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Published in Print: March 25, 2015, as Fight Looms on Kansas Plan to Fund K-12 Via Block Grants

Fight Looms in Kansas on Funding K-12 Via Block Grants

Legislature on board; court voices concern

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The fight over how much to spend on Kansas' public schools—and how that money gets spent—appears ready to enter the next stage of a long-running battle, now that the state legislature has approved a plan to ditch the state's K-12 funding formula and replace it with block grants for districts.

The switch to a block grant system, created by Kansas Gov. Sam Brownback, a Republican, could face a swift challenge from the legal system, however. A few days before the plan gained final approval last week, a panel of state district court judges said it might bar the plan from being implemented because of previous rulings in a school finance lawsuit that dates back to 2010.

Proponents of the plan, including Republican policymakers who control the state legislature, stress that the plan to fund districts through block grants only lasts for the 2015-16 and 2016-17 school years, and that this period will give lawmakers sufficient time to create a new formula. They also say that the state's current formula badly needs to be replaced and is not producing high levels of student achievement.

However, critics of the block grants say that districts will lose out on funding they would have otherwise received under the formula, and that the block grants themselves will still be subject to the whims of the state appropriations process over the next two years. They say that the K-12 spending picture is threatened by the state's ongoing fiscal difficulties.

In the background is a court case, Gannon v. Kansas, in which the legal system will ultimately decide whether the state's funding for public schools is inadequate.

Ending the Formula

The current formula in Kansas takes into account districts' enrollment, student demographics, and transportation needs. For example, students designated as "at risk," such as those receiving subsidized meals, are eligible for additional funds.

Under the new plan, that formula, and the considerations it makes for those factors, would disappear. (As of late last week, the governor had yet to sign the legislation.) Instead, for the next two school years, districts would receive their funding in block grants for them to spend on their students and operations.

The plan would largely freeze basic aid to schools, keeping it at about the same level, $4.1 billion, in fiscal 2016 as in the current fiscal year. However, a Kansas Department of Education analysis showed that districts will lose out on $51 million in state aid they were expecting under the formula in fiscal 2016. Districts with rising enrollments, as well as those with growing numbers of at-risk students, could also see reductions in overall state per-pupil funding.

Flexibility or Uncertainty?

The temporary move to block grants would ensure that legislators would have the time to fix a "horribly complicated" formula that hasn't led to strong levels of student achievement, said David Trabert, the president of the Kansas Policy Institute, a Wichita-based group that favors conservative fiscal policies and free markets.

As an example of the current formula's ineffectiveness, Mr. Trabert pointed out that just 36 percent of white students, who make up the majority of students in the state's class of 2014, demonstrated college readiness on four ACT subject tests. (Among all Kansas students in the class of 2014, 31 percent demonstrated college readiness on the ACT, 5 percentage points above the national average.) He also said districts often haven't been the best stewards of their budgets.

"It really hasn't done anything for kids," Mr. Trabert said of the state's school finance system. "We don't fund students in Kansas. We fund institutions."

But critics of the block grant plan, like the Kansas National Education Association, say that block grants only provide an illusion of stability, since the plan is not attached to the appropriations process. Opponents say that means that districts' supposed flexibility to use block grants won't matter very much if their funding is drastically cut even as child poverty in Kansas increases, which it has in recent years.

More broadly, the block grant proposal does nothing to satisfy previous rulings from state courts that the state sufficiently fund its existing formula, said Marcus Baltzell, a spokesman for the teachers' union.

"There was nothing wrong with the old formula as long as it was properly funded," Mr. Baltzell said.

Legal Fight on the Horizon

The courts, however, could step in and complicate the fate of the block grant legislation.

Last year, in a ruling on Gannon v. Kansas, a suit in which the plaintiffs alleged in 2010 that the state was not funding public schools as required in the Kansas Constitution, the state supreme court ruled that Kansas school funding was inequitable. Legislators responded by increasing spending on certain programs targeted to relatively poor districts, a solution the state's highest court deemed satisfactory.

However, the court did not rule on the question of funding adequacy in Kansas. It remanded that question to a state 3rd Judicial District Court panel. Last December, that panel ruled that K-12 spending in the state was, in fact, inadequate, and said that if lawmakers increased annual K-12 spending by $548 million, or an increase in per-student spending from $3,852 per year to $4,654 per year, it could be a legally sound fiscal solution.

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Earlier this month, before the Kansas Senate approved the block-grant legislation, that district court panel announced that it was considering issuing an order to block that bill from taking effect.

The state has also been grappling with large budget deficits—Kansas faces a $600 million budget deficit for fiscal 2016, according to estimates published earlier this year. As of last month, fiscal 2015 tax revenues were $37 million below analysts' estimates published at the start of the fiscal year.

Vol. 34, Issue 25, Page 18

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