Key Issues for the Kansas Supreme Court in the Gannon school finance case

Based on briefs filed by both parties and oral arguments Tuesday, the Kansas Supreme Court's decision in the last school finance case will focus on these questions.

1. How much is enough? The state says actions by the Legislature over the past two sessions will provide $1 billion more in school funding over a six-year period. The plaintiffs want $500 million added to what the Legislature did immediately (for next school year) and up to $2 billion more phased in and adjusted for inflation.
   
2. Meaning of the latest cost study. The state says the $2 billion cost of meeting state standards developed by Dr. Lori Taylor and others is based on "moon shot" aspirational goals that should not be required constitutional adequacy. It argues the Legislature used another approach to adequacy, based on previous rulings of constitutional compliance in 2009. The plaintiffs say the new study's goals are based on what Kansas students need to be successful, as defined by the State Board of Education, and the new study confirms what previous state-commissioned studies, a peer review this Spring, and an alternative study commissioned by the plaintiffs found about the cost of meeting state standards. Several justices questioned why the Legislature has repeatedly paid for cost studies it then doesn't want to follow.
   
3. What is required to meet the “Rose” standards? The Supreme Court has set the standard for adequacy as enabling "all" students to meet or exceed seven standards of educational competence, from basic skills to preparation for college and career, called the Rose standards after a Kentucky school finance case. A major reason courts found the current finance system unconstitutional is that about 25 percent of students score below "grade level" on Kansas state tests and nearly 15 percent do not graduate on time. The state says approved funding should[LF1] allow 85 percent of students to reach grade level. Plaintiffs say the target should be at least 90 percent of students on grade level and 60 percent of students "college ready" on state tests. Justices asked how high the constitutionally acceptable bar had to be – can schools be expected to reach 100 percent? Put another way, can more money solve all educational issues?
   
4. Does money matter? No debate here: both sides agree additional funding will improve education. The state says its billion-dollar increase will significantly improve student success and should satisfy the constitutional requirement. The plaintiffs say it won't go far enough.
   
5. The role of the court. Several justices expressed concern that any decision based on substantially new facts – such as the new cost study – would go beyond their scope as an appeals court. They raised the possibility of sending the case back to the three-judge panel to consider new evidence. Neither side expressed much support for a step that would add months or years to the process.
   
6. The role of the Kansas State Board of Education in funding. Article 6, section 1 of the Kansas Constitution gives the Legislature the duty to “establish a system of public schools” for educational improvement; and in later sections delegates to the State Board authority for “general supervision” of public schools; to local school boards the duty to “maintain, develop and operate” schools and to the Legislature the duty to “make suitable provision for finance.” The state says this means the Legislature has the primary role, and the State Board is to supervise the system the Legislature “establishes.” The plaintiffs argue the State Board has independent authority to set educational standards for schools and students which the Legislature then must support with adequate funding. When asked if that means the State Board could lower standards (and therefore costs), plaintiffs replied that the Supreme Court should then intervene to the enforce the provision that the public education system must provide educational “improvement.”
   
7. Retaining jurisdiction. The school finance bill passed in the 2018 session includes phasing in more than $400 million spread over the next four years. The plaintiffs want more money now AND a phase-in of additional funds. However, the state wants the court to dismiss the case, which means if the Legislature failed to follow through, a new lawsuit would have to be filed. The plaintiffs want the court to retain jurisdiction until any final resolution is fully implemented, which could be more than five years. The Supreme Court allowed a three-year phase-in as part of the Montoy case in the late 2000’s. It dismissed the case before the Legislature fully funded the law, and funding was reduced when state revenues fell during the Great Recession and following state income tax cuts.
   
8. What happens to the Local Option Budget? The state claims the new requirement of a 15 percent LOB should count in its favor because it will increase the mandatory commitment of funding for each district. (For example, it would keep local school districts from using additional state aid to offset their LOB and reduce local property taxes.) Plaintiffs argue that a mandatory LOB should be 100 percent equalized by the state, rather than equalized to the 81.2 percentile under current law. The court has approved the 81.2 percent rate for the currently optional LOB. Plaintiffs also want the court to remove any voter protest or election requirements for the LOB and strike a provision that requires districts to use LOB funding for at-risk and bilingual education programs in proportion to amount of at-risk and bilingual weighting they receive.
   
9. When will the court decide? That’s up the court. It previously promised a decision by June 30. If the Legislature’s action is found to be insufficient, the state has asked that the system be allowed to operate (schools remain open) during the upcoming school year (while about $200 million will be added) and the Legislature given next session to continue to work toward compliance. Plaintiffs say unless the Legislature approves additional funding for the upcoming school year, more funding committed for the future and changes to the LOB, the court should shut down the school finance system until it does – but want exceptions to allow maintenance of school district buildings and property while schools are closed.

