Facts About Kansas Education, Funding and Tax Policy

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Facts About Kansas Education, Funding and Tax
Policy

• Passing the Buck(s)

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Rising Educational Attainment

• Since 1970, high school graduation rates have
  steadily increased.
• College achievement has more than doubled, and
  tripled for African Americans.
• Since all states joined in the National
  Assessment of Education Progress, Kansas
  combined reading and math ranking increased from
  12th in 2003, to 10th in 2005, and 7th in 2007.

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Advancing OpportunityPercent of Kansans With a
High School Diploma
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Advancing OpportunityPercent of Kansans With a
Bachelors Degree
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Advancing OpportunityKansas Compared to the
Nation (2006)
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Increasing Economic Advantage

• Educational attainment is critical to economic
  security.
• Average incomes increase significantly as
  educational levels rise.
• The education/earnings gap is growing. The job
  market is rewarding educational attainment more
  than ever.

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Educations Economic AdvantageAverage earnings
compared to H.S. Graduate
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Widening Opportunity

• In the early 1970s, special education has been
  required in public schools. Nearly 15 percent of
  students now receive special services. The
  excess cost of special ed has increased from 1
  percent of school district budgets to 10 percent.
• Since 2000, the Kansas achievement gap by
  income and race has narrowed significantly on
  both state and national assessments.

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Cost Benefits to Taxpayers

• School spending has increased significantly but
  compared to personal income in Kansas the cost of
  education has remained stable.
• Even after the Supreme Courts order to comply
  with the constitution requirement for suitable
  finance, district spending compared to personal
  income is almost exactly the same as in 1975
  about 3.6 percent.
• Kansans have benefited from increases in
  educational attainment and income while spending
  about the same proportionate amount of income on
  public education for over a third of a century.

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School District Spending Personal Income
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Changes in District Revenues

• During the 1990s, the Legislature increased state
  funding for districts to reduce property taxes,
  falling from over 50 percent of school budgets to
  23 percent in 2000.
• Since 2000, property taxes have risen to 28
  percent, mostly because of the Local Option
  Budget (LOB).
• Without the LOB, school budgets would be at a
  35-year low compared to Kansas personal income.
• Under recent changes in state law, use of the LOB
  is much more constrained by state limits and
  election requirements.

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Property Taxes District Budgets
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School Staff and Compensation

• Since 1975, districts have consistently spent at
  least 50 percent of their operating budgets on
  classroom teacher salaries and benefits.
• Although headcount enrollment is almost the same
  as in 1975, the number of classroom teachers
  increased from about 26,500 to nearly 38,000.
  Reasons include more special education, bilingual
  and at-risk services more specialized class
  offerings, lower class sizes, and all day
  kindergarten and preschool programs in many
  districts.
• If school districts had the same pupil teacher
  ratio today (12.41) as in 1975 (18.01) and
  spent the same amount on teacher salaries, the
  average salary would be nearly 70,000, instead
  of 49,000.

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Teacher Salaries School Budgets
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Future Cost Pressures

• To compete for high quality personnel, school
  salaries must be comparable to those for other
  professionals not just the consumer price index
  (CPI). The CPI measures consumer costs, not
  salaries or services.
• Special education costs will continue to rise as
  parents seek more services based on new
  technology and research. Recent examples autism,
  deafness, dyslexia.
• Schools must continue to improve student
  achievement, whether because of No Child Left
  Behind or national economic and social
  imperatives. Unskilled individuals simply cannot
  compete in the 21st century economy.
• Schools continue to be given new responsibilities
  to address social needs, such as fighting
  childhood obesity.

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Implications for Tax Policy

• If the benefits of public education are shared by
  the entire state, so should the cost. This calls
  for a broad tax base, balanced among major
  revenue sources, and few exemptions.
• Instead, Kansas is putting more of the tax burden
  on residential property, expanding exemptions and
  exceptions for property, sales and income taxes,
  and reducing reliance on income taxes.
• State and local governments must increase tax
  rates to raise the same revenue relative to
  economic growth.
• If state revenues are limited, revenues must be
  raised locally. For school districts, revenues
  must either be equalized by state aid or will be
  dramatically unequal across the state, raising
  constitutional issues.

