In this episode of WichitaLiberty.TV: Jonathan Williams of American Legislative Exchange Council (ALEC) explains the goals of ALEC, changes to Kansas tax policy and the results, and the effects of state taxes on charitable giving. View below, or click here to view in high definition at YouTube. Episode 100, broadcast November 8, 2015.
Shownotes
Arthur C. Brooks, author of The Conservative Heart, spoke about being a happy warrior in the conservative movement during the keynote speech of the Annual Awards Dinner of the Kansas Policy Institute on October 20, 2015, in Wichita. Brooks was introduced by KPI President Dave Trabert. Videography by Paul Soutar. View below, or click here to view at YouTube.
Part of the difficulty in understanding and debating school spending in Kansas is the starting point, that is, the lack of factual information. From 2012, a look at a survey that revealed the level of knowledge of school spending by Kansans.
When asked about the level of spending on public schools in Kansas, citizens are generally uninformed or misinformed. They also incorrectly thought that spending has declined in recent years.
These are some of the findings of a survey commissioned by Kansas Policy Institute and conducted by SurveyUSA, a national opinion research firm.
In a press release, KPI president Dave Trabert said “As Kansans consider how to deal with the potential fallout from another school lawsuit, pressure to expand Medicaid, ballooning pension deficits and concerns about rising property taxes, we wanted to check again to see how perceptions of the facts influences opinions. Good information is essential to informed opinions and it is clear that when given the facts, Kansans offer much different responses than what is typically reported from overly-simplistic public surveys.”
Here’s the first question of the survey, asking about Kansas state spending on schools: “How much state funding do you think Kansas school districts currently receive per pupil each year from JUST the state of Kansas? Less than $4,000 per pupil? Between $4,000 and $5,000? Between $5,000 and $6,000? Or more than $6,000 per pupil?”
The correct answer is the last category, according to Kansas State Department of Education. State spending on Kansas schools, on a per-pupil basis, is $6,984 for the most recent school year. That’s total state-funded spending of $3,184,163,559 divided by 456,000.50 full time equivalent students. 13 percent of survey respondents chose the correct category. 44 percent thought the correct answer was less than $4,000.
Mike O’Neal, President of Kansas Chamber of Commerce, spoke to members and guests of the Wichita Pachyderm Club on October 9, 2015. His topic was “The Kansas Budget and Taxes: The 2015 Legislative Session and Looking Ahead to the 2016 Legislative Session.” This is an audio presentation.
Reporting from the Wichita Eagle on this event is here, but be sure to read the comment by Dave Trabert of Kansas Policy Institute:
The Eagle’s analysis here is just wrong. The statute does not refer to current spending as the Eagle used, but total spending.
72-64c01. Sixty-five percent of moneys to be spent on instruction. (a) It is the public policy goal of the state of Kansas that at least 65% of the moneys appropriated, distributed or otherwise provided by the state to school districts shall be expended in the classroom or for instruction. http://www.kslegislature.org/…/072…/072_064c_0001_k/
Absent a qualification limiting the analysis to current spending or anything else, the statue applies to total spending.
Total spending according to KSDE in 2014 (2015 hasn’t been publised) was $5,975,517,681 and Instruction spending (downloaded and tabulated across all funds in the KSDE Comprehensive Fiscal and Performance System) was $3,293,217,088, which is 55.1% of spending. Mike O’Neal correctly said that Instruction accounted for 55% of total spending.
The difference between actual spent on Instruction and 65% is therefore $591,576,250. That is more than $500 million…and the Eagle is again wrong on the facts.
FYI, the definition of Instruction comes from KSDE and the US Dept of Education…and has not changed over the period.
Why can’t Kansas public school spending advocates — especially a former Kansas state budget director — tell the truth about schools and spending, wonders Dave Trabert of Kansas Policy Institute.
Dave Trabert, Kansas Policy Institute
He has a table called State Aid and Enrollment that is sourced to page 60 of Kansas July Comparison Report, but much of the information in his table does not appear on page 60. The total amount of $4.059 billion is there and two of the smaller items but not the rest. A few items — KPERS payments, Local Option Budget Aid and Capital Outlay Aid — are close to what we found in other documents but not the $2.639 billion he calls General Classroom Aid. And you can’t find that anywhere because there is no such thing as “General Classroom Aid.”
