Kansas schools have used funds to increase spending

Although revenue to Kansas school districts has declined, schools have been able to increase spending by using fund balances. These fund balances have been the subject of controversy, with school spending advocates insisting that they can’t be used in the way that we now see they have been used.

The controversy over school spending has been played out in the pages of the Wichita Eagle, both on the editorial page and in advertisements placed by public interest groups.

The group that has placed most of the ads, the Kansas Policy Institute, was mentioned, although not by name, in an Eagle op-ed written by several Wichita-area school superintendents.

The op-ed states: “This group’s goal is to cast doubt on school funding.” We’ve found, however, that there is plenty of doubt and misinformation about Kansas school funding. A recent poll that KPI commissioned found that very few Kansas residents are well informed about school funding and spending.

School spending advocates have every motivation to keep the public from learning the facts, as the KPI poll found that when Kansans are presented with the truth about school spending, very few are willing to personally pay more taxes for increased spending on schools.

As to the controversy over fund balances, a Kansas Watchdog story (Schools Districts Tap Cash Reserves to Increase Spending ) gives more details. (Kansas Watchdog is a project of the Kansas Policy Institute.)

I spoke with KPI president Dave Trabert about the recent figures released by the Kansas State Department of Education. He said there are several things that Kansans should learn from these figures, the first being that there is good news in these results. Schools have been able to increase spending despite losses in revenue.

Trabert said that the challenge that schools may have is to find a way to offset half of the loss of federal stimulus funds. In the case of USD 259, the Wichita public school district, that figure is $9.7 million. The recent report from KSDE states that the Wichita district will end the current school year with $14.5 million in its contingency reserve fund.

Trabert said that the contingency fund provides the funding needed to keep spending at current levels. There is no need to cut anything, including employees. (The Wichita school district recently announced plans to cut 117 employees.)

While there may be increased costs in some areas that can’t be avoided, districts have options. A bill introduced in the Kansas Legislature would give districts additional flexibility in using fund balances that are not available presently. The bill is HB 2748.

Even without this bill, Trabert said that school districts can “spend down” fund balances simply by not adding as much to the various funds that school districts have been adding. That’s the other piece of good news: school districts have been spending down the funds that they claim can’t be used.

By using fund balances, schools in Kansas were able to increase spending by an estimated $320 million in the current school year. Revenue to Kansas school districts declined by about $50 million, but $370 in fund balances were used to boost total spending by $320 million. Trabert verified these figures with Kansas Deputy Education Commissioner Dale Dennis.

School districts in Kansas also complain that the state is often tardy in making its payments to them. Legislation has been introduced that would require the state to pay on time. The state has the money, Trabert said, noting that if the state truly did not have the funds, we would see plummeting bond ratings for the state. But the state’s policy, as stated in the 2009 Comprehensive Annual Financial Report is “As a cash flow management policy, the State seeks to avoid borrowing from its own idle funds to meet expenditure obligations of the State General Fund.”

So the money is there, but the state makes a deliberate decision to not pay school districts on time.

There is still money in funds that can be used for the upcoming school year. Schools should be able to meet their funding needs without asking the state to increase taxes.


9 thoughts on “Kansas schools have used funds to increase spending”

