LOB property tax increase already in effect

From Kansas Policy Institute.

LOB property tax increase already in effect

By Dave Trabert

About a year ago we asked the Kansas Department of Education to verify our calculation of the Local Option Budget (LOB) property tax increase that would result if Base State Aid Per Pupil (BSAPP) was increased from $3,838 per-pupil to $4,492 in accordance with a final Gannon ruling in favor of the plaintiffs/against Kansas taxpayers. KSDE verified our calculation but didn’t mention that the Legislature had already authorized districts to calculate LOB based on a hypothetical BSAPP of $4,433. Therefore, our reporting that increasing BSAPP to $4,492 would prompt an LOB increase of $154 million was inadvertently inaccurate, since most of that increase has already taken place. Upon learning of the potential mistake, we immediately contacted KSDE for clarification and issued this correction. We apologize for our role in this inadvertent reporting.

It should also be noted that the authorization to calculate LOB at a hypothetical rate of $4,433 expires on June 30, 2014; if not re-authorized, LOB calculations will be based on the actual amount of BSAPP, which currently is $3,838.

Setting LOB aside, let’s revisit the potential impact on citizens and the state budget if the Gannon ruling is upheld and implemented.

The Shawnee County District Court initially ruled that Base State Aid Per Pupil should be $654 higher than current, which would cost about $443 million. The Kansas Department of Education says even that is not enough; Deputy Superintendent Dale Dennis says the total state portion should be $657 million instead of $443 million. We’ll use the KSDE version of how much more should be spent on public education to explain the impact.

The following three tax increase options show the impact of funding the entire $657 million by property tax, sales tax or income tax.

If Legislators chose to reduce other General Fund spending instead of raising taxes, the following table shows the impact of a pro rata reduction. (Our recent public opinion poll found this option of reallocating the state budget to be the most popular (36%) with Kansans if school funding is to be increased, followed by 31% who prefer making schools operate more efficiently; only 27% would prefer some sort of tax increase.)

Regardless of the amount, it’s safe to say that there will be little, if any, impact on student achievement. That’s not a prediction; it’s history. Billions more in funding, even adjusted for inflation, has had no real impact on independent measures of student achievement.

For reasons explained in “Student Focused Funding Solutions for Public Education,” we believe the Court should make a student-focused decision that requires legislators to determine what it costs to achieve required outcomes while schools are operating in a cost-effective manner and fund them accordingly. To this day, not a single legislative or judicial school funding decision has been based on efficient use of taxpayer money.