Today’s Wichita Eagle Blog wants readers to believe that now is the time to increase funding on public K-12 education:

When the economy crashed and the state made large budget cuts to education funding, lawmakers urged school districts to be patient. “The common goal is restoring that money, and we will restore that money,” Rep. Steve Huebert, R-Valley Center, told Wichita superintendent John Allison in 2010. Well, the economy is growing again and the state now has a significant budget surplus. Yet the House has resisted a Senate proposal to restore about 10 percent of the base state aid that was cut over the past four years.

When the economy crashed and the state made large budget cuts to education funding, lawmakers urged school districts to be patient. “The common goal is restoring that money, and we will restore that money,” Rep. Steve Huebert, R-Valley Center, told Wichita superintendent John Allison in 2010. Well, the economy is growing again and the state now has a significant budget surplus. Yet the House has resisted a Senate proposal to restore about 10 percent of the base state aid that was cut over the past four years.

The data for Kansas and the nation in general shows no connection between higher spending and better achievement.

Taxpayer funding of public education increased from $3.1 billion in 1998 to $5.6 billion last year, but test scores on The Nation's Report Card (NAEP) show relatively no change.  Spending on public education in Kansas has grown much faster than inflation and enrollment.

The states with the highest NAEP scores in the region on each student cohort (White, Hispanic, Low Income, etc.) spend at least $1,200 per-pupil less than Kansas.  Colorado has the best scores for White students.  Texas has the highest scores for Hispanic and Black students; Texas also has higher scores than Kansas for White students and trails Kansas by a single point for Low Income...yet spends $1,400 less per-pupil.

Every state, including Kansas, has a lot of work to do to raise student achievement, but more money isn't the answer.

Okay, the economy is growing relative to what was happening in 2008 and 2009 but much slower than in most parts of the country.  Kansas continues to fall farther behind in job creation, wage and salary distribution and private sector GDP.  Kansas continues to have more U.S. residents choose to leave Kansas than to move here.

I'm sure Rep. Huebert meant what he said, but the 'being patient' part still applies.  Yes, the state finally has some small reserves but those reserves pale in comparison to those held by local school districts.  Kansas is attempting to have a 7.5% reserve balance and some see that as justification for increasing school funding.  But many of those same people say schools need every penny of their own 16% ending balance (which grew from 11.7% six years ago).

School districts enter the year with far greater certainty of their revenues than does the state.  School districts have added to their reserves every single year since 2005.  The last two years alone have seen reserves increase by $160 million, meaning that administrators either felt it was more important to increase reserves than spend that money on education services or the formula is giving districts more money than they actually need.  Or some combination of the two.

A review of the data indicates it's probably a little of both.  There is very strong evidence that the funding formula is providing more funding than is needed for Special Education, At Risk and Bilingual.  Districts surely are providing all of those services they believe are necessary, so the fact that they've increased reserves in those funds by $84 million over the last two years must mean that they are receiving more money than necessary.

Recognizing this, the legislature last year passed SB 111 to allow districts to transfer up to $232 per-pupil (about $154 million) from a dozen funds (including those mentioned) and use it for any purpose.  Most districts declined that opportunity; at last report, only $24 million of that transfer authority had been exercised.

Some districts don't have the ability to tap reserves because they don't have much set aside, but the vast majority can do so.  Dozens of districts consistently operate with less than a 10% carryover ratio (current operating reserves as a percentage of that year's operating costs).  Yet the state average last year was 16%, with many districts consistently operating with more than a 20% ratio.

That's just one reason that many legislators may be hesitant to increase school funding.  Another may be that Deputy Commissioner Dale Dennis' last estimate showed that 2012 will be a record-setting year for school spending at $5.672 billion, with per-pupil spending at $12,454 and only 1.6% below the 2009 record of $12,660.  With spending at or near record highs, operating reserves having increased more than $400 million since 2005 and most districts choosing not to use prior years' excess revenue, it's certainly understandable that some legislators might think it's not necessary to give schools more money right now.

Maybe someday we will see these facts in news stories.

Claims that Base State Aid Per-Pupil (BSAPP) has been cut back to 1990s levels are quite deceptive, as they ignore how state funding of schools has significantly changed over the years.  At one point, nearly all programs were funded out of BSAPP, but subsequent years have seen more money added on top of BSAPP for services that previously came out of the base.

Since student populations vary widely some districts receive additional money through ‘weightings’ on top of BSAPP ("At Risk, Bilingual, etc).  Quite a few ‘weightings’ have been added or expanded over the years, with the effect of reducing stress on BSAPP.  A full list of the weightings, their respective values and the complete formula is available on KansasOpenGov. 

The adjacent table demonstrates how those weightings and other state aid have changed.

   

In 1998, there was only $178 per-pupil in addition to BSAPP, KPERS and Bond aid.  This year’s estimate is more than 10 times that amount. 

It is correct to say BSAPP has remained relatively unchanged since the late 1990s, but that leaves out an increasingly large portion of State K-12 funding.  In 1998, BSAPP accounted for nearly all of State funding of Education (91%) while today BSAPP has been supplemented by allotments made via ‘weightings’ and now accounts for only 55% of State funding of education.

The only way to fairly compare the change in BSAPP over the years would be to deduct those items that once were paid out of the base but are now in supplemental funds (or vice versa; increase BSAPP each year on the same basis). 

School districts, and now newspaper editorials, see today's KC Star, only want to talk about base state aid when it comes to discussions about K-12 finance in Kansas. However, base state aid is only about 30% of this year's estimated total funding.

Here are some facts that are conveniently ignored in too many discussions of school funding. Every fact below comes from the Kansas Dept. Of Education; Deputy Commissioner Dale Dennis provided the 2012 estimates to KPI last November.

Total spending in 2012 is predicted to be $5.672 billion and set a record. State aid is set to account for $3.157 billion, at $6,931 per-pupil. That is more than double base state aid.

While there have been recent declines in state aid, they have been grossly overstated. 2012 aid is only 4% below the 2009 peak but is 34% higher than in 2005.

