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Minutes for SB44 - Committee on Senate Select Committee on Education Finance
Short Title
Appropriations for the department of education for FY 2019, 2020 and 2021; increasing BASE aid for certain school years; continuing 20 mill statewide levy for schools and exempting certain portion of property used for residential purposes from such levy.
Minutes Content for Wed, Feb 6, 2019
Chairperson Baumgardner opened the hearing on SB 44. The Chair stated the Committee had many conferees and the hearing would continue on Tuesday, February 12, 2019. She stated the Committee would spend considerable time during the legislative session working on the bill. She noted the committee would hear from the Kansas Legislative Research Department (KLRD) and the Kansas State Department of Education (KSDE)before hearing testimony.
John Hess, Fiscal Analyst, KLRD, provided and discussed several budget-specific documents, noting SB44 includes any changes to the KSDE budget for fiscal year (FY) 2019 and the entire KSDE budget for FY 2020. Mr. Hess provided an executive summary overview of the KSDE budget (Attachment 1), the KLRD Budget Analysis (Attachment 2), the Governor's budget recommendations (Attachment 3), a KLRD memorandum describing the total amount of increased aid to schools for a six-year time frame beginning in FY 2018 (Attachment 4), and a KLRD memorandum summarizing the House school finance calculation effort (Attachment 5). The two KLRD memoranda were requested by Chairperson Baumgardner to provide reference to the Committee.
Mr. Hess stood for questions.
Chairperson Baumgardner asked for clarification on the other recommendations listed on pages 175 and 176 of the Budget Analysis, and if the requests came from the Governor or state agencies. Mr. Hess responded that the deletion of the $41.9 million, including $41.2 million from State General Fund (SGF), were deleted agency enhancement requests, and the remainder of the requests were actions taken by the Governor.
Dale Dennis, Deputy Commissioner, KSDE, provided a memorandum reviewing how the State Board of Education (State Board) determined its recommendations on the Base Aid for Student Excellence (BASE). (Attachment 6) Mr. Dennis noted the Sate Board increased the inflation factor by 1.44 percent based on the Kansas Supreme Court opinion in June 2018. Mr. Dennis provided page 1 and 7 of the Kansas State Board of Education meeting minutes from July 10, 2018, which shows the State Board's approval of the 1.44 percent increase in state foundation aid. (Attachment 7) He also discussed data on the inflation adjustment totals. He stated the State Board increased the amount by 1.44 percent, subtracted current aid plus the amount approved in 2018-2019, and then divided by four, and subtracted from the amount already approved by the Legislature. The State Board then adjusted the BASE only on the amounts that would be needed for the next four years at approximately $90 million per year. Mr. Dennis noted KSDE increased the budget appeal to the Legislature for FY 2020 for Kansas Public Employees Retirement System (KPERS) and health insurance. He also noted law provides for 92.0 percent of excess costs, and the goal of the State Board is to reach that amount within the next four years.
Mr. Dennis stood for questions.
Vice-chairperson Denning asked if Mr. Dennis why the Governor included the entire education budget in SB 44. Mr. Dennis responded he did not know. Vice-chairperson Denning noted including the entire KSDE budget in SB 44 created angst because half of the state's budget resides in the Select Committee on Education Finance and the Committee is interested in sorting out the final school finance piece.
Vice-chairperson Denning stated the House bill containing the KSDE budget that was sent to the Supreme Court used Montoy logic, but the State Board seems to have deviated from that logic in their calculations, referencing page 3 of the memorandum provided by Mr. Dennis. Vice-chairperson Denning commented if the Committee were to use the Montoy logic that the Supreme Court signed off on, it appears schools would be shorted $271 million from 2020-2023 based on the State Board's calculations. He noted the testimony for Schools for Fair Funding indicates the Legislature can deviate from the Montoy logic, leaving this shortage of $271 million. Vice-chairperson Denning asked Mr. Dennis if he agreed. Mr. Dennis responded he wasn't sure, but he understood the logic. Vice-chairperson Denning stated he wanted to make sure deviating from the Montoy logic doesn't lead to a lawsuit or the Supreme Court stating the Legislature defied the court ruling.
Ranking Minority Member Hensley asked for clarification on the percentage of excess costs, because the 2018 consensus estimates appear to show Kansas will be at 73 or 74 percent of excess costs over time. Mr. Dennis noted on page 7 of his memorandum it is estimated that the percent of special education excess costs funded will drop from 81.4 percent in the current year to 78.2 percent for FY 2020. Senator Hensley clarified that the law states we should be at 92.0 percent.
There were no further questions.
