Feb. 13, 2006

Over $2 MILLION of Kansas Tax Dollars 
Used by Lobbyists and Attorneys 
to Sue the State of Kansas to Increase Tax Dollars?

Also see:  Free State Media:  Government Lobbying The Government

Last Thursday's Salina Journal broke this story: 

News - Page A03
February 9, 2006

Sarah Kessinger
Harris News Service

Should taxpayers fund lobbyists?
Local officials say it's necessary; critics say it's distortionary

TOPEKA -- A Senate panel on Wednesday debated a bill to restrict local governments from spending taxpayer funds on lobbyists.

Large cities and school districts in Kansas routinely hire lobbyists to represent them in Topeka.

But some lawmakers complained they don't always represent public sentiment evident back home.
. . .

The Kansas Secretary of State shows little information about the non-profit Schools for Fair Funding, Inc.

SCHOOLS FOR FAIR FUNDING, INC.
323 WEST 12TH
HAYS, KS 67601

Business Entity Type
DOM:NOT FOR PROFIT CORPORATION
Business Entity Status
CORPORATION IS ACTIVE AND IN GOOD STANDING

The address 323 West 12th St in Hays is the Hays School District.

GuideStar.org  reports IRS 990s reports filed by non-profits, but somehow this group's IRS 990s cannot be found online, but must be ordered from the IRS in Ogden, UT.  GuideStar only provides this information:

GENERAL INFORMATION

• This organization is a 501(c)(6) Business Leagues, etc. 
• This organization is required to file an IRS Form 990 or 990-EZ.
• Contributions are not deductible, as provided by law.

501(c)(6)s include business leagues, chambers of commerce, real estate boards, etc.

BUT the original Form 1024 filed with the IRS on Nov 11, 1997 by Dennis Shoemaker, Derby, KS indicted the group incorporated on Sept 29, 1997 and that the group was a 501c(4), "Civic league, social welfare organizations."  Is GuideStar wrong about the 501(c)(6)?  In 1997 the detailed narrative description of all activities was this:

To appear before legislative committees in respect to legislation of mutual interest for funding of education in Kansas.

Should Schools for Fair Funding have been forced to amend their application with the IRS at the point their purpose was to pursue their interests only through legal action in the courts?

The IRS 1024 form said "Membership is voluntary and open to all Kansas school districts who have an interest in school finance."

And because the group didn't get their way with the legislature, they changed their purpose to suing the State of Kansas to get their way in the courts?

The Articles of Incorporation filed with the IRS (the Kansas Secretary of State "hides" such records from the public through exorbitant fees to obtain copies) under Article III says:

This corporation is organized NOT FOR PROFIT and the objects and purposes to be transacted and carried on are:

1. To further school legislation.  The general purposes of the corporation are to operate soley and exclusively as a charitable, scientific, literatry and educational organization.

2. To further such objects and purposes, the corporation shall have and may exercise all the powers conferred by the laws of the State of Kansas ... specifically, ... purchase, hold, lease, convey, mortgage and pledge such real and personal property in Kansas ...

When this group changed from working with the legislature forcing their way through the Kansas counts by suing the State of Kansas did their stated purpose change?  Does this change violate their charter? An IRS letter to the group on Jan 18, 1998 granting their 501c(4) status stated this:

"If your sources of support, or your purposes, character, or method of operation change, please let us know..."

Apparently no change was ever filed with the IRS.

What tax dollar information can be found in the IRS 990s?

Part I.  Revenue, Expenses

Part II.  Statement of Functional Expenses

Part III.  Statement of Program Service Accomplishments

• $286,290 for Lobbyists
• $1,824,581 for Legal Fees

OVER TWO MILLION TAX DOLLARS TO RAISE MORE TAX DOLLARS?  Does this make any sense?  Is this fair to all taxpayers in the state?  

Who controls the Board of Directors of Schools for Fair Funding? 

Schools for Fair Funding Board of Directors

Some information is known from press reports.  Most of legal fees were paid to Alan Rupe (Wichita), John S. Robb (Newton), who is also general counsel for USD 265 Goddard.  Have these attorneys become quite rich suing the state for higher taxes for schools?  Will Somers, Robb & Robb disclose how much they've been paid on this law suite?

Also see:

• Phillip Brownlee:  "Who are those guys?  School-finance attorneys vow to keep pressure on Legislature."  Wichita Eagle, Dec. 14, 2003
• Attorneys assert no-compromise stance on education funding, Dodge City Globe, Jan 29, 2004
• Attorneys differ with ed plan, Topeka Capital Journal, Jan 29, 2004
  "Attorneys Alan Rupe and John Robb, whose lawsuit prompted Shawnee County District Judge Terry Bullock to declare the current school funding system unconstitutional."  Picture caption:  "Alan Rupe, of Wichita, ... tells the Senate Education Committee the governor's school finance plan doesn't properly address disparities between districts. Rupe and John Robb, left, of Newton, were lead attorneys in a case challenging the constitutionality of the state's school finance formula."  And what is the governor's school finance plan? Is Sebelius content to just blame the legislature and stack the KS Supreme Court with Democrats?
• Plaintiffs asking additional school districts to join lawsuit, Dodge City Globe, Aug 13, 2005
• Lawrence School District considers joining the suite and paying $4/student, Lawrence Journal-World, Aug 12, 2005

How much was "consultant" Richard G Salmon paid by Schools for Fair Funding?  Why isn't this public information and part of the IRS 990 filing?