KCEG and other “just spend more” proponents often make reference to “classroom aid” in ways to make it appear that the Legislature is not providing enough “classroom aid” but here’s the dirty little secret you (and especially teachers) aren’t supposed to know: only local school boards and superintendents decide how much money is spent on instruction. The Kansas State Department of Education has an official definition of “Instruction” spending which is often used interchangeably with “classroom” but there is no official aid classification for “classroom.” Mr. Goossen and friends are just making it up for political purposes.
Under both the old school formula and the temporary block grant system, districts get several different types of aid but they alone decide how much of the multiple discretionary amounts received are used for Instruction, Administration, Student Support, Maintenance and other cost centers. Even Capital Outlay Aid (contrary to Goossen’s implication) can used for Instruction purposes (and is) as set forth in the KSDE Accounting Manual.
Here are a few more examples of the truth being tortured by Mr. Goossen:
Goossen says the block grant system is “not a recipe for creating world-class schools” as though that is some sort of revelation. The block grant system is only a temporary funding mechanism put in place to allow time to build a new student-focused funding system, replacing a dysfunctional, institution-focused system that most certainly was not a recipe for creating world-class schools.
Here’s what the old system produced after the injection of nearly $2 billion over the last ten years:
It will always cost a lot of money to fund public education but it’s how the money is spent that makes a difference — not how much. For example, Instruction spending accounts for just 55% of total education spending; $2 billion and ten years ago it was 54%. Here’s another discouraging fact: enrollment increased by 4% over the last ten years, while classroom teacher employment increased by 5% and non-teacher employment increased by 10%.
Outcomes apparently don’t really matter to KCEG and others (including many school districts and their taxpayer-paid lawyers) who continue to say there was nothing wrong with the old system … it just needed more money! Just look at what happened when more money was poured into the system.
Scores barely changed while per-pupil spending jumped from $6,985 per pupil to an estimated $13,343 last year, which is $3,223 more per-pupil than if funding had been increased for inflation since 1998. Reading proficiency remains below 40% and Math Proficiency is still less than 50%.
This is not an indictment of the many good people working hard in schools but an indictment of the old funding system. It is no one’s fault that achievement is unacceptable but it is everyone’s responsibility to acknowledge that fact and work toward a funding mechanism that puts students and outcomes first and uses efficiency savings to drive more resources to instruction and increase pay for effective teachers.
Kansas schools could receive $21 million annually in federal funds if the state had adequate information systems in place.
One of the nuggets buried in a policy brief released last year by Kansas Policy Institute is that the state is not capturing all federal funds to which it is entitled. That is, would be able to capture if the state had adequate information systems in place. Here’s a section of the policy brief:
Capture federal reimbursement of K-12 KPERS costs
States are entitled to be reimbursed by the federal government for the pension costs of school employees engaged in the delivery of federally-funded services, such as Special Education and Food Service. Kansas, however, foregoes federal reimbursement because many school districts’ payroll systems lack the ability to properly capture the necessary information. (Estimates are not permitted; the information must flow through payroll systems.) The State should require that school districts utilize a single state-provided or outsourced payroll system to capture annual federal reimbursement of $21 million.
Here is a sum of money that Kansas schools could receive if only Kansas had the necessary information systems infrastructure in place. A side benefit would likely be better management of school systems’ payroll if such a system was in place.
Is $21 million a significant sum when the state spends several billions on schools each year? The Kansas school spending establishment contends that a tax credit scholarship that might divert $10 million from the state to private schools is something that schools can’t afford. But here’s an example of twice that amount being available if Kansas school leadership had the will to obtain it.
The Kansas Policy Institute policy brief “A Five-Year Budget Plan for the State of Kansas: How to balance the budget and have healthy ending balances without tax increases or service reductions” is just ten pages in length. It may be downloaded from KPI here or alternatively from Scribd here (may work better on mobile devices). A press release from KPI announcing the policy brief is at 5 Year Budget Plan Outlines Path To Protect Essential Services and Tax Refom.
Asking taxpayer-funded entities whether they are operating efficiently is a perfectly legitimate question that, frankly, should be the starting point of every budget discussion. That some find it offensive is indication that the issue should be much more aggressively pursued across government, writes Dave Trabert of Kansas Policy Institute.
By Dave Trabert, Kansas Policy Institute.
Thirty-eight school districts have applied for additional state aid from the Extraordinary Needs fund based on increased enrollment, reduced property values, loss of state aid (just Hutchinson) and the reactivation of two refugee resettlement agencies in Wichita by the U.S. Office for Refugee Resettlement. The State Finance Council will decide whether — or the extent to which — each case merits additional funding from state taxpayers.
