Are We Ready for Tomorrow?

Apr 25, 2018 by

The Legislature is set to return on Thursday, April 26 and at the top of everyone’s list of questions is “What about the school finance error?”

Maybe not everyone’s, but it’s on the top of our list!

We’re working on rumors and some good intelligence gathering to try and figure out how things will go down come Thursday.

First, we know there is a planned fix for the error which is tied to Rep. Clay Aurand’s (R-Belleville) effort to mandate a certain level of LOB effort and label it as part of BASE aid. The error can be fixed simply by repealing that provision and we are hopeful that will be the first order of business.

Of course, in the meantime, the state has received more good news about revenue collections and that has spurred a lot of talk about what to do with this “extra” money.

Rumor has it that the some in the House will again try to add to the school finance bill perhaps by pursuing either an amendment offered earlier by Ed Trimmer (D-Winfield) to change how the CPI was calculated in determining  a funding level or one by Jeff Pittman (D-Leavenworth) that would boost the reimbursement of special education funding to the statutory 92%. Both amendments were considered in floor debate on SB 423 earlier and were not adopted, having received only 41 and 43 votes respectively.

If SB 423 is amended to fix the LOB issue and restore the $80 million, we believe there is a chance that the Court will still believe the bill falls short of constitutional adequacy either for the overall increase or for the five-year phase in. Such a Court decision could result in a special legislative session this summer. There is also a chance the Court could call this bill a “good faith effort” and give the Legislature another year to augment the future-years in the plan. We’ll just have to wait and see.

If either the Trimmer or Pittman amendments were to be added, it increases the chances that the Court will approve the plan but it may also create a greater challenge getting the bill through the Senate – we are confident Senate President Wagle (R-Wichita) and Majority Leader Denning (R-Overland Park) will oppose such increases. We just can’t predict what might happen to the 21 votes in the Senate if the bill gets costlier.

KNEA supports the Trimmer and Pittman amendments because both align with our Legislative Agenda and priorities. But we also believe that, should they be offered and fail, that is not a reason to vote NO on the $80 million fix. To allow SB 423 with the error to stand as the proposed solution to Gannon would be irresponsible, to say the least. And it would guarantee a negative reception in the Court, a special summer Legislative Session, and the possibility that our schools will be closed come August.

Now throw into this the Senate’s massive, “Brownbackian” tax cut bill, HB 2228. This bill, which now goes to the House, gives away more than $500 million in new tax cuts and tax adjustments. Coincidentally, the new school finance bill with the fix costs more than $500 million. Passage of HB 2228 cancels out the revenue needed for SB 423!

The Court has been very clear that they want a school finance plan that has the money in it. They have essentially said, “show us the money.” To pass a $500 million finance plan concurrent with a $500 million tax cut would be a disaster. Remember that in the early stages of Gannon, the State argued that there was no revenue for increased school funding and the Court responded that the money was there but the Legislature gave it away in the 2012 Brownback tax cuts. Deja Vu all over again!

Our hopes for the next nine days?

Fix the mistake. Repeal the Aurand LOB amendment. That will restore the bill to the level of funding that was intended on April 7 and take care of new equity challenges.

If the votes are there to increase the funding, do so. We support full funding of special education – we always have and always will. If such amendments are not adopted, pass the underlying bill that fixes the error. Do not use a desire to do more as an excuse to not fix the underlying problem.

Resist the temptation to cut taxes again. Kansas is still in recovery from the Brownback disaster. Things are looking good but this is not the time to cut taxes. We still have to meet school funding adequacy and we also need to address the mess in our foster care system, the challenges faced in public safety, the restoration of funds taken from the highway program and KPERS, and many other vital services. Tax cuts can wait. Remember that voters in 2016 sent many new legislators to Topeka specifically to restore our revenue system. It’s only been 10 months since that happened.

Good Revenue News Means We Can Have Necessary Things Again

We, like all Kansans, are happy to see continuing good news about revenue collections. We’ve repeatedly exceeded estimates thanks to the work of a bipartisan group willing to vote to repeal Brownback’s income tax changes and then vote to override his veto of their action. It looks like the state is on a path to stability once again. We’re not out of the woods but, as Sam would have said, “The sun is shining in Kansas.”