Chairperson Baumgardner welcomed the conferees and went over the amount of time they each had to ensure everyone had a few minutes to speak. She noted the conferees were given an option to present during the continuation hearing on February 12, 2019.
Patrick Woods provided proponent testimony for the five Shawnee County school districts as One United Voice and also noted he was representing the Kansas Association of School Boards. (Attachment 8) Mr. Woods also provided a document that discusses what Topeka Public Schools would like the Legislature to consider. This document includes transition to teaching programs, licensures, KPERS, and additional funding opportunities. (Attachment 9) Mr. Woods also provided a document that outlines the One United Voice legislative positions and outlines the variety of ways the new state aid for the 2018-19 has impacted learning in Shawnee County schools. (Attachment 10)
Dr. Kelly Arnberger, Superintendent and elementary principal, USD 482 Dighton, provided proponent testimony. (Attachment 11) He stated SB44 would allow school district throughout Kansas to eliminate a major concern and spend their time planning approaches to better educate students. He noted during the last three years, USD 482 raised their base teacher salary, held local property taxes steady, and launched a district redesign. He noted USD 482 has 250 students in pre-kindergarten through twelfth grade.
Darrel Harbaugh, President, USD 445 Board of Education in Coffeyville, Kansas, presented proponent testimony. (Attachment 12) He shared achievements of USD 445 over the years, including being part of the Kansas CAN redesign project, being in the tenth year of a 0-5 early learning center model, focusing on social-emotional learning, and having a community health center in each building in the district. He also provided a document outlining Montgomery County schools legislative positions and lists examples of how future funding would be used by Montgomery County schools. (Attachment 13)
Justin Coup, Superintendent, USD 393 Solomon, gave proponent testimony. (Attachment 14) Mr. Coup discussed how his district used the previous year's additional funding for staff raises, at-risk, and early childhood education. Mr. Coup stated between the additional funding and the Kansas CAN vision, USD 393 is able to see the possibilities the future holds for their students. He noted without a stable funding mechanism, USD 393 is unable to plan beyond a year at a time.
Jeff Travis, Superintendent, USD 273 Beloit, provided proponent testimony. (Attachment 15) Mr. Travis is also a board member of Schools for Quality Education, which is composed of over 100 rural school districts in Kansas. Mr. Travis focused on the need to end the ongoing debate on funding Kansas education. His testimony included a list of educational opportunities that would come from consistent funding and noted SB 44 would allow for equalization for all Kansas students.
Patty Logan, Chair, Stand Up Blue Valley, provided proponent testimony. (Attachment 16) Stand Up Blue Valley is an organization that keeps Blue Valley voters informed on issues that impact their schools. Ms. Logan discussed the excellence of Blue Valley schools, the need to account for inflation, funding special needs students, and issues with funding uncertainty.
Bill Brady, Schools for Fair Funding (SFFF), provided proponent testimony. (Attachment 17) SFFF is a coalition of 40 school districts from across Kansas that represents 140,000 Kansas students. Mr. Brady noted SFFF represents the four plaintiff districts in the Gannon lawsuit; Dodge City, Hutchinson, Kansas City, and Wichita. Mr. Brady testified SB 44, in its current form, would solve the Gannon VI issues, and if passed without amendments, the four districts would stipulate to the court that the issues have been resolved. Mr. Brady stated SFFF would only ask that the Court retain jurisdiction to see the out-years get implemented and appropriated as planned. He stated if there are amendments to the bill, then the lawyers would have to analyze the effects of the amendments and their impact on equity and adequacy. He noted the State Board used a fixed rate of 1.44 percent for inflation, SFFF has chosen to support the State Board's numbers and inflation calculation to end the litigation. He also noted the State must be prepared on May 9, 2019, to convince the Court it has fulfilled its proposed Montoy safe harbor by adding six years of inflation over the remaining four years of the five year plan.
Brandi Fisher, Executive Director, Mainstream Coalition, provided proponent testimony. (Attachment 18) Mainstream Coalition is an education and advocacy organization located in northeast Kansas, representing around 12,000 residents around the state, and is focused on educating and advocating for good governance, public schools, and health communities. She stated the bill in its current form fulfills the courts requirements in Gannon VI and ensures opportunity for all Kansans equally.
Justin Henry, President, Kansas School Superintendents Association, provided proponent testimony. (Attachment 19) Mr. Henry discussed the need for predictable funding to plan for staffing. He stated if school districts can plan and it is predictable, then schools might not be dependent on local option budget (LOB), which could consequently lead to a decline on property taxes. He stated they are not advocating for the block grant.