Several members of the Finance Council asked the applicants to provide information about steps taken to make their district operate more efficiently, to which some school districts, legislators and media responded with various forms of criticism. Asking taxpayer-funded entities whether they are operating efficiently is a perfectly legitimate question that, frankly, should be the starting point of every budget discussion; that some find it offensive is indication that the issue should be much more aggressively pursued across government.
Kansas Policy Institute gathered the following data to help citizens make their own determinations, and even more information is available in our 2015 Public Education Fact Book. We requested a copy of each applicant’s Budget at a Glance for the current year from those who didn’t already have it posted to their web site in order to compare their current year budget with actual spending from prior years. We were only able to collect data on 21 of the 38 districts; remarkably, 8 applicants said their budget wasn’t finalized so the data wasn’t available. Seven applicants had the data but five of them would not provide it and two said they couldn’t provide it because those with access were away from the district. We were unable to get a response from the other two.
Some interesting information is found in the data shared by the 21 applicants, including:
Complete information on the applicants that provided information (dollar amounts by category including Capital, Debt Service and Total) can be downloaded here. The spreadsheet also shows the amounts each district received in block grant-equivalent funding for FY 2014 and the amounts for FY 2015 through FY 2017 as calculated by the Department of Education.
Kansas City’s 57% increase in Administration amounts to $15.7 million, which is ironically about the same amount that applicants are collectively requesting in Extraordinary Needs funding. A Legislative Post Audit efficiency study conducted in 2013 found that Kansas City was paying well above market for many positions and it appears that that may still be true.
The adjacent table is a sampling from the district’s payroll listing for the 2015 school year obtained through an Open Records request. Work of this nature could be outsourced at much better prices, with the savings made available for Instruction.
Kansas City may be somewhat of an extreme example but it is very common for districts to have work performed by district employees that could be more efficiently outsourced. This is just one example of valid questions that should be asked of districts that are requesting additional aid.
Allocation of resources to teaching and non-teaching positions would be another valid line of inquiry. Classroom teacher employment over the last ten years has outpaced enrollment in many cases and non-teacher employment has grown even faster. This is not to say that the relationship should be the same in every case, as there are a number of legitimate reasons for some degree of variance. But the raw data — available here — allows for additional benchmarking that indicates opportunities more efficient staffing levels.
It would also be pertinent to ask applicants whether they provide lucrative payouts to employees who terminate or retire. The Blue Valley superintendent received a one-time payment for deferred compensation of $328,591 last year; the cost of that alone is significant but it could also 
dramatically increase his pension .. for life. The Shawnee Mission Assistant Superintendent collected $132,614 for unused sick leave and vacation upon retirement and could also collect additional pension as a result. Kansas City told us that the position of Chief Human Resources Officer was eliminated but his contract had to be paid out, which accounts for the large increase last year.
Local school boards make these decisions to provide lucrative payouts but taxpayers all across Kansas pick up part of the tab, as there is no separation between what is paid with state and local tax dollars on items of this nature.
School districts may have made some spending adjustments but they are still organized and operating rather inefficiently according to Legislative Post Audit and other information. It would be appropriate for any grant of extraordinary aid to be conditional upon a commitment to implement substantive measures to implement specific operating efficiencies, including outsourcing to regional service centers and the private sector as appropriate.
Kansas school funding has been growing much faster inflation and enrollment, but for some, it will never be enough, and they will continue to use taxpayer money to press their monetary demands, writes Dave Trabert of Kansas Policy Institute.
By Dave Trabert
A recent blog post by the Kansas Association of School Boards (KASB) Associate Executive Director Mark Tallman says “Total school district funding is, in fact, at an all-time high, expected to top $6.1 billion this year” but “… the part of school funding available for day-to-day operating costs is not keeping up with inflation and enrollment.” There are several misleading aspects to his statement and the data does not support the intended message, but let’s first give credit for the courage to contradict education officials who say funding has been cut. Bravo!
KASB’s definition of operating costs does not comport with the official definition used by the Kansas Department of Education or the U.S. Department of Education1, but for the sake of argument, let’s say that it’s correct. Let’s also assume that their definition of current operating funding represents the amount needed to efficiently operate schools and achieve the required outcomes, even though the facts refute any such claim.
By increasing the KASB-defined operating spending for inflation (the calculation for 2006 is $6,928 times (191.41 ÷ 185.14) = $7,162), we find that schools received a lot more money each year than if KASB’s 2005 amount had been increased each year for inflation. The margin of difference is getting closer over the next two years (if one doesn’t count all of the funding), but funding will have exceeded inflation by almost $3.9 billion since 2005.
