For Kansas budget, balance is attainable
wichitaliberty.org
A policy brief from a Kansas think tank illustrates that balancing the Kansas budget while maintaining services and lower tax rates is not only possible, but realistic.
Fri, 19 Sep 2014 19:18:30 +0000
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What's the best way to create more jobs in Wichita? Come and find out on Friday at the WSU Metroplex. Free and open to the public. Yes Wichita Coalition For A Better Wichita Wichita Metro Chamber of Commerce http://kansaspolicy.org/events/119824.aspx?view=c


Fostering Economic Growth in Wichita
kansaspolicy.org
A discussion on the jobs fund portion of the proposed City of Wichita 1% sales tax. Agenda to be announced.
Mon, 15 Sep 2014 19:53:26 +0000
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A chance to truly understand the issues facing Wichita voters in November. What is the best way to give more Wichitans a chance to find a job? RSVP in first comment. Voice For Liberty Yes Wichita Coalition For A Better Wichita Wichita Metro Chamber of Commerce http://www.kansas.com/news/local/article2006841.html


Kansas Policy Institute to host public forum on proposed job development fund
www.kansas.com
The Kansas Policy Institute, a conservative Wichita nonprofit organization, is hosting a community forum on the proposed job development fund, which is part of the one-cent-on-the-dollar sales tax that will be on the November ballot.
Wed, 10 Sep 2014 17:19:04 +0000
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Posted by David Dorsey on Monday, September 15, 2014

In April of this year I posted a blog in which I made a case for supporting public charter schools and expanding them in Kansas as one way to address a troubling and unmoving achievement gap among our minority and low income students. After a few recent readings - a report supporting charters and an opinion opposing them - it’s time for a follow-up.

A recent analysis by the Mackinac (Michigan) Center for Public Policy found that charter schools outperform traditional public schools (TPS) when adjusted for students who qualify for free lunch. Specifically, Audrey Spalding, the author of the report, found that

if there are two schools of the same grade levels where both have the same percentage of students eligible for a free lunch — one a charter public school and the other a conventional public school — the charter would, on average, be ranked 5 percentage points higher on the state’s rankings.

It is worth noting that in Michigan 66.4% of charter school students qualify for free lunch, while only 39.2% of TPS students qualify for free lunch.

The Michigan study is another affirmation of public charter schools, especially when it comes to serving low-income and minority students. It is worth noting that the achievement levels and “gaps” of these subgroups in Michigan is typical of any given testing population on any given metric; meaning we would see similar results on national exams, ACT scores, state-level exams in Kansas or any other state. It is also worth pointing out that nothing in stating these scores should be read as a statement about low-income or minority populations being “unable to learn.” It is a statement, tragically so, that they haven’t  been given the right educational opportunities needed to succeed.

Here is more evidence that validates the public charter school movement.

CREDO 2013 Study

As I pointed out in that previous blog, Stanford University’s Center for Research on Education Outcomes (CREDO) 2013 report found success for low-income and minority students. To the point:

Looking back to the demographics of the charter school sector in the 27 states, charter school enrollment has expanded among students in poverty, black students, and Hispanic students. These are precisely the students that, on average, find better outcomes in charter schools. These findings lend support to the education and social policies that focus on education as the mechanism to improve life chances for historically underserved students. Charter schools are especially beneficial learning environments for these students.

Julia Lawrence, writing for Education Weeks about the CREDO findings in Boston states

What makes Boston special is that a large percentage of students who are enrolled in charters in the city are exactly of the demographic background that these types of schools were designed to reach – coming from lower-income, minority families.

CREDO director Margaret Raymond said in this interview: “the charter school sector is getting better on average and that charter schools are benefitting lower-income, disadvantaged, and special education students.”

US News Best High Schools in America

Three of the top five 2014 U.S. News Best High Schools in America are public charter schools. Each serves significant minority populations: BASIS – Scottsdale (46%), Gwinnett School of Mathematics, Science and Technology (Atlanta suburb Lawrenceville, Georgia) (75%), and BASIS – Tucson (47%).

Success Academy

Success Academy in New York is perhaps the highest profile charter school organization in the country, largely due to the controversy between founder and CEO Eva Moskowitz and new New York Mayor Bill de Blasio. Of the 9,000 students in Success Academy’s 32 schools 97% are minority and over 80% are low income. Their schools rank in the top 1% in math scores and the top 3% in English language scores city-wide.

IDEA and YES Prep Academies

IDEA and YES are two charter groups that operate preparatory high schools in Texas. IDEA’s three schools serve about 2,200 students; almost all students are minority and about 80% are low income. YES operates four prep schools in the Houston area; almost 100% minority and about 60% low income. Those seven high schools were in the top 17 in the state and top 117 nationally according to the U.S. News rankings.

KIPP

KIPP (Knowledge is Power Program) has 162 elementary, middle, and high school charters across the country serving 58,000 students. Nearly 90% of those students are low-income and 95% are African American or Latino. KIPP schools consistently outperform their traditional public schools counterparts.

Rocketship

Rocketship schools, a charter organization that started in the Silicon Valley and is spreading to other metro areas including Memphis, Milwaukee and Houston have outperformed similar schools in both the local area of San Jose and the state of California as a whole, while serving mostly low-income Hispanic students.

“Crab Mentality”

But the one-trick-pony naysayers continue. A recent Education Week opinion slammed charter schools and declared their supporters suffer from “truth deprivation.” The author, Gerald N. Tirozzi, cites the same CREDO study and comes to the conclusion that charters are no better. But for some unexplained reason, he spends 974 words without a single mention of the improvement of low-income and minority students CREDO itself reports. His attitude amounts to that of crabs in a bucket.