A good portion of these increases have gone directly to Instructional spending, as defined by the state. In fact, that number has increased 87% between 1999 and 2011 and more than double the combined rates of inflation (32%) and FTE enrollment (1%).

At the same time spending has increased, current operating cash reserves (excluding capital outlay, federal and bond payment funds) have increased to a record-high $868 million at the beginning of this year. That’s 90% more than was in those accounts in 2005. The balances increased more than $400 million as state and local tax dollars were not spent.

Some level of reserves is appropriate, but districts had no cash flow problems when they had $500 million in reserves. They could and should spend some of that money left over from prior years while still operating responsibly.

If the Senate gets their way and spends $74 million it would reduce the State’s ending balance. How is it logical for the State to spend reserves but not school districts, especially since districts' reserves are far greater than the State's?

The Senate plan is not logical...or prudent. It is political.

Last Wednesday, April 18, the Wichita Eagle editorial page made an outrageously false claim about Kansas Policy Institute, saying we were 'playing fast and loose with the truth.  Our crime?  We have a fact-based opinion with which they disagree!

We asked for an immediate meeting to make our case and request a retraction, but the Opinion Page Editor, Phillip Brownlee, said he wasn't available until next week but didn't believe a meeting was really necessary, saying "It's just that The Eagle editorial board (and the Kansas Dept. of Ed, school districts and many other observers) thinks the ads are misleading. Even your last piece to us was misleading, implying that the state had lowered its standards because the cut scores had changed and its terms (proficient, satisfactory) had changed. The cut scores changed because the test changed, not because the standards were lowered. And the terms changed in order to match the NCLB terminology (again, it didn't lower standards)."

The Eagle editorial board, KSDE, local districts and others don't like the ads because they disclosed that proficiency does not require full comprehension of grade-appropriate material.  There is nothing whatsoever misleading about stating that fact.  The 'misleading' part is that parents hadn't been told that standards were that low or that they had been reduced.

Our last piece to the Eagle didn't 'imply' that standards were reduced in 2006, it stated it for a fact based on documents we acquired from the Kansas Department of Education.  According to the Kansas Assessments in Reading and Mathematics 2000 Techical Manual, the five assessment categories were once (highest to lowest) Advanced, Proficient, Satisfactory, Basic and Unsatisfactory; at some point between 2000 and 2006 (when the cut scores were changed) they were changed to Exemplary, Exceeds Standard, Meets Standard, Approaches Standard and Academic Warning.

As explained in this full-page ad we ran in the Eagle on Sunday, April 22 (yes, we had to spend a lot of money to get the truth in front of Eagle readers), the former categories of Proficient and Satisfactory were combined into a single category now called Meets Standard.  (As KSDE says, "...a proficient student has satisfactory comprehension....").  A student formerly had to fall into one of the top two categories to be proficient, but now only has to be in the top three categories.  

The KNEA (teachers' union) likens the current definition of Meets Standard to a 'C.'  If they are consistent in their logic, they must also believe that a student previously had to earn a 'B' to be considered proficient.

KSDE lowered the cut scores in 2006 - the minimum percentage of correct answers required for inclusion in each category.  Some people believe lower cut scores are not necessarily indicative of lower standards (arguing that the test could have been made infinitely harder) but there is nothing in the KSDE Technical Manual that says so. Proficiency under the 2000 standards required having at least 87% correct answers; now it is as low as 63%.

But even if you discount the change in cut scores, there is no denying that the U.S. Department of Education says Kansas has some of the lowest standards in the country.  They say Kansas' 4th grade Reading standard is lower than 40 other states; the 8th grade standard is lower than 35 other states.  

If that's not enough proof, there's more.

That same KSDE 2006 Technical Manual says the standards were changed to such extent that no comparisons to prior years' achievement results should be made.  (Sometimes it's important to note what people don't say; we find no place where they say the standards were made more difficult in 2006, yet no comparisons to prior years should be made.  If standards were essentially the same, comparisons would be OK...but if they were lowered....)

Of course, written policy saying comparisons to prior years results should not be made does not stop KSDE and local districts from doing it anyway.  (Imagine what editorial writers would say about KPI if we did something like that.)  

Who do you think is 'playing fast and loose with the truth'?

 

Capitalism is the most amazing vehicle for social cooperation that has ever existed. And that’s the story we need to tell… to show that it’s about creating shared value, not for the few, but for everyone.

~John Mackey, Co-Founder of Whole Foods Market

Cooperation is as much a part of capitalism as competition.  Both are essential elements of the simple system of natural liberty, and most of us spend far more of our time cooperating with partners, coworkers, suppliers, and customers than we do competing.

~David Boaz Executive Vice-President of the Cato Institute

The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants.

~Adam Smith

This week Wichita Downtown Development Corp. (WDDC) is hosting workshops to foster grassroots community engagement for downtown Wichita.  During these workshops participants will be given an imaginary $500 to make Wichita a “better more interesting place,” which begs the question will any group reward the people already working hard to make Wichita an interesting place?

My first thought is to donate $500 to the unfortunate tornado victims.

If it were not for Saturday’s storms I would first use the money to treat the office to authentic Mexican cuisine at Angela’s Café on the corner of E Central and N Mosley ($50).

On my way home I’d stop by Yoder Meats to buy some award winning smoked meats and cheeses.  Next door at the Seafood Shop I’d pick up some fresh lobster tail, ($100, yes you can get fresh seafood in land locked Wichita)!

To go with my surf and turf dinner I’d buy a bottle of Grace Hill Winery’s fine Cabernet Franc, made from grapes grown right here in Kansas ($24).  Then travel up northwest to the Wichita Brewing Company to purchase a growler of their handcrafted Half-Wit Wheat ($16).

All this driving around would surely wear down my tires, fortunately Wichita is home to Tracy’s Automotive, where I can receive a much needed tune-up and new set of tires ($250).

While waiting on my new tires I would enjoy some live music as I chow down on a delectable Maple Bacon donut at the Donut Whole ($10).

Luckily Safe Riders could drive me to the Shockers game where I can enjoy the 70 and sunny weather with friends ($50).

