“USD 428 is fortunate that it hasn’t had to make cuts,” said Khris Thexton, USD 428 Director of Business. “We’ve been in a good financial situation thanks to the administration and the school board managing money wisely.”
It’s a habit that will continue to serve the district well, because for the 2014-2015 school year, the district will receive less funding from the state. About $61,000 less, due to adjustments legislators made to a formula that takes into account the extra money districts spend to help at-risk kids and those that have a harder time learning than their peers.
In March, the state was tasked with ensuring education is properly funded and that each public school district can provide an equal educational opportunity. The legislature did this by agreeing to fully fund their piece of the education finance pie. But they changed the size of the pie.
Money from the state goes into a school district’s general fund. It is awarded in the form of Base State Aid per pupil. That’s $3,835 for the current school year. The state has agreed to increase that by $16 for the 2014-2015 school year, increasing the general fund by $62,000. Sounds good, but the state giveth, and the state taketh away.
To that BSA, the state adds additional funding for each student that is considered “at risk.” In Kansas, that means qualifying for free or reduced lunch. The state will pay out less per at-risk student now, which for USD 428, means a reduction of $95,000.
For students that do not qualify for free or reduced lunch, but who still struggle academically, the state included a modifier to BSA called “non-proficient.” That has been cut too, which locally means another $28,000 gone, Thexton said.
Still, the district will continue to put a priority on helping kids learn, he said.
“We want to keep any kind of reduction in funding as far away from the kids as possible,” Thexton said. “We’re going to make sure our kids have what they need to be successful. That’s our goal.”
District has wiggle room
Thexton came to the district a year ago in June. He has seen the financial difficulties smaller, poorly funded districts in other rural Kansas counties have endured since the state opted to stop fully funding public schools as it was ordered to in the Montoy v. State of Kansas court case that preceded the recent Ganon case.
The verdict in the Montoy case required the state to give money to districts to make up for inadequate funding in the past. While some districts used the money to upgrade programs and facilities, USD 428 put most of the money into savings in the form of cash balances, he said.
This allowed the district to avoid floating bond issues to fund needed improvements or additions like the new gymnasium at Great Bend Middle School.
Prior to 2009, for every dollar raised for schools, USD 428 provided 46 cents, and the state was obligated to provide 54 cents. But when the economy experienced a recession, the state began funding less than 100 percent of that 54 cents.
That required districts to increase the amount of funding received locally in order to balance their budgets. Here, because of the cash balances, the district was able to keep these Local Option Budget increases minimal.
Many poorer districts have already capped out their LOB authority, which provides local funding to unified school districts. But Great Bend’s public schools still have plenty of room to move. Thexton said the district has the authority to increase the LOB by up to four mills, which is nearly unheard of in the state.
How the state shifts the burden
A district is limited to collecting only 30 percent of funding from local taxpayers, Thexton said. So, if the state shrinks the size of the general fund pie, that means the amount of money a district can ask for from local taxpayers shrinks too.
In order to offset this, the state set the amount districts can base their LOB on at $4,430 for the next two years. After that, it’s up to the next set of legislators to decide.
This offset means that while local taxpayers may see an initial slight drop in property taxes, if schools need to collect more money locally to make ends meet, they can, and many will.
Thexton said the district will look in several areas to adjust the budget to make up for the expected decreases.
Luckily, Great Bend has experienced increasing valuations in recent years, which has helped to keep taxes level, he said. Currently, 1 mill will raise $150,000 for the school district. With a net loss to USD 428’s general fund, Thexton anticipates the shortfall can be made up from a combination of savings and incremental increases to LOB.
“It’s easier to bite off a quarter mill or a half a mill rather than hitting everyone with a two or three mill increase,” Thexton said.
Taxpayers won’t likely see a property tax reduction in gReat Bend, because the district is losing money, but the district will try to make it up with cash on hand.
“We aren’t intending to put the burden on local taxpayers, because we’re all local taxpayers,”he said. “We want to offer the best education possible with the money we have while being the best stewards we can be.”