Senate Education Committee hears overview of Kansas school finance formula

The Senate Education Committee on an unspecified date heard an overview of Kansas’ school finance formula from Matthew Willis, senior research analyst with the Kansas Legislative Research Department (KLRD), who outlined how State Foundation Aid, enrollment “weightings,” local option budgets and equalization interact to determine school funding.

The presentation matters because the State Foundation Aid portion of the formula — which funds a large share of state general fund support to K‑12 schools — is scheduled to sunset at the end of 2027, and committee members pressed for district-level figures and clarifications about how local levies and state equalization affect districts differently.

Willis told the committee that the formula begins by calculating a district’s total adjusted full‑time‑equivalent (FTE) student count, including preschool at‑risk FTEs, and then applies a series of weightings — for at‑risk students, high‑density at‑risk, bilingual students, low‑enrollment or high‑enrollment districts, transportation, career and technical education (CTE), special education, and others — to produce a weighted FTE. "State Foundation Aid, which is when we talk about the school finance formula sunsetting, it is primarily the State Foundation Aid portion that is sunsetting, at the end of 2027," Willis said.

That weighted FTE is multiplied by the base state aid amount — Willis said base state aid for the 2024‑25 school year is $5,378 per FTE — then reduced by specified local foundation elements such as certain grants, unencumbered general‑fund balances and any tuition from nonresident students to determine the state’s total foundation aid payment to a district.

Willis described several items tied to or adjacent to foundation aid. The local option budget (LOB) lets districts raise supplemental revenue through a mill levy; state law requires districts to levy at least 15% and caps the LOB at 33% of a district’s modified base amount, with statewide averages running just over 32%. Capital outlay levies are capped at 8 mills for purchases such as buses, building sites and fixed assets; districts with lower assessed valuation per pupil may receive supplemental state aid to equalize how much those mills raise across districts. Willis said equalization also applies to bond and interest aid (capital improvement) under formulas in statute and KSDE guidance.

Willis flagged that some weightings are now rare or limited: the new‑school facilities weighting no longer applies to any district because its qualifying bond issues predate 2015; ancillary facilities weightings currently apply to four districts in the Kansas City area (Blue Valley, Spring Hill, Gardner‑Edgerton and Olathe). He listed districts receiving the cost‑of‑living weighting and said that weighting is funded entirely by local property taxes and is designed to account for higher local costs in some districts.

The state also provides non‑foundation revenues Willis identified: the employer contribution for the Kansas Public Employees Retirement System (CAPERS) for school employers and certain interlocal entities, a modest state contribution to school lunch programs (he estimated about $2.5 million per year in recent years, with a statutory cap expressed as cents per eligible lunch), and federal funds that are distributed either through the Kansas State Department of Education (KSDE) or directly to larger districts.

Willis described how virtual students are funded differently: each district may operate an authorized virtual school; for students 19 and under enrolled in a district’s virtual school he said the program receives a flat per‑FTE payment (the memo/remarks cited a per‑FTE figure as stated in the transcript), and virtual schools also receive per‑credit payments for younger dropouts and adult learners (Willis cited $709 per credit hour for those payments).

Committee members asked technical and follow‑up questions. Senator Pettee asked whether open enrollment allows districts to charge tuition for out‑of‑district students; Willis said he did not believe open enrollment permits tuition charges and offered to follow up or defer to KSTE representatives. Senator Thomas asked whether the subtraction for “unencumbered funds” uses the year‑end unencumbered general‑fund balance; Willis said it is the district’s unencumbered general‑fund balance (as determined at year end) and offered to confirm details in the memo. Senator Shane requested clearer visuals and a future breakdown of which funds may carry forward unencumbered cash balances and their constraints; Willis agreed and said he would provide more detail.

Willis also agreed to supply committee members with assessed valuation per‑pupil data and with district‑level LOB percentages on request. The committee received a link in Willis’ materials to KSDE’s budget page, which Willis said contains district budgets and “budget at a glance” summaries.

No formal motions or votes were taken during the briefing. The committee chair announced additional schedule items and follow‑ups including a forthcoming nomination hearing for a Kansas Board of Regents nominee and a joint meeting with the House Education Committee.

The committee will receive more detailed budget figures in subsequent meetings and asked KLRD/KSDE to provide district‑level data requested by senators.