| School Lawsuit Could Increase Property Taxes by 55%
Total Aid Per-Pupil Would Exceed $17,000
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June 18 - Wichita - If the school districts suing for more funding get their wish, taxpayers could be on the hook for more than $2 billion. A recent article in the Wichita Eagle said district lawyers have studies showing that Base State Aid Per Pupil (BSAPP) should be $6,142; current BSAPP is $3,780. If approved, it would cost the State of Kansas $1.59 billion more and local property taxes would automatically rise by $555 million in accordance with districts' Local Option Budgets (LOB).
Kansas Policy Institute calculated how such an increase would impact taxpayers under three scenarios; funding the state portion entirely through property tax, sales tax or income tax. The extra LOB cost would be funded by local property taxes in each case.
The state collects 20 mills statewide for the support of K-12 education. Based on 2011 assessment values, that generates $599.3 million so an additional 53.03 mills would be required to generate an extra $1.59 billion. That would represent a 41% increase in property tax collections and more than triple the state mill rate for schools.
State law allows school districts to assess local property taxes in an amount up to 30% of their adjusted state aid without taxpayer approval, or up to 31% with voter approval. The statewide effective average rate is above 30%, so the increase in state aid would generate at least $555 million in higher local property taxes, which would equate to at least another 14% increase and bring the total property tax increase to 55%.
Funding the additional state portion through sales tax would bring the state sales tax rate to 9.8% and represent a 65% jump over the current rate of 6.3%. Using individual income taxes to fund the state portion would require a 54% increase, based on the Consensus Revenue Estimate of the amount to be collected this year. In both cases, there would also be a 14% increase in local property taxes unless districts reduced their current mill rates.
BSAPP is only part of the funding provided by state government. Districts receive a multiple of BSAPP (called 'weightings') for many other factors such as At Risk, Bilingual, Transportation, Low Enrollment, High Enrollment, Declining Enrollment, Cost of Living, Virtual Education, Special Education and Vocational Education. KSDE estimates that those additional weightings will provide $2,116 in additional aid per-pupil this year; including extra aid for KPERS and bond payments, total state aid for districts this year is expected to be $6,931.
If BSAPP was $6,142 this year, the multiplying effect of the additional weightings would take total state aid per-pupil to $10,392 and cost taxpayers $1.59 billion more. Including the increase in local property taxes from the LOB, total taxpayer support of public education would therefore rise to $7.8 billion or $17,116 per-pupil.
KPI president Dave Trabert said, "A $2 billion increase in school funding would wreak havoc on the Kansas economy and cost thousands of jobs; some lost immediately and others not created over time. And the cruel irony is that student achievement would likely remain relatively unchanged and well below where it should be. As demonstrated in many different ways in our recent analysis, there is no connection between spending and achievement. Kansans pumped an extra $1.3 billion into public education between 2005 and 2011, yet test scores on independent national tests remain virtually unchanged."
Trabert concluded, "According to the U.S. Department of Education, only about a third of Kansas' 4th Grade and 8th Grade students are proficient in Reading and less than half in Math. More money won't improve achievement; spending existing aid differently and making other operational changes is the answer."
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Kansas Policy Institute is an independent think-tank that advocates for free market solutions and the protection of personal freedom for all Kansans. Our work centers on state and local economic policy with primary emphasis on education, fiscal policy and health care. We empower citizens, legislators and other government officials with objective research and creative ideas to promote a low-tax, pro-growth environment that preserves the ability of governments to provide high quality services. To speak with Kansas Policy Institute, please contact James Franko at (316) 634-0218.
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