Today the Bureau of Labor Statistics released Wichita Metro Area February employment numbers, small gains are a positive step, but yet again we see public sector employment growth outpacing the private sector.  One month is nothing to fret over but a 13 year trend can be telling, as this can only mean higher taxes on a struggling private sector.

Since 1998 the Wichita Metro Area has seen all levels government grow and grow, while private sector employment has often failed to stay above water.  The chart below indexes Wichita Metro Area employment growth in the private sector and levels of government, (any value below 100 means employment is lower than 1998 levels).

Source: Bureau of Labor Statistics

Wichita private sector employment peaked in 2008 at 267,000, but has since lost 24,500 jobs. Only 4 of the 13 years since 1998 has Wichita employed more private sector workers than in 1998. 

All local gov't in the metro area fared better, each year setting a new record level of public employment, until shaving a few workers in 2011.

In 1998 there were 10.35 private sector employees supporting 1 local public sector employee, by 2011 that number decreased to 8.45.  Meaning a heftier tax burden must be carried by each private sector employee to support the growing local public sector.

GUEST POST:  Bob Weeks of Voice for Liberty in Wichita

Recently Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas made the case for extending the production tax credit (PTC) for the production of electrical power by wind.

The PTC pays generators of wind power 2.2 cents per kilowatt-hour produced, a high rate of subsidy for a product that sells for 9.5 cents, according to a March 2010 illustration provided by Westar.

Brownback and Moran contend that this tax credit is necessary to let the industry "complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace." But wind is not a new industry. The PTC has been in place for twenty years. If an industry can't get established in that period, when will it be ready to stand in its own?

The authors also contend that canceling the PTC will result in a "tax hike on wind energy companies." To some extent this is true -- but only because the industry has enjoyed preferential tax treatment that it should never have received.The proper way to view the PTC is as a government spending program in disguise. That's the true economic effect of tax credits. They are equivalent to grants of money.

Amazingly, Brownback and Moran do not realize this -- at least if we take them at their written word as they describe the PTC: "These are not cash handouts; they are reductions in taxes that help cover the cost of doing business." (Emphasis added.)

It is the mixing of spending programs with taxation that leads these politicians to wrongly claim that tax credits are not cash handouts. But not everyone falls for this seductive trap. In an article in Cato Institute's Regulation magazine, Edward D. Kleinbard explains:

Specialists term these synthetic government spending programs "tax expenditures." Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. ... Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010.)

U.S. Representative Mike Pompeo of Wichita recognized the cost of paying for tax credit expenditures when he recently wrote: "Moreover, what about the jobs lost because everyone else's taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families."

This is an example of the seen and unseen, and also of the problem of concentrated benefits and dispersed costs. Politicians hope we won't notice.

When Brownback and Moran write of the loss of income to those who profit from wind power, we should remember that these profits do not arise from transactions between willing partners. Instead, they result from politicians who override the judgment of free people and free markets with their own political preferences -- along with looking out for the parochial interests of the home state. We need less of this type of wind power.

Today’s Lawrence Journal-World had another ‘sky-will-fall’ story warning of economic catastrophe that would accompany tax reform in Kansas.  “Study says lower state income taxes will lead to higher property, sales taxes” is based on a ‘study’ by the Center for Budget and Policy Priorities (CBPP) based in Washington, DC.  

New York Times reporter Matt Bai says the Center for Budget and Policy Priorities (CBPP) is funded by the Democracy Alliance.   According to Bai's account, representatives of CBPP attended a May 2006 meeting of the Democracy Alliance to "talk about the agendas they were busy crafting that would catapult Democratic politics into the economic future."  

It's quite telling that the left-leaning Lawrence Journal-World calls this organization 'non-partisan' but consistently labels free market- oriented organizations as 'conservative'.  

The CBPP study's conclusion is based on nothing more than an assumption: "the state will likely find itself both raising other taxes on middle- and low-income families and making massive cuts to vital services that will badly damage the state’s economy."

This is the classic 'either/or' ultimatum that governments typically give taxpayers...either pay higher taxes or surrender some service you want. In other words, give us what we want or pay the price. Instead, governments should examine every program for effectiveness and efficiency, always looking for ways to maintain essential services at the most cost-effective manner. States with lower tax burdens have far greater job growth and wage & salary disbursements; their private sector GDP dwarfs high burden states. They gain population from people choosing to move from other states while the high burden states (including Kansas) lose population from domestic migration.

The key to having a low tax burden is to control spending, and that's exactly what low burden states and those with no income tax do. According to the National Association of State Budget Officers, states with no income tax spent $2,444 per resident in 2010 while the rest of the country averaged $3,572 or 46% more. Kansas spent $3,216 per resident and would have saved $2.2 billion by spending at the rate of states with no income tax.

Tax reform is about job creation and economic growth. The CBPP 'study' is about justifying the continuation of policies that have fed the growth of government and largely contributed to sub-standard private sector economic growth.

It is disingenuous at best to blame school closings on the current governor and legislature when the changes to school funding, which were prompted by a serious recession, began under a previous governor and legislature.

 And the overall impact of the changes has not been even close to those claimed by Ms. Dietz.  Neither state funding nor overall funding have been 'cut back to 1999 levels' and she knows it.  Ms. Dietz is only referencing a piece of state funding.  The truth, as provided by the Kansas Dept. of Education and Wichita financial reports, is that:

 - State support of public education in 1999 was $2.04 billion; this year it is expected to be $3.2 billion.

 - Total taxpayer support increased from $3.2 billion in 1999 to $5.7 billion this year.

 - KSDE online records for individual districts only go back to 2002 but show state aid per-pupil for Wichita was $4,812; last year it was $7,092.
 
- Total taxpayer aid to Wichita schools was $8,393 per-pupil in 2002; last year it was $13,069.

When governments talk about budget cuts, they are most often talking about reducing their plans to spend more rather than actually spending less money.  According to data provided by KSDE, the Wichita district has spent more money every single year.  The pace of the increase certainly slowed in the past few years but they are still spending more money every single year.