The revenue news means different things to different legislators. Some, as we noted earlier, want to go back to handing out tax cuts as if we had already satisfied the Court school finance ruling, restored the highway plan, paid KPERS back, found the 70 missing children in DCF, and so much more.

In truth, the news means that while we can have some necessary things, we still have a lot to do to get back to our beautiful Kansas.

For the first time in a long time, the legislature is looking at budget profiles with ending balances above zero. In fact today the budget committees are looking at reports that show the state meeting the required 7.5% ending balance. HB 2228, the tax cut bill would wipe that out of course but in the meantime, they can look at other things to fix.

Governor Colyer has submitted a Governor’s Budget Amendment (GBA) that would take funds above the 7.5% ending balance and make an early payment to KPERS. The Legislature is supposed to be making back payments to KPERS by 2020 and this GBA would bring a portion of that payment up now. KNEA supports this GBA. It is critical that KPERS be paid back and the sooner, the better.

This one opportunity and action should be enough to convince responsible lawmakers to step back from the temptation to return immediately to the tax policy decisions that led Kansas to the brink of disaster. We don’t need another radical tax cut – that’s how the Legislature created the problems we are facing today. Now that things are turning around, we hope the Legislature will focus on restoration of services and programs that have made Kansas a great place to live, work, and raise a family.

Join with Our Partners and Urge Your Legislators to Reject Irresponsible Tax Cuts

KNEA is working with other organizations to make sure that our state has ample time to recover from the Brownback experiment before considering any reductions in taxes. As they return to Topeka, it’s important for them to hear that voters want them to act responsibly to ensure our economic and budget recovery. Please take the time to email your Legislators.

Click here to send a message to your Legislators.

 

 

 

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Colyer’s “State of the State,” The Annual Dyslexia Debate

Feb 8, 2018 by

Governor Colyer Gives His State of the State Address

He’s not staking out a solid position on school funding

Governor Jeff Colyer addressed a joint meeting of the House and Senate yesterday to outline his vision for Kansas. He addressed seven broad areas that he hopes the state can deal with:

  1. freedom from sexual harassment in the workplace (and particularly in the statehouse),
  2. transparency in government,
  3. abortion,
  4. job creation and in particular the aircraft industry,
  5. the crises in our foster care and mental health systems,
  6. healthcare, and
  7. public education.

On the first two issues, he lauded the efforts being made by the legislature so far in the 2018 legislative session and even suggested that the package of transparency measures introduced by Democrats are deserving of support.

“A group of legislators, led by Senate Minority Leader Anthony Hensley and House Minority Leader Jim Ward, have put forth several transparency proposals as well. Many of you are working hard on this issue, and your efforts deserve recognition and support.”

Colyer also announced four transparency measures that his administration will take including no longer charging Kansans for open records requests of less than 100 pages, ensuring the Administration relies on official email accounts to conduct state business, instituting performance metrics for Cabinet Agencies so Kansans can see how they perform, and launching a website to serve as a one-stop-shop for Cabinet Agencies to post open meetings, locations and materials.

The healthcare issue may be most challenging for Colyer – or may be an issue where he departs from his past positions – because he was a leader under former Governor Brownback in the establishment of the troubled KanCare system and refusal to expand Medicaid.

We, of course, were waiting for what he had to say about education and addressing the Gannon decision. We were hoping that he would lead on this issue. The Legislature, as you know, appears to be stalled or simply refusing to seriously talk about the issue while the Court deadline and the deadline set by the Attorney General are rapidly approaching.

Unfortunately, Colyer gave little direction to the Legislature about what he would sign except to provide a “framework” of four broad thoughts he wants to see in the solution. He called upon the legislature to keep our schools open, permanently end school finance litigation, phase-in increased funding, and demand accountability and improved outcomes. Missing in his message was any mention of the level of increased funding he believes is needed.