“Crab mentality” rules when one of the crabs tries to climb out of the bucket, but instead of the others assisting the escape, they pull the escapee back in. This “if I can’t have it, neither can you” attitude toward education is what is keeping far too many in the crab bucket that is traditional public education.

He even has the chutzpah to say that charter schools “play by a set of rules that is different from those of traditional public schools, which according to Mr. Tirozzi “have an unwavering commitment to equity for all students.”

“Equity for all students”? Is he serious? What does he consider equity – that every student has a desk and a textbook? Apparently Mr. Tirozzi has never heard of the achievement gap, the precise reason for the rise of charters like KIPP, BASIS, Success Academy, Rocketship , IDEA and YES.

Those in the education establishment try to frame the discussion as if public charter schools are peddled by modern-day versions of the old west’s magic elixir salesmen, preying upon the ignorant and hopeless. AFT’s president Randi Weingarten has chimed in by proclaiming that charter schools have failed to live up to “the leaps and bounds that were promised” in student performance. They fail to realize (or admit) that the charter movement didn’t grow from hollow, unrealistic promises. It rose from parents and visionaries.

Parents - those desperate, not for some magical cure, but for an opportunity for their children to escape the claws of an education system not fit for their needs.

Visionaries – those who see that the one-size-fits-all approach to public education no longer is relevant and are bold enough to try methods that are student-based, not institutional-based.

Charter schools were never meant to be the silver bullet that some have miscast them to be. There are no silver bullets in public education. The system has evolved over the past two centuries, both good and bad. Public charters should be seen as an evolutionary step in giving students and families more opportunities to succeed. Just as there are good traditional public schools, there are poor-performing public charter schools. The key is trying to find what makes the high-performers work and extend these opportunities available to more kids.

So, the next time someone asks you to describe what’s so special about public charter schools, start with a discussion of “crab mentality.”
Posted by David Dorsey on Thursday, August 28, 2014

Over the past few decades several movies have been produced in which the protagonist(s) has to relive a day over and over again until some unknown variable breaks the chain. The most famous is Bill Murray’s Groundhog Day (can it really be 20 years old?). Other movies that have followed suit include Source Code, The 12 Dates of Christmas, Repeaters (a little-known gem of a movie I highly recommend), and this summer’s acclaimed Tom Cruise adventure Edge of Tomorrow.

Composite Scores

After reading the ACT Profile Report for 2014 results I feel like Murray’s Phil Connors, only without I Got You Babe and Punxsutawney Phil. As Table 1 shows for both Kansas and the nation, the 2014 scores look like the 2013 scores that look like the 2012 scores that look like…

 

The good news, with a caveat, is that Kansas high school graduates continue to outperform the rest of the country. Here’s the caveat: 12 states require all high school graduates take the ACT, whether or not they plan to attend college. Predictably, Table 2 shows that those states rank in the bottom half of the nation and distort the performance of states like Kansas that do not require all graduates to take the ACT.

 Scores by Race/Ethnicity

There has also been a “Groundhog Day” effect when it comes to the performances of racial/ethnic subgroups.  Table 3 shows that there has been virtually no change in the past five years among all these subgroups. What is perhaps most troubling, however, is that this means the performance gap of African American and Hispanics persists statically. (Note: ACT does not report data by income level.)

  

College Readiness Scores

ACT provides College Readiness Benchmark Scores that indicate what percentage of students have “a 50% chance of obtaining a B or higher or about a 75% chance of obtaining a C or higher in the corresponding credit-bearing college courses which include English Composition, Algebra, Social Science and Biology.” Table 4 provides that data by racial/ethnic subgroup and the accompanying chart is a graphic representation of the same.

 

 

What first jumps off the screen is how few meet college readiness for all four courses. Only three in ten 2014 Kansas graduates have a 75% chance of getting a C or better in courses in the four core areas. Yikes. And a glance at the chart provides a quick visual of the predicted performance gaps of African Americans and Hispanics as this cohort goes on to post-secondary education. Only 7% of African Americans and 14% of Hispanics are college ready in the four core areas.

Education Funding and ACT Scores

Remember in Groundhog Day when Phil tries to win the affection of Rita (Andie McDowell)? He tries and tries too hard to be what he thinks Rita wants him to be, of course, to no avail. It’s not until Phil has an epiphany and changes his behavior that he succeeds in both getting the girl and moving to the next day.

I believe that parallels the relationship between education funding and ACT scores. More and more of the same will not garner a different result. More funding has not and will not increase ACT scores just like being more of what Phil thought Rita wanted didn’t improve his chances with her.  Whether it’s higher composite scores, reducing achievement gaps or students being more “college ready,” performance will be fated to an eternity of February 2 until the education establishment has a Phil Connors-type epiphany.

As I have presented in a previous blog post, getting serious about expanding public charter schools would be a good place to start, as would providing scholarships and other alternatives for at-risk students. An education system with accountability, transparency and individualized instruction that allows each child the best opportunity to succeed is crucial to moving the needle forward.

Then maybe we’ll wake up to February 3.
Posted by Patrick Parkes on Wednesday, August 27, 2014
The recent release of July’s private sector jobs numbers marks the seventh month of available data for 2014. Kansas continues to keep pace with its income taxing peer states despite a slower month in July than in June. The growth rate from July 2013 to July 2014 was 1.21% compared to June’s 1.35% rate.

This decline levels out when looking at Kansas’ first seven months of 2014 compared to the same period of time in 2013. The 1.41% growth rate Kansas posted is virtually unchanged from last month’s 1.43%. 

On the whole, the private sector jobs growth picture remains clear. States without an income tax maintain a substantial and steady job growth lead over Kansas and the rest of their income-taxing peers. 