Lobbyists for Schools for Fair Funding include

SCHOOLS FOR FAIR FUNDING
  BRADY, BILL
  PETERSON, JOHN C

Which schools are involved in this law suit and are spending tax dollars to sue the State of Kansas to increase tax dollars?

Dr. Ballard said it is anticipated that several school districts, including USD 470, will discuss with the organization the future of memberships and associated legal costs; particularly as the Supreme Court decision is handed down.  Several board members said they were uncomfortable giving more money to SFFF. Dr. Ballard said money out of this year’s general budget had been set aside for SFFF, but the board voted to table the action until after Monday’s hearing in Topeka.

Huge file [30+ MB] with "2004 Comprehensive Annual Financial Report," USD 260 Derby, hides the words "Schools for Fair Funding" or even "Fair Funding." I cannot find these words  anywhere in this 111-page document.  Where is this district's hiding the tax dollars it's spending on Schools for Fair Funding?

• 2005-06 Schools for Fair Funding membership dues

Where is Emporia hiding their figures about tax dollars used to sue the State?

“I recommend staying the course,” said Superintendent Marvin Estes at the board's Monday night meeting. “I don't see any other group but this one that is pressing the Legislature to fix the funding formula.”

"The board also approved membership dues totaling $15,345 (2557.5 estimated enrollment x $6 each) for Schools for Fair Funding, the organization of mid-sized Kansas school districts that is currently suing the state to get the funding formula made fairer for all schools."

Chris Moon's May 30, 2005 Topeka Capital-Journal article was excellent, "State pays court costs:  School funding suit brought by districts has cost $2.9 million":

As the Kansas Supreme Court continues closed-door deliberations over the constitutionality of the state's school funding system, the tab for the six-year legal battle is approaching $3 million.

All of it is funded by taxpayers.  ...

"It's an affront to the idea of freedom," said Karl Peterjohn, executive director of the Kansas Taxpayers Network, which opposes tax increases. "For taxpayers to be forced to fund a lawsuit to raise taxes is an affront to most people in this state."

Unless you are one of those school districts that is suing the state.

...

Figures compiled by the Kansas Legislative Research Department show the state has spent nearly $2.9 million on one side of the lawsuit or the other since 1998.

All told, the districts have spent $2,095,020.

Kaufman, who leads the Schools for Fair Funding coalition, said roughly 75 percent of that was used directly for attorney fees.

Meanwhile, the legislative research department reports the two primary defendants in the lawsuit -- the Kansas State Board of Education and the state -- have spent $780,990 fighting the lawsuit.

The state board spent the most, at $459,752. The attorney general's office, which is representing the state, has spent $321,238.

...

But Peterjohn has been a sharp critic of the spending, calling the lawsuit "a legal lottery" in which "the only guaranteed loser will be the taxpayer."

...

EXPENSIVE LITIGATION The tab for ongoing school litigation challenging the state's school finance formula has reached $2.8 million -- all of it funded by Kansas taxpayers. Here is a break-down of the costs:

The plaintiffs

The Salina and Dodge City school districts sued the state in 1999 asking for better and more equitable funding for schools. Thirteen other districts have joined the effort, paying several dollars to the effort for each student enrolled in their schools.

Fort Scott* -- $33,403 Emporia -- $206,125 Derby -- $258,550 Salina -- $296,373 Newton -- $138,212 Manhattan -- $107,139 Augusta -- $85,800 Great Bend -- $124,626 Dodge City -- $210,562 Independence -- $92,781 Leavenworth -- $165,557 Winfield -- $103,514 Arkansas City* -- $79,848 Hays -- $124,047 El Dorado -- $68,483

Total -- $2,095,020

*Fort Scott and Arkansas City are no longer part of the coalition. Fort Scott dropped out after the 2001-2002 school year and Arkansas City dropped out this year.

The defendants

The Kansas State Board of Education and the state are listed as defendants in the lawsuit. The state board has its own attorney. The state is represented by the attorney general's office, which has contracted with an outside law firm.

State Board of Education -- $459,752 Attorney general -- $321,238

Total -- $780,990

SOURCE: Kansas Legislative Research Department

Does this make any sense?  Is this fair to all tax payers in the state?  Why are tax dollars used to represent some citizens that support an issue, but not citizens that oppose an issue?  What happened to equal protection in Kansas?  No one is against schools, but why are there few or no checks and balances on spending tax dollars for schools?  Why can't we have "local control" of our schools?

Does the KS Supreme Court ruling about this make any sense? Has the KS Supreme Court usurped the power of the legislature?

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