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School funding for the Gannon plan falling behind inflation


Posted Date: 04/22/2022

School funding for the Gannon plan falling behind inflation

For the second year in a row, the increase in Kansas K-12 funding for school district general funds, local option budgets and special education aid will be less than inflation, according to projections developed for the April Consensus Revenue Estimate. 

Both the Kansas House and Senate have passed bills with funding for public education recommended by Governor Laura Kelly to implement the Gannon school plan but have not agreed on a final education funding bill. Those bills increase general state aid next year (2022-23) by $109 million and special education by $7.5 million. Local option budgets are estimated to increase by $35 million, including $16 million in additional LOB state aid. 

That would increase those programs by $151 million above the current year's total of $4.89 billion, or 3.1 percent. The new CRE estimates that the U.S. consumer price index will increase 4.55 percent for the calendar year 2022. 

If the Legislature adds $30 million to special education state aid as proposed by Governor Laura Kelly, the increase would $181 million, or 3.7 percent, still below this year’s estimated inflation rate. 

The current year (2022-22) total funding of $4.89 billion for general state aid, special education aid and estimated local option budgets is $99 million higher than the last year’s actual funding of $4.79 billion, an increase of 2.07 percent. The inflation rate for 2021 was 4.71 percent. 

The school finance plan passed by the Legislature and approved by the Kansas Supreme Court in response to the Gannon school finance lawsuit was designed to restore school district operating budgets to the 2009 level, adjusted for inflation, over a six-year period. The Legislature adopted a six-year schedule of base budget pupil increases beginning in 2018 to reach that level in 2023. However, it now appears that approved funding levels will fall short. 

General state aid, special education aid and local option budgets totaled $4.12 billion in 2009. Adjusted for inflation based on the U.S. consumer price index, that equals $5.2 billion in 2021 dollars. Actual funding in 2021 was $4.79 billion and based on inflation projections will drop to $4.68 billion in 2023, the final year of the Gannon plan phase-in, when adjusted for inflation to 2021 dollars. 

Beginning in 2024, the base amount is to be indexed to the previous three-year average increase in the consumer price index for Midwest states, which tends to be slightly lower than the national U.S. consumer price index. 

The headcount enrollment of all students (including preschool and students in daycare programs) increased from 470,316 in 2009 to 499,034 in 2020 but declined to 483,296 in 2021 during the COVID pandemic and has only recovered to 486,864. (Headcount is different from the Full-Time Equivalent enrollment used for school budgets under the school finance law.) 

Using those enrollment numbers, general fund, special education aid and LOB per pupil was $10,254 in 2009, when adjusted for inflation using the 2021 consumer price index and was $9,914 in 2021. That amount will drop to $9,608 next year based on an inflation rate of 4.55 percent. 

These funding amounts do not include other portions of school expenditures outside of the general fund, special education aid and local option budgets. Major areas not included are, state KPERS contributions, capital outlay and bond and interest expenditures, federal aid, and funding from student fees, such as school meal programs. Generally, these other funds cannot be used for regular education operating costs, including most teacher salaries. 

School districts are expected to receive a total of nearly $1.3 billion in federal COVID relief funds, spread over 2021 through 2024; however, all of this aid is scheduled to expire and is not part of ongoing operating funding. These are expected to allow total school expenditures to increase faster than inflation this year. Without these funds, total expenditures would also likely be falling behind inflation. Actual total expenditures for the fiscal year ending June 20, 2022, will not be available until next fall. 

Tables of USD expenditures from 2007-2023

 

Kansas USD expenditure graph including covid funding

 

Kansas K-12 Expenditures per pupil