Since 1994, when the state took over a larger share of school finance to lower property taxes and provide more equitable funding, Kansas has spent about 50 percent of the state general funding budget on K-12 state aid. That will continue next year, when school district aid will account for 51.2 percent of total SGF expenditures next year, down from 52.6 percent in the past two years.
The Legislature approved $4.17 billion in K-12 state aid from SFG expenditures of $8.14 billion.
The latest data is part of the Kansas Budget Division’s Fiscal Year 2022 Comparison Report, which compares the Governor’s budget proposals from the beginning of the Legislative session with appropriations actually approved.
Since Kansas phased in a new school finance system between 1992 and 1994, school funding has consistently averaged about 50 percent of the state general fund. This means a larger share of the state budget goes to K-12 schools, but it also means less reliance on local property taxes. Kansas provides a higher share of school funding from state sources than most other states, even though total school funding in Kansas is below the U.S. average.
Although the state has been increasing aid for school budgets as part of a six-year plan to settle the Gannon school finance case, the major school finance formula programs addressed by Gannon – base state aid and student weightings, special education aid, and equalization aid for local option budgets, bond and interest payments and capital outlay – have actually been declining compared to the SGF. These and most other aid programs dropped from just under 50 percent of SGF spending in 2002 to 44.3 percent in 2022.
That decline has been made up by funding for the School group of the Kansas Public Employees Retirement System, which increased from 2 percent of SGF spending in 2002 to an average of about 7 percent in 2020, 2021, and 2022. Higher employer contributions are partly due to the funding plan, but this increase is also partly due to past underfunding of the system, which has required higher annual contributions.
This means KPERS funding over the past two decades was lower than necessary to cover actuarial costs and required annual contributions are now higher to make up the past underfunding. Unlike other school district aid programs, these funds simply “pass-through” school district budgets and have no impact on school operations.
(The KPERS School group includes contributions for some non-school district employers, such as community and technical colleges that previously were under the State Board of Education. Since 2015, the non-USD group has been appropriated separately, but for consistency, these funds have been included in the total for school aid.)
Governor Laura Kelly has proposed “re-amortizing” the KPERS school group, which would basically extend the time to fully fund the system’s costs. Such a move would reduce annual contributions to the system, and lower the total spent on K-12 education. However, Legislators have so far rejected this plan, which would add to the long-term cost of the KPERS system (the state would pay less per year, but more over a longer period of time).
These amounts do not include all state spending or all school district funding. The approved state budget for all funds is $21.5 billion for Fiscal Year 2020. A large portion of this funding is federal aid. KASB estimates that total school district spending next year will be nearly $7.9 billion when including federal aid, local revenues, and state funding that is not part of the state general fund. The largest school aid program not included in the state general fund is revenue from the 20-mill statewide levy, estimated next year at $750 million. These funds are collected at the local level and send to the state, then redistributed to school districts as part of state foundation aid.
Qualifying districts also receive over $200 million in bond and interest state aid. These funds are directly transferred from state general fund revenues, rather than appropriated as an expenditure from the state general fund.
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