Even their current operating expenses have increased.  The first column below shows total spending for USD 259 from the Kansas Comparative Performance and Fiscal System; the second column shows current spending, with all Capital Outlay and Debt Service removed (all figures in millions):

2005   $422.4   $383.4
2006   $468.1   $429.7
2007   $527.1   $471.3
2008   $552.0   $507.6
2009   $573.9   $523.5
2010   $585.5   $524.3
2011   $603.8   $526.9

The recession certainly created a lot of unfortunate challenges for everyone but taxpayers and parents deserve honesty from elected officials, not political rhetoric and false information.

The Bureau of Labor Statistics annually revises prior year job numbers and the new 2011 numbers show that Kansas and many states actually had slightly more job growth than originally reported.

Each January BLS performs a final revision on all monthly jobs reports or as the BLS puts it:

This year the Bureau of Labor Statistics (BLS) used special model adjustments to control for survey interval variations for all seasonally adjusted data. These special adjustments are designed to correct for variations in the number of weeks between reference periods in any given pair of months. This resulted in revisions to many seasonally adjusted series affecting data from 1990 forward.  Full details available here.

The numbers changed for each month and resulted in an increase of 15,600 private sector jobs on an average annual basis.  As a result, Kansas now officially recorded a 1.65% increase over 2010; previous reports showed an increase of 0.4%.  The revised numbers also show that Kansas has finally pulled ahead of 1998 employment levels.  Previous reports showed Kansas had 1.1% fewer private sector workers in 2011 than in 1998; the revised report now shows an increase of 0.4%.

Data for all states was revised but Kansas’ upward revisions also improved its competitive position.  Kansas’ previous 2011 growth rate of 0.4% had the state ranked #49, or the second worst in the nation.  The revised 2011 growth rate of 1.65% places Kansas at #23.  Among regional states, Texas, Oklahoma and Colorado had stronger job growth; Missouri and Nebraska had gains but grew at a slightly smaller rate than did Kansas.

The improved numbers are encouraging but Kansas’ private sector employment remains 52,000 jobs (4.65%) below its 2008 peak.   

Have you noticed that some of the same people who say the State should spend its surplus balance have a completely opposite opinion about school districts?

Today’s story in the Topeka Capital-Journal about House Appropriations recommendations on school funding misstates what was actually proposed.  School funding would not be 'cut' in the sense that money is taken away.  As explained today in the Wichita Eagle, the Governor's budget proposed adding $29 million this year and the House Appropriations action is simply eliminating the proposed increase.

The rationale for not increasing funding is that districts already have the money in carryover cash reserves – state and local tax dollars provided in prior years that were not spent.  Legislation passed last year gives districts the authority to transfer up to $154 million to current operations this year and to date, only $24 million of that authority has been exercised.  Even if districts used the entire $154 million, they would still have about $700 million left over, plus another $837 million in Capital Outlay and Debt Service funds.

School districts' balances in their current operating funds have increased 90% over the last six years, going from $458 million to $868 million.  Those balances increased every single year, which means districts didn't spend all of their tax dollars...every single year.

All government entities need some degree of surplus balances but district balances are much larger than state balances.   And not just in total dollars.  The state's goal is to have the statutorily required ending balance equal to 7.5% of General Fund expenditures.  School districts' ending balances in their current operating funds (everything but capital and debt service) represented 11.7% of current expenditures in 2006 and increased to 16.0% by 2011.  The current reserve ratio is somewhere between 16.6% and 18.8%, depending upon which budget figures one uses from KSDE.  Carryover cash reserve balances by district are available on KansasOpenGov.org.

We agree that excess reserves should be used to fund current operations instead of taking more money from taxpayers.  Those who believe the State of Kansas should give some of it's relatively small surplus to school districts should be consistent and call for school districts to tap their own large reserves instead of asking taxpayers for more money.

Last month, Wichita voters took to the ballot box to weigh in on whether the City of Wichita should provide government funded incentives for a new downtown hotel.  This vote reminded everyone that a debate, in Kansas and around the country, remains about the best way to create jobs and economic prosperity.

As the Wall Street Journal wrote after voters decided against this incentive package:

Local politicians like to get in bed with local business, and taxpayers are usually the losers. So three cheers for a voter revolt in Wichita, Kansas last week that shows such sweetheart deals can be defeated.

Policy beliefs aside, some degree of incentives may be necessary as long as some companies expect them, but pragmatism also dictates that neither Wichita nor the State of Kansas can win an economic development war where the largest checkbook wins.  Fortunately, incentives aren’t the only way to compete and in fact may only be important to a small portion of potential employers.

Should we increase incentives?  What about lower taxes and less regulation?  Targeted government spending or investment? These are some of the important issues that will be addressed on 11 April at an economic development summit hosted by KPI.

National and Kansas experts will join at the WSU MetroPlex for a half-day of panel discussions and expert presentations. This free event is open to the public and you can register here. Breakfast and lunch will be served and you can view the full agenda below;

Eco-Devo Through Economic Competition - 11 April 2012

7:30 – 8:15 a.m.: Registration and breakfast

8:15 a.m.: Welcome
- Dave Trabert – President of Kansas Policy Institute

8:30 a.m.: Implications of "Location Matters: A Comparative Analysis of State Tax Costs on Business”
- Joe Henchman - Vice President of Legal and State Projects at the Tax Foundation

9:00 a.m.: Shaping Government to Increase Competitiveness
- The Honorable Maurice McTigue - Vice President of the Mercatus Center at George Mason University

9:45 a.m.: Break

10:00 a.m.: Panel Discussion - Different Perspectives on Competitiveness and Development
- Ron Wilson - Director of the Huck Boyd National Institute for Rural Development at Kansas State University
- Jeremy Hill - Center for Economic Development and Business Research at Wichita State University
- Art Hall, Ph.D. - Executive Director of the Center for Applied Economics at the University of Kansas
- The Honorable Maurice McTigue, Vice President of the Mercatus Center at George Mason University
- Walter Berry - Chair, Wichita Metro Chamber of Commerce Board of Directors
- Nick Jordan, Kansas Secretary of Revenue

11:45 a.m.: Break

12:00 p.m.: Lunch served

12:15 p.m.: A Perspective from Washington
- U.S. Representative Mike Pompeo

A KPI student achievement awareness campaign (an example from the Topeka Capital-Journal is here) has prompted a few people to question whether the ads are correct. The Kansas National Education Association (KNEA) also issued a press release full of blatantly false accusations about KPI and the campaign.

