Superintendent says KSDE valuation change for RHIDs could reduce USD 383 state aid

Superintendent Eric Reed told the Manhattan-Ogden USD 383 Board of Education on Aug. 20 that the Kansas Department of Education (KSDE) plans to change how it treats valuation tied to Residential Housing Incentive Districts (RHIDs). Under the approach Reed described, valuation added by a RHID would count toward the district’s valuation for Local Option Budget (LOB) calculations; if the housing added valuation but did not generate a proportional number of students, the district could see a decrease in state aid under the LOB formula.

Reed explained the previous approach excluded RHID valuation from district valuation while students generated by the housing were counted, which could raise state aid without adding valuation. KSDE’s proposed correction would count the RHID valuation within the district valuation, making the relationship between valuation and student generation more balanced. Reed characterized that as a fairer statewide treatment but warned it could reduce USD 383’s state aid unless projects generate enough students to offset the valuation increase.

He said the district can object to an RHID on the grounds of hardship if a project would increase taxes or otherwise harm the district budget. Reed said he had not yet contacted the city on the change but would do so when specific projects approach the district. Board member Christine asked whether the district’s preference sheet would be updated; Reed said he would update materials when projects come forward and would notify the city as needed.

Board members were advised to weigh projected student generation when reviewing any future RHID proposals because the change increases the importance of student-count estimates in evaluating fiscal impact.