Grading the Legislature on Education

The 2018 Kansas Legislative Session has ended and the campaign for the 2019 session officially begins June 1 when candidates must file if they plan to run in Democratic or Republican primaries. It's a good time to take stock of what happened to the state's biggest responsibility: public education.

Under orders from the Kansas Supreme Court to correct constitutional issues of adequacy and equity, the Legislature has added $400 million in state funding spread over two years (the school year just ending and next year) and committed to an additional $400 million spread over the following four years.

To pay for that increase and fund other state programs, the Legislature also repealed most of the 2012 income tax cuts last session and did not pass another income tax cut this year.

Some legislators argued the additional education funding will not be enough to satisfy the courts and support the state’s educational needs. Others argued it was far too much. Here are some facts.

The $400 million will have increased school funding nearly 10 percent since 2017, the largest increase in almost 10 years. However, when adjusted for inflation, school district general fund, special education and local option budget funding will still be lower than it was a decade ago.

School districts increased teacher salaries an average of $1,200 or about 2.2 percent this year and a similar amount is likely next year. That was the largest increase since 2009. However, it will still leave teacher pay far behind inflation since 2010. According to the National Center for Education Statistics, average Kansas teacher salaries have declined by $4,200 since 2010 when adjusted for inflation.

In 2017, Kansas teacher salaries trailed Iowa by almost $7,500, Nebraska by $4,300, and Missouri by $300, exceeding only Colorado and Oklahoma among our neighboring states. The new funding will help Kansas schools be more competitive, but certainly not close the gap.

Increased funding allowed school districts to add nearly 900 jobs last year, mostly teachers, classroom aides and special education paraprofessionals. However, that is less than half of the total school positions cut since 2009, while enrollment has increased by 25,000 students.

The increased funding equals about $800 per pupil over a two-year period. It is expected to help Kansas make up some lost ground compared to other states. Kansas per pupil funding from all sources was $311 lower than the national average in 2009 but dropped to almost $1,200 lower in 2015, falling from 24th in the United States to 31st. National statistics from other states are not yet available for 2016 and 2017, but because general state aid was frozen under block grant system, Kansas likely fell further behind.

The Legislature also commissioned the first new independent education cost study since 2005. That study made three critical findings. First, higher funding IS strongly correlated with higher student outcome (test scores, graduation rates). Second, Kansas school districts are highly efficient – among the best in the country. Third, 2017 school funding was between $1.7 billion and $2.0 billion short of what it would cost to meet the state's highly ambitious educational goals, which would exceed every other state if achieved.

The new study was validated by an independent peer review, which also found it consistent with a previous study done by the Legislature’s Post Audit agency and cited as evidence in the school finance court case.

These studies are not the only evidence that additional funding will support higher educational outcomes. The states that do better than Kansas on national measures provide more total revenue than Kansas. Until 2009, Kansas K-12 funding consistently exceeded inflation and educational levels have consistently improved: high school completion, college participation and postsecondary attainment is at an all-time high.

Finally, the 2017-18 Legislature increased funding in targeted programs that have proven effective in raising student outcomes, including preschool, mental health services, the Jobs for America’s Graduates program that helps at-risk students complete high school and providing free testing programs for college and career readiness.

Restoring tax revenues and a strengthening Kansas economy also allowed the Legislature to reverse previous cuts to higher education, reduce transfers from highway funding and make up missed payments in the underfunded school retirement system.

While no one wants to pay more taxes than necessary, it should be noted that the state income tax rates are still lower than before 2012. Based on new state revenue and economic projections, total state general spending will remain lower compared to total state personal than any year since 1988. In fact, since the Legislature partially restored tax rates last year, state personal income is growing faster than any time since BEFORE the 2012 tax cuts took effect, and the state’s credit rating has been upgraded.

In other words, over the last two years the Kansas Legislature was able to reinvest in schools and other important programs, found more evidence that school funding increases educational outcomes and kept taxes and spending lower than Kansans previously supported. Now, the court and the voters will give their grades on that record.

Kansas v Florida: Student achievement, funding and economic success

Since the 2017 Nation Assessment of Education Progress test results were released, the State of Florida has received a lot attention, especially for high results among certain student groups. Because Florida spends less per pupil than Kansas, some are asking if this shows educational results can be improved without spending more money.

Florida does spend less per pupil than Kansas. However, since 2012 when Kansas passed major tax cuts that reduced state revenue, Florida has actually increased educational funding more than Kansas, with total revenue per pupil in Florida rising from $9,077 to $9,828 in 2015 (8.3 percent) compared to Kansas $11,557 to $12,055 (4.3 percent). Per pupil amounts for 2016 are expected to be released next month. (Source: Public Education Finances, 2012 and 2015)

Supported by this increased funding, Florida has shown improvement on these national tests. However, a closer look shows that low-spending Florida continues to trail far behind Kansas on many measures of student success.

