Sunday, May 22, 2016

Cuts to Public Education or More Money Than Ever?

In recent weeks, the narrative battle between public education and state legislators has reached new heights - or depths - of divisiveness as school districts have struggled with planning for the upcoming school year. As the legislative session progressed, multiple bills were floated, court hearings were held, the governor made cuts to higher education and social services, and school districts - while promised no changes would be made in education funding - have grappled with making reductions in their budgets in order to live with "flat funding" while trying to explain to employees and constituents why further reductions are necessary. 

There's no doubt about it...school finance is a bit complex. It is easy for folks to get lost in the weeds of fund balances, retirement programs, bond payments, and the like...and it is equally easy for folks to cherry pick particular statistics to fit their particular narrative. I would contend, however, that school finance isn't rocket science, and if you spend any time at all with a school business official they can help you understand it. 

I recently was visiting with a supporter of public education who was distressed with the "more money than ever" narrative and wanting to have a better grasp of the big picture and how they can engage in a deeper informed discussion of these issues. The remainder of this post is intended to get out the weed eater and try to clarify how state aid to school districts has changed over the past several years, but also to note how resources available for general school operations have not changed all that much.

The state can easily show that the state is putting "more money than ever" into public education through a vast array of spreadsheets and statistics. Is this the truth? In a word...yes. This is true when considering all funding, inclusive of the state's contributions to general fund and supplemental general fund (aka the local option budget, or LOB), bond & interest aid, and the state retirement system (KPERS). Critical voices of public education have also been trotting out some talking points of late that are, at their best, misleading, and I hope that what follows can at the least serve as points for reasoned discussion in the days ahead.

One of those points - repeated ad nauseum - states that district budgets are growing at unprecedented levels and are higher than ever. The inconvenient truth with that statement is the change in accounting practices that created that "fact." Exhibit A:


The "General Fund Aid Total" column reflects what has historically come from the state as "general state aid." These amounts are reflective of the statewide 20 mill levy that helps to fund public education. Prior to 2014-15, locally levied dollars were sent by county clerks to school districts, and the state made up the difference in state aid. In 2014-15 however, the state directed county clerks to send the locally generated dollars directly to the state in order to "capture" the full effect of the 20 mill levy as state aid. The result, seen in the table above, is reflective of that change in accounting practice...not additional resources.

And your budget is "bigger than ever," right? Exhibit B:


If you look at the 2015-16 general fund budget in the table above, and look no further, you can assume that our school district received over seven million dollars in additional funds for the current year. And, of course, you would be wrong. Beginning in the 2015-16 school year, legislation required that nearly ALL state aid (general, LOB, capital outlay, and KPERS) be credited to the district's general fund and then transferred to the appropriate fund in the district budget. Again, not additional dollars, but a change in accounting practices. 

We often have these issues in data presentations - and when you have significant changes in accounting practices you can easily start comparing apples to oranges. One has to do only some simple math with the above table to get back to an apples to apples comparison. Note Exhibit C:


You will see that the totals are much higher in the "Calculated Per 2015-16 Rules" column, but at least the apples in 2007-08 are now appropriately reflective of the same apples used in the 2015-16 budget.

We regularly attempt to note the difference in "all funds" and "operational funds" as we work to clarify our budgeting challenges. When the state notes "more money than ever," that is inclusive of payments to the KPERS system as well as Bond & Interest state aid. While those two items are certainly reflective of the state's contributions to public education, those are not dollars that are available to the general operation of the school district. Our general operations, in terms of state aid, are funded by general fund state aid, LOB state aid, and capital outlay state aid - along with the local dollars previously generated by the statewide 20 mill levy in the general fund. To look specifically at those combined state contributions, I offer Exhibit D:


I would implore you to look at the total state aid we have received in these operational funds by year from the bottom of that table up. And then I would ask you note the difference between the bottom - nine years ago - and our current year. And then I would ask you to consider the "more money than ever" conundrum and come to your own conclusion.

The data I have used in the tables above are from a larger data set I prepared to help inform this discussion, including notations about changes in accounting practices over this time frame. Following is that entire table, which may be a bit hard to see in this blog post. If you are interested in the actual document, I have uploaded it here. I would also note that this is not representative of the entire school district budget, but only of the revenue the state provides to our school district and considered "state aid."


Finally - and hopefully you made it this far! - a quick explanation about why we continue to work on identifying cuts in education spending at the same time we have "more money than ever." Simply put, flat funding can't work when expenditures aren't flat as well. Any increases in fixed costs, in addition to any desired improvements in salary and benefits for school district employees, have to be offset by reductions elsewhere. We have done this repeatedly for a number of years, which is why the discussions this year have been so incredibly difficult and painful. "Easy" reductions were made years ago, and districts are now struggling with significant reductions in programs and people in order to stay within the resources available. The table that follows shows how a number of USD 373 "fixed costs" - necessary to conduct the business of school - have increased over a nine year period.


This blog post started out to hopefully give a "quick overview" of what is admittedly a complex and multi-faceted subject. Apparently "quick" wasn't possible now that I look at the length of this thing, but perhaps a more in-depth look was necessary. I hope you find it informative, and please feel free to contact me should you have questions!

© 2016 Russell K. Miller, EdD

2 comments:

  1. Great job, Russell. Now, if we could just get the general public to understand that and throw out the Brownback cronies in the Legislature in the upcoming election!

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  2. Thanks for all of your hard work here!!! It's so important that we share these details. And it's important that our community takes the time to try to understand them thank you!!

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