kansas k-12 efficiency task force: spending facts and efficiency opportunities

7/31/2019 Kansas K-12 Efficiency Task Force: Spending Facts and Efficiency Opportunities

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Governor'sK12EfficiencyTaskForce October8,2012

KansasPolicyInstitute 1

K-12 Efficiency Task Force

Spending Facts & Efficiency Opportunities

DaveTrabert

President,Kansas

Policy

Institute


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Kansas Policy Institute

Independent, non-profit organization promotingeconomic freedom and individual liberty.

Economic issues with expertise in K-12education, tax, fiscal policy and health care.

Personally written several studies on K-12finance and student achievement. 30 yearsexperience as financial manager and general

manager of for-profit businesses.Dispel myth of either / or ultimatum.


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Our focus on education is finding ways toimprove outcomes while also making efficient,effective use of taxpayer funds.

It costs a lot of money to fund public educationbut taxpayers dont have unlimited funds.

Money is important, but many education officials

say (and the data shows) that its how money isspent that mattersnot how much.


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A lot of our work (not just in education) is fact-finding. Much of what citizens understand abouteducationhere and across the nationiseither incomplete or in some cases, not true.

Thats not being critical of citizens, schooldistricts or anyone else. Its just a fact based onmultiple scientific polls and lots of experience.

Facts sometimes cause discomfort but gooddecision-making requires good information.


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One last thought...how districts spend money isntalways their preference.

To some extent, districts are stuck working within

a system full of well-intended barriers. Thats noones fault, but everyones responsibility.

Those barriers can be removed.


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Is More Money the Answer?

Most Kansas education officials equate betterachievement with higher spending.

Some researchers agree but a lot of researchers

and many education officials in other statesbelieve that money does not drive achievement.

Data shows no relationship between higher

spending and better achievementno risk ofefficiency having any impact on achievement.


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States with Best Regional ScoresSpend Less than Kansas

2010Current

Spending

PerPupil

WhiteStudents Hispanic

Students Black

Students

Scale

Score

U.S.

Rank

Scale

Score

U.S.

Rank

Scale

Score

U.S.

Rank

Kansas $9,715 229 T20 209 T15 204 T21

Missouri $9,634 226 T30 209 T15 199 T31

Oklahoma $7,896 221 T48 207 T23 199 T31

Colorado $8,853 236 6 203 T32 207 17

Nebraska $10,734 230 T17 208 T20 199 T31

Texas $8,746 233 T10 210 14 210 T7

Source:CensusBureau;U.S.Dept.ofEducation,NationalCenterfor

EducationStatistics (4th gradeReading)


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More $ Higher Achievement

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

0%

10%

20%

30%

40%

50%60%

70%

80%

90%

100%

'98 '02 '03 '05 '07 '09 '11

4thReading

8thReading

Total$

KansasReadingProficiency(NAEP)andPerPupilSpending(KSDE)

Source:U.S.Dept.ofEducation,NCES;KansasDept.ofEducation


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More $ Higher Achievement

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

0

3

6

9

12

15

1821

24

27

30

33

36

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

ACT

Scores

and

Per

Pupil

Spending

(KSDE)

ACTScore

TotalSpend

Source:ACT.org;KSDE


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2011DemoMix 2011Score 2012DemoMix 2012Score

White 75.8% 22.6 73.8% 22.6

Hispanic 8.8% 19.4 9.9% 19.5

AfricanAmer. 5.6% 17.7 5.3% 17.6

Asian 2.8% 22.5 2.8% 22.0Amer.Indian 0.9% 20.2 0.7% 20.3

Hawaiian 0.1% 18.7 0.1% 20.5

MultiRacial 3.3% 21.2 4.6% 21.0

Other/No Resp. 2.8% 22.0 2.8% 22.7

Composite 100% 22.0 100% 21.9

ACT Score Only Appeared to DeclineBecause the Demographics Shifted

Source:ACT.org


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ACT Score Only Appeared to DeclineBecause the Demographics Shifted

ActualDemo

Scores

Weighted

the

Same

as

2012

Shows

No

Change

2008 2009 2010 2011 2012

CompositeScore 21.9 21.8 21.9 21.9 21.9

Onceagain,fundingchangeshavenoimpactonindependentnational

tests.

FYI,Total

State

Aid

and

Base

State

Aid

peaked

in

2009.


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State Achievement

Not comparable to NAEP, which has higherstandards and different methodology.