It’s understandable that people might think there is something wrong with the ads. Most people reasonably believe the descriptions listed in the ads – “reads grade-appropriate material with full comprehension” and “usually performs accurately on most grade-level tasks in Math” – are the definitions of Meets Standard or Proficient.

The truth, however, is that those are the Kansas definitions of Exceeds Standard. A student does not have to read grade-appropriate material with full comprehension or usually perform all grade-level Math tasks accurately to be considered Proficient by state standards. The ads accurately reflect the percentages of 11th grade students who perform at or above the listed performance descriptors. Here are their definitions for  Reading:

Meets Standard – when reading grade-appropriate narrative, expository, technical and persuasive text, a proficient student has satisfactory comprehension.

Exceeds Standard – when reading grade-appropriate narrative, expository, technical and persuasive text, an advanced student has full comprehension.

As we have traveled the state discussing education in public forums, we’ve found that parents and even some educators have been shocked to learn that Kansas has such low standards. (The U.S. Dept. of Education says Kansas has some of the lowest standards in the country.) An honest examination of all the facts on student achievement shows that a lot of changes are needed to help every student reach their full potential, but a false sense of high achievement is a tremendous barrier to change.

State assessment results are not the only indication that achievement is lower than most people understand. The U.S. Department of Education reports much lower proficiency levels and shows next to little progress over the last thirteen years. The ACT college-readiness measurement says only 28% of 2010 Kansas high school graduates scored high enough to be considered college-ready in English, Reading, Math and Science. KSDE says 21.1% of Kansas high school graduates who attend a Kansas university sign up voluntarily for remedial training. That all makes sense when you understand that KSDE tests show that only about half of 11th graders in Kansas have full comprehension of grade-appropriate material.

The KNEA press release deliberately misrepresents the ad content by implying that full comprehension of grade-appropriate material is the same as Proficient. KNEA may not want parents to know the truth but we’ve been sharing this information with legislators, parents and educators for nearly a year and KSDE has not denied the facts we include in the awareness campaign.

This is not about assessing blame or criticizing students and educators; we have no doubt that educators are doing their best within the confines of the current system. It’s about taking an honest look at student achievement and deciding whether the current system is producing acceptable results or whether some changes are needed. Our kids deserve nothing less.

[Editor's Note: KSDE released a revised report showing that 21.1% of Kansas high school graduates who attend a Kansas university sign up voluntarily for remedial training whereas the original report said 24.6%.]

By now, hopefully you've seen an advertisement in your local paper about the student achievement levels of your area districts. If not, you can view an example of one from the Topeka Capital-Journal here. A version of this exact same ad is running in multiple papers around the state highlighting surrounding districts; you can find the numbers for your district's reading and math scores at www.KansasOpenGov.Org.

What seems to be drawing the most attention is that many Kansans understand student achievement to be higher than what we published. This is because we looked beyond the top-line definitions of student achievement (e.g., Meets Standard) and examine the underlying verbiage that supports it.

Right up front, we are using data directly from the Kansas Department of Education. As with all data at KansasOpenGov, it is from an official government source, in this case KSDE, and is publicly available (we just put it all in one place) or we filed the appropriate Kansas Open Records Act request.

The question we're asking Kansans to keep in mind as they digest the advertisement and this blog is - Are these levels of student achievement good enough?

For instance, the high school reading definition for Meets Standard, from KSDE, reads as “When independently reading grade-appropriate narrative, expository, technical, and persuasive text, a proficient student has satisfactory comprehension.” It is only when a student achieves “Exceeds Standard” status that they are expected to have “full comprehension.”

Let's look at what this means in real terms and use an example from the advertisement linked to above. In the ad, USD 330-Mission Valley is listed as having 50% of 11th grade students who read grade-appropriate material with full comprehension and 71% are usually accurate on all grade-level math tasks. Those numbers reflect the percentage of students who ranked as "Exceeds Standard" and "Exemplary" on the 2011 state exam in either category.

The confusion arises because often a school district or the state point to the number of student at or above grade-level to include those student who "Meets Standard.” Strictly using the state’s top-line definitions, 100% of 11th graders in Mission Valley meet or exceed the state standard in math and 93.3% at the same level on reading.

Remember, a student who “Meets Standard” doesn't have to fully understand his reading material or accurately complete all of his math problems.

So, the question remains, are these levels of achievement good enough?

Many Kansas students receive a fine education, but too many are being left behind. The only way we can have a conversation about how to move forward is to be honest with what our children are achieving. Let’s also remember that there appears to be no link between student achievement and K-12 spending. For instance, between 1998 and 2011, funding for public education in Kansas increased from $3.1 billion to $5.6 billion and Kansas test scores on the “gold standard” of achievement tests from the U.S. Department of Education are virtually unchanged.

We applaud the hard work of Kansas students and teachers but also think some are taking the easier route of looking for evidence to defend the status quo rather than taking an honest look at where we are and how we can get better.

As we tour the state discussing K-12 education, the one constant theme is that No Child Left Behind (NCLB) has been a millstone around the neck of the entire system.  Teachers, administrators, parents, board members, legislators, you name ‘em and people are in near-lockstep agreement that NCLB is, at best, rubbish and, at worst, an educational and constitutional train wreck.

Articulated in countless ways, the arguments against NCLB boil down to more bureaucratic meddling in the classroom interfering with student learning.  From states to teachers to students, the classroom experience is less about learning and more about meeting a national standard.

It should be no surprise, then, that many are starting to offer the same criticisms of the Common Core (CC) curriculum.  CC is being sold as voluntary, but it turning into yet another federal takeover of a state’s prerogative.

CC was originally envisioned as states deciding on their own to agree to basics of student curriculum and standards.  Unfortunately, and unsurprisingly, what was originally envisioned has been polluted by an increasingly political education apparatus in Washington, D.C.

How are the supposedly voluntary CC being hijacked by the Feds?  Both with money and with the desire to get out from underneath that other oppressive, nationally mandated education protocol known as NCLB.