 

 

Posted by David Dorsey on Monday, August 25, 2014

Buzzwords and catchphrases - what would education be without them. Here are a few examples of those catchy little language snippets currently in vogue: research-based, lifelong learner, brain break, differentiated instruction, scaffolding, standards aligned, brain-based learning (my personal favorite – as if there were an alternative?).  If I had a dollar for every time I heard someone in the education community mention collaboration at the K-12 Student Performance and Efficiency Commission meetings last week I could retire without worrying about the solvency of KPERS.

But now sitting atop education’s buzzword totem pole is data driven, as in “my differentiated instruction is data driven,” or “the decision to purchase that standards aligned curriculum was data driven.” Here’s a favorite derivative used by principals to teachers: “How did data drive your decision to use that re-teaching lesson?”

Now don’t get me wrong, I’m as big a supporter of using data as there is, when it is utilized correctly. Data analysis is a significant part of what I do with KPI. And data should be a driving force to improve the overall education of our students. Data analysis has exposed a lingering and significant achievement gap that burdens African American, Hispanic, and low-income students.

However, there is another side to the coin. There is danger in data when it is reduced to a buzzword or part of a buzz-phrase that not only diminishes its importance, but also can cause misuse and unintended consequences.  My experience in the Topeka Public Schools classrooms and recent reporting by the Topeka Capital-Journal validate that this is the case in USD 501.

The rush to embrace the use of data with eyes wide shut is not a new concern. Nearly six years ago Frederick Hess of the American Enterprise Institute wrote a piece published in Educational Leadership called The New Stupid. Hess, recognizing the strides educators are making in using data, cautioned that the zeal to use data to make sound decisions can actually lead to stupid decisions that rely on information in lieu of knowledge. He presents these three categories of pitfalls educators should avoid when climbing aboard the student achievement data bandwagon: using data in half-baked ways, translating research simplistically, and giving short shrift to management data (e.g., operations, hiring and financial practices).

The data-related controversy brewing at Topeka Public Schools could provide two more Hess-like categories to avoid: 1) an onerous data collection/retention system and 2) the potential for student confidentiality violations. The latter is described thoroughly in two stories in the Topeka Capital-Journal – an article posted on August 20 and then this updated article posted later the same day. The newspaper reports that potentially confidential information was posted on what the district called “data walls.” These walls, which all teachers helped create at every elementary and middle school, displayed a note card (sans student name) for each pupil in the building. That card was placed under their appropriate heading of achievement (i.e., all “Proficient” students grouped together). Unfortunately, it appears some of the schools had information on cards that disclosed student free or reduced lunch status. According to the USDA this is a violation of students’ privacy.

But what the newspaper didn’t report was how arduous the entire data collection process was on the teachers. The creation and updating of the data walls was just part of the burden put on teachers to keep, maintain, and update virtually all student data. This included formative and summative assessments, daily work, student behavior and anecdotal notes. Teachers were required to keep all that information in what was called a “data notebook.” By the end of the school year, the typical data notebook was a full 3 or 4 inch binder, and some teachers even had multiple notebooks of that size. Their main complaint, as you might expect, is that the time lost being a teacher in order to be a records clerk was actually an impediment to student achievement (not to mention teacher sanity). Of course, the underlying purpose of this effort was to help teachers make data driven instructional decisions. Unfortunately, the outcomes of this effort were decreased instructional time, alienated teachers and apparent violations of the law.

A line from Hess’s article is so appropriate here, it bears quoting.  “Data driven decision making does not simply require good data; it also requires good decisions.” 

Let’s hope from this point forward the administrators of Topeka Public Schools take heed of Hess’s cautioning and no longer fall victim to “The New Stupid.”
Posted by Dave Trabert on Friday, August 15, 2014

Former state budget director Duane Goossen’s recent blog post entitled “Woe to Education Finance” is yet another example of data being deliberately distorted or falsified for political gain.  Mr. Goossen served as budget director under governors Graves, Sebelius and Parkinson and has been a vocal critic of anything even hinting at efficient government…let alone lower tax burdens.  Indeed, his post concludes, “The fallout from the governor’s tax plan has made investment in Kansas public schools impossible.”  That false claim is completely debunked on page 60 of the Division of Budget’s FY 2015 Comparison Report, showing that state funding of schools will increase by $176 million this year (not counting property taxes that will finally be recorded properly as state aid). 

And that’s just the beginning of the false claims and distortions.

Goossen:  “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.”

Table 1 shows the most recent estimate of per-pupil spending for the year just ended.  Even if the portion recorded as Federal and Local is unchanged this year, the addition of $176 million will take per-pupil expenditures to roughly $13,411.  That would be $751 more per-pupil than six years ago….not $548 less.  Mr. Goossen is only telling a partial story, as shown in the next section.


What’s more, to the extent that costs are increasing for schools, they are also increasing for individual families and businesses. Mr. Goossen is essentially demanding that taxpayers give government a raise when they have no such power with their own paychecks and are facing rising costs as well.   His demand for more money also presumes that districts are organized and operating efficiently, which we know is not true according to multiple Legislative Post Audit studies.

Note: The KSDE estimate for 2013-14 was provided before the addition of funding during the recent legislative session, so it is possible the actual spending will be higher than the estimate.  It should also be noted that KPI’s estimate of 2014-15 utilizes data from Budget and KSDE and that there could be reporting differences between those entities that would affect the Total.  This note also applies to Table 5.

Goossen: “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.”

Mr. Goossen writes this as though the amounts listed are all that is provided to schools.  In reality, he is talking only about Base State Aid Per Pupil, which is just the beginning point for a portion of school funding.  As shown above, total aid per-pupil is about three times greater than Base and that total state aid that is more than double the Base. He deliberately ignores funding that doesn’t suit his preferred narrative.

