MOE Waiver Request — Kansas, Documentation of the State’s Fiscal Burdens
Summary
This is part of a Kansas MOE waiver request that opens with the Department's list of factors the Secretary may consider, such as whether the State increased support for education and whether it used ESSER, GEER, or HEER funding to replace State funding. It closes with a letter from Laura Kelly, who is identified as Governor of Kansas, saying her administration stands ready to answer questions about the waiver request. In answer to the question on fiscal burdens, Kansas says its consensus revenue estimating group on April 20, 2020 reduced revenue forecasts for SFY 20 and SFY 21 by a combined $1.272 billion. It says an allotment plan announced June 29, 2020 included expenditure reductions of $437.5 million and revenue adjustments of $266.8 million.
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“MOE Waiver Request — Kansas, Documentation of the State’s Fiscal Burdens.”
Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-education-pdf-www-ed-gov-3c4ef17168/
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2. Documentation and data supporting the description of the State’s fiscal burdens (e.g., revenue data, appropriation
tables, unemployment statistics, etc.) including any State action that impacted State revenue (e.g., tax increases or
decreases).
3. In addition, in its waiver request, a State should submit information on the relevant factors listed below to support
its request. The Secretary may ask States for additional information after States submit the MOE waiver request
form.
In determining whether to grant a State an MOE waiver, the Secretary may consider factors such as:
Has the State increased support for education?
The Department understands that it is possible that a State has maintained or increased overall funding for education and the
proportion of the State budget for education has still declined because of increases in other areas of the budget (e.g., public health). In
these cases, the Secretary may consider:
• Has total State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal year?
• Has total State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal
year?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has the State appropriated an increase in State funding for K-12 education and for higher education for future fiscal years?
Are there exceptional circumstances that caused the State to be unable to maintain support for education?
If a State’s support for education declined, the Secretary may consider:
• Are there specific severe effects of the COVID-19 pandemic on the State’s economy that necessitated reductions in support for
elementary and secondary education and for higher education?
• What steps did the State take to avoid and/or minimize such reductions?
• Did the State use Coronavirus State and Local Fiscal Recovery Funds awarded by the U.S. Department of the Treasury under
section 9901 of the ARP Act to support elementary and secondary education and higher education?
• How did reductions in support for elementary and secondary education and for higher education compare to other budget
categories?
• Did the State take steps that reduced or will it take steps to proactively reduce its financial resources in a way that impacted or
will impact its ability to meet MOE requirements (e.g., tax changes (and in what context), additional contributions to rainy day
funds)? If so, what was the impact of the reduction (e.g., to what extent were its resources reduced or will its resources be
reduced)?
Has the State used or will it use ESSER, GEER, or Higher Education Emergency Relief (HEER) funding to replace State
funding for education?
It is important for the Department to understand the State’s use of pandemic-related Federal funds when reviewing a request for a
waiver. The Secretary may therefore consider:
• Will all unallocated ESSER or GEER funds relevant to the waiver be used to provide net new resources to K-12 schools and to
higher education and not be used to replace existing State commitments to K-12 education and to higher education?
• Will all unallocated HEER funds be used to provide net new resources to higher education and not be used to replace existing
State commitments to higher education?
• Has the State previously used any ESSER, GEER, or HEER funds to replace State funding for education?
To the best of my knowledge and belief, all of the information in this MOE data submission are true and correct and the
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My administration stands ready to answer any questions that the Department has regarding
this waiver request. Please do not hesitate to reach out to my office with any questions. Should
you require further information, please contact Adam Proffitt, Director of the Budget. His phone
number is 785.296.2436 and his e-mail address is Adam.C.Proffitt@ks.gov.
Sincerely,
Laura Kelly
Governor of Kansas
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1) A description of the extent to which the State experienced fiscal burdens in preventing,
preparing for, and responding to the coronavirus and an explanation of how those fiscal
burdens affected the State’s ability to maintain fiscal effort (e.g., the status of and any
changes to the State’s rainy day fund, whether the State experienced a decline in revenues,
or an increase in other emergency expenses resulting from the pandemic, such as expenses
related to health care, unemployment insurance, or support for small businesses)
Consistent with nearly every state, Kansas saw a precipitous drop in revenues early in the
pandemic. On April 20, 2020, the state’s consensus revenue estimating (CRE) group reduced
revenue forecasts for SFY 20 and SFY 21 by a combined $1.272 billion relative to previous
forecasts. Due to the revised outlook, on June 29, 2020, Governor Kelly announced an allotment
plan for SFY 21. This plan included expenditure reductions totaling $437.5 million and revenue
adjustments of $266.8 million. Additionally, the Governor instructed all agencies to submit SFY
22 budget requests that included a reduced resource package equal to ten percent of their base
budget (excluding debt service and caseload programs) as a starting point for the budget creation.