Here then is the full text of his remarks on education (to read the entire address, click here):

Finally, and perhaps the most pressing question in many of your minds, where will we go on education? And before we get to the elephant in the room, let me first thank you to the legislature for the remarkable investments you have made in early childhood education. Early childhood education works.

On my first day as governor, I had the opportunity to visit a public school in my hometown of Hays. I want you to know that your Governor is a supporter of public education. In Kansas, we invest in our schools, not because a court tells us to, but because we want to invest in our children and our future. We invest in teachers because they invest in our kids. We support things like the Kansans Can Redesign program because we are willing to do hard things for the youth of this state.

And now I want you to think about something. Governor Bob Docking, Governor Bob Bennett, Governor John Carlin, Governor Mike Hayden, Governor Joan Finney, Governor Bill Graves, Governor Kathleen Sebelius, Governor Mark Parkinson, Governor Sam Brownback, and Governor Jeff Colyer. The last ten Governors of Kansas. Five Democrats and Five Republicans. Fifty years and counting. That’s longer than the Cold War. All ten governors have had the specter of education lawsuits overshadowing education. This must end now.

To some in politics, leadership is about being a bully or being the loudest, shrillest voice in the room. To others, it’s about staking out a position and never compromising. To me, leadership is about setting a vision and bringing people together to achieve common goals. And, as a former legislator, I know that you don’t appreciate being told what to do by a governor or anyone else for that matter. And I think the reaction to a recent State of the State address is plenty evidence of that.

What I learned from President Reagan is that we develop principles that allow us to resolve our issues. As the sign on his desk and now mine says, “It can be done.” With that in mind, I will offer a framework that I hope you can see fit to support:

  1. We must keep our schools open.
  2. We need a definitive solution that ends the school finance lawsuits FOR GOOD.
  3. Increased investments in K-12 Education must come through a phased-in approach that doesn’t increase the tax burden on Kansas families and ensures schools can effectively allocate any new funds they receive.
  4. Lastly, and most importantly, we must insist on accountability and improved outcomes.

I will sign school finance legislation that meets these objectives. This will not be easy, but public servants and leaders are not called to make the easy choices. We’re here to do the right thing, and the right thing is never easy.

House Education Committee Hears Bill on Mandatory Dyslexia Screening

The House Education Committee held its annual dyslexia hearing, this time on HB 2602 which would mandate screening all children for dyslexia.

Proponents generally blasted the public schools as knowing little about dyslexia, of refusing to provide support to children with dyslexia, and of not talking to or listening to parents. Opponents including USA, KASB, and Special Education Directors countered with all of the efforts being made on behalf of children under both Section 504 of the Americans with Disabilities Act and IDEA.

KNEA testified as neutral on the bill, raising concerns about its vagueness.

The bill seems to suggest that all students shall be screened for dyslexia. There are, however, questions left unanswered.

  • Are all students to be screened annually or is this a screening upon enrollment only? Is there an intent for there to be additional screenings later?
  • If all students are to be screened as a matter of course, are schools prepared to conduct such screenings? Are there enough trained personnel in our schools to handle such screenings in a timely manner?
  • If a school district screening suggests the child has dyslexia and the district then suggests that the student be evaluated by “a licensed physician, psychologist or psychiatrist” does the school district then have any obligation to pay for a follow-up evaluation?

In oral testimony, KNEA also took issue with the proponents’ complaints that schools and teachers do not advocate for children. KNEA lobbyist Mark Desetti cited his own experience as both a teacher of 13 years and a parent of four children, one of whom was diagnosed with dyslexia. “Teachers,” said Desetti, “are the best advocates for your children inside the school building. They routinely argue on behalf of struggling students and often butt heads with principals and special education directors in demanding support services for those students.”

Desetti, as well as Rep. Steven Crum (D-Haysville) and Rep. Melissa Rooker (R-Fairway) noted that teachers in Kansas can now be non-renewed for battling with administration or the school board. Perhaps it is time to restore due process for Kansas teachers so that they can continue to advocate for the needs of their students.