KASB uses a different methodology in their inflation analysis. They show prior years’ spending in 2014 inflation-adjusted (constant) dollars; i.e., $X spending in 2014 has the same buying power as $Y in prior years. That methodology is common for restating buying power but it is irrelevant to the question of whether schools are or have been adequately funded.
The Kansas Constitution says the legislature must make suitable provision for the finance of public education; it does not say that schools must be given whatever they want to spend or that efficient use of taxpayer money cannot be taken into account. The honest truth is that no one knows what schools need to achieve the necessary outcomes while making efficient use of taxpayer money, because no such analysis has ever been undertaken in Kansas. We do know, however, that every Legislative Post Audit has found schools to be operating inefficiently and school superintendents openly acknowledge that they choose to spend more than is necessary in many circumstances. We also know that school districts haven’t even spent all of the money they’ve received over the last ten years, as about $400 million has been used to increase operating cash reserves.
There may be ways to demonstrate that today’s funding has less buying power than a particular point in time but that doesn’t mean that each year’s funding didn’t keep up with inflation and enrollment — as shown above, per-pupil funding as defined by KASB was $3.9 billion more than an inflationary increase.
The gap is even greater for total funding, which would have been $6 billion less over the last ten years if per-pupil funding for the 2005 school year had been increased each year for inflation. School districts received large funding increases beginning in 2006 from a Supreme Court Montoy ruling based on a cost study that has since been abandoned by the Supreme Court in Gannon.
The Shawnee County District Court may believe that schools are not adequately funded, but they ignored the Kansas Supreme Court in arriving at what amounts to little more than a political perspective. School funding has been growing much faster inflation and enrollment, but for some, it will never be enough … and they will continue to use taxpayer money to fund KASB justifications (and attorneys) for their monetary demands.
1KSDE and the U.S. Department of Education say operating expenditures “…do not include equipment (700 object codes), Capital Outlay or Bond & Interest. [700 object codes include expenditures for acquiring fixed assets, including land or existing buildings; improvements of grounds; initial equipment; additional equipment; and replacement of equipment.]” The KASB definition also excludes Food Service and employee retirement costs but they don’t disclose that their definition is not the official definition and it also does not comport with the Kansas Supreme Court, which says all funding sources, including retirement costs, should be considered as part of adequate funding.
An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. A new paper from Kansas Policy Institute explains.
July 30, 2015 — Wichita — An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. These Maintenance of Effort (MOE) requirements are highlighted in a new paper by Kansas Policy Institute and is authored by former state budget director Steve Anderson. MOE stipulations force state and local governments to maintain a constant level of funding for several federal grant programs, most notably Medicaid and the Elementary and Secondary Education Act, two major components of Lyndon Johnson’s “Great Society;” in FY 2014 these two programs accounted for over two-thirds of Kansas general fund expenditures.
Dave Trabert, president of Kansas Policy Institute, offered the following in conjunction with the release of the paper, “Maintenance of Effort requirements are an end-run on the U.S. Constitution, which prohibits the federal government from dictating how states operate. The feds use MOE to create contractual obligations that effectively control large chunks of states’ budgets and limit legislators’ ability to make appropriate decisions for their constituents.”
Unfortunately, policy makers are bound by MOEs regardless of the state’s budget situation, changing priorities, or new-found efficiencies. A previous legislature can effectively tie the hands of future elected officials. Sometimes it is even agency bureaucrats who sign up for “free federal dollars” apart from the normal appropriations process with little legislative input.
Steve Anderson, author of the “Maintenance of Effort: The Federal Takeover of State Budgets” and current Senior Fiscal Policy Fellow with KPI, said, “The constitutional right of a state to control the appropriation of their citizens’ tax dollars is too often being abrogated by the federal government’s MOE requirements. This takeover of the state budgets is like an addictive drug from which withdrawal is painful. Unlike a drug, this addiction can be created by prior legislatures, governors or even bureaucrats. The pervasiveness of MOE goes to almost every function of state government.”
The report outlines several strategies that can be utilized by state governments to mitigate the negative effects of MOEs. One proposal may prove difficult with existing programs but brings some common sense to policy making moving forward — avoid federal funds as much as possible. Conversely, a similar recommendation would be that all new grant programs be approved by the state legislature.
In conclusion KPI President Trabert said, “MOE requirements are not about improving outcomes, but dictating how states operate. Until Congress puts a stop to this practice state legislators must say no to the promise of ‘free money’ from the feds and avoid the problems brought by MOEs.”