Kansas is like many states and continues to feel the pinch of a very tough economy.  In response, the financing of states priorities are under review.  No different with K-12 education and Race To The Top money being offered to states through the U.S. Department of Education.  Education Week’s blog said it best last March when describing the federal dictate to states on Race To The Top funding.

I'm sure you remember, because it set a lot of people's neck hairs on end, that President Obama recently proposed that Title I [Race To The Top] funding for disadvantaged students be tied to whether states have adopted the Common Core State Standards.

And I am also sure you know that in order to get the most bang for their buck in Race to the Top applications, states have to promise to adopt the common standards.

It is unrealistic to believe that states won’t belly up to the federal bar for this happy hour special.  Policy makers respond to the same incentives as do individuals and what is ceding a little K-12 control to the Feds in exchange for more money?  Nearly every other area of public policy is moving in that direction, so why not education?

Second, as states work to get out from underneath the widely-panned NCLB, they are being encouraged (much like the Corleone Family encouraged filmmakers to hire family members) to adopt CC.  Once again, the Education Week blog offers some insight into what is takes for a state to score a NCLB waiver.

…a key requirement for states seeking a waiver is that they have adopted "college- and career-ready standards" and assessments. The standards don't have to be the [Common Core standards]. But if they're not, a state will have to certify, through its public higher education system, that its standards are tough enough that mastery of them will serve as a passport allowing students to skip remedial courses in college and go right into credit-bearing work.

That is a pretty powerful ONE-TWO combination for states to ignore, “Hey Kansas!  We’ve got money for you to spend on K-12 education and we’ll even let you off the hook from NCLB.  All you have to do is let us effectively run your schools from Washington.”

Which gets us back to where we started as the one common theme as we talk to people around Kansas – more federal, and Topeka, involvement in education does nothing to help Kansas students learn.  In fact, returning control to local school boards is at the heart of Governor Brownback’s K-12 finance plan.  Regardless of its other faults, the plan recognizes the imperative to put control in the hands of those closest to actual student learning.

Assurances that CC won’t turn into NCLB on steroids amount to a collective “trust us” from its proponents.  “Things weren’t perfect with the previous regulations, but we’re smarter now and have learned from our mistakes.  This time we’ll get it right,” is a common enough bureaucratic refrain as to be cliché.

Let’s stop pretending that CC is voluntary and call it what it is – an offer state can’t refuse.  

Proponents of the education status quo often turn to images of a dedicated teacher, toiling for hours with little pay to help Johnny learn his multiplication tables.  Teacher and student grinding out hour after hour to learn and succeed and it works because we all had a teacher who stuck around after class to help us get past that stumbling block and remember their dedication to us.  

How does more red tape and bureaucratic intrusion help that teacher get through to a struggling child?  It doesn’t and every teacher we’ve spoken with will be happy to tell you about how NCLB is driving them out of the classroom.  

CC is no different and further threatens to undermine the best parts of our educational system and institutionalize the worst.  

The February 21 newsletter published by Kansas Education Policy Report, a subscription-based news service located in Topeka, included the following accusatory statement:

"That’s because districts receive large property tax distributions in May of each year, near the end of the school year, which makes their June 30 carryover amounts look artificially high – a quirk in the system that is often exploited by critics who allege districts carry excessively large cash balances.”

Saying that critics are ‘exploiting’ what they call a quirk in the system is simply not true and an attempt to brush aside a very substantive issue.  Anyone who has followed our writing on carryover cash balances knows full well that the primary issue is that the balances continue to grow each year, which the commentary completely ignores.

Payments and expenditures occur on the same schedule each year.  These funds operate on a cash basis, just like personal checking accounts.  Since there is an annual reconciliation of outstanding encumbrances as of June 30, the only way that ending unencumbered balances grow is for annual revenue to exceed annual expenditures.  

The July 1 unencumbered balances by district and fund are available at KansasOpenGov.org.  Annual unencumbered carryover cash balances in current operating funds (excluding those dedicated to Capital Outlay, Debt Service and Federal funds) grew every single year since 2005 as follows:

2005 – $458.2 million
2006 – $494.1 million
2007 – $542.3 million
2008 – $587.1 million
2009 – $699.2 million
2010 – $774.6 million
2011 – $868.3 million

The 2011 total includes $8.3 million in Activity Funds which had not previously been reported by districts, but the balance of the $402 million difference between 2005 and 2011 ending balances represents state and local taxpayer funds that districts received but did not spend.  

Districts need some degree of carryover balance but the fact that these balances have grown nearly 90% in the last six years is a clear indication that the funding formula is giving districts more money than they need to provide current services.  

Further evidence is found by examining the trend in Current Carryover Ratio, which measures the beginning balance in current operating funds (as described above) as a percentage of that year’s current operating expense (total expense less capital and debt service).  The 2006 Current Carryover Ratio was 11.7% (July 1, 2005 beginning balance divided by 2005-06 current expenditures).  The ratio dropped a bit in the next two years but look at what happened in the last few years:

2006 – 11.7%
2007 – 11.0%
2008 – 11.3%
2009 – 11.9%
2010 – 14.4%
2011 – 16.0%

The 2012 budgeted ratio is even higher, although the exact amount depends upon which budget data one uses from KSDE.  The Carryover Reserve Ratio report on KansasOpenGov also shows that dozens of districts have consistently operated with less than a 10% ratio…quite a few even operate with less than 5%.  That is a strong indication that many of those districts operating with reserve ratios of 20% (and much higher) are likely doing so by choice, not necessity.

Deputy Commissioner Dale Dennis has said on numerous occasions that districts increased their reserves (by not spending tax dollars on current services) in the last three years in reaction to changes in state funding and because the state has been late making payments.  Motivation aside, districts’ choice to put some of their aid dollars in the bank indicates that at least that amount of money must be considered discretionary; surely, districts would not deny services to students that they believed are truly needed when they have more money to spend.  

It is also noteworthy that districts have reportedly been paid on time this entire year and it is anticipated that that will continue into the future.  Still, the last report from KSDE showed that districts had only chosen to draw down $24 million of the $154 million authorized by SB 111.

