Saturday, March 7, 2015

Block Grants & the Impact on Newton

Earlier this week, the Kansas Legislature introduced bills in both chambers outlining a plan to move from a formula driven school finance plan to a "block grant" method of funding. The governor and many legislators continue to decry that the current formula is too complex, outdated, and intended to obfuscate the process of financing the state's obligation of providing a suitable education to its populace. If you have some time and the inclination, you can peruse the House version of the new math. Personally, and having only worked four years with the current formula and appreciated its simplicity in being able to plan and predict funding for the coming year, I would posit that the block grant bill is anything but simple. But I digress...

The tables I am including below have been built on the figures provided by the Kansas State Department of Education. The data provided by KSDE includes the Governor's earlier allotment recommendation followed by the legislature's recommendations for the current year (FY15, aka 2014-15) as well as a two year budget for FY16 & FY17. If you choose to tinker with the spreadsheet linked above, you might also take a look at this document that explains the various columns that are included.

In that our district recently decided to the close the virtual program we sponsor at a local education service center, I have backed out the dollars that KSDE included for virtual. No program, no money. And unlike the spreadsheet provided by KSDE, which by legislative direction did not include comparisons to the current year original budget, I have included those numbers to get a clearer picture - and again, backed out virtual funds in order to get an "apples to apples" view. As a matter of further explanation, the General St. Aid row is a combination of all the weightings currently used in the school finance formula (at risk, bilingual, vocational, etc.). The Cap Outlay Aid and LOB Aid rows are representative of the equalization formula that has been utilized to offset differences in property values around the state for Capital Outlay and Local Option Budgets (I pontificated a bit on equalization in a previous post). The KPERS row is the state's contributions to the retirement program for public educators. In previous years this has just flowed in and right back out of our budget, but is now included as part of the block grant. Finally, the columns include our anticipated Legal Maximum Budget for the current year (what we budgeted for) along with the proposed adjustments for the current year and the following two years. This is about as simple as I can get it, folks:



So, a reduction during our current year followed by some modest increases, right? Well, yes...if you just look at the totals. Block grant advocates have touted that a benefit of this method is taking off the various weightings and allowing districts more flexibility in how they use their funds. This is misleading, however, as paying the KPERS obligation is no more an option for local districts than it has been for the state. In order to get a clearer picture, then, I offer you the same information included above, but minus the KPERS line:



Looks a bit different, huh? Same reduction for our current year, and very small increases for the following two. Some would say this is ok...it's just flat funding and not a reduction. And frankly, some would be wrong. Flat is never flat. Increases in fixed costs like electricity, water, sewer, property insurance, unemployment/work comp insurance, etc. are very likely. Giving salary schedule movement to our very deserving teaching staff costs about $300,000 each year. Offering modest hourly increases to dedicated classified staff is needed to hire and retain qualified personnel. With flat funding, the only way to compensate for such increases is to find other places to reduce expenses. Unfortunately, after years of budget reductions in public education, the easy choices are long gone. 

Hearings are yet to come on the block grant proposal, and then the legislature still has to find a way to close the state budget deficit and appropriate funds required to meet its obligations. Should the current school finance formula be fully funded, we would be looking at an entirely different story, but that is not at all the intention of the proposed block grant system. 

Stay tuned...the legislative session is a long way from over.


© 2015 Russell K. Miller, EdD

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