Comparisons only valid to 2006 per KSDE;

standards were reduced in 2002 and 2006 andthe test changed in 2006.

Slight upward trends since 2006, while funding

rose significantly through 2009, dropped in 2010and has been increasing since.


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Meets Standard - Reading

$1,700

$1,900

$2,100

$2,300

$2,500

$2,700

$2,900

$3,100

$3,300

$3,500

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

AllStudents StateAid

Source:KansasDept.ofEducation


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Full Comprehension - Reading

$1,700

$1,900

$2,100

$2,300

$2,500

$2,700

$2,900

$3,100

$3,300

$3,500

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

AllStudents StateAid



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Spending Not Related to Achievement

Large funding increases had no impact onindependent national tests.

State assessment scores on slow, steadyupward trend while State aid rapidly increased,dropped and then steadily rose again.

Money is important but its how money is spent

that mattersnot how much.


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Revenue Review


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K-12 Funding

State Federal Local Total

1994 $1,469 $137 $1,012 $2,618

2005 $2,362 $399 $1,529 $4,290

2009 $3,287 $414 $1,966 $5,667

2010 $2,868 $727 $1,995 $5,590

2011 $2,962 $667 $1,959 $5,587

2012 $3,184 $447 $2,139 $5,771

MillionsofDollars

Source:KansasDept.ofEducation.


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State Aid Per-Pupil

Base KPERS Bond Other Total

1998 $3,670 $157 $42 $178 $4,047

2004 $3,863 $250 $113 $567 $4,793

2006 $4,257 $320 $130 $1,299 $6,006

2008 $4,374 $434 $156 $2,045 $7,008

2010 $4,012 $477 $194 $1,643 $6,326

2011 $3,937 $409 $212 $1,953 $6,511

2012 $3,780 $690 $230 $2,283 $6,983


G ' K 12 Effi i T k F O t b 8 2012


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Base State Aid State Aid

Base State Aid was only 54% of state aid in 2012.

KPERS 10%, Bond 3%, Weightings & Special Ed 33%.

Weightings assigned for At Risk (free & reduced lunch),

Bilingual, High / Low / Declining enrollment, newfacilities, etc.

BSAPP x Adjusted Enrollment = State Financial Aid

(with adjustments for local effort)plus KPERS, Bond,Special Education.

Governor's K 12 Efficiency Task Force October 8 2012


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Base State Aid State Aid

456,000 full time equivalent students in 2012.

672,771 FTE was basis for aid distribution.

Districts with higher concentrations of At Risk,

Special Education, etc. receive more revenue,which partly accounts for higher spending per-pupil relative to districts with low levels of same.

Governor's K 12 Efficiency Task Force October 8 2012


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Governor sK12EfficiencyTaskForce October8,2012


Local Aid Based on Spending

KSDE calculates Local aid by subtracting Stateand Federal aid from total spending reported bydistricts.

Total spending can be higher than reported.Construction spending from bond proceeds isntreported as Capital spending; its only reported asDebt Service when bond payments are made.

Changes in cash reserves also impact Local aid.

Governor's K12 Efficiency Task Force October 8 2012


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Governor sK12EfficiencyTaskForce October8,2012


Unencumbered Cash Reserves

All spending and revenue data is based on

standard government cash accounting.

District accounting is run through more than 30different funds created by the Legislature.

Annual fund balances only increase if revenuesexceed expenditures (encumbrances accountfor funds committed via purchase order but notpaid at year-end).

Governor's K12 Efficiency Task Force October 8, 2012


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Governor sK 12EfficiencyTaskForce October8,2012


Carryover Cash (millions)

Capital Debt AllOther Total

2005 $320.1 $284.7 $458.2 $1,068.6

2006 $364.2 $299.1 $494.1 $1,157.6

2007 $384.0 $307.4 $524.3 $1,236.4

2008 $449.3 $320.5 $587.1 $1,360.6

2009 $451.7 $344.3 $699.2 $1,498.9

2010 $429.8 $361.9 $774.6 $1,567.4

2011 $470.8 $366.3 $868.3 $1,710.2

Source:KansasDept.ofEducation;excludesfederalfunds

AllDistrictsStatewide



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y ,


Carryover Reserve Implications

$410 million increase in All Other (current

operating) funds represents tax revenue thatwas used to increase reservesin some casesplanned, but $164 million of the increase was in

At Risk, Special Ed and Bilingual.Carryover reserves present different type ofefficiency opportunity. Finding ways to make

reserves available helps districts and at leasttemporarily reduces taxpayer costs.



