By MICHAEL STRAND
Special to The Hays Daily News
When Gov. Sam Brownback recently unveiled his plans for immediate cuts to state spending to align with revenues -- including a $40 million reduction in this year's state contribution to KPERS, the state employee pension fund -- he stressed he wasn't cutting funds to public schools.
But for the past two years, the governor has been counting contributions to KPERS toward increases in education funding.
In fact, where the state used to directly deposit money into KPERS, it has started first transferring the money into school district accounts, and then into the pension fund, in about the time it takes to say "can't touch this."
"The only reason they put it into our accounts is so they can count it as state aid," said Salina Superintendent Bill Hall, who noted while the state's pension contributions do show up in the district's budget -- $7,296,184 for the 2014-15 budget, an increase of $729,618 from the previous year -- the district doesn't get to use the money.
Also this year, the state began collecting the longtime, 20-mill statewide property tax for schools and then sending it out to school districts -- $7,705,279 for the Salina school district -- and counting it as state funding.
Hall acknowledges the governor's planned cuts to the pension fund also don't really affect the district -- but says it's not consistent to count pension contributions as increased school funding -- but to not count pension cuts as school funding cuts.
"I think the governor's office will count it when it's in their best interest, and not count it when it's not," Hall said.
Mark Tallman, spokesman for the Kansas Association of School Boards, said his organization didn't have a quarrel with counting KPERS contributions as school funding.
"During the campaign, we said KPERS increases should count -- but stressed it's not part of the operating budget, not money schools can use," Tallman said. "So when you cut it, it's not a cut that affects school operations."
Still, Tallman said, "Be consistent ... if you don't think it should count as a decrease (to cut KPERS's funding), then it shouldn't count as an increase."
Local Reps. Diana Dierks and J.R. Claeys, both Republicans, agree.
"It should count as a cut to schools," Claeys said of reduced KPERS funding.
The state is in the middle of a lawsuit over school funding, but Claeys said the various accounting changes that inflate what the state appears to be spending on schools miss the point.
"What (how much) we spend is no longer relevant," Claeys said. "It's now the 'Rose Standard.' "
This March, as part of that state school funding lawsuit, known as Gannon, the Kansas Supreme Court said decisions about whether school funding meets the state constitutional requirements should be based on standards that came out of a 1989 school funding lawsuit in Kentucky, the Rose lawsuit.
Whatever the court's decision on that school funding suit, Claeys said, the shortfall in the pension system needs to be dealt with.
This past year, the state employee pension fund reached the point of being 60 percent funded -- crossing the threshold from "weak" to merely "below average," according to the rating by Standard & Poor's.
The fund is still nearly $10 billion short of being able to pay future retirees, but before the recent cuts it was expected to be fully funded in approximately 20 years.
"We need to not step back from KPERS," Claeys said. "You can't fund other priorities with this $10 billion boondoggle hanging out there."
That unfunded $10 billion means "technically, we are in debt," Claeys said.
Holding at 60 percent funded, instead of making additional progress toward getting the pension system fully funded, "is like paying the minimum on your credit card," he said. "It's a tough position to put yourself in."
Claeys added KPERS became underfunded "by choice. ... In years when we had the revenue to deal with it properly, we grew government instead."
Dierks said she has gotten numerous calls during the past week about the governor's cuts, mostly from people concerned about pensions.
While the governor's cuts are enough to close a $280 million gap between spending and income for the current fiscal year, that gap is now projected at more than $600 million for the budget year starting July 1.
"We've swept all these funds (of excess money), and next year there's no place to go," Dierks said. "Come Jan. 12, there's lots of concern about how we stay solvent."