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Kansas: More Evidence of the Harm of Large Tax Cuts

Kansas’ Supreme Court’s ruling that the state isn’t meeting its constitutional obligation to equitably fund its schools is the latest evidence of why Kansas is the poster child for the harm of large state tax cuts. 

Here’s the background:

Kansas made major cuts to K-12 funding in the wake of the Great Recession.  Then, in 2012 and 2013, it enacted massive tax cuts — among the largest state tax cuts in U.S. history.  Revenue shortfalls due largely to the tax cuts have since kept K-12 funding well below pre-recession levels. 

The state Supreme Court ruled in 2014 that Kansas wasn’t providing enough K-12 funding to poor school districts.  As part of their response, lawmakers replaced the funding formula, which targeted resources to schools with greater need (e.g., poorer districts and districts with higher enrollment growth), with a block grant tying a district’s funding to its previous year’s funding.  Districts with greater need — which automatically qualified for more funding under the old formula — must now apply for it, with no guarantee that they’ll get it.

Overall K-12 funding rose under the block grant, but only because the block grant encompasses spending previously viewed separately from aid to classrooms, like teacher pensions.  Aid going directly to classrooms actually fell, after adjusting for inflation and rising enrollment.

As former state budget director Duane Goossen put it: “School block grants are a direct result of the state’s financial crisis. With revenue dropping as a consequence of unaffordable tax cuts, the switch to block grants provided a way to shut off increases for schools.”

Kansas must adopt a system of equitable financing by June 30, the court ruled.