Kansas Legislative Research Department January 22, 2018

MINUTES

SPECIAL COMMITTEE ON A COMPREHENSIVE REPSONSE TO THE SCHOOL FINANCE DECISION

December 18-19, 2017 Room 112-N — Statehouse

Members Present Representative , Chairperson Senator Molly Baumgardner, Vice-chairperson Senator Jim Denning Senator Anthony Hensley Senator Carolyn McGinn Senator Rick Wilborn Representative Larry Campbell Representative Steven Johnson Representative Ed Trimmer Representative Representative

Staff Present Lauren Mendoza, Kansas Legislative Research Department J.G. Scott, Kansas Legislative Research Department John Hess, Kansas Legislative Research Department Edward Penner, Kansas Legislative Research Department Jason Long, Office of Revisor of Statutes Tamera Lawrence, Office of Revisor of Statutes Nick Myers, Office of Revisor of Statutes David Wiese, Office of Revisor of Statutes Scott Wells, Office of Revisor of Statutes Jill Wolters, Office of Revisor of Statutes Natalie Scott, Office of Revisor of Statutes Zach Fridell, Office of Revisor of Statutes Scott Frank, Legislative Post Auditor Connie Burns, Committee Assistant

Conferees Dale Dennis, Division of Fiscal and Administrative Services, Kansas Department of Education Arthur S. Chalmers, Attorney for the State of Kansas in Gannon v. State Keith Bradshaw, Kansas Department of Corrections Stephanie Bunten, Kansas Judicial Branch Dan Thimesch, Kansas Department of Health and Environment Georgianna Correll, Kansas Department for Aging and Disability Services Gina Meier-Hummel, Acting Secretary for Children and Families Blake Flanders, Kansas Board of Regents Derek Schmidt, Attorney General

Others Attending See attached lists.

Monday, December 18 Morning Session

Chairperson Finch called the meeting to order and welcomed the Committee.

Presentation of Information Requested Related to Equity Issues

Edward Penner, Kansas Legislative Research Department (KLRD), summarized legislative history of the local option budget (LOB) cap and provided information on the process used by school districts pursuing LOB authority of 33 percent (Attachment 1):

● In 1992, the School District Finance and Quality Performance Act (SDFQPA) provided for a maximum LOB of 25 percent of a school district’s state financial aid (SFA) and originally required the maximum percentage of LOB to be decreased in the future by the percentage increase in base state aid per pupil (BSAPP).

● In 1995, legislation eliminated the provision reducing the LOB cap based on future growth of BSAPP.

● In 2005, the Legislature increased the LOB cap to 27 percent of SFA for school year 2005-2006, 29 percent of SFA for school year 2006-2007, and 30 percent for school year 2007-2008.

● In 2006, legislation allowed LOBs to reach 30 percent in school year 2006-2007 and 31 percent in school year 2007-2008 and all years thereafter. Any school district wishing to adopt an LOB in excess of 30 percent was required to receive approval of the electorate of the district at an election.

● In 2009, the Legislature allowed the LOB authority of school districts to be calculated using a BSAPP of $4,433 for any year in which the actual BSAPP was lower than $4,433 and allowed school districts to calculate their LOB authority using the greater of the special education aid (as a component of SFA) they had received for school year 2008-2009 or the current school year.

● In 2014, legislation enacted allowed the LOB authority of school districts to be calculated using a BSAPP of $4,490 for school years 2014-2015 and 2015-2016, and would return to $4,433 for school year 2016-2017 and all years thereafter.

Kansas Legislative Research Department 2 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 This legislation also excluded virtual school state aid from SFA for the purposes of calculating LOB authority and provided that any school district with an LOB in excess of 30 percent could take school board action to adopt an LOB of up to 33 percent for school year 2014-2015, but was required to conduct a mail-ballot election in order to adopt an LOB in excess of 31 percent for any school year thereafter.

● In 2015, the Legislature changed the LOB cap calculation as part of the legislation repealing the SDFQPA. LOBs were no longer capped as a percent of SFA, but rather by a district’s school year 2014-2015 LOB, with one exception; if a school district successfully conducted a mail-ballot election prior to July 1, 2015, it could receive LOB authority up to 33 percent of its SFA for school year 2014-2015.