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The State of Our State…

Jan 10, 2018 by

Read more from CJOnline http://cjonline.com/news/state-government/education/2018-01-09/brownback-s-offer-600-million-k-12-budget-shifts

Last night, Governor Brownback delivered his final State-of-the-State address to a joint session of the Kansas Legislature. And what a speech it was. It is roundly being attacked by his former allies, the most conservative Republican Legislators, with JR Claeys (R-Salina) actually tweeting, “The governor has waved the white flag of surrender from the dome, and tossed every ally he had left under the bus…Then put the bus in reverse…Then lit fire to the bus.” Wow.

Usually a final speech is a time to reflect on the accomplishments of one’s administration but this speech was short on accomplishments and long on “dreams.”

Among those accomplishments were the opening of the state’s longest hiking and biking trail, a reduction in adult obesity, the opening of the National Soccer Training Center, moving the American Royal from Missouri to Kansas, and a rising quail population. There were a few economic wins included in his list such as the opening of a new milk drying plant to serve the large dairy farms in southwest Kansas and our growing wind energy industry but overall, it did not read like a bragging list of major accomplishments.

The K-12 Education Proposal

The second part of the speech is what angered his one-time allies. Brownback announced that his budget would include $600 million in new K-12 education funding to be spread out over five years. The conservatives have been fighting the Supreme Court and arguing that money doesn’t matter in education. They have tried to say that the Court should be satisfied with just a few new dollars targeted specifically to at-risk students. They were certain they had an ally in Sam Brownback and are looking at his proposal as turning his back on his loyal followers (see JR Claey’s quote above).

On the surface, there is nothing alarming in the Governor’s education proposal. He would put $200.8 million in new education funding in fiscal year (FY) 2019 and an additional $100 million in each of FY 2020, 2021, 2022, and 2023. Most of the 2019 increase has already been passed as part of SB 19 in the 2017 session.

He then cites three expectations of the school system based on this new money. Specifically he wants by the 2022-23 school year:

  1. To reach a 95% statewide graduation rate,
  2. To attain a statewide post-secondary effectiveness rate of 75%, and
  3. To continue to move schools statewide toward the Kansans Can model for school redesign launched by the Kansas Department of Education.

As a means to achieve these three goals, the Governor sets the following five strategic objectives for Kansas school districts to meet by the 2022-2023 school year:

  1. Have the highest teacher pay average of our neighboring states, including having a higher teacher pay average than the State of Missouri by the 2018-2019 school year;
  2. Increase the number of school counselors and school psychologists in Kansas schools by 150.00 FTE positions each year;
  3. Have 50 schools participating in the Kansans Can school redesign project;
  4. Offer 15.0 credit hours of dual credit coursework to every Kansas high school student, at no cost to students (including tuition, fees or books), through a partnership between Kansas high schools and the state’s institutions of higher learning; and
  5. Offer every Kansas high school student, at no cost to the student, the choice of taking either the ACT college entrance exam or the Work Keys assessments (for attainment of the National Career Readiness Certificate) during his or her high school career.

In terms of the goals, it is hard to find something to argue with in this proposal.

What, of course, is up in the air is whether or not the Supreme Court will accept such a long phase in. We believe it is likely that they will allow the remedy to be phased in over time but five years might be too long. The last phased in remedy was in 2006 in response to the Montoy decision and the legislature failed – for a variety of reasons including the 2008-09 economic collapse – to fulfill the promises made at that time. Later, when the economy was in recovery and revenues were on the rebound, instead of going back to the phase in, the legislature, under the direction of Governor Brownback, gave all new revenue away in the disastrous tax cuts of 2012.

Now comes the interesting part. The Governor has proposed a dollar amount that is very likely to be supported by Democrats and Moderate Republicans, leaving the conservatives in the position of either taking that number or cutting the proposed funding for schools. It is not lost on anyone under the dome that the 2016 legislative elections were about taxes and school funding.

What happens to a dream deferred?

So asked Kansas native Langston Hughes in one of his most famous poems.

We bring this up because the third portion of the Governor’s speech was about dreams – dreams that we would argue have been deferred thanks to his own policies that devastated the revenue system for Kansas.

