Legislative staff review school finance flows and district cash balances; task force requests month‑by‑month breakdowns

Legislative Research Department fiscal staff presented an overview of school district fund types and statewide aggregates of available resources and expenditures. Matthew Willis (KLRD) showed FY24 totals and trends for cash balances and revenue sources and explained that school budgets are spread among several fund types that carry different legal restrictions and uses.

Willis reported statewide aggregates (rounded): roughly $2.6 billion in combined district cash balances, about $2.47 billion in local revenue, $5.45 billion in state revenue and $993.5 million in federal revenue for FY24 (figures presented in millions during the briefing). The task force discussed that special revenue funds (which include special education, food service, capital outlay and federal funds) are large and, in aggregate, are used for legally defined purposes. Several members asked how transfers into special revenue funds operate; Willis explained that many state and local aids are initially deposited in the general or supplemental general fund and then transferred into special revenue accounts (for example, special education and bilingual aid and certain LOB transfers are moved to the special revenue fund for expenditure).

Lawmakers and board members raised questions about the size and trend of cash balances. Representative Steele noted the apparent growth in aggregated cash balances and asked what reserves represent operational savings versus capital or debt timing. Willis and other staff said a large portion of special revenue cash balances is tied to capital outlay (districts may levy up to 8 mills and often hold capital funds pending construction or equipment purchases) and that timing explains why some balances appear large on June 30; property tax receipts and bond schedules and the timing of payments create peaks and troughs. Several superintendents and directors reiterated that local boards and district finance officers plan reserves for legitimate reasons (facility projects, cash‑flow timing to make September/October bond payments, and required three‑month food‑service carryovers), and that ESSER and other temporary federal funding boosted some district balances during the pandemic years.

KLRD provided a rough statewide calculation during the meeting that FY24 aggregated cash balances were about 22% of the sum of cash balances plus the year’s revenues — a figure lawmakers said they wanted examined in more detail. Legislators requested follow‑up data: month‑by‑month ending cash balances for districts (to see timing and seasonality), operational reserve amounts excluding capital and voter‑approved bond/interest holds, and a clearer mapping of which funds and transfers feed special education expenditures.

Ending: No formal decisions were made. The task force emphasized the need for transparent, month‑by‑month public reporting of district cash balances and a staff memo distinguishing operational reserves from capital or debt‑service timing reserves. Willis and staff agreed to return with requested breakdowns.