Goossen: “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.”


Deceptive’ would be a generous interpretation of Mr. Goossen’s representation in this regard.  As shown in Table 2, he is grossly understating total aid to school districts.  Multiplying Base State Aid Per Pupil times Weighted Enrollment produces an amount roughly equal to Base State Aid plus extra money provided through many weightings (At-Risk, Bilingual, Transportation, etc.); adding Local Option Budget money would lead on to believe that school funding for 2013 was about $3.2 billion.  The actual total, according to the Kansas Department of Education, was $5.8 billion.

Saying “schools must run their classrooms and education programs within that total” is the caveat that saves his representation from being an outright false claim.  There is no official definition of “education programs” but he later provides a few examples of what he may exclude from “education programs,” saying “…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.”

It is true that money for the listed spending categories must generally be used for those purposes, but his “etc.” contains a lot of unrestricted funding, the most notable of which, Supplemental General State Aid, was $339 million for 2013 and is budgeted to be $448.5 million this year.

Mr. Goossen and other “just spend more” proponents loudly proclaimed over the last few years that the Legislature should raise Base State Aid in accordance with the Supreme Court settlement over Montoy.  But now that the Supreme Court has effectively reversed that ruling and says that all funding, including State, Federal, Local and even KPERS must be counted toward adequacy, they have a decidedly different – and quite hypocritical – position.  They still cling to Base State Aid as their touchstone and refuse to acknowledge that, as the Supreme Court says, “….a stable retirement system is a factor in attracting and retaining quality educators—a key to providing an adequate education.”

It is also worth noting that school districts say nicer facilities lead to better student outcomes when they want more money for that purpose, but facilities suddenly don’t count when they want other money.  Spending more money on facilities also makes less available for other functions, as does having district employees perform functions that could be privatized, which forces more money to be spent on KPERS.

Goossen:  “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.”

 The false claim about per-pupil spending being down was already debunked but Goossen also implies here that Base State Aid Per Pupil is all that schools receive to pay for supplies, electricity, transportation and teachers’ salaries, which of course is not true.  Table 3 highlights other major unrestricted funding sources that Mr. Goossen and others routinely ignore in their pursuit of more money. 


At-Risk funding does carry some restrictions but that funding is not required to be used for the exclusive benefit of students who generate the funding.  For example, the KSDE At-Risk Guidelines say “At-Risk funds can be used to support classroom teacher salaries to the proportional percent identified at-risk students.”  The guidelines merely require that at-risk students be present in the classroom. 

Table 4 shows spending from the K-12 At-Risk Fund in 2013 (another $19.8 million was spent from the At-Risk 4 year-old Fund, which can be used for K-12), including money spent on each category that Mr. Goossen implied could only be funded with Base State Aid dollars.   Most of the salary expenditure was for regular classroom teachers but money was also used to pay for custodians, support staff and administration.



Goossen:  “The per-pupil figure has dropped because state funding has dropped.”

Table 1 shows that per-pupil funding of schools has increased. Table 5 shows that state funding has also increased each year since 2011 and is budgeted to set a new record this year.  Again, Mr. Goossen does not allow the facts to get in the way of his political narrative.



Goossen: “Is the state in a position to add money to push the per-pupil amount up?

Set aside the fact that that just happened.  The real issue here is that Mr. Goossen is posing the wrong question.  “Just spend more” is simply about institutional demand for more money and completely disregards the educational needs of individual students.  Political demand for more money also ignores these realities:

  • Every Legislative Post Audit report says districts are not operating efficiently.
  • $430 million of education funding was used to increase district cash reserves since 2005.
  • Student achievement on independent national tests is relatively unchanged despite large funding increases over the last decade.

One must wonder how much of Kansas’ and the nation’s student achievement woes are attributable to political self-interest and putting a higher priority on institutions than on the needs of individual students.    

Posted by David Dorsey on Friday, August 15, 2014

This August 10, 2014 article from the Topeka Capital-Journal, is aptly titled “Topeka USD 501 teachers point to paperwork, micromanaging as stressors.” The article was triggered by the resignation letter of former 5th grade teacher Kris Rowan. A letter (which, according to the article, the district didn’t want to be made public) in which she outlines her reasons for retiring earlier than she had planned due to the aforementioned micromanaging and paperwork. This passage from her letter bears highlighting:

I can’t work any longer where I feel so untrusted, so on guard, so unable to be creative, where my individuality is not wanted, where everyone must be doing the same thing at every grade level.

I could not have said it better. I had the opportunity to spend time in her classroom as a math teacher with her for a year at Randolph Elementary. I know Kris to be a very bright, dedicated and conscientious teacher.  So it doesn’t surprise me that she joined the scores of us who also left, disappointed and frustrated with the direction of USD 501.

“The district is a sinking ship,” described another fellow teacher to me as to why she resigned at the end of last year from USD 501. She took her exceptional teaching talents to another district. I am one of several Lowman Hill teachers who parted ways with USD 501 at the end of last school year. Some are teaching in other districts, others retired earlier than expected. And I know others who wanted to leave but were unable to find other teaching positions or are simply riding into the retirement sunset.

Dissatisfactions that are leading teachers to move on are not limited to USD 501. Unrealistic demands are taking their toll across the state. I know of a now former Johnson County teacher who, after getting her degree to teach in her 40s, said five years ago that she would “teach until they fire me.” She retired out of frustration last May. These quotes are indicative of sentiments heard in districts across the state:

  • “This is not why I got into teaching.”

  • “I can’t possibly do everything they want us to do this year.”

  • “I can’t be creative anymore.”

  • “I have a life (outside of teaching).”

