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.Learn how you can support the Voice for Liberty. Click here.