Following is a press release from Kansas Policy Institute. It is important that citizens understand the issue of the unspent fund balances. It’s also important that they are aware of the refusal of school districts and school spending advocates to deal forthrightly with the public on this issue. It provides insight into the nature of our public schools, and why reform is so difficult. In July Dave Trabert, President of KPI, appeared before the Wichita school board to discuss these fund balances. For information on that appearance, see Wichita school district discusses unspent fund balances. For more articles on the fund balances, click on Kansas school fund balances.
Kansas Schools Start The New Year With Even More In The Bank — New Authority To Spend Now Exists
Operating Carryover Cash Reserves Increased 90% Since 2005
September 29, 2011 — Wichita — New data from the Kansas Department of Education show that Kansas public schools increased their operating carryover cash reserves by $93.7 million in the fiscal year ended June 30, 2011. Operating cash reserves (not including capital, debt or federal funds) increased from $774.6 million to a record-high $868.3 million. The increase in operating reserves includes a first-time disclosure of $8 million in school activity funds, which are primarily used for school athletics.
“We continue to hear about schools choosing to cut classroom spending, but many districts are not spending all of their state and local tax income,” said KPI president Dave Trabert. “These funds operate much like personal checking accounts; the unencumbered balances only increase when income is greater than spending. It will be interesting to see how Kansas school districts use the new authority they have which makes it easier to spend down these balances.”
Effective July 1, 2011 school districts were permitted to transfer unencumbered carryover cash balances from a group of twelve funds to be used for any operating purpose. Some of these balances have always been available but, to the extent that restrictions existed, the new law (SB 111) expedites access by lifting all restrictions. SB 111 gives districts authority to access those funds to offset the $232 per-pupil decline in base state aid over the last two years.
Since 2005, Kansas schools have increased operating reserves by $410.1 million. The balances increased every year over that time frame, when a Kansas Supreme Court ruling forced legislators to increase school funding. Last year’s increase was the second-largest; the greatest annual increase of $112.1 million occurred in 2009. A complete, district by district breakdown is available at KansasOpenGov.org, a website operated by Kansas Policy Institute. As with all data on KansasOpenGov.org, the carryover balances were obtained through Kansas open records law from the appropriate government agency, in this case the Kansas Dept. of Education.
Trabert concluded, “As of July 1, the average Kansas school district had nearly four times the amount permitted to be transferred in the funds identified in SB 111. All but ten districts across the state could exercise the full authority of SB 111 and still have carryover cash balances. Of course, each district is faced with a unique situation but teachers and parents have a right to know that this option exists.”