Questions about recent Kansas Policy Institute survey
The Kansas Policy Institute released a public opinion survey this week addressing school finance and state tax policy. School leaders may receive questions related to this survey or want to share information on these issues with their school boards and community.
There are important facts about school funding the survey did not address.
- Total school funding, when compared to total Kansas personal income, is at the same level it was 20 years ago, or even 40 years ago.
- Property taxes have nearly doubled since 1997, but so has Kansas personal income.
- Kansas spending per pupil is below average compared to other states and the rank has been dropping in recent years.
- However, Kansas ranks in the top 10 for educational outcomes nationally and out-performs most states in the region.
- Over the past two decades, the percentage of Kansans completing high school and earning college degrees has increased to an all-time high.
If efficiency is measured by outcomes achieved for inputs provided, Kansas schools ranks among the most efficient in the nation.
Kansas spending per pupil
The Survey: The survey asked how much per pupil Kansas school districts receive just from the state of Kansas, with 69 percent responding $5,000 or less, and how much districts receive from all tax revenues, with 71 percent responding $9,000 or less.
The Facts: Total state-only funding reported by the Kansas State Department of Education for the 2011-12 school year was $6,883 per pupil. That includes nearly $700 per pupil in state payments for the Kansas Public Employees Retirement System, which flow through district budgets but are not part of district operating budgets. Total spending per pupil from all sources last year was $12,656.
School funding amounts can be confusing because of the various components of school budgets. The starting point is the base budget per pupil set by the Legislature, which was $3,780 last year. This is what the state provides for a “regular” student. The state then adds various “weighting” factors for special education, at-risk and bilingual students, transportation and district size, which provide an average general operating amount from the state of $6,555 per pupil. Districts add an average amount of $2,110 per pupil for their local option budgets. This amounts to a total state and local operating budget of $8,665 per pupil.
In addition, school districts received an average of $981 per pupil in federal aid for three major purposes: free and reduced price meals for low income students, special education aid for students with disabilities, and “Title” services for disadvantaged students.
Finally, districts received $690 per pupil in KPERS contributions for district employees, and districts spent $2,320 for capital costs such as buildings and equipment, payments on construction bonds for new schools, and other local revenues like student fees. None of these funds – almost 25 percent of total revenues – can be spent for regular education operating costs.
All of these amounts (except the base per pupil) vary substantially among districts. Districts with low enrollments, higher percentages of low income or special needs students, and/or bond issues approved by voters will have higher-than-average expenditures; while other districts will be lower than average.
Misunderstandings about government fund accounting are common. Legislators and state leaders often say half of the state budget is spent on K-12 education. However, that is only true of the state general fund. K-12 funding is only about 25 percent of the total state budget.
Changes in Spending Per Pupil
The Survey: Nearly 40 percent of respondents thought total school funding had decreased by 10 percent over the past five years, 22 percent said school funding was unchanged, and the remainder thought funding had increased by up to 5 percent or 10 percent.
The Facts: From 2008 to 2012, Kansas spending per pupil increased $468 dollars per pupil, or 4.8 percent. However, all of that increase occurred between 2008 and 2009, the final installment of a three-year funding plan approved by the Kansas Supreme Court. From 2009 to 2011, total spending per pupil dropped from $12,660 to $12,283, or 3 percent. Last year, per pupil funding was increased back to $12,656, just slightly below the 2009 level. Most of that increase ($256 per pupil) was for KPERS contributions. The Legislature is trying to make up for past underfunding and because extra payments were made last year to help the state manage its own cash flow. The rest went to school bond payments, capital outlay, food service and student fees for meals and books.
However, school district general fund budgets last year were $234 per pupil or 4 percent below 2008. Because some districts increased their LOBs, the combined general fund and LOB per pupil dropped $100. However, many districts are capped at their maximum LOB level. Since 2008, the consumer price index has increased by about 7 percent, so state funded operating budgets, adjusted for inflation, have actually dropped by about 10 percent.
School District Cash Reserves
The Survey: Nearly half of respondents said they thought school district reserves have increased less than $50 million since 2005. Nearly 30 percent estimated between $50 and $250 million, 9 percent between $250 and $400 million, and just 3 percent over $400 million.
The Facts: Since 2006, total cash balances reported on July 1 of each year increased by $557 million. Districts report they have increased cash reserves due to increased funding in areas such as debt service, long-term uncertainty over state and federal funding, and chronic delays in state aid payments in previous years. State aid payments were frequently late during the state budget crisis from 2009 through 2011. While payments have been paid on time for the past year, the state is expected to face significant financial challenges in the future due to the income tax cuts passed last session.
Over 40 percent of the cash balance increase ($231 million) was for special purposes such as bond payments where voters have approved construction bonds, savings for capital costs like repair and equipment, insurance reserves or other restricted areas. By law, districts cannot use these funds for regular operations.
Another 36 percent of the increase ($119 million) was for programs that need cash on hand because state and local revenues are not received in time to begin operations, such as special education and food service.
Most of the rest of the increase was in school district contingency reserve funds ($95 million), following the Legislature’s decision to nearly double the maximum contingency reserve allowed from 6 percent to 10 percent. Over the past year, total balances remained level. Many districts believe maintaining reserves is a prudent decision when future funding is so uncertain.
The Survey: Nearly two-thirds of respondents agree school districts should combine some “outside-the-classroom” functions with other districts to make more money available for classroom instruction.
The Facts: Kansas school districts are aggressively sharing programs, personnel and purchasing. These efforts include special education cooperatives, area service center programs, purchasing cooperatives, insurance and energy pools, shared staff (both teachers and administrators), distance learning, common accounting and payroll services and numerous other cost-saving initiatives.
Over the past decade, school districts have added nearly 1,000 teachers; 2,500 other instructional positions to assist teachers and students; nearly 300 licensed student support staff (counselors, nurses, etc.) and over 500 jobs in instructional support, most for technology.
To help fund these positions, districts cut 138 non-licensed student support positions; 228 central office jobs, 152 school office positions, 250 other administrative or unclassified positions; 465 maintenance and operations jobs and 274 food service jobs.
The Survey: Finally, the survey asked for opinions on property taxes, which have approximately doubled since 1997 for all local governments. Over half of respondents said this increase was caused by “inefficient spending,” while 12 percent said improvements in service, 14 percent unfunded mandates, 11 percent other circumstances and 12 percent were unsure.
The Facts: School districts received about $2.1 billion in local revenues last year, mostly from property tax but also student fees and other non-tax revenue. About $600 million was from the 20-mill statewide levy set by the Legislature. Another $650 million was the local share of school district LOBs, which are limited by the state to 31 percent of general fund budgets. (In 2005, the Legislature raised this cap from 25 percent to give districts more local control over their budgets.) $150 million was raised from district capital outlay levies, which are capped at 8 mills and subject to voter protest petition. About $50 million was from mill levies for special local weightings subject to protest petition. Over $300 million was raised to repay school district bond issues, which are approved by local voters.
Whatever the cause of increased property tax revenues for school districts, these revenues are either set by the Legislature, directly or indirectly capped by the Legislature, or subject to voter protest or required election.