  • “They don’t want teachers, they want curriculum delivery robots.”

This paragraph from the article pinpoints the source of the frustration for many:

She and other teachers at the district who spoke to The Topeka Capital-Journal described dramatic changes in the past year to the district’s teaching initiatives and requirements for its elementary schools. The new approach, they say, resulted in unprecedented micromanaging of their daily activities, and long hours spent on paperwork. Some directed their criticism toward Diane Cox, who joined the district one year ago and oversees instruction.

Although I agree that last year did bring “unprecedented micromanaging,” the trend toward centralized authority at the expense of building autonomy and individual discretion preceded Diane Cox. I noticed a distinct move toward central office control and a “cookie cutter” approach to teaching about five years ago under her predecessor.

But what brought this to a head last year is the district’s unrealistic and counterproductive approach to the collection and use of data, which I will discuss in my next blog.

Posted by Dave Trabert on Friday, August 15, 2014

A July 13 New York Times editorial made several false and misleading claims about school funding and economic performance in Kansas, so we submitted a response to set the record straight.  Predictably, the Times ignored our request but you can read about The New York Times Assault on the Truth in the Commentary section of our site.

As noted in our response, this isn't the first time the Times has ignored our submissions.  We have no burning desire to have our name in their paper; it's simply about getting the truth published.

It's bad enough when politicians make false and misleading statements, but our freedom is at stake when media is leading the propaganda parade.

 

Posted by David Dorsey on Tuesday, August 12, 2014

The KNEA made good on its promise to file a lawsuit pursuant to the passage of HB2506, which was signed into law during the 2014 legislative session and was the legislative response to the Gannon v. Kansas school finance lawsuit.  Specifically, the suit challenges the provision of the law that essentially eliminates state-mandated teacher tenure (although the law allows local districts to put tenure rights into teacher contracts).

The suit states on page 2 that “KNEA has standing to sue on behalf of its members, many of whom are non-probationary teachers who have lost valuable rights due to the passage of the (law).” As a former teacher, I say it’s time for a group of parents AND independent-minded teachers somewhere in the state to stand up to the union and claim some of their “valuable rights” that have been lost to their children’s education for years. Rights that have been lost due to ineffectual teachers who are protected by laws and procedures that make it nearly impossible to dismiss a teacher for incompetence.

As I have written previously in this venue, I know of many teachers who are also fed up with tenure-protected incompetent teachers. As a classroom teacher, I could tell early in the year which of my students had that teacher the previous year. As teachers, parents and even from our own student experience, we all remember who the underperforming teachers were. It took considerable time trying to catch those unfortunate ones up with the other kids. And in my capacity as a specialty math teacher, I witnessed gross incompetence of teachers on a daily basis. It’s sad to say that in my 20 years as an elementary level teacher, I witnessed only one teacher who was fired for incompetence and it took the district two years to get it done. That meant two more classes of elementary students were subjected to an ineffective teacher; two more classes that fell behind the others in their grade. And two more years the proceeding teachers had to spend needless time reteaching.

The truth is, KNEA should be advocating for a quality education for all students instead of protecting those who impede it.

That’s not happening now, nor is it ever going to happen, so the time has come for the parents and teachers willing to buck the union to take a stand.

They did it in California in the Vergara case, and it worked. And buoyed by the success in the Golden State parents are following suit in New York as reported in this Wall Street Journal article. Similar suits can be expected in other states across the country, according to WSJ. It’s time Kansas becomes one of those states.

If Kansas decides to seriously address the achievement gap endured by minority groups and low-income students, removing incompetent teachers from classrooms has to be the place to start. In the recent Gannon decision, the Kansas Supreme Court deemed that adequacy of education is defined by standards, the so-called Rose standards, as opposed to total money spent. Students are not going to have an equal opportunity to meet those standards unless districts across the state minimize the number of low performing teachers.

Speaking for all the good teachers across the state, when the poor teachers are gone we can spend more time taking our students forward instead of making up for lost time.

Now, if only KNEA shared the same concern.

Posted by Patrick Parkes on Friday, August 08, 2014

A Recent Graduate Entering the Workforce:

Thus far, we have examined Wichita’s proposed sales tax increase through the very distinct lenses of family life and retirement. Yet, the financial impacts of the increase are certainly not limited to these important life phases. Consider the financial obligations of a recent college graduate with an engineering degree working in Wichita’s aerospace sector. Research from the popular compensation website Salary.com notes that entry-level engineers in the area can expect to earn almost $62,000 annually. This may seem like a healthy starting salary at which sales tax changes are hardly noticeable—especially for a young person without the commitments of a family, children, a mortgage, etc. However, like many of her fellow graduates, she juggles her current living expenses on top of her student debt load of $29,000 (i.e. the current national average). The extra $253 she could owe next year under a sales tax increase would certainly be put to better use as one of the loan payments she dreads each month. Or, better yet, she could use the money to make an extra payment against her loan’s principal and get herself out of debt sooner.


A Stable, Two-Income Family:

For a final scenario, consider a relatively comfortable family of four living on $111,000 annually. This family is on solid financial footing and may even manage to save up enough for a nice vacation each summer. However, with both kids nearing high school age, the mother and father are very worried about how they will meet the demands of college tuition costs in the coming years from universities that seem determined to continue increasing their prices. As such, these parents getting serious about putting money away in the 529 plans they started years ago but haven’t given much attention until now. To help jump-start these plans, the mother has just begun a new job as a paraprofessional at the local elementary school. She likes that the position will allow her to keep working hours similar to her kids’ schedules, and the idea of being able to contribute to the family’s savings plans motivates her. With that said though, she often gets discouraged in thinking that her meager salary will fall well short of providing for even the mounting expenses of her kids’ high school years; let alone the college savings needed. The extra $329 this family could owe annually under a new sales tax may seem minuscule. Yet, this family could undoubtedly think of a whole host of better uses for it in light of the aforementioned major financial decisions and sacrifices looming on the horizon.     

