Following wholesale reforms in 1992, the Kansas Legislature continued to wrestle with local school finance almost yearly – even after a half-dozen warnings from the Kansas Supreme Court about chronic underfunding. In 2017, after a disastrous, four-year manhandling by Gov. Sam Brownback, school finance was reset; Brownback left office and a handful of sensible Republicans had been elected to the Kansas House.
The heat source in this issue is always double-barreled – one, the property tax; the other, the cost of rural schools.
When the state began to provide substantial, long-term aid to local schools in the 1990s, realists never believed that property taxes would pay the entire cost. A statewide 20-mill property tax provided the foundation. (This year, the tax generates about $750 million of the state’s $5.2 billion in local finance.) Income and sales tax revenues are added to a central aid pool. At base, state aid is apportioned according to district wealth (or poverty), and the number of students to be educated.
Topeka provides roughly 75 percent of every public school budget. The rest is generated through “supplemental” local property taxes.
The law also provides low-enrollment aid to small schools in sparsely settled communities.
Some rural districts, home to oil and gas production, great stretches of irrigated cropland and industrial feed lots, were among the state’s wealthiest. But much of that wealth was corporate and often gave the wrong impression. In many districts with outsized wealth, more than half the students met poverty guidelines for free and subsidized school meals. Corporations held wealth; the workers and their children didn’t.
Urban legislators were early and persistent critics, many of them representing neighborhoods with crowded and under-funded schools. They insisted that aid for country schools and their thin enrollments was a waste of precious resources.
Low-enrollment aid was written into the school finance reforms of 1992 to gain the support of rural legislators. Without this aid, scores of sparsely populated districts would be forced to close or merge, with devastating economic and social impact on their communities. Of the state’s 286 school districts today, more than 200 have enrollments of 1,000 or less.
The struggle for funding in an urban-dominant legislature, even with added aid for “high-enrollment” districts, provokes a simmering resentment of rural schools and calls for consolidation in one or more of its many forms.
But two factors have slowed the urban passion for rural consolidation. First, it has happened anyway. The continued withering of rural economies and populations (and tax bases) prompted consolidation of 18 school districts in central and western Kansas from 2002 through 2011. This happened with no nudging from legislators.
Second, the political muscle of urban and suburban legislative districts has grown sharply in the past decade. Six of the state’s 105 counties – Johnson, Shawnee, Wyandotte, Douglas, Leavenworth and Sedgwick – now elect two-thirds of the 40-member Senate and 125-member House of Representatives. Their share is bound to increase with reapportionment next year based on the 2020 census.
Meanwhile property taxes and state school finance remain entwined, critical to a balance of funding for the state budget in spite of the legislature’s recent attempts to disconnect them.
For one example, the legislature has expanded property tax exemptions for big business, including broader machinery and equipment exemptions for large commercial properties. The first exemptions, in 2006, have cost local government millions in tax revenues and local taxpayers millions in rate increases.
This happened at a time of increasing farmland values, although farm taxes have remained relatively unchanged. A constitutional amendment, approved in 1986, protects farmland assessments through use-value property appraisal; taxes are determined by the income derived from the land, not by its market value. (The amendment was to prevent owners from being forced to sell land simply to pay their taxes.)
But some legislators, itching to finance even greater tax cuts and new ways to pay for local schools, now consider farmland a kind of low-hanging fruit. Farmland is relatively low-taxed, given its value in proportion to the tax breaks and government subsidies secured over the years by the farm lobby; and rural Kansas no longer has the legislative power to prevent raids on its assets.
Urban and suburban legislators may soon have the muscle to unravel the Constitution’s use-value protection for farmland. Constituents and school patrons in five or six counties alone comprise nearly the majority needed to begin the effort.
Urbanites may see farmland as a new source of revenue for their schools and tax relief for their office parks and subdivisions. The issue tells us that Republican Kansas may be headed for an economy dominated by the haves and have-mores.
