Kansas Republican leaders have said they will propose reducing the statewide 20-mill school levy in the 2024 legislative session. The levy is part of how the state funds public education and without it, the Legislature would have to replace the revenue or reduce funding to districts.
What is the 20-mill levy and how does it impact school funding?
State law requires that every school district levy a 20-mill tax on property in their district to help finance public schools. This money doesn’t stay in the taxing district but rather is sent to the state to create the pool of money that funds all districts. This 20-mill levy income is combined with other revenue sources like sales and income tax to fund schools.
The amount a district actually receives from the state is determined by the weighted number of students enrolled multiplied by the base state aid per pupil. The Legislature determines the base aid. The weighting allows a student to be counted more or less than one, depending on specific circumstances. This becomes the district’s general fund budget. The amount needed to fund the per pupil aid for the current year is estimated to be $3.47 billion. The 20-mill levy is expected to raise $856 million, or about 24 percent of the total needed. The Legislature has appropriated the balance needed from other sources.
These calculations are based on estimates that regularly change. Fluctuations in enrollment and receipts from the 20-mill levy require that the Legislature make adjustments each year. If the Legislature does not add enough to make up for less revenue from the 20-mills (such as if the levy was reduced), the base per pupil amount would be reduced to fit the amount of money available.
It is important to know that the state base per pupil funding makes up only a portion of the money a district spends. Other revenue sources include state special education aid, Local Option Budgets, Federal aid, bond aid, capital outlay aid, and student fees. The state aid per pupil makes up about 40 percent of the total a district spends. The 20-mill levy covers less than 10 percent of the total spent.
Why was the 20-mill levy created and how has it changed?
The current structure of school funding was created in 1992 to provide equity among districts across the state. Because property valuation varies greatly between districts, large differences existed in funding and tax rates. The new system established a base state aid per pupil. The Local Option Budget (LOB) was created so that districts that were spending more than the new state amount per pupil would not have to cut their budgets. For all but some high-wealth districts, the new law significantly reduced property taxes. The state made up the difference by raising both income and property taxes. The K-12 state aid increased from approximately 40 percent of the state general fund budget to 50 percent, which has generally remained ever since.
However, property taxes continue to be unpopular, and the Legislature has frequently used adjustments to this statewide school levy to lessen the statewide property tax burden. Changes have included reducing the statewide 20-mill school levy and further reductions are currently being proposed. The levy began at 35 mills but was later reduced to 27 and then 20-mills. Other tweaks to property taxation have included removing the statewide levy from motor vehicles and continuing to increase the threshold on the property value to be taxed.
How do changes in the statewide mill levy affect the amount of funding that school districts receive?
The impact of a change in the mill levy depends on other policy decisions by the Legislature. In previous reductions in the levy, the Legislature has generally appropriated enough other state aid to fund the statutory base amount. Any tax cut reduces the amount of state funding available for education or other programs. When the Legislature reduced the statewide levy in the late 1990s, the per pupil base funding was not reduced. However, it increased just 7.3 percent from 1993 to 2005, while the consumer price index increased 34 percent. In response, districts increased their Local Option Budgets. Because LOB’s are partially funded by property taxes, higher LOB levies offset the reduction in the statewide levy in many districts.
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