tends to overstate. The census count also misses on foster care, non-traditional living arrangements and the fact that population changes after the count is taken. Chairman Campbell also sought a dialog on at-risk students from the perspective of urban and rural schools districts. John Allison, the current Superintendent, and Alicia Thompson, who will soon become the Superintendant appeared on behalf of Wichita Public Schools and described the many types of at-risk students they work with. Penny Hargrove, Superintendent, Hiawatha Schools, USD 415, an SQE member, reviewed with the committee her district’s experiences with the at-risk student population that continues to present major challenges because of the lack of resources. Students continue to arrive with serious problems that become harder to address when other community resources, such as mental health services, also lack the funds to help. Dr. Hargrove was asked by a committee member about what she would like to do if she had more resources. Dr. Hargrove responded by saying that she would first try to meet the needs of our students by determining where they are at and then provide services to help them grow in real time. Second, she would want to provide more extended programs so that they would become more engaged in school and find it more relevant to their lives. Finally, she felt it was important to work with the community to provide pre-Kindergarten services so that they will be ready when they enter Kindergarten. Chairman Campbell’s comments at the end of the hearing seemed to indicate that they would not change to the U. S Census for use as the at-risk proxy even though everyone understood that the free lunch proxy we now use is not perfect; however, with the interest shown by the Senate Education Committee on this issue other ideas will probably be discussed that may affect how the number of students who are at-risk will be determined for purposes of the new school finance formula.
On Tuesday the K-12 Education Budget Committee and the Senate Education Committee held a joint meeting that featured a presentation from Dr. Randy Watson, Kansas Commissioner of Education, on National Student Clearinghouse Data. Many members of the state board also in attendance and participated in a discussion with the committees. Commissioner Watson highlighted the fact that according to the Georgetown University Center on Education and the Workforce, by the year 2020, 71 percent of the jobs in Kansas will require some level of postsecondary education. He then pointed out that according to the National Student Clearinghouse related to the class of 2010 less than 65 percent enrolled in college the following year and that six years later less than 40 percent had graduated. Also, after the passage of six years almost one-fourth had never enrolled. Clearly, at the outset there is a gap between what we need and what we are producing. Commissioner Watson stated that the board’s long-range “KansasCan” vision for Kansas students targets the state’s post-secondary attainment rate through more individualized programming. This is important as the recent Gannon IV decision on adequacy and the Rose capacities points to the need to assure that all students are college or career ready upon graduation from high school. The legislators and board members proceeded to have a good discussion as to how they hope to work together to achieve these goals.
As expected, several legislative committees and caucuses received briefings on the Gannon decision in order to decipher what the ruling said in order to determine just where the legislature needs to go from here to assure that the schools stay open after June 30th. While some legislators argued that because the court did not specify a dollar amount they only need to provide for a constitutional formula it is safe to say that the majority understand that additional funding will be needed. There will no doubt be a lot of debate over the amount of dollars needed to meet the Gannon IV directive. Dale Dennis indicated that if we only adjusted the current BSAPP of $3,852 to $4,895 for inflation it would take an additional $700 million. One of the attorneys for the Gannon plaintiffs has a number in the $800 million range. The State Board is seeking $841 million over the next two fiscal years to fund their “KansasCan” vision. Clearly, we have a long way to go, but it is encouraging that on the House side the K-12 Education Budget Committee has been diligent in looking at all of the proposals put forth so far and seeking further clarity as it did this week on the at-risk proxy issue as picks up the pace to draft a constitutional finance formula. The second challenge is to determine the amount needed to constitutionally fund the formula. Senate President, Susan Wagle announced this week the appointment of The Select Committee on Education Finance that will be chaired by Majority Leader Jim Denning, R-Overland Park with Carolyn McGinn, R-Sedwick as vice chair and Anthony Hensley, D-Topeka as the ranking minority member. The remaining committee members are Molly Baumgardner, R-Louisburg; Barbara Bollier, R-Mission Hills; Bud Estes, R-Dodge City; Dan Goddard, R-Parsons; Dan Kerschen, R-Garden Plain, and Pat Pettey, D-Kansas City.Read More
Legislative Report -February 24rd, 2017
The statehouse is quiet today after a tumultuous week that culminated in Wednesday’s vote by the House to override the Governor’s veto of House Bill 2178, the bill that would have repealed the so-called LLC income tax exemption. The House managed to have 85 (one more than the 84 two-thirds needed) of its members vote in favor of the motion. Later that day the Senate failed to reach its needed two-thirds or 27 votes to complete the override when it fell three votes short. Since then both the House Taxation Committee and the Senate Assessment and Taxation Committee reported bills out of committee that would enact the Governor’s tax plan. In addition, the Senate tax committee also introduced a new bill, Senate Bill 215, that contains the same provisions as House Bill 2178, except that the rate increases and the creation of a third bracket would not become effective until January 1, 2018. This would remove the retroactivity argument used by a few Senators who cited this reason for why they did not join in the override. It is also important to note that the other funding issues related to the $320 million shortfall in the FY 17 budget are still not resolved. The House sent House Substitute for House Bill 2052, their rescission bill that does not contain cuts to K-12, and House Bill 2161, the bill that has the mechanism to capture $317 million from a PMIB investment fund, to the Senate last week. It is foreseeable that the Senate may demand some cuts in the rescission bill as a bargaining chip with the House in order to provide a veto proof number of votes on their new tax proposal. The work would then even become more complex as the budgets for FY 18 and FY 19 still have to be worked out and, even presuming a redesigned income tax bill passes, there are questions as to if it would provide enough revenue to stabilize the Kansas budget to avoid further cuts. All of this does not take into account the Supreme Court’s anticipated Gannon adequacy ruling.