First, it is important to note that NAEP does not test all students in a state. NAEP tests only a statistical sampling of students and only at two grade levels (fourth and eighth) in two subjects (reading and math) every other year. NAEP provides a "scale score" for each state, and also reports the percent of students at various benchmark levels: below basic, at basic, at proficient and at advanced. For a description of limitations and cautions related to NAEP as identified by the federal evaluation team, see KASB Research Specialist Ted Carter's recent blog post here.

For 2017, Kansas actually outscored Florida for all students, with 76.4 percent of students at basic or higher and 38.2 percent at proficient or higher compared to 71.0 percent and 32.3 percent, respectively, in Florida. However, Florida has a far higher percentage of low income students than Kansas. For students eligible for free or reduced meals, 69.0 percent of Floridians scored at basic or above and 27.2 percent were at proficient, compared to 64.1 percent and 22.9 percent of Kansans, respectively. (Source: Kansas Association of School Boards analysis of NAEP data.)

Unfortunately for Florida, students do not graduate and go to college from fourth or eighth grade, and the state does not fare nearly as well in other measures. For example, Florida lags behind Kansas for all students in the four-year adjusted cohort graduation rate, 80.7 to 85.7 percent; for low income students 74.4 to 77.5 percent, for Limited English Proficiency students 60.0 to 77.4 percent, and students with disabilities by the same rates. (Source: National Center for Education Statistics, Public High School 4-Year Adjusted Cohort Graduation Rate.)

Graduation is vital when at least 90 percent of future jobs are expected to require a high school diploma or more and most students will not be able to enter college or technical training programs without it.

What about preparing for college? Kansas and Florida both tested the same percentage of students last year using the ACT test (73 percent), but in Kansas 29 percent of students met all four college ready benchmarks, compared to just 21 percent in Florida. Kansas schools are sometimes criticized because less than one in three students score college ready on all ACT tests; in Florida it is barely one in five. ACT does not break out results by income level, but Kansas also outperformed by every ethnic/racial subgroup except Hispanics. (Source: 2017 ACT State Briefing and Profile Reports)

Better preparing students for college is critical because almost all job and income growth is in careers requiring education beyond high school.

Finally, Florida trails Kansas in every measure of educational attainment by young adults (aged 18-24). In Kansas, 12.5 percent of this age group has not completed high school or the equivalent; in Florida, it is 15.5 percent. In Kansas, 48.5 percent of young adults have some college education, one- or two-year certificate or an associate's degree; in Florida the percentage is 45 percent. In Kansas 10.3 percent of 18-24-year-olds have a four-year degree compared to 9.0 percent in Florida. (Source: American Community Survey, Educational Attainment 2016 one-year estimates)

Higher levels of educational attainment results in higher earnings and lower unemployment rates, qualifying students for higher paying jobs and attracting employers who need these skills.

Why is there such a gap between Florida NAEP scores and other educational indicators? First, it is likely that the additional spending over the past several years has made an impact on younger students. The Governor of Florida, Republican Rick Scott, has credited additional spending on education for rising NAEP scores. Focusing resources on preparing students for standardized tests may improve that measure, but apparently Florida is not yet providing the support or effectively implementing strategies to help prepare students more broadly.

Kansans participating in community forums conducted by the Kansas State Board of Education overwhelming supported a broader definition of academic success than standardized test scores.

The question is this: would Kansans trade higher scores for low income students at fourth and eighth grade and spending about $2,200 less per pupil for doing worse on every other major measure of preparing students to be successful after high school?

KASB will release its updated “Comparing Kansas” Report on educational outcomes and funding this summer. Past editions have found that every state exceeding Kansas across all measures spends more than Kansas. Recent academic studies have found a strong positive correlation between funding and student success. So did the most recent education cost study commissioned by the Kansas Legislature.

Noted above is the fact that Florida has more low-income students than Kansas. Some have suggested that Florida gets better educational results than Kansas while spending less money. We've seen that isn't true when looking at a broader range of outcomes. But it is also argued that spending less on education and other public services boosts a state's economy. As a low-tax, low-spending, zero income tax state, Florida should also be a model for economic prosperity.

It turns out that is not the case, either. Florida trails Kansas in per capita income, $46,858 to $47,600 in Kansas. Florida has a higher unemployment rate than Kansas, 3.9 percent to 3.4 percent (after Kansas raised income tax rates last year). Florida has a higher poverty rate for all residents, 14.7 percent compared to 12.1 percent in Kansas, and a much higher poverty rate for children under 18, 21.0 percent to 14.1 percent. (Source: Bureau of Economic Analysis, State Personal Income; Bureau of Labor Statistics, State Unemployment Rates; American Community Survey Factfinder.)

Florida has made solid gains on one national test, but when looking at all other student achievement measures, Kansas schools put students in a much better position to succeed. Increased funding from the Legislature will help them continue to do so.

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