The Chair asked the Committee if they had any questions for the conferees.
Vice-chairperson Denning referenced page 22 of the SFFF testimony and asked Mr. Brady if SFFF adopted to the penny the State Board's position on the Supreme Court's request for inflation. Mr. Brady said SFFF is asking the Legislature to pass SB 44 and SFFF is comfortable with those numbers. He stated they believe inflation is higher than 1.44 percent, but SFFF is willing to stipulate to 1.44 percent.
Vice-chairperson Denning noted the Supreme Court has stipulated they are comfortable with 1.44 percent for inflation, but wanted it to be clear that on page 22, the SFFF has taken the State Board's calculation for inflation and included it in the SFFF testimony. Mr. Brady responded SFFF supports the State Board's position.
Vice-chairperson Denning asked if the Legislature stipulates to the Court that the Legislature is adopting the formula for inflation, the lawsuit will be resolved, with the Court retaining jurisdiction. Mr. Brady noted yes, if the Court retains jurisdiction and the formula is funded in this way on the BASE. Vice-chairperson Denning noted the Montoy safe harbor statement in the SFFF testimony, and stated the inflation calculation provided by the State Board does not follow the Montoy accumulation logic, so there is a $271 million shortage. Vice-chairperson Denning wanted to clarify that SFFF would be okay with this shortage, would not bring another law suit, and would help convince the Court that the state is not adopting the Montoy safe harbor. Mr. Brady stated if SFFF stipulates along with the State, there would not be a hearing. Mr. Brady stated if they stipulate, they would not bring a lawsuit.
Vice-chairperson Denning noted the 1.44 percent inflation is not the issue, it is the accumulated method of Montoy verses the fixed method used in the State Board's estimates. He noted if the State used the accumulated method instead of fixed method, that would add an additional $271 million. He wanted to clarify SFFF are okay with that method. Mr. Brady responded in the affirmative.
Ranking Minority Member Hensley asked Mr. Dennis why there was a dissenting vote on the proposal adopted by the State Board. Mr. Dennis said there was a dissenting vote, but wasn't sure why. Ranking Minority Member Hensley stated the member voted this way because they did not accept the 1.44 inflation number, as she thought the inflation factor should be between 2.0 and 3.0 percent. Mr. Dennis responded that professionals will say it is 2.0 to 2.5 percent in the next four years. Senator Hensley asked how the 20 mills is factored in and Mr. Dennis responded in detail about the growth producing between $25 and $30 million additional revenue per year. Senator Hensley noted that if using $25 to $30 million per year in growth, then the additional required in the first year would be $65 million instead of $92 million. Mr. Dennis stated that would be true if the 20 mills had not already been counted.
Ranking Minority Member Hensley shared with the Committee a letter he wrote on January 29, 2019, to Attorney General Derek Schmidt asking for guidance on the school finance deadlines for the 2019 Legislative Session. He also provided the Attorney General's response dated February 5, 2019. (Attachment 20) (Attachment 21)
Vice-chairperson Denning stated he wanted to be clear that the issue is not about the 1.44 inflation factor, because that has been resolved by the Supreme Court.
Chairperson Baumgardner drew the Committee's attention to written testimony that was also provided to the Committee.
Dr. Rick Atha, Associate Superintendent of Organizational Support, Shawnee Mission School District provided written proponent testimony. (Attachment 22)
Blue Valley Schools provided written proponent testimony. (Attachment 23)
Gail Jamison, President, Goddard Advocates for Public Education, provided written proponent testimony. (Attachment 24)
Megan Peters, Parent and Chair, Education First Shawnee Mission, provided written proponent testimony. (Attachment 25)
Nikki McDonald, Chair, Olathe Public Education Network, provided written proponent testimony. (Attachment 26)
Mike Mathes, Interim Superintendent, USD 251 North Lyon County, provided written proponent testimony. (Attachment 27)
Dr. Cory L. Gibson, Superintendent, USD 262 Valley Center, provided written proponent testimony. (Attachment 28)
Dr. Troy Pitsch, Superintendent, USD 294 Oberlin, provided written proponent testimony. (Attachment 29)
Rex Bruce, Superintendent, USD 374 Sublette, provided written proponent testimony. (Attachment 30)
Dr. Shellaine Kiblinger, Superintendent, USD 447 Cherryvale-Thayer, provided written proponent testimony. (Attachment 31)
Chairperson Baumgardner stated additional oral testimony would be presented at the continuation of the hearing on February 12, 2019, and the Committee will have ongoing discussions on the contents of SB 44.
Chairperson Baumgardner adjourned the meeting at 2:30 p.m.