House K-12 Education Budget Committee On House Bill 2270 submitted by Kelly Lampe, Superintendent, USD 459 Bucklin, a member of Schools for Quality Education
February 15, 2017
Chairman Campbell and members of the House K-12 Education Budget Committee. Thank you for the opportunity to provide written testimony on House bill 2270. We applaud this effort that appears to be a sound, visionary approach for a long term funding formula for our local public schools with the goal to support “equitable” state funding at an “adequate” level in order to allow every school district to meet the unique needs of our students, as required by the Rose standards adopted by our courts and the Kansas legislature. This legislation would help us create efficiencies through funding predictability, cost of living upgrades, and appropriate weightings to help assure the extra funding to provide for the additional needs of our students.Read More
Legislative Report -February 17th, 2017
A very busy week as the legislature got down to the business of putting a plan in motion to fill the $320 million budget shortfall for the 2017 fiscal year and begin the process of stabilizing the budget for future years. The Senate passed by a vote of 22-18 and sent to the Governor House Bill 2178, the income tax bill that would repeal the so-called LLC exemption, modify the existing rates, add a third top bracket, and allow 100 percent of medical expenses as a deduction. The House passed it the previous day by a vote of 76-48. While the Governor has stated that he will not sign the bill, there are hopes that he will allow it to become law without his signature. He has 10 days to veto the bill once it hits his desk or it will become law without his signature. The bill would raise $590.2 million for FY18 and $453.8 million for FY19, amounts still deemed inadequate by some for the long term, particularly if the much anticipated Supreme Court decision on the Gannon adequacy issue calls for more state support. Regardless. all agree this is a much needed start.
Legislative Report -February 10th, 2017
A “Big Thank You” to everyone who took the time to contact your Senators this week. YOU helped make a difference. As dawn broke Thursday morning, the Kansas Senate was poised to pass Senate Bill 27, the rescission bill, that included a five percent cut ($154 million) to K-12 education. It quickly became apparent that the Senate Leadership’s plan, that also Senate Bill 115 ($100 million from a state investment fund) and Senate Bill 147 (removal of the LLC exemption and increase income tax rates) in the package, had fallen apart during the night and there were not 21 Republican votes in support of the K-12 budget cuts. At 8:00 a.m. the Senate convened and immediately recessed so that the Republicans could caucus for the purpose of settling on a lesser cut of three percent to K-12. The caucus could not find support for the lowered three percent cut. This finally led to the adjournment of the Senate shortly before 9:00 a.m. because it made little sense to debate bills that could not be passed. The day had been set aside for extended floor debate on the cut and tax package. The Senate is pro forma today. It goes without saying that the intense response by education advocates made a difference. Schools for Quality Education joined with KASB, KNEA, Wichita USD 259, Kansas City USD 500 and Schools for Fair Funding to issue a statement against the passage of Senate Bill 27. A copy of that statement is at the end of this report. Your continued vigilance is needed as the matter of resolving the FY 17 budget shortfall is far from over.
Senate leadership immediately announced that no bills will be considered by that chamber until the $320 million deficit for FY 17 is resolved. The deadline for getting non-exempt bills out of committee is today, February 10th, and the deadline for getting non-exempt bills out of the house of origin is February 23rd.
Legislative Report -February 3rd, 2017
The legislature picked up some good news this week when the January revenues came in $23.8 million over the estimate. This marks the third month in a row that the numbers were more than what the consensus revenue estimating group predicted after they revised the numbers downward in early November. One Senator was heard commenting that “if you keep lowering the bar you might trip over it.” While the news is good, there is still a $320 million shortfall this fiscal year that will have to be dealt with. The debate continues over how to address it. There is still hall talk that the Senate wants to include some across the board cuts in their plan, while most feel the House may end up adopting some form of the Governor’s proposal to borrow all or most of the $317 million in an investment fund held by the Pooled Money Investment Board. This is an option most legislators detest as it continues the use of one-time money to solve a continuing structural defect in the budget. It is expected that some action will be taken with regard to the Governor’s FY 17 rescission bill before the legislature’s turnaround break set for February 23rd.