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y ,


Carryover Reserve Ratio

All Other reserve balance on July 1 divided by

current operating expense.

Some degree of reserves are necessary for cashmanagement, but carryover reserve ratios rangefrom 1% to 65%, with median of 16%.

Dozens of districts consistently operate with lessthan 10% ratio.



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Spending Review



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Spending Per-Pupil

5,177 5,6346,274

6,6206,884

6,671 6,641

3,4293,711

3,8834,179 4,209 4,048 4,081

1,1011,251

1,4011,389 1,567 1,611 1,561

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2005 2006 2007 2008 2009 2010 2011

Instruction OtherCurrent Capital&Debt

Source:KansasDept.ofEducation, ComparativePerformance&FiscalSystemwithno

capitalallocatedtooperatingcosts.



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Spending Per-Pupil

53.3% 53.2% 54.3% 54.3% 54.4% 54.1% 54.1%

35.3% 35.0% 33.6% 34.3% 33.2% 32.8% 33.2%

11.3% 11.8% 12.1% 11.4% 12.4% 13.1% 12.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011

Instruction OtherCurrent Capital&Debt

Source:KansasDept.ofEducation,ComparativePerformance&FiscalSystemwithno

capitalallocatedtooperatingcosts;2012fromDistrictBudgetProfiles,unknownifany

capitalisallocatedtooperatingcosts.



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2012 Record Spending Year

Districts Budget at a Glance reports provide

summary information. Greater detail on costcenters wont be available for several weeks.

KSDE accounting policy permits districts to

report some capital expenditures as operatingcosts; BAG comparisons therefore understatecapital and overstate operating costsand

different basis than other per-pupil comparisons.



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2012 Record Spending Year

2011 2012 %Change

Instruction $3,093 $3,178 2.8%

Other

Operating 1,866 1,925 3.1%

CapitalOutlay 169 209 23.7%

DebtService 446 457 2.5%

Total $5,574 $5,769 3.5%

Source:KansasDept.ofEducation,BudgetataGlance

MillionsofDollars



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BAG Spending Per-Pupil (with somecapital included in operating costs)

$6,799 $6,970

$4,103 $4,221

$1,351 $1,460

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2011 2012

Capital&Debt

OtherCurrent

Instruction

Source:KansasDept.ofEducation, BudgetataGlance;districtsarepermittedtorecordsome

capitalspendingasoperatingcosts,theexactamountofwhichwontbeknownuntillate2012

.



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Primary Spending Categories

Instruction Operations&

Maintenance

StudentSupport Transportation

StaffSupport FoodServices

GeneralAdministration Community Services

SchoolAdministration CapitalOutlay

CentralServices (Admin.) DebtService

Source:KSDEAccountingManualavailableonlineat

http://www.ksde.org/LinkClick.aspx?fileticket=u1dJuGOEBzg%3d&tabid=18

77&mid=7853



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2011 Per-Pupil SpendingStatewide

Low Median High

Instruction 4,767 7,023 17,698

StudentSupport 0 287 2,172

StaffSupport 5 268 887

Administration 624 1,269 4,236

Operations /Maint. 187

1,105

6,444

Transportation 48 501 1,981

FoodService 318 573 1,459

CommunitySvc. 0 0 334

Capital&

Debt 0

1,132

19,405

Total 8,840 12,367 51,408

Source:KansasDept.ofEducation,ComparativePerformance&Fiscal

System;nocapitalexpendituresallocatedtooperatingcosts.



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2011 Per-Pupil Spending72 499 FTE Students

Low Median High

Instruction 5,993

7,688

17,698

StudentSupport 0 239 858




1,228

6,444


FoodService 429 658 1,459


Capital&

Debt 0

532

21,983

Totalspending 9,763 13,367 51,408


System;nocapitalexpendituresallocatedtooperatingcosts.Totalis

measurementofoverallspending,notthesumofeachcategory.