State economic indicators began to slowly recover throughout the fall of 2020, which
prompted the CRE group to modestly increase its revenue forecast. On November 25, 2020, the
CRE group increased the revenue forecast for SFY 21 by $463.0 million. With this revised
outlook, the Governor was able to begin adding funding back into the SFY 22 budget that had seen
reductions with the earlier actions. As the economy continued making progress through the spring
of 2021, the Legislature was able to add even more funding to key areas of the budget, including
restoring funding for higher education. In the final days of the 2021 session, the Legislature, at
the request of the Governor, added an incremental $53 million to the higher education budget as
one of its final actions. This addition of incremental dollars was intended to show the state’s
commitment to working with the Department on meeting its MOE requirements, and it is intended
to be a pathway to full compliance with MOE requirements for SFY 23.
When the final budget bill for SFY 22 was passed at the end of the 2021 Legislative session,
the Legislature passed a budget with a projected ending balance of only $547.2 million. This
ending balance was projected to be 6.7% of our total expenditures, below the statutorily required
7.5%. The approved budget also contemplated liquidating the entirety of the state’s budget
stabilization fund and transferring those moneys into the SGF as a maneuver to sustain funding for
key programs.
While the revenue outlook in Kansas has improved greatly since the end of the 2021
legislative session, the explosive spread of the Delta variant across the entire US continues to
threaten a sustained economic recovery. We are monitoring its spread across Kansas and are
focused on responding swiftly and deploying all required resources to ensure the health and safety
of our citizens. We will also monitor the state’s economic recovery and will continue to find ways
to invest in areas of the state that have been hardest hit by the pandemic.
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2) Documentation and data supporting the description of the State’s fiscal burdens (e.g.,
revenue data, appropriation tables, unemployment statistics, etc.) including any State action
that impacted State revenue (e.g., tax increases or decreases).
Supporting documentation showing the state’s fiscal burdens and headwinds can be found
at the end of this document.
Enclosure A provides the state’s budget profile for SFY 19 – SFY 22, based on the most
recent approved budget. On this profile, you will see that the state projected a SFY 22
ending balance of 6.7% of total expenditures, which is below our statutorily required 7.5%.
Given the revenue forecasts that were available at the time this budget was passed, adding
additional funding to any line item would have put the state in a perilous fiscal position.
Enclosure B provides several charts that show the increases in total dollar funding for
higher education over the past four years. The first chart compares actual/projected higher
education funding by year against the dollar funding during the baseline years. The second
chart shows the pure dollar increase by year above the average of the baseline years. The
following three charts show historical funding for both K-12 education and higher
education in Kansas.
Enclosure C provides revenue forecasts issued by the CRE group for April 2020,
November 2020, and April 2021. Additionally, this provides a look at full year SFY 21
actual revenues, which actualized above forecast.
Enclosure D provides a line-item review of the Governor’s allotment plan for SYF 21, as
was introduced in July 2020 when revenues first saw a sharp decline. The plan outlined in
this enclosure was an effort to bring the state’s SFY 21 ending balance to zero, as opposed
to being negative as was projected at the time.
Enclosure E provides links to relevant source data material. This includes a link to SB 50,
which was a bill that was implemented by the 2021 Legislature which reduced the overall
tax revenues for Kansas. This bill did expand the tax base by requiring out of state
marketplace facilitators to remit sales tax on all in-state sales, but it also provided tax relief
across a number of areas of the tax code, which will lead to a net decline of general fund
revenues in the coming years. Most notable of the tax reductions is the ability for Kansas
taxpayers to itemize their Kansas return, regardless of if they itemize or take the standard
deduction on their federal return.
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3) In addition, in its waiver request, a State should submit information on the relevant factors
listed below to support its request. The Secretary may ask States for additional information
after States submit the MOE waiver request form.
Has the State increased support for education?
The recently enacted Kansas budget for SFY 22 provides an increase in funding for higher
education of $111,699,941 relative to the baseline years, as is detailed in our completed Appendix
C. When combining higher education and K-12 education, the state’s level of support has
increased by $973,876,528, relative to the baseline years.
Of the increase in total SGF expenditures in SFY 22 versus the baseline measuring period,
K-12 education represents 57.8% of the increase and higher education represents 7.5% of the total
increase.
Are there exceptional circumstances that caused the State to be unable to maintain support
for education?
The state has increased its level of support for higher education for SFY 22 by
$111,699,941, relative to the baseline years.