The bottom line, if you will, is that every dollar unnecessarily appropriated to one service is a dollar that is either taken away from another service or is unnecessarily taken from taxpayers.  We believe government has a fiduciary and moral obligation to use taxpayer funds efficiently and effectively.   While there is no question that government entities need some degree of carryover reserves, the evidence overwhelming indicates that school district operating reserves are much higher than is necessary.

The current K-12 funding formula is not designed to provide schools with the minimum resources they need to achieve required outcomes while also operating and being organized in a cost-effective manner because such a study has never been conducted in Kansas.

The Augenblick & Myers 2001 study that was used by the Montoy courts was supposed
to have taken efficiency into account but, as explained by Caleb Stegall in “Analysis of Montoy vs. State of Kansas,” A&M chose to ignore efficiency. 

A&M presented the court with inflated numbers by deliberately including 50 high-spending districts that did not meet their own criteria for 'successful schools' - those achieving required academic outcomes and also operating in a cost-effective manner.  

The subsequent Legislative Post Audit study merely duplicated the bogus A&M study.  It is particularly noteworthy that LPA carefully pointed out on page 2 of their report that they were not asked to determine what it would cost to achieve required outcomes AND have schools organized and operating in a cost-effective manner.

The only logical thing to do is to finally have such a study conducted and then fund it.

Dave Trabert

You may have read about a new plan in the Wichita Eagle to incentivize new home purchases.

"With new-home construction foundering and builders buried under the weight of taxes on unsold lots, the Wichita City Council on Tuesday will look at a plan to jump-start the flagging local homebuilding industry. "City staff is recommending adoption of a five-year property tax moratorium for the first 1,000 qualifying new houses built over two years. The city and the Wichita Area Builders Association started developing the plan in October in an attempt to reinvigorate a market that has stagnated with declining sales and tight credit."

This proposal may be a well-intended effort to help home builders and some taxpayers, but it would do so at the expense of all other businesses and taxpayers.  Unless the City of Wichita reduces spending by the amount of the tax rebates, the foregone revenue will have to be made up by everyone else.  Government doesn't just spend money when it writes checks, it also spends taxpayer money when it gives credits, rebates, loans and other types of incentives.

City Council should also recognize that rebating property taxes to buyers of certain new homes will also harm taxpayers who are trying to sell existing homes.  

If the City of Wichita wants to help (all) taxpayers, the best way it can do so is to cut spending and reduce everyone's taxes.  The City's annual financial reports show that property tax collections increased from $59.3 million in 1997 to $115.4 million in 2010.  That's a 95% tax increase.  Over the same period, Wichita's population increased 16% and inflation was up 33%.  There is no good justification for taxes to increase at nearly double the rate of population and inflation.

The Institute on Taxation and Economic Policy (ITEP) recently published a paper arguing that the nine states with the highest income taxes are actually faring better than the nine states with no income tax.  ITEP cites Gross State Product (GSP) per capita, Real (inflation-adjusted) Median Household Income, and the Unemployment Rate as their basis.  

Using per-capita data to justify that high-tax states are doing well deliberately discounts overall growth in GSP, employment and population shifts.  One needs only a simple drawing to see GSP Per Capita, Real Household Income, and the Unemployment Rate are not appropriate measures.

In this first scenario our state has nine individuals; seven earning an income and two unemployed.  GSP per capita is $3, Real Median Household Income is also $3, the Unemployment Rate is 22%, and lastly our overall wealth is $28.  Now supposed the first 4 individuals decide to seek opportunity in another state.  Now our state looks like this:

Our GSP per capita is $5, Real Household Median Income is $5, the Unemployment Rate is 0%, but our overall wealth is now $25.  Not one person’s wealth increased and in fact our state is worse off, we have fewer jobs and less wealth.

Jonathan Williams of the American Legislative Exchange Council and coauthor of Rich States Poor States, spoke to the Senate Committee on Assessment and Taxation, a pro-growth crowd for lunch, and the House Committee on Taxation.  Jonathan reiterated what has been the case for decades now, a lower tax burden will lead to more output, more opportunity, and more jobs.

Below is a slide Jonathan presented to our legislators yesterday, as you can see,  states with No Income Tax achieved faster growth in Gross State Product, Population, and Jobs within the past ten years.  

Less intuitively Total State Tax Receipt Growth in the non-income taxing states actually outpaced the highest income taxing states.  How is this possible?  Texas gained 4 congressional seats worth of people who now pay sales tax, property tax, as well as any other tax in the state ~ Jonathan Williams.
In-short people move to the opportunities that a low tax environment fosters.

Kansas has a choice, do we take lessons from the other laboratories and propel our state into a high level of economic performance or do we continue to watch as other states pass on by with bold moves to foster more output, more opportunity, and more jobs. 

The Bureau of Labor Statistics December jobs report shows Kansas has a lot of ground to cover before private sector employment returns to its 2008 peak. Kansas began 2011 with private sector employment at 93.4% of the 2008 peak and finished 2011 at 94.4%.  

Kansas still needs 63,000 jobs, roughly Butler County's population, to reach the 2008 employment high.  Under the current scenario Kansas will not likely reach the 2008 peak for years to come. WSU’s Center for Economic Development and Business Research pinned Kansas private sector employment growth at just under 13,000 for 2012.

Aggressive tax reform that puts money back in the hands of hard working Kansans will help speed the recovery.

A recent story in the Wichita Eagle focused on comments from Senate Minority Leader Anthony Hensley, D-Topeka, regarding a conflict of interest for members of the House and Senate Tax Committees. After examining data gathered by the Eagle, showing that 20 of the 23 members of the House Taxation Committee and 9 of the 11 member of the Senate Tax Committee have business interests that would be exempted from state income tax under the Brownback plan, Hensley suggested that some of the members should consider recusing themselves from voting on the plan.

“They certainly ought to at least let the general public and the rest of their colleagues know that they have a conflict of interest,” Hensley said. “We have rules in the Senate that provide for that. “When a bill hits the floor on final action, you cannot be forced to vote if you have a conflict of interest and you announce that publicly before the vote takes place. It addresses this very kind of thing.”

