TOPEKA — Gov. Laura Kelly praised the Kansas Senate on Friday for passage of legislation allocating $90 million a year to the state's public school system in an attempt to comply with a court order to cover inflationary costs incurred by districts.
The Kansas Legislature has labored during the 2019 session with a Kansas Supreme Court's ruling that inflation wasn't taken into account when lawmakers last year adopted a $525 million, five-year bill to bring K-12 education spending into constitutional compliance. Justices accepted the broad adjustment in state aid, but retained jurisdiction on the appellate case pending resolution of the inflation issue.
The Senate, with backing from Republicans and Democrats, voted 32-8 for the school funding plan in Senate Bill 142.
Kelly said the Senate bill matched funding recommendations by the Kansas State Board of Education and the Kansas Department of Education.
"The goal of this bill is to address inflation, end the litigation and meet the needs of our students, teachers and schools," Kelly said. "We look forward to continuing to work with lawmakers to move this bill forward through the process and settle this once and for all."
The Senate's bill wouldn't comply with the latest demand of Schools for Fair Funding, which represents districts in the school finance lawsuit against the state. SFFF withdrew support for the bill in a bid to secure a much larger expansion in state aid. Kansas spends $4 billion annually on public education.
Sen. Kevin Braun, R-Kansas City, said he voted for the bill because it was a viable option for meeting expectations set forth by the Supreme Court and followed the outline established by a Senate education committee.
"I deeply regret that the plaintiffs have again attempted to change the numbers," Braun said. "That does not demonstrate a commitment to students. Being honest, upfront and honoring your word on Senate Bill 142 is showing a commitment to our students."
Sen. Dan Kerschen, R-Garden Plain, said he joined Republicans voting against the bill because the school spending diverted resources that ought to be spent on colleges and universities, mental health programs, correctional facilities, disability services, a state water plan, highways and the state pension system.
The bill now moves to the House, which has been working on an education bill that includes controversial policy, including taxpayer-financed vouchers for students to attend private schools if shown to have been bullied in a public school.
Meanwhile, the Senate voted Thursday to send the governor a tax reform bill allowing a handful of multinational corporations in Kansas to repatriate foreign earnings while paying a reduced federal tax and no state tax on the income. In addition, the bill would enable about 15 percent of individual Kansas taxpayers to claim a higher standard deduction on federal taxes while itemizing deductions on state taxes.
Under Senate Bill 22, the state's 6.5 percent sales tax on food would fall to 5.5 percent in October. The legislation also would impose an internet sales tax on out-of-state businesses shipping goods into Kansas.
The package contained $137 million in corporate tax benefits and $50 million in income tax avoidance to individuals. The sales tax break was valued at $43 million annually. The internet tax could generate $21 million per year.
Kelly, while foreshadowing a possible veto of the bill, compared it to legislation signed by then-Gov. Sam Brownback lowering personal income tax rates and eliminating the state income tax for 300,000 business owners. Lawmakers underestimated the value of the business tax cut by about $200 million annually, which contributed to years of budget problems.
"Remember back to 2012," Kelly said, "the Legislature sent that tax cut bill to the governor at that time knowing full well that it was a complete, total disaster."
She said Senate Bill 22 would "put our state once again in a self-inflicted budget crisis forcing hardships on our schools, our highway program, our most vulnerable children and our economy."
The Kansas chapter of National Federation of Independent Businesses urged Kelly to set partisan politics aside and sign the bill. It provides tax benefits to businesses and individuals in accordance with federal tax changes signed by President Donald Trump, said NFIB lobbyist Dan Murray.
"If you reduce the state tax burden on small businesses, you’ll make it easier for them to grow and create jobs," Murray said.