Monday, August 11, 2014

Woe to Education Finance

By Duane Goossen
Funding for public education in Kansas is in big trouble!

Costs for supplies, electricity, transportation, and teachers’ salaries are all increasing. But for the coming academic year, schools must cover those growing expenses with $548 less for each student than they had 6 years ago — 6 years ago. And the state’s grim financial situation imperils any prospect for improvement.

The Kansas school finance formula may seem complicated on the surface, but the key calculation is easy to understand. At its root, a school district’s budget is determined by an amount per pupil multiplied by the number of students. School districts can then add on a “local option budget” of up to 33 percent of the basic budget. Schools must run their classrooms and education programs within that total.

In the 2008/2009 school year, school budgets were based on a per pupil amount of $4,400 — the high point for school finance in Kansas. For the upcoming 2014/2015 school year, lawmakers budgeted $3,852.

School budgets are financed by a combination of state funding and local property tax funding. A change in either state funding or property tax funding affects the per pupil amount. The per pupil figure has dropped because state funding has dropped.

Yes, school districts also receive funds for to pay for other things:  the Kansas Public Employees Retirement System (KPERS), special education, school building construction, capital outlay, food service, etc. However, that funding must be used for its intended purpose. In fact, in most districts, special education aid does not cover the full cost of providing services and must be supplemented from the district’s general budget.

Most notably, the cost of the employer share of school employee KPERS contributions has increased dramatically as the state works to repair an underfunded retirement system. The state sends funding to cover the KPERS expense to school districts, and they in turn send it immediately to KPERS. The KPERS funding makes it look like the state is putting more money into schools, but it’s a so-called “pass-through.” That increased funding does not pay the electric bill or a teacher’s salary, for example.

Is the state in a position to add money to push the per pupil amount up? Definitely not.

In fact, the $3,852 per pupil budgeted for the upcoming school year is probably unreachable given that midyear cuts likely will have to be imposed on the FY 2015 state budget.

For the year following, Kansas faces a situation in which the state’s expenses — without any increase for school finance — will be hundreds of millions higher than revenue. The state’s bank account will be empty and unable to make up the difference.

The fallout from the governor’s tax plan has made investment in Kansas public schools impossible.  At best, the state can only tinker with school finance, which leaves two options: more funding from property taxes, or more school district cuts.

That’s not a recipe for progress.