Note: This blog has been updated from its original posting on August 5th, 2014 

Click here for Part I in this series.

Posted by Patrick Parkes on Friday, August 08, 2014

Introduction:

A sales tax in Wichita will matter. I know this because states with low overall tax burdens are proving every day that taxes do matter. These states continually outpace their high-burden peers in private sector job growth, private sector GDP growth, as well as growth in wages and salaries—to name a few. But, to be sure, these developments are by no means just esoteric statistical phenomena. Individuals and families are taking notice and “voting with their feet” by leaving high-burden states and moving to low-burden ones. These low-burden states are far from being carbon copies of each other by nature, but they have each managed to embrace a simple recipe. They have found ways to spend less per resident, operate more efficiently, and provide better public services at better prices. This commitment allows citizens to keep more of what they earn, save and invest, start new businesses, and/or support existing ones. Contrarily, high taxes and added taxes disrupt the natural flow of otherwise strong state economies by taking money that could have been spent within them to finance oftentimes inefficient and wasteful governments.  This is how we ought to examine the proposed 1% sales tax in Wichita: by putting the tax’s impact in perspective not based on what it will mean for city government in Wichita but instead based on what it will mean financially for individuals and families living therein. The same could be said at the local level as well. Why not go to Andover or Derby to buy groceries and save a little coin rather than pay a higher sales tax in Wichita? 

We must keep in mind from the outset that new tax obligations are especially burdensome on all types of individuals and families because they must be met in addition to taxes that these individuals and families are already paying. Thus, coming up with roughly an extra $160-$350 in added sales tax payments each year may not seem like an incredible sacrifice in its own right. However, doing so when one is already feeling both pinched financially and overburdened by the existing tax code is an entirely different matter. As a starting point, consider that the average adjusted gross income (AGI) per household in Wichita is $59,382. This figure is based on 2012 IRS tax filing data for Sedgwick County as well as Consumer Expenditure Survey (CES) data. At this average income level, a household would face an additional tax burden of $240 annually under a new 1% sales tax in Wichita. In an effort to illuminate the broader impact of such a tax, we expanded upon this methodology and created four unique household scenarios representing a broad swath of the Wichita community. We selected a diverse group of four tax brackets that would inform the “financial pictures” underlying each of our four scenarios. We created the “financial pictures” using adjusted gross income (AGI) averages for each tax bracket chosen. Next, we considered the estimated percentage of income subject to sales tax for each bracket. Finally, we multiplied these pieces of income by the 8.15% total sales tax rate in Wichita that consumers will face if a 1% increase goes into effect.  Due to national AGI and CES averages, our tax burden calculations inherently assume an average family size of 2.6 consumers per household. Family sizes in the stories below vary slightly from this average baseline. Nevertheless, the baseline still provides an appropriately safe estimate of the added tax burden that a few “example” households may face if the 1% sales tax increase is enacted.

Retirement and Living on a Fixed income:

First, think about a 65 year-old recent retiree living in Wichita. The American Association of Retired Persons (AARP) estimates that an average retiree of this age lives on just over $31,000 annually. Add a small pension and/or some other small investments to this fixed income stream that is largely reliant on Social Security benefit payments, and our retiree likely brings in close to $35,000 annually. If the City of Wichita enacts its proposed 1% sales tax, our retiree could pay $161 in additional sales taxes per year. This sum may seem small and inconsequential by itself, but—as we discussed above—sums like these are never paid in a vacuum. They are sacrificed in addition to and on top of existing financial obligations. If our retiree is like the majority of recent retirees in this country, he is counting on every dollar he can save to cover the rising costs of the healthcare he and his wife will need as they age. According, to a recent article from Fidelity Investments, a 65-year-old couple retiring this year will face an average of $220,000 in healthcare costs throughout retirement. Facing this daunting sum, a $161 sales tax hike is the last thing Wichita retirees need added to their financial plates.         

Job Loss in the Manufacturing Sector:

Next, consider a family of three earning $55,000 per year (slightly above the median income reported for Wichita). This family’s groceries, gas, cable, insurance premiums, and two car payments are becoming impossible to meet due to recent job loss and the drastically altered finances the family now has at its disposal. The husband was laid off recently from his previously steady manufacturing job. While he has been able to pick up some part-time and temporary work, he is certainly among the 15% of Americans who report themselves as underemployed. As such, his wife has re-entered the workforce as a freelance graphic artist. Still, this family has had to tap into its already modest and fast depleting savings to make ends meet. The $228 in additional sales taxes this family could owe annually if Wichita’s rate increase passes is the last thing it can afford to think about given its already dire financial straits.

Note: This blog has been updated from its original posting on August 4th, 2014 

Posted by Steve Anderson on Thursday, August 07, 2014
Direct transfers of taxpayer money sent to a specific business or industry is always a tough sell to politicians, let alone the voting public. But, that is why some corporations pay lots of money to lobbyists. If we can’t get a company more revenue (via a taxpayer-funded payment) why don’t we lower their expenses via a tax loophole that lowers how much they pay in taxes?

These sort of special interest tax breaks come in a variety of different forms but the net effect of each is the same - revenues are diverted from the appropriation process and instead sent to some “special” group.   A shrewd lobbyist will often make sure the program is funded in a way that their client(s) will receive their funding even if the statute is changed in the future.  However, that should not preclude bringing these special interest deals to an end.  This is especially important given that the reduction in tax rates will increase the impact of these programs on the revenue stream even as the state continues along the path to eliminating the individual income tax.     