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2011 Per-Pupil Spending500 999 FTE Students

Low Median High

Instruction 4,990

6,680

11,620





1,104

1,723


FoodService 318 556 799


Capital&

Debt 0

1,000

6,726

Total 9,426 11,764 18,393






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2011 Per-Pupil Spending1,000 1,999 FTE Students

Low Median High

Instruction 5,087

6,538

12,726





1,002

1,563




Capital&

Debt 0

1,139

4,849

Total 9,209 11,399 19,285






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Low Median High

Instruction 4,767

5,925

11,380





853

1,458




Capital&

Debt 0 1,430

4,261

Total 8,840 11,156 18,241






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Low Median High

Instruction 5,460

6,062

8,506





794

1,422

Transportation 182 321 460



Capital&

Debt 476

1,398

3,582

Total 10,179 11,219 15,075






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2011 Per-Pupil SpendingOver 15,000 FTE Students

Low Median High

Instruction 6,027

6,390

8,293

StudentSupport 414 540 872




804

1,297

Transportation 287 340 988


CommunitySvc. 0 0 0

Capital&

Debt 654

1,654

3,161

Total 11,518 12,529 15,628






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2011 FTE Enrollment ranges from72 students to 46,484

FTE Enrollment Number

of

SchoolDistricts Percent

of

SchoolDistricts FTE

Students

Enrolled Percent

of

FTE

Enrolled

Lessthan500 131 46% 38,160.9 8%

500to999 73 26% 52,102.4 11%

1,000

to

1,999 38

13% 53,860.1

12%2,000 to4,999 28 10% 90,226.9 20%

5,000to14,999 11 4% 82,123.9 18%

Over15,000 5 2% 138,638.6 30%

Statewide 286

100% 455,112.8

100%

Source:KansasDept.ofEducation;FTEinComparativePerformance&Fiscal

Systematthetimespendingdatawasdownloaded



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Combine Non-Instruction Functions

District size obviously has some impact on

spending but significant efficiency opportunitiesexist without consolidating districts.

Will discuss in greater detail later but touch on it

now before Twitter lights up with the c word.Various service-sharing arrangements existacross district lines.but there is much moreopportunityand its not just about savingmoney.



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2011 Median Per-Pupil SpendingAdministration vs. Student/Staff Support

$0

$200

$400

$600

$800$1,000

$1,200

$1,400

$1,600


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Students per District by County

286 districts across 105 counties.

77 counties have fewer than 1,000 students perdistrict (see handout in packet).

22 counties have just one district, althoughportions of a county are assigned to districts inadjacent counties in some cases.



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County2012FTE

EnrolledDistricts

Avg.FTEper

District

CountySq.

Miles

Gove 469 3 156 1,071

Gray 1,260 4 315 869

Marion 1,976 5 395 954

Sumner 3,688 7 527 1,185

Osage 2,738 5 548 719

Jefferson 3,577 6 596 557

Dickinson 3,742 5 748 852

SamplingofCountieswithLowAverageEnrollmentandMultipleDistricts

Source:KansasDept.ofEducation,GoogleMaps. Portionsofsome

countiesmaybeassignedtosomedistrictsinadjacentstates.



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County2012FTE

EnrolledDistricts

Avg.FTEper

District

CountySq.

Miles

Rawlins 311 1 311 1,071

Sherman 982 1 982 1,056

Jewell 293 1 293 914

Osborne 300 1 300 894

Hodgeman 303 1 303 860

Scott 895 1 895 718

Morris 753 1 753 703

SamplingofCountieswithOnly1HomeDistrictperKSDE

Source:KansasDept.ofEducation,GoogleMaps. Portionsofsome

countiesmaybeassignedtosomedistrictsinadjacentstates.



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Geography is not a deterrent to service-sharing

arrangements or combining many non-instruction functions across multiple districts orcounties.

Not just about saving money. Efficiency can(and should) reduce costs but also providesopportunity to redirect money.

Expect resistance and apprehension, but knowthat parents are supportive when fully informed.



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KansasOpenGov.org

All government data; listed by district

Revenue by source

Spending by category

Carryover cash

Student achievement

Employment and enrollment

Payroll listings

Checkbooks



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Efficiency Opportunities



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Heard superintendents and other district staff

say theyve done all they can, and dont doubtthat they believe that to be true.

Thats why independent reviews by experts in

logistics and finance are so valuableinsidersknow what theyve done but Ive seen bunkermentality, parameter limitations and politicalcorrectness prevent a lot of employees andmanagers from speaking up or seeing the fullpotential.



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Independent experts can ask questions without

fear of retribution from supervisors.

Benefit ofwhy do you that? orwhy do you doit that way?

Tremendous opportunities to save money andredirect resources where they will do mostgoodbut many require cultural shift in thinking.



