Kansas Cost Study Finds that Schools Need at Least $316 Million More

Just before the start of the 2006 legislative session, the Kansas Legislative Division of Post Audit released a highly-anticipated cost study that recommended increasing foundation-level funding for 2006-2007 by at least $316 million. The study was required by school finance legislation enacted by the 2005 Legislature, which requested that Legislative Post Audit conduct “a professional cost study analysis to determine the costs of delivering the kindergarten and grades one through 12 curriculum, related services and other programs mandated by state statute in accredited schools.”

Methodology

The study used both input-based and outcomes-based approaches to estimate the cost of providing public elementary and secondary education in Kansas. The input-based approach examines the costs to school districts of delivering the curriculum, services, programs, and graduation requirements mandated by the state. The second approach estimates the costs school districts face in meeting the educational performance standards established by the Board of Education. In addition to using these approaches to provide estimates of the cost of regular K-12 education, the study also determined additional costs for educating low-income, bilingual, and special and vocational education students in districts of varying sizes and locations.

The report also studied the cost of transportation and the relationship between the amount of funding for K-12 education and educational outcomes, but did not address school facilities or declining enrollments.

The Study

The input-based approach utilized three class-size models:

25 students per class;
18 students per class in grades K-3 and 23 students per class in grades 4-12; and
20 students per class.

The resulting base-level costs per pupil for 2006-2007 ranged from $4,519 to $5,105, an increase from the current state funding formula of $4,257. The outcomes-based approach recommended a base-level cost of $4,659 per pupil.

The study assigned weights for low- and high-enrollments, and “at-risk,” urban-poverty, and bilingual factors. Furthermore, the study assigned additional costs for each full time equivalent student in special education, vocational education, and in need of transportation for 2.5 miles or more.

After taking all these cost estimates into account and adjusting teacher salaries according to regional variation, the study concluded that the additional amount of foundation-level funding needed for 2006-2007 ranged from $316.2 million to $623.7 million using the input-based approach, and $399.3 million using the outcomes-based approach. This represents an increase in foundation-level funding of 11% to 23% for the input-based approach, and an increase of 15% for the outcomes-based approach.

Foundation-level funding for school districts in Kansas is currently derived from a mix of “General State Aid” and “local effort.” “Local effort” is primarily a mandatory statewide 20-mill property tax levy. An increase in foundation-level funding, then, can come from either source or a combination of the two. If the State were to finance the entirety of the estimated increase, its share would increase from its current 80% to a range of 82.0% to 83.6% through the input-based approach, and 82.4% through outcomes-based. If the local mill levy were raised to fund the increase, the State's share could drop to 71.7% - 65.1% (input-based) or 69.8% (outcomes-based).

The study suggests that the Legislature hold harmless districts that would receive less than their current level of state funding under a new calculation (requiring an amount ranging from $35.1 million to $0.7 million with the input-based approach, and $9.4 million with the outcomes-based approach).

Reactions

A range of reactions was reported in the media following the release of the report. According to the Wichita Eagle, Governor Kathleen Sebelius said, "Now that the Legislature has received its cost study, we have a better idea of the investment needed to educate our children." Some legislators were unhappy because the study tilts some funding away from rural schools and into schools impacted by urban poverty; others thought the estimated increase is too high. Sen. Kay O'Connor (R-Olathe) told the DeSoto Explorer, "There's no way I'm going to support that report…We are spending like crazy, and we're building a deficit. We have got to learn to live within our means.” However, Alan Rupe, plaintiff attorney, encouraged legislative action, stating in the Kansas City Star, "My hope to what the Legislature does is very short - just go do it. They have the numbers and know what it costs. They commissioned a study to determine what it costs to educate our kids. We just need to roll up our sleeves and do it."

Litigation Backdrop

The study finds its origins in the school finance case Montoy, et al. v. State of Kansas, first filed in 1999. The case Kansas Supreme Court, in 2005, found the funding of public schools to be inadequate and, after new legislation was passed, ordered the Legislature to increase school funding further. In its order, the Court relied on a cost study that recommended a total increase of $853 million. When the Legislature met during the summer 2005 in a special session, it increased school funding and called for a study by its own auditing division.

Prepared by Katherine Lu, January 31, 2006