These transfer schemes are funded in a number of different ways that obscure the transaction from both the public and the appropriation process.  For example, there are a number of these special deals that are funded by payroll withholding taxes. The payroll withholding exemptions are programs where the state abates collection of state income tax withheld on employee’s wages.  The state then provides either a program or directly funds some benefit for the employer.   These programs come in many forms and often are nearly impossible to find within the very complex tax and revenue reporting statements.   In general these programs require relatively long commitments by the state of taxpayer funds.  The discontinuance of these type of programs will not generally eliminate the programs immediately but it will create savings going forward that could be substantial to the maintenance of a stable fiscal environment and a more transparent tax code. It would also be a breach of trust, on some level, to yank away a promise made by the state to an entity or individual. But, that doesn’t mean we have to let these program exist into perpetuity.

Investments in Major Projects and Comprehensive Training (IMPACT)
IMPACT provides for major project investment to provide financial assistance to defray business costs.  IMPACT uses withholding revenue for a direct funding source to pay for bonds issued by the state for projects.  In fiscal year 2013 that percentage was 2% and the program expended $25,420,654 of funds that otherwise would have gone to the state coffers.   The good news is that Kansas stopped issuing bonds in the IMPACT program effective Dec. 31, 2011. The bad news was it was replaced with other programs that are very similar.   The IMPACT payments will extend on for a number of years in to the future because of the bond’s that funded those projects.   This ability to bind future legislators and taxpayers to these sort of “deals” is, in and of itself, problematic but there is more damage done to the state of Kansas than just the direct cost of these bonds.    

Bad policy like the type of special interest payment that IMPACT represents often have negative impacts in the future that are not foreseen at the time of their passage.  For example, the IMPACT bonds were at the heart of the recent Moody’s down grade of the Kansas state bond rating.  The IMPACT bond’s ratings were reviewed by Moody’s rating agency because the funding source to pay off the bonds - withholding taxes - was being reduced by a cut in the tax on wage earners in the state income tax rates.  The media, which generally is not comprised of individuals with a financial background, reported that the change in the IMPACT bond ratings were caused by the broad tax cuts, which is only partially true.   What the media in general did not report, at least not with the same enthusiasm as their portrayal of the impact of the income tax cuts, was that Moody’s noted the long running unfunded liabilities of the Kansas Public Employees Retirement System (KPERS) and the lack of spending cuts as key elements of their downgrade. 

However, analysis of the IMPACT bond rating issues bring to light another important problem with these type of give a ways.  Future legislators have their hands tied because their predecessors have committed future tax revenues in a manner that precludes the ability to bring an immediate cessation, or even partial reduction, in the special interest funding source without repercussions such as the recent bond rating issue.   

Promoting Employment Across Kansas (PEAK)  
The PEAK program allows companies that create 100 new jobs within a specified two-year period to retain 95% of employee withholding taxes for up to 10 years.  Not surprisingly with such a generous incentive companies have grown its use rapidly going from $2.7 million in expenditures in 2010 to an estimated $12.5 million in 2012 years.   The “cap” on this program going forward is: In FY 2014, the cap is $12 million. In FY 2015, the cap is $18 million, $24 million in FY 2016, $30 million in FY 2017, $36 million in FY 2018, and $42 million 2019.    Immediately freezing the cap at the current level and eliminating the program going forward to prevent new obligations generates significant savings going forward for the state. This is giveaway is even more troubling when considering that a recent analysis from Kansas City’s Kauffman Foundation found that, “PEAK incentives recipients are statistically not more likely to generate new jobs than similar firms not receiving incentives.”  

Kansas Bioscience Authority (KBA)
The KBA’s short lifespan is a microcosm of what can go wrong with the concept of dedicated directed funding.   The lack of transparency created by bypassing the scrutiny of the appropriation process often leads to expenditures that generate headlines but don’t create economic growth.  

The legislation that created the KBA produced a number of programs and funding streams. It also set the total funding limit to the authority over 15 years at almost $582 million.  The funding was to be for a period of 15 years from the effective date of the establishment of the KBA and required the State Treasurer to annually pay 95% of withholding above the certified base, as certified by the Secretary of Revenue, on Kansas wages paid by bioscience employees to the bioscience development (code categories from NAISC) and investment fund of the KBA. 

The amount of funding transferred to the KBA grew from almost $20 million in 2006 to nearly $36 million by 2008 before the creation of the annual funding cap of $35 million in 2009.   Issues with operations and management emerged in 2011 which led to a forensic audit by an outside CPA firm.  The audit pointed to a number of issues that led subsequent legislatures to reduce the Authority’s funding to $11.3 million in 2012, $6.3 million in 2013, and $4.0 million in 2014 (KBA funding history here). It is doubtful that the current Administration or legislatures would increase funding above current levels but the $35 million is still the statutory cap leaving open that possibility.   

There is a secondary issue with KBA’s statutory cap caused by the treatment of these type of dedicated directed funding in the budgeting process.   These statutory caps for entities like KBA are considered to be at their cap amount when forecasting future budgets.  The $35 million of KBA statutory cap, for example, creates an illusion in fiscal impact statements issued by the Kansas Legislative Research Department (KLRD) because those statements show the full statutory amount of $35 million being spent every year for the five years they project.   Based on the current trend line of KBA funding this will not happen and, instead, creates a significant overstatement of expenditures and helps create fiscal deficits where none may exist.   These projections are used by legislators and the media and should strive to present as accurate a picture as possible of current and possible future realities. A more proper and accurate display of these type of funded programs for five year projections like KLRD produces would consider whether spending could be altered or removed completely. This should be reflected in either the actual amount shown, if there was a history of partial funding, or, at the very least, in a separate line item with a notation that the sum could be arbitrarily reduced or eliminated.   

