Kansas GOP Insider (wannabe): Why Kansas Debt per Student Is Gi-normous

Thursday, July 7, 2016

Why Kansas Debt per Student Is Gi-normous

The Kansas Policy Institute released a piece last week showing how school debt exploded between 2004 and 2014. Public school debt increased by 53.7 percent. That's total insanity, but as usual the heavy hand of government intervention played a huge role in the exploding debt--and the rush to build new school buildings as fast as possible.

In Kansas, the number of students in public schools increased by 5.6 percent within those 10 years, and debt per headcount went through the roof. In 2004, debt per student was $5,728. Ten years later, it was $8,805 per student. 

If I had to guess, the vast majority of the debt was secured between 2011 and 2013. Many of the districts that built new schools between those years didn't have growth that made those new buildings a necessity, BUT there was talk of changing the school finance formula beginning in 2010, when Gov. Sam Brownback was elected.

The formula needed to change. Adopted in 1992, it's been heavily litigated ever since. Somehow, school districts were angry about the 1992 formula (See Gannon 2005), but now that it's been eliminated, they continue to demand that the formula be reinstated. (See, Gannon 2016, to be before the Kansas Supreme Court (ahem, circus clowns) in September of this year.)

In 2012, legislators tweaked the 1992 school finance formula. The 1992 formula created a 20 mill property tax for every property owner in the state. That money went directly to Topeka to be used to fund schools. The formula offered a base state aid per pupil (BSAPP), and then a district's student population was weighted based on a number of things like students on free and reduced lunches, distance students lived from the school buildings, English as a second language students, and new facilities. Basically, a student who lived more than 2 miles from the school district on a free and reduced lunch plan was counted as more than a single student. 

It's odd that making some students more equal than others somehow is considered by some to be an equitable and fair way to fund schools. The old formula incentivized putting students on Individualized Education Plans (IEPs) and on signing students up for free and reduced lunches among other things. 

One thing the 2012 proposed formula dropped was some forms of new facility weighting. This State Aid in Bond and Interest weighting added more funding when a district built new buildings. Basically, a school would receive a state-funded subsidy based on the school district's assessed valuation per pupil when it built a new school. These weightings and adjustments were based solely on the value of the most expensive district in the state. This meant that if Blue Valley, the wealthiest district in the state, has a property value assessment per student of $5,000, every district is funded to that amount. I never understood why, if the goal was to be fair, the baseline wasn't the average property value assessment per student statewide, instead of just matching Blue Valley. That would have been a more cost efficient plan, but then, being fiscally responsible and economical was never the point.

The 2012 formula tweak also eliminated the New Facility weighting provision of the 1992 formula. This provision added 25 percent of the base state aid per pupil to a school's budget for the first two years a new building was in use. That money was to be used to hire new teachers and cover staff and utility costs of the new building. Adding to the student population, with or without a new building under the old formula, meant new funding at a bare minimum of the BSAPP times the number of additional students. If a district couldn't afford to pay new teachers to staff a new building, should a district be adding buildings in the first place? 

So, as legislators and state politicians debated the pros and cons of adjusting the 1992 formula, school administrators saw the writing on the wall. The state money train was about to be derailed. It was a sprint to voters to explain, often in very misleading terms, how important new buildings were to the district RIGHT NOW. Every school district in Johnson County passed a new building bond issue between 2011 and 2013. To be fair, Johnson County is probably the fastest growing county in the state. That said, growth slowed dramatically during the economic recession, and population growth countywide wasn't meeting growth projections. And Johnson County isn't the only county that built new schools between 2011 and 2013. My guess is there was a statewide rush.

So, the amount of public debt per Kansas public school student exploded, faster than CPI, faster than population growth. 

The 1992 formula should never have been adopted in the first place, and now that it's on its way out, it's ironic that the districts that suffered the most, (ahem, Blue Valley) seem to be the loudest advocates for continued enslavement to the rest of the state. I don't get it.

1 comment:

  1. If I'm not mistaken, the original mill rate was set at 32 mills and later reduced to 20 mill.
    John Faber