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Minutes for SB382 - Committee on Education

Short Title

Amending the capital improvement state aid schedule to exclude U.S.D. No. 207, Fort Leavenworth.

Minutes Content for Wed, Feb 19, 2020

Chairperson Baumgardner opened the hearing.

Dustin Avey, Managing Director, Piper Sandler & Co., gave background information regarding the funding formula for Capital Improvement State Aid which has unintentionally created inequity. School Districts receive State Aid for Bonds based on their Assessed Valuation Per Pupil. The per pupil portion of this calculation includes virtual students. Suggested legislation would be to modify the current law to require that school districts must have the authority to issue bonds in order to be eligible to receive Capital Improvement State Aid from the calculation which would remove Fort Leavenworth USD 207. Also modify the formula to exclude virtual student from the per pupil count.(Attachment 2)

Quentin Breese, Superintendent, USD 333 Concordia shared that Capital Improvement State Aid plays an integral role in their challenge to provide great education to their 1,200 students over the 336 square miles of their district. The district continues to foster involvement from our stakeholders and gain traction on a number of great solutions to our aging facility needs with efficiency and modern classrooms, however, they continue to hit roadblocks when costs for these solutions are revealed. Capital Improvement State Aid has decreased by more than 31 percent in Concordia since 2015. This change has a significant impact on facility planning. The proposed modification of removing USD 207 from the calculation appropriately realigns the law with its original intent of managing ongoing budget expense to the state without creating inequity among school districts.(Attachment 3)

Brad Wilson, Vice Superintendent, Spring Hill USD 230, told of his rapidly growing district which has passed four bond issues in the last 17 years and was receiving 50 percent state aid for bonds approved prior to July 1, 2015 but only 19 percent for those approved after July 1, 2015. The lower percentage of state aid puts tremendous pressure on the district to increase the mill levy in order to make the bond and interest payments. As old debt is retired and new debt approved, they believe the net cost to the state would be little to no additional funding.(Attachment 4)

Mark Tallman, Associate Executive Director, Kansas Association of School Boards, stated that USD 207 valuation per pupil essentially never increases, while most other district’s valuation per pupil increases over time. Because bond and interest costs NOT covered by state aid are paid by local property taxes, there will be two consequences. First it means shifting more reliance on school facility costs to the property tax, which is not the most popular revenue source and second, low wealth districts will require much higher property tax levies than higher wealth districts to raise revenue.(Attachment 5)

Chad Higgins, Superintendent of Schools, Maize USD 266 stood as a neutral conferee on this bill. As it relates to funding public schools in Kansas, adequacy and equity will remain the foundational tenets of a suitable system. The benefits of modifying the Capital Improvement State Aid include equity, adequacy, and mill levy relief.(Attachment 6)

Written proponent testimony was submitted by:

Justin Coup, Superintendent, USD 393 Solomon (Attachment 7)

John Allison, Superintendent, USD 382 Olathe (Attachment 8)

Chairperson Baumgardner closed the hearing.