Week 3: Education, Water, KPERS & the Budget

Dear , 


Thank you to those who have written me so far on various issues we are debating this session.   We are now at the end of the third week, and most bills are still in the hearing process, so your insights and opinions are quite valuable as we consider various legislation coming before us.  The more constructive input we receive on a bill, the better.


Thursday, January 29th, was "Kansas Day", the day Kansas became the 34th State to enter the Union.  We can be proud that our state at its birth was at the forefront in fighting against slavery.


As legislation continues to work its way through the committee process, we continue to process information regarding the state's biggest challenges.

Education and the courts


On Thursday, we received an update from Attorney General Derek Schmidt on the pending school finance litigation.  As I have discussed in past newsletters, the state has been involved with school litigation in some fashion for over 20 years, largely due to debates over definitions and what's required under the complicated school finance formula.


As you'll recall, the Legislature complied with the Supreme Court ruling last session by adding $126.2 million in equalization funding.  This week, the "Schools for Fair Funding," an organization involved in the Gannon v. State lawsuit, has filed a new motion to reopen the Kansas Supreme Court decision on the equity of education funding.  Stay tuned on that motion.


This past December, a panel of three judges ruled that Kansas' school funding was inadequate under the state's constitution. The state is now in the process of appealing this ruling.  The decision by the panel appears to be out of compliance with the Kansas Supreme Court's directives given to the panel.



Education and the numbers


The Kansas Department of Education recently released new numbers showing that K-12 Education funding has increased by $312.2 million in the last three years. The governor's budget proposal contains a sunset of the school finance formula effective on July 1, 2015 and requested the Legislature reform the formula. Until the reform takes place, the Legislature would use block grant funding for school districts. The Legislature is still waiting for introduction of a bill for the block grant that would contain other details of this proposal.


Below are graphs on the total state expenditures on education and the amount spent on each Kansas student.  As you can see, spending is at an all-time high, both in total expenditures as well as in the amount spent per-pupil, which is now near $13,000 when all revenues are figured.  


Any notion that we are not spending an increasing amount of money on education simply goes against the facts.  Whether the right school districts are getting the right amount of funding is another matter.



Water Crisis


The situation with the High Plains aquifer is an increasing concern and Governor Brownback has been tackling the issue throughout his tenure.   During his first term, he challenged the Kansas Water Authority (KWA), Kansas Water Office, and the Kansas Department of Agriculture to come up with a 50-year vision for the water supply of the State. In n this year's State of the State address, he asked that a plan be implemented for adequate water supplies by the end of his second term. The KWA presented its annual report to the Natural Resources Committee this week, and recommended a plan of action. The Vision and Mission team will remain statewide, but all the goals will be regional. The KWA has appointed individuals to serve on regional goal setting teams to develop plans that are specific to each area of our state. The role of each team is to participate in public forums, develop goals for their local region based on public input and available resources, and present the goals to the KWA.

Below is a graph on the estimated usable lifetime for the High Plains Aquifer:






The state's retirement system, known as KPERS, has been a top priority for the state.  Before 2012 KPERS was one of the most underfunded pension plans in the country.  Since 2012, due to bi-partisan reforms enacted by the legislature, there has been an increased investment of $445 million paid into KPERS and KPERS is now funded at over 60%. 

This December, the State General Fund budget had a shortfall of $280 million, because of a decrease in revenue projections and an increase in K-12 and Medicaid caseloads. The governor had an allotment plan with a $52.1 million reduction to the KPERS system which reduces the contribution rate from 12.12% back down to the FY 2012 contribution rate of 9.50%.  This change was just for FY 2015.

The Governor's FY 2016 and 2017 budget proposal will make significant payments to the KPERS system. Additionally, his plan calls for the issuance of bonds in the amount of $1.5 billion to reduce the unfunded liability and the employer contribution rate. The proposal also includes a further reduction in employer contribution rates by extending the current amortization period by an additional ten years, from FY 2033 to FY 2043. The Governor's Budget Director believes these two changes will save around $39 million in FY 2016 and $92 million in FY 2017. 


The Legislature is examining the governor's proposals for the KPERS system and in the coming weeks will make a determination on the best path forward.


The Budget

Before proceeding to discussions about the budget for the next two years, the House and Senate budget committees continued discussions on fixes for the state's deficit in the current fiscal year to deal with the decrease in revenue.  It is likely next week we will be focused on floor work to find a solution for the current fiscal year.

The non-partisan Legislative Research department indicated that a recession bill needs to be passed by mid-February so the state can pay their bills on time and end the year in the black.  It's likely that next week the Senate will debate an addendum to the current year's budget to meet the needs of school finance transfers. During discussions in the House Committee on Appropriations, the state's Budget Director Shawn Sullivan indicated we should approve a budget-balanced plan by February 13 to head off any potential delays in scheduled aid payments to schools.

During his testimony, the director stated another $174 million needed to be transferred to school districts. House lawmakers have suggested transferring half of the funds now and half before the end of the fiscal year in June.  I will keep you updated as we move forward.


Staying Committed on Taxes


With the new revenue projections coming out this week indicating a further hole in the state budget, I am concerned there will be some pressure to increase tax rates to make up for the deficit.  I will resist this strongly, as the reason we have a problem in our budget is not the revenue, but the amount the government spends.  Prior to the tax cuts we delivered in 2012 and 2013, the tax rates in Kansas were stifling for both families and small business, and any inkling of going back on that would be incredibly damaging.  Thus, we need to do the hard work of limiting spending and have the courage to remain true to our convictions to balance our budget and keep the burden off our taxpayers.



If you have any questions or concerns, don't hesitate to contact me!  Thank you.

In honor of your liberty,

Mary Pilcher-Cook

Mary Pilcher Cook


Working in honor of your liberty.
Contact me today!