Has the State used or will it use ESSER, GEER, or Higher Education Emergency Relief
(HEER) funding to replace State funding for education?
The state has not used the proceeds from ESSER, EANS, or HEER as replacing state
dollars for any of the effected entities, nor does it plan to with any remaining unallocated funds.
We view these streams of federal dollars as net new resources for the education system in Kansas,
and they are being allocated to schools in accordance with their intended purpose.
As part of the Governor’s allotment plan for SFY 21, the state did initially use GEER
funding to replace state funding for higher education. The use of GEER in this capacity was to
offset the impact of any SGF cuts to higher education that occurred with the allotment. The initial
plan called for a reduction of the base funding for higher education moving forward, as revenue
projections at the time were several hundred million dollars below previous forecasts. However,
as revenues improved during the fall of 2021, the Governor restored this allotment with a
corresponding level of state funding for the SFY 22 budget, ensuring that the pre-pandemic base
allocation for higher education was restored, prior to any reduced resource changes being applied
to the agency, as was the case with all state agencies.
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Enclosure A (SFY 22 Approved Budget)
State General Fund Revenues and Expenditures
As of passage of SB 159, the 2021 Legislative Session Omnibus Bill
Governor’s Comparison Report:
https://budget.kansas.gov/wp-content/uploads/FY2022 Comparison Report-07.12.2021.pdf
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Enclosure C (April 2020 CRE Estimate for SFY 20)
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Enclosure C (April 2020 CRE Estimate for SFY 21)
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Enclosure C (November 2020 CRE Estimate for SFY 21)
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Enclosure C (April 2021 CRE Estimate for SFY 21)
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Enclosure C (Actual SFY 21 Revenues)
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Enclosure C (April 2021 CRE Estimate for SFY 22)
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Enclosure D (Initial SFY 21 Allotment Plan)
FY 2021 Governor's State General Fund Allotment Plan
July 2020
Revenues
* Delay PMIB Loan Payment--FY 2021 $ (132,166,666)
* Additional PMIB Loan--FY 2021 (132,166,667)
* State Water Plan--Dept. of Agriculture (1,247,699)
* State Water Plan--Kansas Water Office (1,160,000)
* EDIF--Crossroads Conversations Project (20,000)
Subtotal--Revenues $ (266,761,032)
Governor's Allotment Expenditure Reductions
FY 2021 Human Service Caseload Savings $ (146,686,946)
Delayed FY 2022 State Foundation Aid Payment--KSDE (79,345,549)
Replace Higher Education SGF with GEER (26,274,163)
IDD Waiver--FY 2021 Increase (8,958,340)
SB 155 Career & Technical Education--Board of Regents (8,500,000)
Winfield & Lansing Expansion--Department of Corrections (6,089,218)
School Safety Grants--Department of Education (5,000,000)
University of Kansas Medical Center--Cancer Center Research Grant (5,000,000)
All Other Agency-Specific Allotments (40,033,935)
KPERS Death & Disability (D&D) Moratorium--Exec. Branch (46,687,965)
Coronavirus Relief SGF Savings (1,932,543)
Subtotal--Governor Allotments $ (374,508,659)
Expenditure Reductions Needing Legislative Action
* Coronavirus Response Fund $ (19,978,708)
* Judicial Branch--D&D Moratorium (525,289)
* Legislative Branch--Death & Disability Moratorium (224,775)
* Evidence-Based Juvenile Programs--Department of Corrections (42,315,140)
Subtotal--Expenditures Requiring Legislative Action $ (63,043,912)
Total Allotment Plan $ (704,313,603)
* Items Needing Legislative Action
Source:
https://budget.kansas.gov/budget-report/fy-2021-governors-budget-report/
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Enclosure E (Links to Resources)
Gannon v. State of Kansas (School Finance Case):
https://www.kscourts.org/Cases-Opinions/High-Interest-Cases/Luke-Gannon-v-State-of-Kansas
2021 Legislative Session Appropriation Bills:
http://kslegislature.org/li/b2021_22/measures/documents/hb2007_enrolled.pdf
http://kslegislature.org/li/b2021_22/measures/documents/sb159_enrolled.pdf
http://kslegislature.org/li/b2021_22/measures/documents/hb2134_enrolled.pdf
2021 Legislative Session Tax Adjustments Bill:
http://kslegislature.org/li/b2021 22/measures/documents/sb50 enrolled.pdf
SFY 22 Governor’s Comparison Report (Includes Approved SFY 22 Budget):
https://budget.kansas.gov/wp-content/uploads/FY2022_Comparison_Report-07.12.2021.pdf
Historical Revenue Forecasts from CRE Group:
https://budget.kansas.gov/estimates/
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