A look at equitable tax levies for school districts in Kansas

Tuesday, February 16, 2016 by Dr. John Heim - Executive Director of the Kansas Association of School Boards

McFly Looks at Equity

I love me some history. Having taught the subject to teenagers, I know that my enthusiasm isn’t shared by all. We have all heard some variation of the axiom “Those who forget the past are doomed to repeat it.” Goodreads website attributes various permutations of this wisdom to folks ranging from George Santayana to Lemony Snicket to Jesse “The Body” Ventura. The ever-cynical Kurt Vonnegut offered an admonishment saying, “I’ve got news for Mr. Santayana: We’re doomed to repeat the past no matter what.”

Let’s see if we can’t change Kurt’s mind. First, I will attempt to make history interesting by making this lesson about something near and dear to everyone: your money. Next I will outline the dangers of falling into the trap of time as a flat circle.

It is time to get started, so crank up the DeLorean and fire up the flux capacitor: We are headed for 1988. Ronald Reagan is president and a Bush is running for president. (Check that dial again: 1988? This seems like déjà vu.) Denver lost the Superbowl. OK, that’s good. Bono and U2 are at the top of the charts and “Rain Man” is playing at the Cineplex. An Islamic woman prime minister is serving in Pakistan.

Locally, Danny and the Miracles will win the National Championship. That’s the good news. The bad news is that if you live in the Spring Hill School District your General Fund school mill levy is 119.3 mills. But the good news is that if you live in the Burlington School District your local mill levy is 6.9 mills. That’s right, the range of mills necessary to support local schools ranged from 6.9 to 119 mills. The median mill levy was 53 mills.

In 1988, the highest five mill levies in Kansas were:

District	1988 GF Mills	2016 GF Mills
Spring Hill	119.3	20
Blue Valley	93.4	20
Olathe	92.9	20
Desoto	91.2	20
Topeka	87.5	20

When equity was finally addressed in the 1992 law, all General Fund mill levies were set at 35 mills. The law also included assistance for low valuation districts in their bond and interest funds. For all but about 20 districts, the shift to 35 mills represented a huge decrease in local property taxes. The property tax decrease – and resulting revenue dip - was compensated for by increases in sales and income taxes.

Over the next few years, as the state’s economy improved, the General Fund mill levy was decreased a few more times until it reached the current 20 mill levy indicated above. The question of why the legislature passed the 1992 school finance bill is subject to some debate, but it cannot be denied that tax equity was a big part of the equation.

But why is tax equity such an important factor in a school finance case? The courts have held that a child’s education cannot be a function of his or her address. Because the taxpayers in the highest taxed districts were paying 17 times what those in the lowest were paying, issues of equity come into play. It is harder to raise the revenue in a high tax district than it is in a low tax district.

Without proper equity provisions in a school finance system, Kansas runs the risk of falling back into the trap of some districts paying significantly more locally than others. We don’t want to go back to Biff’s future where up is down and down is up.

How can we avoid this? That’s the topic for next week’s blog.