Job Creation Fund
Another of those dedicated directed funds is the Job Creation Fund (JCF).  The Job Creation Program Fund or the “deal closing” fund, its more press-friendly moniker, lets the state, led by the Office of the Governor, make investments and extend incentives aimed at attracting or retaining businesses within a range of statutory guidelines.  The funding for the JCF was from the elimination of three other credits:  Kansas Enterprise Zone, Job Expansion and Investment Credit Act and a refundable credit for property taxes paid on machinery and equipment.  This sort of reallocation of funding sources carry the coveted title of “revenue neutral” and hence have no fiscal impact statement for legislators to worry about when the funding was created.   This allowed elected officials to be able to say on one hand they eliminated special interest funding while creating another special interest fund out of the “elimination” of those entities.  The annual cap on JCF funds is $10 million  which is how much could be immediately saved by letting JCF join its now-defunct predecessors in state history. 

Transfers Out of the State General Fund
There is another area where what would be State General Funds are diverted from the appropriation process.   There are a number of transfers out of the State General Fund with the largest and most notorious being the $135 million School District Improvements Fund.  Not only does this amount not get counted in the school formula, the recent Gannon ruling on school funding pointed directly to this fund as an example of inequity in funding.  This “inducement” to issue bonds for new buildings was a bad idea both from a policy and process aspect.   Policy-wise the Kansas Supreme Court’s Gannon ruling was correct in pointing out that only the growing school districts could use this fund with a few big school districts garnering most of the monies.   Process-wise the choice to use a transfer as the funding mechanism not only bypassed the school finance formula but also ensured that these funds are not counted by the National Center for Education Statistics; NCES is the “go to” place for comparing education-related data from across the country and is run by the U.S. Dept. of Education. 

There is also another series of transfers that have their own particular issues.  The adjacent list shows the recipient and the amount for FY-2015 (available at link above).  The picking of winners and losers by government is never a good idea and the direct transfer of taxpayer funding to companies is a suspect type of economic development.   

 Transfers out of the State General Fund
Spirit Aerosystems Incentive($3,500,000) 
Eaton MDH Spec. Qual. Indus. Mfg. Fund ($30,000) 
 Siemens Manufacturing Incentive($650,000) 
 Learjet Incentive ($6,000,000)
 TIF Replacement Fund ($900,000)
 Learning Quest Match ($500,000)
 Total ($11,580,000)
It is also troubling when local communities enter into Tax Increment Finance (TIF) arrangements, not to mention other subsidy giveaways, which are basically an agreement between a company or individual and the city to suspend property tax payments for that company or individual.  State taxpayers as a whole have to make up for lost revenues to the governing body of each such city from the TIF arrangement.  This means that a TIF issued in Johnson County is, at least in part, paid for by residents of Bourbon County and Elkhart. This distribution of funds from taxpayers across the state to individual “redevelopment areas” that were created by local governments in a manner that is basically hidden from the citizens is another great example of why these “off the tops” are bad policy.  Requiring these TIF subsidies to be debated in the light of the full appropriation process would no doubt lead to questions by legislators whose districts did not include cities who receive this subsidy. 

A general thought for legislators, citizens and industry on these economic subsidies.   The reduction in income tax rates by the state on withholding rates has already provided a huge incentive for these companies in addition to the direct largess they receive from these dedicated funds.  The rate cut on withholding taxes increased the take home pay of their employees without those companies having to give a pay raise to their employees out of company funds. Note that the “incentive” of lower withholding taxes is applied to EVERY wage earner in the state and does not go about picking favored businesses, industries, or individuals. This type of transparent, rules-based, and equally-applied policy is the correct way to encourage economic growth and allow the free market to dictate outcomes not politicians or bureaucrats.
  
Conclusion
Every program that spends the funds of the taxpayer should be examined regularly and the nature of these “off the tops” suggests that is not happening. The need for transparency and accountability is especially true of programs that benefit any specific individual, company or sector of the economy at the expense of another.  Because of the contractual type of arrangement some of these represent we do not advocate for the state breaking existing contracts in regards to incentives.  But, the creation of new or expansion of existing economic development handouts that are direct redistributions from taxpayers to other sectors of the economy needs to be halted and those still in existence need to be reviewed.   

A complete review of every agreement entered into by the state to ascertain if that agreement is contractual in nature or are not legally binding going forward should proceed this next legislative session.   The state should review those that are not legally binding and current renewals that can be foregone and put this “off the top” funding back in the appropriation process going forward.   How much could the state expect to realize would be determined by that review. Even a preliminary, informed estimate would be in the neighborhood of $50 million annually without breaking any contractual arrangements.   The following chart gives an estimate of just three programs with statutory flexibility.  

 Total Dollars Returned to the State Coffers
 $s in Millions FY16 FY17 FY18FY18 
 Freeze PEAK at Current Levels $6$12$18$24
Kansas Bioscience Authority $25$25$25$35
Cease Job Creation Fund $10$10$10$10
 Totals$41$47$53$69
The issue of transparency is front and center in all of these programs and it would be appropriate for every “off the top” to be displayed on both Consensus Revenue Estimates and Appropriation profiles so that legislators and citizens can see that a significant amount of funds have already been appropriated by these arrangements.  

Posted by David Dorsey on Friday, August 01, 2014

The updated version of the formula that will be used by the Kansas State Department of Education to determine student weighting in the coming school year is presented below. This complex formula is the basis to adjust (increase) the number of “students” in a school district for state funding purposes.

Dissecting this complicated formula reveals those factors the state recognizes that require additional money.

Highlights include:

  • