AP Analysis: Tax debate to shadow schools mediation

3/7/2013

By JOHN HANNA

AP Political Writer

TOPEKA (AP) — The Kansas Supreme Court inspired optimistic talk about an early end to an education funding lawsuit against the state when the justices ordered mediation in the case, but any discussions will be shadowed by the Legislature's ongoing debate over phasing out the state's personal income taxes.

The high court last week put on hold a lower-court order directing lawmakers to increase the state's annual spending on public schools by at least $440 million. The Supreme Court also said that if the parties in the lawsuit couldn't agree on a mediator by Friday, the justices would appoint one to oversee talks.

Gov. Sam Brownback, Attorney General Derek Schmidt and some fellow Republicans in the Legislature reacted positively, seeing hope for a discussion about school funding issues and the state's larger budget picture.

"I'm an optimistic guy," said John Robb, a Newton attorney representing students, parents and school districts suing the state.

But the Supreme Court's order for mediation doesn't alter the political context in which talks would occur. Kansas enacted massive income tax cuts last year. Brownback and the Republican-dominated Legislature aren't backing away from those reductions, and they're considering a mix of policies this year designed to keep Kansas on what the governor calls "a glide path to zero" individual income taxes.

The lawsuit is aimed at forcing a big boost in spending on public schools to fulfill past promises made by the state and to commit Kansas to future increases. Those goals clash over the next few years — and possibly much longer — with moves to eventually eliminate income taxes. Many lawmakers, particularly conservative Republicans, contend the state's founders meant for them, not the courts, to have the last word.

"I know it's black and white," said House Majority Leader Jene Vickrey, a conservative Louisburg Republican. "We're given the responsibility to discern our budget and balance all the responsibilities that we have."

The Kansas Constitution requires the Legislature to "make suitable provision" for financing the state's "educational interests" and the Supreme Court has said it means lawmakers must finance a suitable education for every child.

Base state aid for public schools peaked at $4,492 in 2008, just before the Great Recession. It's now $3,838, which is $654 less per student, almost 15 percent lower. The decline sparked the latest lawsuit, and in January, a three-judge panel in Shawnee County District Court ordered legislators to hit the $4,492 mark.

"If people want to seriously resolve this lawsuit, there may be creative ways to do that," Robb said of mediation. "I'm not going to write it off."

Robb also sounded a conciliatory note by saying he wants legislators to participate in mediation, because they'd ultimately have to approve budgets and school finance legislation reflecting any agreement.

But if GOP leaders are involved in the talks, they'll come with a broader agenda. Some want the Supreme Court to consider that legislators have numerous pressing issues outside of funding public schools — and a big one is ensuring the state's long-term economic vitality.

"I'd like them to see how difficult our job is," said Senate President Susan Wagle, a conservative Wichita Republican.

The district court panel irritated some GOP conservatives by chiding legislators for claiming to do what they could for schools while approving big tax cuts last year. The January ruling helped fuel a renewed push for measures to revise the state constitution's education article and change how appellate court judges are selected.

Senate Judiciary Committee Chairman Jeff King, a conservative Independence Republican who is a leading advocate of both measures, called parts of the lower-court ruling "problematic" because they read as if they're designed to prompt a reversal of the tax cuts.

Schmidt decried "ample posturing" in the case.

"This really more closely resembles a political dispute than a legal one," the attorney general said.

Last year's tax cuts are worth almost $850 million during the fiscal year beginning in July. If the Legislature reversed them, there presumably would be more than enough money to comply with the district court panel's ruling.

Brownback and lawmakers are considering proposals this year to stabilize the budget, such as eliminating two popular income tax deductions for homeowners and canceling a decrease in the sales tax scheduled for July. But the goal is to enable future cuts in income tax rates — and some conservatives would prefer to cut spending anyway.

Simply put, the Republican governor and GOP-controlled Legislature aren't reversing course on trying to phase out personal income taxes. Wagle called the idea "a travesty," arguing that Kansas is trying to combat economic uncertainty with pro-growth policies.

"You just can't pay the bills if you're not in a growing economy," Vickrey said.

Meanwhile, many educators and the lawyers suing the state argue the Kansas Constitution gives public education a special, priority status. The conflict in underlying philosophies is likely to hinder any attempt to settle the lawsuit.

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