Olathe Public Schools has long been an attractive school district for families living in the Kansas City area — and its steadily growing enrollment numbers reflected that.
But Superintendent Brent Yeager said that trend has changed in recent years, citing the rising cost to buy a home and declining birth rates for families.
“Our incoming kindergarten classes are substantially smaller than our exiting senior classes,” Yeager said. “The first many, many, many years of our district from about 1965 to about 2019 it was just the opposite.”
In Kansas, the amount of funding that school districts receive is tied to enrollment numbers. Yeager said the Olathe School District is missing out on $22 million annually it would receive if it had the same number of students as it had in 2019.
School districts across the Kansas City area are facing similar challenges as declines in local, state and federal funding drive them to consider school consolidations, staffing cuts and diving into their reserves to balance their budgets.
Kansas schools say funding loss is driven by enrollment declines and special education funding shortfalls, while schools on the Missouri side say a plan to give taxpayers relief after overpaying their bills would claw back millions of dollars from their budget.
Frank Harwood, deputy commissioner of the Kansas State Department of Education's division of fiscal and administrative services, said declining enrollment is affecting all but a handful of the state’s school districts.
School districts in Kansas also continue to grapple with the state’s chronic underfunding of special education. Kansas statute requires the state to fund 92% of the extra costs to educate students in special education.
The legislature hasn’t met that threshold for 15 years, and Harwood said it will likely pay about 65% of additional costs next year.
“Because special education services are required by state and federal law, districts have to make those payments,” Harwood said. “Those expenses have to be paid, which means it goes back to other areas that then get shorted.”
Yeager said the Olathe School District transferred $44 million from its general funds to balance its special education budget. That money is typically used to pay for staff salaries, benefits, utilities and transportation.
“It inhibits our ability to provide great raises for our staff. It inhibits our ability to innovate, to try new things, and at the end of the day, it's impacting kids in our classrooms,” Yeager said.
To cope with declining enrollment, Olathe plans to consolidate some schools. Yeager said it's also eliminated or reduced 27 positions at the district level, mainly through not filling roles when employees retire or leave and delegating their duties to other staff.
The district also cut a group of mental health professionals because of a decline in state funding for the program and will offer students support through a network of outside providers.
Yeager said the district tries to avoid making staffing decisions that impact classrooms, but he still worries about the effect cuts will have on teachers and students.
“Our teachers and our staff and our parents in this district are the best spokespeople for our school system,” Yeager said. “When they share their experiences and what it's like to work here, and if that becomes harder or doesn't meet the needs of kids that are within our system, that will have that long-term impact on us as a district.”
Blue Valley School District’s budget is on a 'slippery slope'
Harwood said school closures are happening frequently across the state in large and school districts. And allocating more to special education expenditures and declining enrollment has put districts in a difficult position.
“It's going to be really important that they are working with their communities, helping them understand the impacts of the difficult decisions and why those decisions are the best course for the whole community,” Harwood said.
The Blue Valley School District has already faced pushback from parents after teachers were told it was considering cutting its fifth-grade orchestra program.
Superintendent Gillian Chapman said they’re still working with staff on what the program will look like moving forward, including pushing the entry point back to sixth grade or moving it to an after-school activity.
But it’s just one piece of a complex plan the district is navigating as it also faces declining enrollment and a gap in special education funding.
“We don't have the reserves to draw on any longer. We barely have one month of operating expenses to draw on, and so we're just now trying to maintain the programming that our community expects, and to maintain reasonable class sizes and pay our staff a wage that they can afford to choose Blue Valley,” Chapman said.
When enrollment dropped by 173 students in the fall alongside a $10 million budget gap, Chapman said the district began not filling open positions where possible.
It also looked at reducing resources for programs, like combining small classes or allowing students to take a class at a different school with higher enrollment. The district has also increased parking fees and school lunch prices while decreasing the number of days buildings are open during summer break to save on utilities.