● In 2017, SB 19 allowed the $4,490 BASE amount to increase with inflation beginning in school year 2019-2020. All districts are capped at 33 percent of the district’s total foundation aid (TFA), the statutory successor to SFA, but any district that has not previously adopted an LOB in excess of 30 percent that wishes to do so is subject to a protest petition by the electorate of the school district.

Of the 38 school districts with authority to adopt an LOB up to 33 percent of TFA immediately upon passage of SB 19, all 38 school districts received this authority via the successful passage of a mail-ballot election prior to the beginning of school year 2015-2016. The Kansas Department of Education (KSDE) provided a chart detailing the time and manner in which the 38 school districts received authority to adopt an LOB of 33 percent.

Mr. Penner also provided a table in response to the Committee’s request on what it would cost the State if every school district went to 33 percent. In order to get every school district to 33 percent, a total of $82.2 million would have to be added to the LOB statewide. All 286 school districts are reflected (Attachment 2).

Dale Dennis, Deputy Commissioner, Division of Fiscal and Administrative Service, KSDE, provided requested related information related to equity issues:

● Capital Outlay Fund cash balances (Attachment 3);

● At-Risk Pupil Assistance Program Guidelines for 2017-2018, which define an at- risk student and what criteria identify an at-risk student (Attachment 4); and

● The cost for every school district to vote on increasing its LOB, which would be approximately $3,050,000 (Attachment 5).

Presentation of Information Requested Related to Adequacy Issues

In response to the Committee request on which other states had adequacy studies conducted, Mr. Penner provided a document titled “A Comprehensive Review of State Adequacy Studies Since 2003” prepared for the Maryland State Department of Education (Attachment 6).

Kansas Legislative Research Department 3 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 Of the 39 states that have conducted adequacy studies since 2003, between 80 to 90 percent have not implemented the findings. The four broadly used methods of cost analysis are Successful Schools/Districts, Cost Function, Professional Judgment, and Evidence-Based.

The Committee asked about the cost and manpower required to do another cost analysis. Scott Frank, Legislative Division of Post Audit (LPA), stated it could be done in-house at no additional cost by three staff over the course of five months. The Committee inquired how many school districts use block scheduling. Mr. Frank stated that information was not available. The Chairperson asked Mr. Frank what the cost and time frame would be to do a blended cost analysis and using more than one methodology. Mr. Frank said it would double the time and manpower.

Mr. Penner also addressed the difference in the figures included in the Court’s analysis, explaining the difference is with the starting points. The Committee requested additional information: a comparison on the differences between the plaintiffs‘, the three-judge panel’s, and the Kansas Board of Education’s numbers.

Mr. Dennis provided requested information related to adequacy issues, and referred to a legislator’s request for information on the number of school districts that had taken advantage of the expanded use of capital outlay funds. A memorandum prepared by KSDE in response to this request was provided at the request of the Chairperson (Attachment 7). The information provided concerning adequacy issues included:

● The amount of fees assessed by districts that offered all-day kindergarten in the 2016-2017 school year above the regular enrollment/textbook/technology/activity fees for students enrolled in all-day kindergarten (Attachment 8). The Committee requested additional information tying the dollar savings realized with SB 19’s change to counting kindergarten students as 1.0 full-time-equivalent (FTE), excluding the students who receive free lunch;

● The headcount kindergarten enrollment for school years 2016-2017 and 2017- 2018 (Attachment 9);

● Summaries of the Parents as Teachers and Four-Year-Old At-Risk programs, which discuss the purpose, practices, and outcomes for each program (Attachment 10); and

● At-Risk Fund balances for school years 2014-2015, 2015-2016, 2016-2017, and 2017-2018 (Attachment 11).

The Chairperson recessed the Committee and reconvened at 10:30 a.m.

Discussion of Gannon v. State of Kansas Litigation

Arthur S. Chalmers, Attorney for the State of Kansas in Gannon v. State, addressed questions and concerns from the Committee. Concerning miscellaneous adequacy issues, Mr. Chalmers noted, on pages 46 through 47 of the opinion, the Court appears to agree there is some merit to early intervention and all-day kindergarten; however, the State has not met its

Kansas Legislative Research Department 4 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 burden in terms of showing how those programs really benefit adequacy. Asked to clarify to the Committee how those issues were presented, whether in briefing or oral arguments, Mr. Chalmers stated he felt the Court recognized that the State was addressing adequacy issues, for example, in all-day kindergarten, however, the Court found that 91 percent of school districts were already getting all-day kindergarten, and was unsure of what the new money was being used for. The Court said the State needed to show its work by explaining why, how, and how much achievement will improve at the funding level provided. The Court did acknowledge that freeing up moneys for all-day kindergarten would make money available for other purposes.

The Committee asked how the State should demonstrate to the courts that any amount of money is going to lead to the outcomes the Court seems to want to see. Mr. Chalmers stated that looking back to Gannon IV on pages 916 through 917 of the decision, it is not about money, but how the dollars are spent.

In response to a question concerning whether the Legislature needs to have a new study done or use an existing study and fund to one of those levels, Mr. Chalmers agreed that to persuade the Courts may take expertise outside of the Committee and the Legislature.

Mr. Chalmers stated what the Legislature needs to do to help the State make its case is to have a funding solution, with all the Committee minutes with their attachments, by March 1, to give the State’s attorneys time to develop a response and arguments.

Presentation of Miscellaneous Information Requested

J.G. Scott, Assistant Director for Fiscal Affairs, KLRD, presented requested information on Select Programs with Services Directed towards K-12 Education (Attachment 12). About $95.0 million in services are provided to K-12 but not included in KSDE’s budget, including state and federal dollars and some grant money.

Mr. Dennis provided miscellaneous information requested by the Committee:

● A breakdown of the estimated expenditures for the next three years by size of the school district (Attachment 13);

● Estimated expenditures for teacher and administrator salary increases for the next three years (Attachment 14);

● Virtual FTE Enrollment for school years 2014-2015, 2015-2016, 2016-2017, and estimated 2017-2018 (Attachment 15);

● Out-of-state students attending Kansas school districts for school years 2014- 2015, 2015-2016, 2016-2017, and estimated 2017-2018 (Attachment 16);

● Postsecondary Progress, Kansas Assessment Scores, and Graduation Rates (Attachment 17);

● The number of students by school district that met one of the ten criteria for an at-risk student in the 2016-2017 school year (Attachment 18);

Kansas Legislative Research Department 5 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 ● The free lunch headcount in unified school districts for school years 2014-2015, 2015-2016, 2016-2017, and estimated 2017-2018 (Attachment 19);

● The number of teachers in unified school districts for school years 2014-2015, 2015-2016, 2016-2017, and estimated 2017-2018 (Attachment 20);

● The headcount enrollment for school years 2014-2015, 2015-2016, 2016-2017, and estimated 2017-2018 (Attachment 21); and

● Results of a survey conducted on how school districts would spend additional funding on approximately $200.0 million for the next three years (Attachment 22).

The meeting recessed until 1:30 p.m.

Afternoon Session

Chairperson Finch reconvened the meeting at 1:30 p.m.

Presentation on Revenue Adjustment Scenarios

Chris Courtwright, Principal Economist, KLRD, provided fiscal notes for selected tax law changes on property, individual, and sales tax (Attachment 23). Any increases would have to be evaluated on the impact on the economy. Charts reflected changes in revenue based on a sales/use increase from 6.5 percent to 6.6 percent, food tax reduction from 6.5 percent to 6.4 percent, Mill Levy tax increase from 20 to 21 mills, repeal of the 20k Homestead tax exemption, a statewide property tax increase on full tax base 1.5 to 2.5 mills, and Individual Income Tax increase for 2018 of 0.1 percent in all three tax brackets. The Chairperson clarified that the Committee is not recommending any legislation or action, but exploring all options to obtain information to present to the full Legislature.

Mr. Courtwright addressed questions and concerns from the Committee on motor vehicle taxes as options to look at with the Department of Revenue. The Committee requested information on how many dollars were lost when the Mill Levy went to 20 mills in 1997, and changes to LOB in the same time frame.

Presentation on Budget Adjustment Scenarios

Mr. Scott presented the State General Fund (SGF) Profile FY 2016-FY 2022 (Attachment 24). Table 1 reflects an additional 200.0 million added to the first year; table 2 reflects 300.0 million the first year and an additional 300.0 million the second year; and tables 3 through 5 reflect 200.0 million, 400.0 million, and 600.0 million of additional dollars. Revenue would have to increase by 300.0 million dollars to make the Department of Transportation transfer, instead of those funds going to the SGF.

Kansas Legislative Research Department 6 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 Presentation on Impact of Budget Reductions to Select State Agencies

Keith Bradshaw, Contract Programs and Finance Executive Director, Kansas Department of Corrections (KDOC), presented information on the impact of an 18 percent reduction on the Kansas Department of Corrections (Attachment 25). The KDOC SGF budget for FY 2019 is $364.4 million. An 18 percent reduction would be $65.6 million. KDOC’s budget is largely driven by personnel costs and the offender population. Operation of adult correctional facilities account for 46 percent of the agency’s budget, inmate health care and food services contracts is 23.4 percent, and KDOC supervision of offenders on post-release in the community and supervision of probationers by county-operated and State-funded community corrections agencies accounts for 8.5 percent. A reduction of this magnitude would require a reduction in offender population through a change in sentencing laws and the early release of offenders.

KDOC prepared three possible options for consideration:

● Option 1 would allow KDOC to close three correctional facilities and to make reductions to the food service, health care, and offender program contracts consistent with the reduction in populations;

● Option 2 would allow KDOC to close two correctional facilities and make corresponding reductions in the contracts discussed in Option 1; the remaining cuts would come from the elimination of all community corrections. As of November 2017, the Average Daily Population for community corrections was 8,131 offenders, of which 58.9 percent were assessed as being moderately high to high risk of offending; and

● Option 3 would allow KDOC to close one correctional facility plus units at other facilities and eliminate $20.3 million in community corrections funding as discussed in Option 2. The remainder would come from the elimination of parole services, the elimination of all reentry services, and the elimination of juvenile prevention grants. These additional reductions would result in approximately 5,600 offenders who currently are on post-release supervision being left unsupervised, the elimination of programs and services that help facilitate the successful reintegration of offenders released from prison back into society, and elimination of programs that target at-risk behavior and prevent youth from entering the juvenile justice system.

Stephanie Bunten, Chief Financial Officer, Office of Judicial Administration, Kansas Judicial Branch, presented information on the impact of an 18 percent reduction on the Kansas Judicial Branch (Attachment 26). Reductions in Judicial Branch appropriations would come from employees’ salaries, which would mean approximately 70 working days (or more than three months) of court closures across the state. This number could be affected by turnover savings and fluctuating docket fee revenues. Layoffs or hiring freezes are not options because the Judicial Branch already has approximately 120 vacancies due to previous years’ budget cuts and high employee turnover.

Dan Thimesch, Chief Financial Officer, Kansas Department of Health and Environment, (KDHE), presented information on the impact of an 18 percent reduction on the KDHE (Attachment 27) and indicated a review of all relevant state and federal statutes and regulations would be necessary before considering any aspects of this testimony. Reducing SGF funding could require one or more of the following: statutory changes, regulatory or policy changes, waivers amendments, and CMS approval. Further, any contemplated reductions in SGF funding

Kansas Legislative Research Department 7 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 should consider state match on federal funds and avoid, to the extent possible, loss of such SGF funding. Mr. Thimesch reviewed the impact to specific programs:

● Administration – The $645,009 reduction is equivalent to 25 percent of the SGF portion of salaries and wages inclusive of the Office of the Secretary, Human Resources, Public Information, Information Technology, Legal and Management and Budget, and the impact could be estimated at 24.5 of the 98 funded positions. The agency could not maintain adequate direction, oversight, compliance, program support, reporting, and analysis with such cuts;

● Division of Public Health (DoPH) – A reduction in SGF funding would eliminate or significantly reduce programs and services delivered to Kansas citizens, and the related Public Health benefits derived from the impacted programs. An impact analysis on the State’s Health Care system should be carefully considered;

● Division of Environment – The following programs in the Division of Environment would be reduced or terminated if the 18 percent reduction to SGF funding is enacted: parasite testing and chlamydia/gonorrhea testing, Spill Response Program, Asbestos Program, and concentrated animal feeding operations. A total of ten FTE positions would be lost in these programs;

● Division of Health Care Finance – Reductions in Medicaid would create the inability to purchase medically necessary services for eligible consumers and provide access to treatment programs and preventative services. If the CHIP program is not funded, about 39,000 children would be without health insurance. Reductions in Administrative (Medicaid and State Employee Health Benefits) will impact program management, adherence to state and federal regulations, ability to assess fiscal impact, and more.

Georgianna Correll, Budget Director, Financial and Information Services Commission, Kansas Department for Aging and Disability Services (KDADS), presented information on the impact of an 18 percent reduction on the KDADS (Attachment 28). She stated the reduction would result in at least an 18 percent reduction to all programs funded by the State, including, but not limited to, the Senior Care Act, Intellectual/Developmentally Disabled State Aid Services, and mental health grants and services. Many of the State-funded programs, services, grants, and contracts are funded partially by the federal government and is contingent on the State’s participation. Not only would the State’s SGF funding be reduced for those programs and services, but the federal funding would be reduced. The services and programs impacted include the administration of the Community Developmental Disability Organization; the Aging and Disability Resource Center, which screens individuals for three of the Medicaid waivers; and Meals on Wheels and other nutrition programs for older adults. The reduction would impact KanCare/Medicaid programs and services by causing a reduction in provider rates and numbers of individuals served both in long-term care and on the seven Medicaid disability waivers, causing accumulation of a wait list for all Home and Community Based Services waivers and could result in fewer providers being willing to care for KanCare participants. Budget cuts would force staff reductions that would impact oversight of the agency’s behavioral health and long- term care services.

Reductions would also impact KDADS-administered state hospitals and institutions. The Kansas Neurological Institute would be reduced by $1.7 million. 44.0 FTEs would be required to be cut/unfunded; three homes would have to be closed and consolidated, as well as decrease

Kansas Legislative Research Department 8 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 the staffing ratio available to serve these individuals; and 23 residents would be impacted by the closure/consolidation.

At Larned State Hospital, 111.0 FTEs and 8.0 non-FTEs would be cut/unfunded and one unit from the State Security Program (KDOC inmates) would have to be closed, impacting 30 inmates. Two units from the Psychiatric Services Program would be closed, with 60 residents impacted. One reintegration facility from the Sexual Predator Treatment Program would have to close, with 16 residents impacted. Contract services currently provided for patient care, safety, and treatment would be drastically reduced.

At Osawatomie State Hospital (OSH), 30.0 FTEs would be cut/unfunded and 13-23 beds would be eliminated, based on the elimination on the licensed (OSH) or certified side (Adair Acute Care (AAC)). The reduction would require either 75 percent of one unit to be closed on the licensed side or 42 percent of one unit to be closed on the certified AAC side.

At Parsons State Hospital (PSH), 64.0 FTEs would be cut/unfunded, four cottages would be closed, and the consolidation of remaining residents would put the residents in potentially threatening living environments due to overcrowding and the subsequent inability to maintain the structure necessary to keep the most dangerous individuals from hurting themselves or others. Seventy-five residents would be moved/transferred against the will of their parents and/or guardians to other locations.

Information was also provided on current special education services provided to school- age residents (Attachment 29).

Gina Meier-Hummel, Acting Secretary for Children and Families, Kansas Department for Children and Families (DCF), presented information on the impact of an 18 percent reduction on the DCF (Attachment 30). DCF’s budget is $261.0 million from the SGF and $623.0 million from all funds. An 18 percent reduction in SGF funding would be $47.0 million, with the all funds reduction dependent on the specific programs that would be reduced or eliminated. DCF would not recommend the cuts identified, which the agency believes would have a devastating effect on DCF clients. The potential cuts are limited or influenced by a number of factors: some programs are mandatory, some contain SGF moneys required to meet federal maintenance of effort (MOE) requirements, and some require SGF moneys to meet federal matching requirements. 80 percent of SGF moneys in the agency is spent on foster care, adoption assistance, and salaries. DCF identified 22 actions that would be required to address this loss of funding, including: closure of 8 DCF service centers; elimination of Family/Community Services prevention grants in Prevention and Protection Services (PPS), the Economic and Employment Services Food Distribution program, the Head Start Collaboration program, Child Care and Development Fund matching, the Faith-Based Community Initiatives program, the Human Trafficking program, Adult Protective Services grants, the Foster Care Federal Disability Advocacy contract, Foster Care and Family Services grants to 4 tribes, and the Chafee Independent Living program; elimination of SGF moneys in the Family Preservation Program; reinstatement of the 4.0 percent collection fee for Child Support Services; reduction of foster care contracts by 12.0 percent, which could impact services and placement and result in longer stays in foster care; reduction to PPS Family Services prevention assistance not needed to meet federal matching requirements; reduction of funding to other operating expenses, strategic development, vocational rehabilitation, and information technology; increase in salary shrinkage; and discontinuation of Adoption Support and Permanent Custodianship programs for future cases.

Kansas Legislative Research Department 9 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 Ms. Meier-Hummel stated, as the list demonstrates, a cut this deep could not be implemented without having a significantly negative impact on Kansas’ most vulnerable citizens.

Blake Flanders, President and CEO, Kansas Board of Regents, presented information on the impact of an 18 percent reduction (Attachment 31). The 2017 Legislature appropriated a total of $760.0 million for postsecondary education for FY 2019. An 18 percent reduction would remove over $136.0 million from the system. The reduction would have an impact on three areas: Kansans’ access to postsecondary education; Kansas employers’ workforce needs; and the system’s ability to compete for students in a regional market in nearby states. Mr. Flanders will provide additional information on the universities, how the 18 percent reduction would be broken out by university, and what the increase would be on tuition. The Committee also requested cost information on developmental classes and instructors at community colleges to get students ready for credited classes.

Mr. Courtwright provided the requested information concerning dollars lost when the Mill Levy went to 20 mills in 1997, and changes to the LOB in the same time frame (Attachment 32).

The Committee was adjourned at 3:28 pm.

Tuesday, December 19 Morning Session

Chairperson Finch called the meeting to order at 9:00 a.m.

Presentation on the History of Article 6 of the Kansas Constitution

Nick Myers, Assistant Revisor of Statutes, provided a history of the education article of the Kansas Constitution (Attachment 33). The school finance litigation has focused on the constitutional provisions contained in Article 6 and has specifically focused on the language in Article 6 Sec. 6(b).The current provisions came from a 1966 constitutional amendment that was passed by the Legislature during the 1966 Special Session and later ratified by the people in the 1966 November general election. The provisions in Article 6 have not changed since the 1966 amendment. When Kansas was admitted as the 34th state in 1861, the “Wyandotte Constitution” contained nine education sections in Article 6 that were generally “designed to provide for the establishment of schools during pioneer times.” The nine sections remained unchanged for a little over a century, and became a prominent focus of the Legislature, particularly after World War II.

The Kansas Legislative Council’s (today’s Legislative Coordinating Council) report recommended Section 6 should add new provisions on school finance and the report noted such language was recommended by the Education Advisory Committee and intended to enable the State to finance public education. Not all the members of the Legislative Council thought the finance provision was necessary or desirable, and some members felt the Legislature already had the authority to enact the types of legislation being proposed. Mr. Myers noted the differences between the Council’s recommendation and the current language of Article 6 Sec. 6(b) are evident when comparing the two, and highlighted a table in his testimony doing just that. In the 1966 Special Session, three concurrent resolutions making amendments to Article 6 were introduced; of the three, HCR 505 was the concurrent resolution that was ultimately adopted by the Legislature and submitted to and approved by the people of Kansas.

Kansas Legislative Research Department 10 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 Mr. Myers addressed questions and concerns from the Committee, and stated he will further investigate for additional minutes from the 1966 Special Session.

Presentation on Legislation Addressing School Finance Litigation

Jason Long, Senior Assistant Revisor of Statutes, provided the Committee a summary of prior legislation addressing school finance litigation (Attachment 34). Since 1992, when the SDFQPA was passed, the has introduced, considered, and passed various pieces of legislation to address school finance litigation. School finance litigation generally has focused on the Legislature’s obligation to fund public K-12 education under Article 6, Sec. 6(b). The legislation can be classified as legislation barring the courts from exercising jurisdiction over claims of Article 6 violations; modifying the rules and practices of civil procedure as they apply to claims of Article 6 violations; prohibiting the expenditure of public moneys to finance the litigation of claims of Article 6 violations; redefining the phrase “make suitable provision for finance of the educational interests of the state”; granting the constitutional power of appropriation exclusively to the Legislature; and prohibiting the closure of schools as a remedy for violations of Article 6. The memorandum provides a brief overview of each category including examples of such legislation. The attached table lists examples of bills or resolutions introduced since 1992 that have addressed school finance litigation. Mr. Long addressed questions and concerns from the Committee.

Presentation on Other States Constitutional Provisions Concerning School Finance

Tamera Lawrence, Assistant Revisor of Statutes, provided the Committee a briefing on the type of language states use in their constitution to address K-12 public education (Attachment 35), including a chart with each state’s constitutional provisions that provide for a K-12 public school system and, if applicable, a funding requirement for such public school system. Several states have no funding requirement for a public school system in their constitutions. The memorandum does not address litigation based on the constitutional education provisions or how each state’s court has interpreted such provisions. All 50 state constitutions have an education provision, but the obligations vary based on the specific language of the education provision, as do their state court’s interpretation of such language. No two states have the exact same language in their educational provisions. The most basic level of responsibility placed on state legislatures is the establishment of a system of public schools. Some states place a higher level of funding responsibility on their state legislature than merely establishing a school fund, and a few states provide a specific spending requirement.

The Chairperson recessed the Committee, and reconvened the Committee at 10:30 a.m.

Presentation on School Finance Litigation Trends and Gannon Litigation

Attorney General Derek Schmidt provided the Committee a briefing on School Finance Litigation Trends and Gannon Litigation (Attachment 36). The Attorney General encouraged the Legislature to pass whatever curative legislation intended by the beginning of March to account for time for the bill to be enrolled and considered by the Governor. Then the State’s litigation team will have ample time to properly consult with interested parties, gather the necessary information from the legislative record, and brief the State’s defense prior to the deadline ordered by the Supreme Court.

Kansas Legislative Research Department 11 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017 The Attorney General brought up the following points for the Legislature to consider: who may bring a constitutional challenge to a school funding law; what court should the challenge be brought in; what duties are included in the “suitable” provision for school funding that the Kansas Constitution requires; are “equity” and “adequacy” really the components; are those the only components or are there others not yet identified by ligation; what are the appropriate tests to measure suitability; should there be constitutional time lines on school finance litigation; and who should be allowed/required to participate in school finance litigation.

The Attorney General suggested it is time for a thoughtful, global discussion in our state about whether Article 6, Sec. 6, as it is currently written and as it has been interpreted over the past 50 years, truly reflects how the People of Kansas intend these important decisions about school funding to be made. He stated his purpose is to suggest that Kansas would be better off if the people were allowed to either reaffirm that the system of determining school funding is working as intended, or to determine that modifications and clarifications are needed. Only the Legislature can ask the People what they prefer.

The Attorney General addressed questions and concerns from the Committee on past legislation, court cases, and a multiple year approach.

Preliminary Committee Comments and Report Recommendations

The Committee declined to make recommendations; however, it commends to the Legislature the testimony provided to the Committee, the minutes of each meeting, and this report and its appendices. Additionally, Chairperson Finch allowed members to request information to be provided as appendices to this report.

Noting the Committee had not discussed potential cost savings related to merger or consolidation of school districts, Senator Wilborn requested information on that topic be provided. Representative Campbell asked that an analysis of the Augenblick and Myers cost study done by Caleb Stegell for the Kansas Policy Institute be included with the report. (Representative Campbell later withdrew this request.) Senator McGinn asked for a calculation of expenditures and services provided by other state agencies to K-12 education that have been reduced or eliminated since 2009. Senator Baumgardner asked for LPA’s recent performance audit titled “K-12 Education: Evaluating Transportation Services Funding” to be attached.

The Chairperson thanked the Committee members, and the Revisors and Research Staff for the great job done in such short time frame.

The meeting was adjourned at 12:02 p.m.

Prepared by Connie Burns Edited by Lauren Mendoza

Approved by the Committee on:

January 19, 2018 (Date)

Kansas Legislative Research Department 12 Special Committee Comprehensive Response to the School Finance Decision Minutes for December 18-19, 2017