Rooker Review: Gannon v. Kansas

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CONTACT MELISSA

In Topeka:
State Capitol Room 168-B
Topeka, KS 66612
melissa.rooker@house.ks.gov
785-296-7686

At home in Fairway
4124 Brookridge Drive
Fairway, KS 66205
melissa@melissarooker.com
913-961-1555

Dear Friend:

This week, the budget debate and school finance took center stage. I voted NO on the budget (House Substitute for SB 161) because it accelerates the reckless borrow and spend tactics that have badly depleted our state agencies. Here is an editorial from last Sunday’s KC Star that accurately sums up the array of problems we face. I am quoted at the tail end.

Fiscal Year 2016 and 2017 Supplemental Budgets - The Budget Has No Clothes
The budget passed Thursday left us only a $6 million ending balance for THIS year (with five months yet to go), absolutely ignoring the revenue trends we have experienced since 2012. Moreover, we knew a Gannon decision (the school finance case) was coming and we needed to prepare for it, but made no such accommodation. Bottom line – much like the fairy tale emperor, this budget “has no clothes.” Even if you ignore the pros and cons of the policy provisions stuck into the bill – the fact the entire budget relies on the same series of broken economic thinking, borrowing, and fund sweeps that got us into this position is ludicrous. To add insult to injury, we are now adding KPERS retirement funds to the list of places we are borrowing from to protect the tax policies that brought us to this point.

KPERS
Only six states have higher unfunded liabilities (the difference between what is scheduled to be paid out over time and what is scheduled to be collected) in their retirement funds than Kansas. To address this problem, created by years of ignoring our scheduled contributions as a state, the legislature overhauled the system several years ago. Extensive research and thought went into the new program, and the plan included an escalated payment schedule to help us retire the debt by 2033.

Last year, the legislature was asked to borrow a BILLION dollars to restructure the unfunded KPERS debt, to help provide solvency and pay down the liability, but instead the money saved is being channeled directly into the general fund.

Yesterday, the legislature passed a budget that includes delayed payments to KPERS and an 8% interest rate on the repayment. The plan requires us to repay this short-term loan in the first quarter of FY 2017, but my question is, with what? The budget is built on the false hope that next month is better without evidence currently or historically that it will be. There is no happy ending to this fairy tale.

Legislative Power to Appropriate
The governor has the authority to make unilateral cuts to the budget if the balance is projected to fall below zero. However, this bill expands that authority if the ending balance falls below $100 million, which is essentially unlimited power since we are currently there. We granted this to the governor last summer, but included a provision to protect K-12 funding from those cuts. This time, the bill does not protect schools – everything is on the table – he can cut whenever and wherever. Those who supported this budget sold out their constituents by giving the legislature's most important job to the governor. All bets are off.

Keep in mind the budget debate took place on Wednesday, with final action on the bill scheduled for Thursday morning. Before we made that vote yesterday, the Kansas Supreme Court announced their decision in the Gannon school funding lawsuit.

Gannon v. Kansas Equity Decision

This Kansas Supreme Court decision was an 80-page document that can be summed up in two quotes directly from the text (Pages 74-75):

Quote 1: "In short, if by the close of fiscal year 2016, ending June 30, the State is unable to satisfactorily demonstrate to this court that the legislature has complied with the will of the people as expressed in Article 6 of their constitution through additional remedial legislation or otherwise, then a lifting of the stay of today's mandate will mean no constitutionally valid school finance system exists through which funds for fiscal year 2017 can lawfully be raised, distributed, or spent.”
- Translation: The Block Grant funding formula in SB 7 is unconstitutional and will remain so unless it’s fixed by June 30. If it isn’t fixed by June 30, no constitutional funding formula exists in Kansas meaning we have no mechanism for allocating dollars to schools.
Quote 2: "Without a constitutionally equitable school finance system, the schools in Kansas will be unable to operate beyond June 30.”
- Translation: If we don’t have a constitutionally sound method of distributing school funding, we will be banned from distributing any funds, until such time we have a funding formula which meets the demands of the constitution as set out by Kansas voters. The court will prohibit the treasurer from distributing funds, effectively shutting down our public schools statewide until a plan is approved.

The immediate response by many legislators has already been to declare the court’s action "judicial overreach" and call for ignoring the court order. This kind of talk is dangerous for democracy. I hope voters are paying attention to their elected officials.

We each swore an oath to uphold the constitution of both the United States and the state of Kansas. Both documents enshrine three separate branches of government, assigning each specific powers to ensure that there are checks and balances. Chief among the constitutional duties of the legislature is the power of appropriation. In turn, the court system is assigned the role of deciding if the laws we pass meet the constitutional test.

It is very clear in this decision that the court has shown the utmost deference to the legislature’s responsibility to appropriate funds while simultaneously carrying out its own constitutional responsibilities. The decision once again invites the legislature to craft a remedy and present it to the court for review, a task solved by restoring the funding cuts made in the 2015 session.

Our responsibility is not discretionary when it comes to providing suitable funding for our public school system. We cannot continue to ignore the fiscal reality we find ourselves in as a state – despite holding spending growth at or below 1% over the course of the past six years, we are not bringing in enough revenue to meet costs. We are not stranded on a deserted island with one bottle of water to go around – the legislature is in control of the available resources and can choose to work on real revenue reform. Sadly, the current administration is happier cutting services in order to avoid the tough decisions reform will involve.

I will continue my work with a team of education stakeholders on a funding plan that fulfills our duty to the children of this state.

To learn more:
Full Kansas Supreme Court Decision
Supreme Court Press Release (A good, brief synopsis if you have better things to do than peruse 80 pages of court precedent!)
Response from across Kansas:
Kansas Association of School Boards Review
Kansas National Education Association Statement
Prairie Village Post: Northeast Johnson County legislators, advocates react to Gannon ruling that state school finance isn’t equitable

I encourage you to stay tuned for more details in future updates, and please connect with me if you have questions or concerns. I am honored to serve.

Sincerely,

Rep. Melissa Rooker
Kansas State Representative, District 25
Serving Northeast Johnson County