Kansas Must Boost School Funding, Court Rules

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DALLAS – Kansas lawmakers already struggling to close a nearly $800 million revenue shortfall must find more money for public schools, the state Supreme Court ruled Thursday.

Although the court did not specify an amount of funding needed to bring the state in compliance with the state constitution, lawmakers have speculated that it could be about $500 million.

"Under the facts of this case, the state's public education financing system provided by the legislature for grades K-12, through its structure and implementation, is not reasonably calculated to have all Kansas public education students meet or exceed, educational standards," according to the ruling.

The ruling came as the Legislature was in its mid-session recess a week after lawmakers failed to override Gov. Sam Brownback's veto of a budget that would have raised an additional $1 billion through income tax increases. House Bill 2174 would have essentially repealed the tax cuts that Brownback promoted and the Legislature approved in 2012.

Attorney Alan Rupe, who represented the plaintiffs in the case known as "Gannon v. State of Kansas," called for lawmakers to continue challenging the Brownback tax cuts.

"Many Kansans associate Gov. Brownback's tax cuts with the state's inability to fund basic state programs and agencies, as well as education," Rupe said. "The new, more moderate Legislature has already suggested that it will repeal some of the tax cuts put into place by Governor Brownback."

On Monday, Moody's Investors Service issued a report saying the failure to override Brownback's veto was a negative factor for the state's Aa2 credit, which has a negative outlook.

"With the state for now sticking with a lower-tax policy, Kansas will continue to struggle to balance its budget, consider deferring pension contributions again, and drain its highway fund of funding for crucial transportation projects," Moody's analyst Dan Seymour wrote in the market comment.

S&P Global Ratings lowered its outlook on Kansas' AA-minus issuer credit rating to negative from stable on Feb. 9.

On the positive side, Kansas tax revenue in February rose $40 million above estimates, continuing a trend since November of monthly figures either meeting or exceeding projections.

The upbeat trend has reduced the state's current-year budget shortfall to about $270 million from the previous $350 million.

In November, state officials lowered their revenue forecasts for the year to account for several previous months of sError! Hyperlink reference not valid.hortfalls.

"I am pleased to see continuing growth in withholdings and individual income taxes this month," Revenue Secretary Sam Williams said in a statement Wednesday. "Month-to-month sales tax have increased 2.4% and is a hopeful sign that Kansans' income growth mean they have more money to spend."

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