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Potential Operating Savings atMedian (millions of dollars)

Less than

500

500 to

999

1,000

1,999

2,000to

4,999

5,000 to

14,999

Over

15,000Total

Instruction 16.1 24.7 29.8 75.4 32.1 38.0 216.2

Stud.Support 2.5 5.6 8.9 18.4 9.6 17.1 62.0

StaffSupport 3.3 3.5 2.9 4.7 5.4 12.1 31.8

Administration 4.8 4.9 6.4 5.0 6.9 26.1 54.0Oper. &Maint. 5.2 5.5 4.9 6.6 2.5 22.3 47.1

Transportation 5.2 4.3 3.6 8.9 8.3 16.8 47.0

FoodService 3.8 0.1 0.0 0.6 0.3 0.0 4.8

Comm. Svc.0.2 1.9 2.1 1.7 4.1 3.1 13.1

Total 41.1 50.4 58.5 121.2 69.2 135.6 476.0

Source:KansasDept.ofEducation,ComparativePerformanceandFiscalSystem.

Calculationofspendinginexcessofmediancostperpupilbydistrictclassification.



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Potential Operating Savings atMedian (millions of dollars)

Not saying funding could or should be reduced

by $476 million. Purpose of this exercise is toidentify greatest potential areaswhere to lookfirst.

Media and KASB repeat after me.

Some Instruction variances are driven byformula; more money is available for At Risk,

etc.; districts with above-median concentrationswill likely have above-median cost.



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Efficiency Categories

Organization / Logistics

Contractual / HR policies

Prioritization

Privatization

Key to all is changing the thought process.Change that cant be done to what has tochange to make that possible?

Andover technology savings.



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Administrative Costs

Ranged from $624 to $4,236 per-pupil in 2011.

If districts with enrollment under 1,000 FTE heldadministrative costs to $1,100 per-pupil andlarger districts held to $900, savings in 2011

would have been $111.6 million.

31 small districts spent less than $1,100 per-pupil in 2011 and 22 larger districts spent less

than $900.



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Organization and Logistics

Combine administrative functions within a

county, including transportation, operations, foodservice, etc.

21 districts in Trumbull County, Ohio used 272 buses

to transport 34,000 students across 600 square miles.

1 district in Kanawha County, WV used 150 buses totransport 33,500 students across 900 square miles.



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Organization and Logistics

Functions that could be more affordably (and

effectively) provided at the state level, such as ITand payroll.

Multi-county purchasing and warehousing for all

supplies, materials, etc. whether used in theclassroom, for maintenance, technology, etc.Review of district checkbooks shows greatpotential for savings.



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Contractual / HR Policies

Labor agreements and HR policies show a lot of

self-inflicted costs.Work rules that limit what an employee can do.

Multiple (sometimes 10 or more) supplemental paysystems that inflate administrative costs. (Wichita)

Payroll listings show multiple pay scales for clerical,custodial and others, which often result in above-market costs.

Annuities and other plans in addition to KPERS.

Paid leave, repurchased sick days, etc.



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Prioritization

Priority-based budgeting

If educating kids is #1 priority, all expenditures shouldbe measurednot justifiedagainst that priority.

Every program and function should be examined foreffectiveness and prioritized by staff. Once all funding

needs (not wants) are met for top priority, needs arefilled for the second priority, and so on.

Example: district reduced Instruction staff and

programs but gave $117,000 to another entity for aGED program outside the district.



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Privatization

Decide what must be done by a district

employee and privatize everything else that candone more affordably.

Food service, custodial, building and groundsmaintenance, payroll, IT, security, etc.

KPERS real cost is about 16% of pay, plus otherbenefits that typically exceed privatesectoronly pay contractors when work must be

done.



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2012 Payroll

Custodian $65,198 Secretary $75,571

Custodial Supervisor $91,046 BusDriver $51,055

Electrician Foreman $98,637 Security $60,379

Carpenter $81,545 MaintenanceSupv. $100,877

Painter $74,660 Nurse $81,535

Locksmith $45,703 Psychologist $92,619

Pipefitter $70,383 SocialWorker $80,724

Examplesfromdistrictslayingoffteachers,closingschools,etc.

Source:KansasOpenGov.org,withpayrolldataprovidedby

schooldistricts,reflectingtotalpaybutnotbenefits.



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2012 Payroll

Examples not necessarily representative of all

districts; only have 21 district payrolls listed onKansasOpenGov.org.

Deliberately chose some of the highest-paidpositions to make a point.

Multiple people typically employed in many

maintenance, health care positions.



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Contact Info

KansasOpenGov.org

KansasPolicy.org

(316) 634-0218

[email protected]

kansas k-12 efficiency task force: spending facts and efficiency opportunities

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