  1. Area superintendents explain education funding
    The following is an editorial that was printed in the May 2, 2010 Wichita Eagle. Superintendent John Allison, along with superintendents from neighboring districts, believed it was necessary to put into perspective claims made by groups that cast doubt on education funding in Kansas.
    A special interest group has purchased numerous advertisements across Kansas focusing on increases in public education funding. This group’s goal is to cast doubt on school funding. Using information from the Kansas Department of Education, the group presents a biased interpretation of official data. But data without perspective is misleading.
    Critics say: School funding has increased 26% in five years
    The legislature’s own 2006 study on school funding found districts required increases to meet rising state and federal performance expectations. While funding grew 26 percent, performance expectations grew significantly – 40 percent in reading, 63 percent in math! Performance standards against which schools are judged have not been suspended during this recession.
    Additional funding was designated by the legislature for students who need additional support to achieve. This is why Kansas schools invest more than 70 percent of their funds on instruction and student instructional support. Increased funding has gone into the classroom, and the investment is paying off through increased achievement.
    Other significant increases include: Voter-approved bond issues, passed to improve facilities because local taxpayers understand that schools are a long-term community investment; State employee retirement (KPERS) contributions due to state lawmakers’ decision to reflect these funds in local school budgets; and Increases in federal funding devoted primarily to nutrition and to serve children in poverty. In all cases, law restricts funding for designated expenses.
    Critics say: Districts have large cash balances that could be used to offset budget gaps!
    Districts have cash balances on July 1 for the same reason families have cash in the bank at the beginning of each month – to pay bills. Cash balances do NOT mean the money isn’t budgeted! Fund balances in school budgets cover expenses for three to six months because tax revenues do not come in monthly, in some cases only twice a year.
    If this money was not held in reserve, districts wouldn’t be able to pay employees’ health insurance, bond payments, utilities, special education or many other regular expenses. With frequent late aid payments from the state, districts’ contingency reserve funds have been essential to meeting employee payroll. Furthermore, quoted cash balances are overstated by $205 million of state aid that was delinquent on June 30, 2009.
    Critics say: Schools spend more than $12,000 per student to educate children.
    The implication is that this is “too much.” However, the total cost of educating students is calculated including many restricted funds: bond and capital outlay, KPERS retirement payments, federal funds, grants and targeted funds for special groups of students.
    The primary source of revenue used to fund regular education is the base state aid per pupil. These funds, combined with the local option budget (local property taxes), pay for classroom teachers, supplies, technology and utilities, along with the support systems needed to run a district.
    Current state law says that the base state aid per pupil should be $4,656 this year. Instead, schools are at $4,012. Last week House Appropriations recommended an additional $131 per pupil cut, down to $3,881. This is a 17 percent reduction from current law, and comes at a time when schools continue to be held accountable for increasingly high performance expectations.
    The value that Kansas taxpayers are receiving from their K-12 public education system has never been better. Continued budget reductions will be devastating. Funding education today will help tomorrow’s Kansas communities compete for industry and help maintain our state as a great place to live, work and raise families.
    Submitted by the following superintendents on behalf of school children in Sedgwick and Butler counties,
    John Allison, Wichita
    Tom Alstrom, Cheney
    John Burke, Haysville
    Randal Chickadonz, Rose Hill
    Charlie Edmonds, Goddard
    Mark A. Evans, Andover
    Sue Givens, El Dorado
    Doug Powers, Maize
    Brad Rahe, Mulvane
    Mike Roth, Clearwater
    Scott Springston, Valley Center
    Craig Wilford, Derby

  2. Actually Mr. Superintendents you might want to do a little research before you expose just how little you know about your own funding! The numbers that KPI reported were UNENCUMBERED CASH. Unencumbered means they had no claims against them. What part of that do you not understand? Encumbered funds are the ones that are spent but still in the bank. If these clowns are running the schools no wonder we have financial problems.

  3. When funding becomes so complex that truth becomes fiction and fiction becomes truth, it’s time to change the way we fund every child’s education. The system has finally become so top-heavy that it is not longer sustainable in its current form. It’s time to return responsibility for educating each child to each parent. The only way to do that is to have the money follow the child.

  4. Kimpot 54 is right on target with his/her suggestion to “have the money follow the child”. This would bring school choice for students and their parents and bring dramatically needed competition to the status quo public education system.

  5. Hi

    I’ve heard that USD 259 has an ambitious building plan set to start next year including new high schools, and another new Gym at East High for example. I couldn’t find anything on the USD 259 website. Just wondering why we need new buildings if we’re laying off teachers. Yes, I understand that the new building money comes from a “different pile” than teacher’s salaries.

    Later

    Mike
    Wichita KS

  6. Why are we building two new high schools??

    There is a very simple answer: The voters in USD 259 voted to fund the bond issue to pay for these new buildings. This is totally seperate from state funding.

    Do you so hate democracy that the desires of the voters do not matter?

  7. Hi, I didn’t see your response until now. The question stands. We are laying off teachers, we aren’t tearing down any high schools (or other schools), so, we’ll have fewer teachers but two new high schools to put teachers in? I understand the funding issue and I understand the bond issue. STILL USE SOME LOGIC. We are laying off teachers, and building lots of new classrooms. WHY?

    We voted on the Bond issue a few years back, AND we can’t use the bond issue money to pay teachers, just to build. On the other hand it makes NO SENSE to build new schools (not replace school buildings) when you’re downsizing.

    Mike

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