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Education, Tax Rates and Economic Prosperity

• Effects of tax burden versus educational
  attainment on personal income and poverty

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Sources of Information

• Data from the U.S. Bureau of Economic Analysis
  used to rank the 50 states per capita income for
  2006 and compare to 1970 ranking.
• Poverty rates from U.S. Census Bureau.
• Comparison of states tax burden used data
  reported by the Tax Foundation.
• Educational outcomes information came from the
  National Center for Education Statistics and the
  U.S. Census Bureau.

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Sources of Information

• For educational attainment, state rankings on
  four measures were used
• Combined reading and math scores on the 2007
  National Assessment of Education Progress.
• Percentage of adults with high school diplomas.
• Percentage of adults with at least a bachelors
  degree.
• Percentage of adults with an advanced degree.
• These rankings were combined to produce an
  average rank on all measures for each state.

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High income states tend to have higher tax rates

• Of the 25 high income states in 2006, 15 were
  also in the top 25 ranked by state and local tax
  burden, and 20 were in the top 25 ranked by total
  tax burden.
• 14 high income states either raised or
  maintained their ranking since 1970 8 are high
  tax for state/local taxes only 11 are high
  tax for total tax burden.

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Low income states tendto have lower tax rates

• 20 of the 25 low income states are also low
  tax states.
• 17 low income states have either declined or
  maintained their low ranking 11 are low tax
  based on state and local tax burden 15 are low
  tax for total tax burden.

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High tax states tend tohave lower poverty levels

• Of the 25 lowest poverty states 13 rank among
  the 25 high tax states based on state/local
  taxes, and 17 are among the 25 states with the
  highest total tax burden.
• Of the 25 highest poverty states 15 are low
  tax based on state and local income and 17 are
  low tax on total tax burden.

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Low tax rates are little benefitif incomes are
also low

• Connecticut highest total tax rates (37.5) and
  highest per capita income (49,852).
• Oklahoma lowest total tax rates (27.6) and 37th
  lowest per capita income (32,210).
• After tax per capita income in CT is 8,000
  higher than OK (34 higher).

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High income states have high educational
attainment

• 20 of 25 high income states are also in the top
  25 in educational attainment.
• 13 of 14 high and improving states are in the
  top 25 in education.
• 20 of 25 low income states are also in the
  bottom 25 in educational attainment.
• 13 of 17 low and declining states are in the
  bottom 25 in education.

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Highly educated states tendto spend more on
education

• Of the 25 states with the highest educational
  ranking, 20 also ranked in the top half in per
  pupil spending.
• Of the 25 states with the lowest educational
  outcomes, 20 were in the bottom half in per pupil
  spending.
• Of the 15 lowest-performing states on education,
  only two ranked higher than 30th on spending.

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Kansas and its neighboringstates reflect
national trends

• Our region Plains States (KS, MO, NE, IA, ND,
  SD, MN) plus CO and OK.
• Only CO and MN have higher per capita income and
  education levels than KS Nebraska ranks fourth
  on both measures.
• MN and NE have higher state/local and total tax
  burden than KS, CO a higher total burden.

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Kansas and its neighboring states reflect
national trends

• Remaining five states each have lower total tax
  rates.
• Each has lower capita income than the top four
  and higher poverty rates than the top three (CO,
  MN and KS).
• These five have lower rates of high school
  completion, adults with bachelors degrees and
  (except for MO) masters degrees.

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Is this prosperity?

• Oklahoma lowest tax burden in region, lowest
  total tax burden in nation.
• Lowest spending education in region.
• Lowest rate of high school completion and adults
  with bachelors degrees, tied for second-lowest
  in adults with masters.
• Lowest per capita income in region.
• Highest poverty rate in region.