It’s one thing if a piece of legislation targets a specific industry or employer, but when legislation applies uniformly as in this case, it’s simply not practical to have members of a part-time citizen legislature recuse themselves. And no one knows that better than Senator Hensley, a special education teacher in the Topeka district who routinely introduces and votes on legislation impacting public schools. Senator Hensley obviously believes he has no conflict on education issues, yet he has no problem finding fault with others who do the same as he.

It’s also noteworthy that the Eagle story failed to mention this obvious conflict.

Here are a couple of maps for Monday, courtesy of our friends over at the Tax Foundation.
This first map shows the percent of income residents are paying to their state and local governments, essentially the price for services in each state.

 

  

The map below shows how much money each state has lost due to interstate migration. States, much like Wal-Mart and Target, must deliver services at a greater value than competitors to win over consumers, or residents.

Too often in Kansas we talk a lot about how much we spend on K-12 education but not nearly enough time talking about student achievement.

Next week the House Education Committee plans to change that (at least for the day) with a series of hearings on Thursday 19 January.  Never mind the usual hearings of one person standing up and giving a canned speech.  Next week, Rep. Clay Aurand's committee will be having congressional style panels with multiple people testifying at the same time.  Hopefully allowing for a more robust discussion.  Check out the proposed speaker line up below...subject to chance, unfortunately.

9:00 a.m. – The State of Kansas Education
Dave Trabert - President of Kansas Policy Institute
Dr. Janet Barresi - Oklahoma State Commissioner of Education and member of Chiefs for Change
Mark Tallman - Kansas Association of School Boards

10:00 a.m. – Public School Reform
Natise Vogt – Walton (KS) Rural Life Center
Gary Lewis – Maize (KS) Virtual Preparatory School
Peter Groff – Visiting fellow at Johns Hopkins University School of Education and the Principal of MCG2 Consulting and the former President and CEO of the National Alliance for Public Charter Schools
Susan Patrick – President of International Association For K-12 Online Learning

The hearings will likely be held in the Old Supreme Court Chamber at the Capitol.

After the hearings, Dr. Barresi will present at a public lunch for legislators at the Topeka Capital-Plaza hotel.  More details to come.

Unless we start challenging the status quo, more and more Kansas kids will be left behind their peers.  Hopefully, this is the first step in the right direction.

A recent column by the KC Star’s Steve Rose (available here) tried to make the case that states with no income tax are only able to do so because they have unique revenue sources. Examples he gave included gambling in Nevada, tourism in Florida and oil & gas in Texas, Alaska and other states. Fortunately, Mr. Rose didn’t do his homework.

The key to having a low tax burden and/or no income tax is not access to extra revenue; it's how much you spend. Yes, some states with no income tax have unique revenue opportunities but they could just spend more and have higher taxes like other states. Instead, they’ve figured out that they can have good quality government services AND high job growth by controlling spending and keeping taxes low.

The nine states with no income tax spent $1,767 per resident in 2009 out of their General Fund. That was 27% less than the national average and 21% less than Kansas. If Kansas had spent at the rate of the no-income-tax states, we would have spent $1.1 billion less that year.

KPI compiled research comparing the states with the highest tax burden to those with the lowest tax burdens and also those with no income tax. The low burden states dramatically outperform high burden states on job creation, gross domestic product, wage & salary distribution and domestic migration (U.S. residents moving in and out of states). The states with no income tax tend to do even better.  Check out the facts here at our tax reform page.

Okay, so this doesn't deal specifically with Kansas but it is a pretty good explanation of the work KPI does.

Around the world, the countries that are most economically free enjoy better health, longer life spans, a cleaner environment, and even their least well off populations have more money.  Why should it be any different in Kansas?

The answer - It wouldn't be any different!  The freer Kansans are to provide for themselves and their family, the better off the entire state will be.

Tip 'o the hat to www.EconomicFreedom.org for the video

Welcome to KPI's latest effort to help make Kansas a freer and more prosperous place to live and work.  (Please note the use of the German word for "welcome" because who doesn't appreciate a tip of the hat to the native language of the Austrian School of Economics.)

My name is James Franko (sorry, not the actor but this one) and I'm in charge of making sure we get this blog started off on the right foot.  To that end, our goal is to create a place to discuss the public policy questions facing our state. We believe this can be done in a courteous way that allows for all voices to be heard and respected.  

With that in mind, please remember that Kansas Policy Institute is a 501(c)3 non-profit organization and is governed by rules that will prevent any comments, messages, or other content from being posted that;

• Constitute a communication in support of or in opposition to any candidate for any public office;
• Electioneering or lobbying communications within the meaning of applicable federal or state law.

Once again, this is to be a place to discuss, and even debate, the policy issues of the day. This does not include personal attacks, vulgarity, offensive content, spam, or links to things directly selling products. However, we gladly encourage you to post links to other blogs, media outlets, or organizations that advance the conversation and make a meaningful contribution. This means we can delete content that;

• Is abusive, vulgar, offensive, threatening or harassing language, personal attacks of any kind, or offensive terms that target specific individuals or groups;
• Off-topic comments or comments that promote services or products;
• Gratuitous links to sites that could be viewed as spam;
• Personally identifiable information such as social security numbers, addresses, and telephone numbers.

Something appearing on this blog DOES NOT constitute or imply the support or endorsement of said content by KPI, our staff, or board members. We’re trying to create the free flow of ideas and someone posting a study from the Bugs Bunny Institute for Public Policy does not mean KPI is supporting Bugs Bunny or his policy ideas.

We reserve the right, at our absolute discretion, to remove any comments we feel violate the rules outlined above or the spirit of this blog.

Lastly, while we were all riveted by the debates in Washington, D.C. about raising the debt ceiling or extending the payroll tax cut, we'll be focusing on Kansas issues.  There are plenty of other forums to debate the latest news from inside the Beltway and trust you'll find an appropriate place to make your opinion known. So, unless it deals with a direct impact on Kansas policy (e.g., Medicaid, NCLB), personal liberty, or economic freedom we'll leave those federal topics for discussion elsewhere.

Please e-mail me ( james.franko@kansaspolicy.org) should you have any questions or concerns.