Brownback said, “A dream spoken sets up the architecture for the creative efforts of free men and women to build upon.” How true that is.

Then he went on to call out his dreams – and perhaps the dreams of many Kansans. These are his dreams quoted from his speech:

“My dream for Kansas is to be the best place in America to raise a family and grow a business.”

“I dream that education in the state is tailored to each student’s needs and desires.”  

I dream of leading the country in developing new treatments to heal old maladies using your own adult stem cells.”

“I dream of a future Kansas exporting wind electricity across America.”  

“Dream with me of a growing and diversifying Air Capitol of the World.”  

“I dream that Kansas will continue to be and grow as a major financial services hub.”

“Dream with me of feeding the world.”  

“I dream of reconciliation between the races.”

“I dream of a culture of life.”

This is the speech that he could have and should have given in his 2011 State-of-the-State address. Today these are simply dreams deferred while he pressed an agenda of massive tax cuts that simply starved the state’s ability to pursue those dreams.

It is what the 2018 Kansas Legislature does and what happens in the 2018 Kansas elections that will determine if dreams can be pursued or if, in the words of Langston Hughes, “they dry up like a raisin in the sun.”

To read the Governor’s speech, click here.

To see Budget Director Shawn Sullivan’s presentation to the Appropriations and Ways and Means Committees, click here.

To view a video reaction to the Governor’s speech by Heidi Holiday of the Kansas Center for Economic Growth, Sarah LaFrenz of the Kansas Organization of State Employees, and Kansas NEA Governmental Relations Director Mark Desetti, click here.

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Special School Funding Committee Wraps Up Three Days of Meetings

Dec 19, 2017 by

The 2017 Special Committee on a Comprehensive Response to the School Finance Decision (hereinafter referred to as the SCCRSFD) wrapped up their third day of meetings today, ending with a presentation from Kansas Attorney General Derek Schmidt.

Schmidt spoke broadly about article VI of the Kansas Constitution and wondered generally about whether or not the Court’s interpretation of that document is congruent with the people’s. “Maybe it is; maybe it isn’t,” said Schmidt. “But maybe we should ask.” Schmidt also wondered whether “adequacy and equity” were the best way to consider what is “suitable.” In his written testimony, Schmidt said “Determining whether a law is ‘equitable’ – i.e., fair to all – is a traditional role of courts. But determining whether an amount of funding is ‘adequate’ is more traditionally a legislative function, not a judicial function.”

Most of today was consumed with constitutional studies, including a report on the history of the education article in the Kansas constitution. The 1861 Wyandotte Constitution had an education article which remained unchanged until 1966 when the legislature proposed the current language which was adopted by voters in the November 1966 general election. It has remained the same since then. But another report to the SCCRSFD noted that since the Montoy decision in 2004, the legislature had proposed 39 statutes and constitutional amendments that would stop school districts from suing or prevent the Court from issuing an enforceable remedy in a school finance lawsuit.

The Committee also looked at what the other 49 state constitutions have to say about education.

Monday was spent in a deep data dive. The Committee studied at-risk funding – how many kids are on free lunch, how many are in at-risk programs, how many are in each district, and what are the criteria used for placement in an at-risk program. They looked at special education, preschool, virtual school, and kindergarten enrollments; and they examined personnel reports.

They studied post-secondary progress, assessment scores, and graduation rates; they counted out-of-state students attending Kansas schools, and they reviewed the fees that had been charged for all-day kindergarten in some districts.

And they kept coming back to “how much?” How much money will they need to put into K-12 education to meet adequacy? If there were anything like the consensus around the room, it would probably be the belief that $600 million is the magic number. It was the only number tossed about repeatedly. Some on the committee seemed to imply that this could not be done due to a belief that it would have to be provided in one year. This was key to Rep. Larry Campbell’s (R-Olathe) repeated questions on whether or not schools could efficiently spend that much money in one year. But on the other side were legislators who promoted a phased-in approach. This was repeatedly brought up by Sen. Anthony Hensley (D-Topeka) who recounted with AG Schmidt the actions they took in 2005 and 2006 in response to the Montoy decision. Back then the Court accepted a three-year phase-in of new funding.