Chapman said the district is also decreasing the number of days that some staff work, reducing their pay. She said the district may also move some support staff into different positions, but won’t be cutting their roles.
She said the district is trying to avoid cutting anything that has a direct impact on students. But unless legislative action is taken, she said the reductions will continue.
“I think we're on a very slippery slope, and our community needs to understand that we're doing the best we can, and we'd love to maintain some of these programs and opportunities for students that our community expects,” Chapman said. “However, we're just not able to do it because of the chronic underfunding of special education.”
Missouri falls short of fully funding education
Missouri education officials said budget deficits are becoming increasingly prevalent for school districts across the state.
Kyle Kruse, deputy commissioner of financial and administrative services for the Missouri Department of Elementary and Secondary Education, said COVID-19 relief funding has dried up for schools as the state copes with its own budget deficit.
Kruse said the state budget passed by the legislature this year should have fully supported the school funding formula. But he said declining revenue from taxes on the lottery, cigarettes and sports betting have caused a shortfall.
“It's going to be difficult to have numbers that are fully reliable, and it's also difficult to forecast what general revenue would be available for the state to fund, not only education, but all the other programs,” Kruse said.
Schools were expecting the state’s adequacy target — or estimated per-pupil cost to educate students — to be $7,145. But Kruse said the shortfall for school funding would result in a state adequacy target being paid to schools of just over $6,900.
Lee’s Summit Superintendent David Buck said in a legislative update this week that the school district is set to lose nearly $5 million in state funding if that number drops even further next year.
In a March letter to families, Buck said the district is also receiving less federal funding and revenue from property taxes because of senior tax caps and changes to commercial assessments. He said that puts the district in a $6.5 million deficit, leading it to make significant cuts at the district level last year.
Property tax credits could have 'substantial' long-term impacts
Lee’s Summit joined nearly a dozen other districts raising alarms about interim County Executive Phil LeVota’s plan for property tax credits and a cap on 2025 commercial property assessment increases.
Kansas City Public Schools would lose out on an estimated $60.4 million because of the county’s tax policies, according to the districts’ letter.
Erin Thompson, the district’s chief financial officer, said 80% of the district’s budget is made up of property taxes in Jackson County.
“That's how the system was set up in this country,” Thompson said. “Property taxes pay for school districts, fire departments and libraries, so this would greatly affect public education by limiting us.”
Thompson said the district will likely have to dip into its reserves to make up for the loss while trying to keep a balanced budget, but it’s not operating on a deficit.
A spokesperson for the district said it doesn't anticipate any significant staffing reductions for the upcoming school year and “will be able to maintain current operations and staffing levels in the near term,” but the long-term impact of the property tax rollbacks is substantial.
LeVota responded to the districts’ letter in a video and told KCUR that the tax credits were the best option to give relief to taxpayers without asking for that money back from districts, city and county budgets.
“I sympathize with them,” he said of the school districts. “I don't want to fight with them, but unless they give me some solutions to look at, we're at an impasse here.”
KCPS has already made difficult cuts as COVID relief funding ended, including decreasing its number of school substitutes. During the pandemic, the district placed two full-time substitutes in each building. Now, it has a pool of just 15 subs to rely on.
There is a financial bright spot for the district — it’s continued to see an uptick in enrollment numbers, which adds up to more funding from the state. Last year’s historic $474 million bond passage to improve the district's buildings also means less money will be spent on deferred maintenance from its general fund.
But KCPS still faces other local funding challenges, according to Thompson.
The district is at risk of losing out on $6 million per year if a tax break to revitalize the Country Club Plaza goes through. The Dallas-based Gillon Property Group seeks to cap the Plaza’s property tax bill for three decades, drawing pushback from dozens of parents and teachers.
“Half of us won't be here so it would go into the future that this generation wouldn't even see,” Thompson said.
The school district is also asking families to weigh in on their budget priorities for the next school year as it faces the end of some grants for programs and positions, like digital coaches.
