(Updated with more complete comments from governor, key Republican senator and public education advocates, with edits throughout)
Weeks of intense speculation were answered Thursday when Gov. Laura Kelly signed the new education budget but vetoed a provision that could have cost funding for school districts with declining enrollment.
Kelly signed the $6.3 billion elementary and secondary education budget with reservations, including the item she vetoed that would have changed how school enrollment would be calculated to determine funding in the school finance formula.
Kelly said the provision “pulled the rug from underneath rural school districts,” adding that it would have “dangerous and devastating” consequences.
“I will not allow this to happen to our rural school districts, which are essential to the fabric of Kansas,” Kelly said in her veto message.
“As governor I have always been committed to ensuring that our rural schools are properly supported to serve their communities.
“This provision jeopardizes the vitality of our rural communities and threatens the economic engines of many small towns,” she said.
Republican leadership immediately said the governor’s line-item veto was out of bounds and called on the attorney general to review the matter.
“We are extremely concerned,” Kansas Senate President Ty Masterson and House Speaker Dan Hawkins said in a joint statement.
“The administration exceeded their authority under the Kansas Constitution, which limits line-item vetoes to items of appropriations,” Masterson and Hawkins said in their statement.
Some Republicans said the situation isn’t as dire as presented by the governor. They noted that school districts losing enrollment would still get extra money for being classified as a low-enrollment district in the school finance formula.
They said that the measure the governor vetoed was intended to limit the state from paying for students in districts where they no longer attend school.
“We do know that we have declining enrollment,” said Republican state Sen. Molly Baumgardner, chair of the Senate Education Committee.
“The intention is not to cause harm to school districts,” she said in a recent interview. “It is an effort to put the money where students actually are.”
Baumgardner said she initially had concerns about the proposal, thinking that it would only benefit a handful of school districts.
She said the data showed that it would benefit about half the school districts, although public education advocates said about 100 school districts would have been hurt by the change.
Republican state Rep. Kristey Williams, chair of the K-12 Education Budget Committee, said the change in calculating enrollment meant an extra $5 million for schools.
“It’s funding real students in real time where they are,” Williams said.
“We fund students,” she sad. “The governor, I guess, wants to fund empty seats.”
Kelly, as she did last week in vetoing a tax bill, criticized the Legislature for rolling unrelated bills together, including elements combining policy with appropriations.
“The Legislature continues a pattern of bundling appropriations and policy provisions into one bill, limiting the ability for the public and their elected representatives to weigh in on each individual element of the legislation,” Kelly said.
For the future, Kelly urged the Legislature to wrap the education budget into the rest of the state budget instead of separating it out in a standalone bill where other policy items are added.
“Instead, the Legislature has decided to logroll unpopular provisions into this bill, provisions that would not withstand scrutiny or pass muster on their own,” the governor said.
“This process lacks public transparency and prevents the collaboration that could prevent unintended consequence of hastily crafted legislation,” she said.
The Kansas Nation Education Association joined the governor in criticizing lawmakers for how the process unfolded in the Legislature by tying school funding to an “anti-public school agenda.”
“Those legislators who voted in favor of this bill knew that doing so would pit fully funded schools against harmful policy and leave Gov. Kelly with few options,” said Kansas NEA President Sherri Schwanz.
“Standing up for Kansas kids shouldn’t be this difficult, but the lack of courage to stand up for Kansas kids shown by those who voted for this bill is simply shameful,” Schwanz said in a statement.
In her veto message, Kelly criticized parts of the bill that allowed nonpublic school students to participate in public school activities and expanded a program that provides tax credits for private school scholarships.
The bill signed by the governor leaves intact a measure expanding a program that’s intended to encourage school choice.
The new law broadens a program that provides tax credits for donations to private school scholarships.
It expands student eligibility for the program to 250% of the federal poverty level from 185% of the federal poverty level currently.
A donor to the program now gets a 70% tax credit on their individual or corporate income taxes with contributions from a single taxpayer capped at $500,000. The tax credit would be increased to 75% under the bill.
But Kelly’s veto focused on language in the bill that would have allowed school districts to calculate their enrollment based on the current year or the previous year, a measure that critics said would hurt schools with declining enrollment.
The law previously allowed school districts to base their enrollment on either of the two preceding years. The change approved by the Legislature would have benefited school districts with growing enrollment.
“For districts experiencing declining enrollment, this change precipitates immediate funding adjustments that districts would be required to make in the upcoming school year rather than over the next few years as dictated by current law,” she said.
“These districts are already preparing for the budget impacts of declining enrollment, but the decision to rapidly speed up the fiscal effect of declining enrollment leaves districts in the untenable situation where they must cut budgets in a matter of weeks.”
Kelly said the enrollment calculation was part of the formula approved by the Kansas Supreme Court in 2019. Rewriting the equation, she said, could put the state back in court defending school funding.
“Changes to this formula run the risk of noncompliance and jeopardize our track record of constitutionally funding schools,” she said.
Baumgardner said state taxpayers would be paying multiple times for the same student who moved within the state from one district to another using the old method.
Using the old method, she said, taxpayers would be on the hook for a student who moved into the new district, but that same student would still be counted for enrollment purposes in the district where they once resided.
The Kansas Association of School Boards had vigorously lobbied the governor to veto the bill, partly because of the change in calculating enrollment and because of the expansion of the tuition scholarship program.
But the group was still disappointed by what the governor could not do – add more money for special education to comply with state law.
The governor “couldn’t fix the bill’s inadequate response to the special education shortfall — only the Legislature can appropriate funds,” the group said in a statement.
“This is a fight that will continue. It’s a shame when the state has a record budget surplus that legislators didn’t see this as an opportunity to start closing the special education funding gap.”