A big part of the funding discussion was focused on how to find $600 million. Fiscal staff presented revenue-raising ideas, showing the committee how much certain taxes would raise if the rates were raised incrementally. And representatives of other agencies (Corrections, Aging & Disability Services, Children & Families, Health & Environment, the Judiciary, and the Board of Regents) provided details on how they would absorb an 18% budget cut which would free up $600 million to be transferred to K-12.

The Committee now will forward their data and findings to the full legislature in the hope that this will jump-start the process when the 2018 session convenes on January 8.

Remember that the Court expects briefs on the solution to be filed by April 30. AG Schmidt and state’s attorney Arthur Chalmers both told the Committee that they needed a solution passed by March 1 to give enough time to prepare for the April 30 deadline. That’s a very tight timeline for a legislature used to stringing things out until the last minute!

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School Finance and KPERS Under Discussion in the Statehouse

Dec 5, 2017 by

Rep. Blaine Finch, right, speaks during a meeting of a House-Senate committee starting work on the Legislature’s response to a court order on school funding. At left is Rep. Ed Trimmer.
CELIA LLOPIS-JEPSEN / KANSAS NEWS SERVICE

Starting to Talk About a School Finance Fix

The first meeting of the Special Committee on a Comprehensive Response to the School Finance Decision (how’s that for a committee name!) met for the first time yesterday. They will meet again for two days on December 18 and 19 in advance of the 2018 legislative session.

Committee members are Rep. Blaine Finch, Chairman (R-Ottawa), Sen. Molly Baumgardner, Vice-Chair (R-Louisburg), Senators Jim Denning (R-Overland Park), Anthony Hensley (D-Topeka), Carolyn McGinn (R-Sedgwick), and Rick Wilborn (R-McPherson) and Representatives Larry Campbell (R-Olathe), Steven Johnson (R-Assaria), Ed Trimmer (D-Winfield), Troy Waymaster (R-Bunker Hill), and Valdenia Winn (D-Kansas City). As Chairman, Finch runs a tight ship, sticking to the agenda and the timelines specified in the agenda.

Yesterday’s meeting was intended to bring everyone up to speed on the status of school finance with the passage of SB 19 (the Kansas School Equity and Enhancement Act or KSEEA) passed at the end of the 2017 session and the subsequent Supreme Court decision of October 2, 2017, in the Gannon school finance lawsuit. (Click here to see the powerpoint presentation used in the meeting.)

SB 19 created a new school finance formula that is very similar to the formula in effect prior to its repeal in favor of the Brownback block grants (the CLASS Act). It increased school funding by about $292 million. KSEEA also made several modifications to the equity provisions in the school finance law.

The Supreme Court on October 2, 2017, ruled that the KSEEA was unconstitutional both in terms of adequacy and equity. The Court noted that structurally, the bill was constitutional on adequacy but in implementation was unconstitutional. It was noted that the $292 million in new funding was an “outlier” when compared to other analyses – the Plaintiffs averaged the two cost studies done for the legislature and came up with a figure of $1.7 billion, the State Board of Education budget request was for $893 million, and the earlier 3-judge panel calculated $819 million. We should note that the original version of SB 19 as drafted by Rep. Melissa Rooker (R-Fairway) and Sen. Laura Kelly (D-Topeka) would have provided $750 million in new funding over three years.

The Court also found that four changes in the bill made funding less equitable. Specifically, they called out

  • a provision expanding the use of capital outlay funds,
  • a provision reinstating the protest petition to reach the maximum LOB,
  • a provision using the prior year’s LOB to determine equalization aid in the current year, and
  • a provision setting a 10% floor for the distribution of at-risk funds.

The Committee spent the morning reviewing all of this Court and legislative history.

In the afternoon, Finch led the committee in a discussion of what remedies might be options available to the legislature and what information the committee members would need to consider those options. Finch made it clear that nothing was off the table. Committee members should feel free to bring any ideas forward and suggesting a possible option would in no way imply an automatic endorsement of that option.

The discussion was guided by a memo from Fiscal Analyst John Hess of the Legislative Research Department (click here to read the memo). It was less about generating alternative options that it was seeking information to guide the committee. Information sought included:

  • how much of increased enrollment in our schools is due to virtual schools and students from out of state,
  • how much would need to be raised in taxes to meet the higher spending goals,
  • if new school funding was not found through revenue increases, what would across the board cuts to other programs look like, and
  • what are the implications/challenges of requiring all LOB increases to have been and continue to be subject to a protest petition?

The new data will be used in guiding discussions at the next meeting.

Challenges to KPERS Discussed in Committee

The Joint Committee on Pensions, Investments and Benefits met on Monday, November 27. On the surface, the committee’s agenda was at best perfunctory and at worse a forecast of another four or five hours listening to and digesting reports regarding Bond Proceeds and Valuation charts while sitting on wooden chairs.

But wait, there is more.

In the background of most any meeting at the Statehouse lurks the issue of school funding. Where will the legislature find the revenue to appropriately fund schools? We know some legislators have taken a stand against raising taxes to increase funding for schools and some are against complying with the Supreme Court ruling at all.  These factors leave the path to solving the school finance problem somewhat murky at best.

So, where does the legislature find additional revenue without raising taxes or cutting other vital programs?

The legislature has already used up the Bank of KDOT (the highway fund). What money could possibly be available to help solve the school finance issue? How about the bank of KPERS?

The legislature cannot legally take money from KPERS that has been deposited in the system, so that money is safe. BUT, they can reduce the funding stream to KPERS to offset money needed to fund schools appropriately. Much like robbing the armored car filled with deposits on the way to the bank, the legislature could take the money BEFORE it is deposited into the system. Appropriations to KPERS can be reduced as they have been in the past. The legislature has a history of reducing KPERS payments to fund government when revenues do not meet expectations. KPERS payments were diminished to help fund government responsibilities during the failed Brownback tax cuts.

Here is what we know from the reports submitted at the committee meeting:

  • Current KPERS retirees and actives will receive their benefits. Current earnings on KPERS accounts are equal to or greater than current payments to KPERS retirees.
  • The State/School statutory employer contribution has been below the actuarially required funding for 24 years – meaning the legislature has underfunded KPERS for 24 years.
  • The payment of the FY 2016 employer (the state) contribution reduction ($97.4 million plus promised interest) that was scheduled to be paid on June 30, 2018, was eliminated.
  • FY 2017 employer (the state) contributions were reduced by $64 million but will be repaid over 20 years starting in FY 2018. The first payment has already been made.
  • FY 2019 employer (the state) contributions are reduced by $194 million but will be repaid over 20 years starting in FY 2020.
  • The state needs to pay $623 million each year to stay even regarding their commitment to funding KPERS and not add to the underfunding of the KPERS system.

The KPERS system is currently in better shape than it has been in past years due to excellent investments and returns by the KPERS staff, the influx of bond money, and the increased contribution rates by the state and current active members.

The question posed by one of the committee members highlights the situation. “What would the legislature’s payment to KPERS be if we had paid our bill?”  Remember, it currently requires $623 million just to stay even and not put KPERS further in debt. The answer is, if the legislature had paid what was owed to KPERS, they would be making a $100 million payment each year instead of something north of $623 million.

We are already currently paying bills due for previous year’s lack of payment to KPERS. A generation is considered to be 20 years. The legislature has underfunded KPERS for the last 24 years. We are the next generation paying the bills for the last generation. We have the clear feeling that this legislature is desperate for money due to the school funding decision. If they kick the KPERS debt can further down the road, it will be our grandchildren and great-grandchildren paying the bill for the current/near future actions of the legislature. Add to that scenario the Brownback tax cuts and we can see upfront and personally the cost of those “cuts”.

Clearly, it is not appropriate for the legislature to reduce their commitment and contributions at a time when the KPERS system is just now returning to fiscal health.

 

 

 

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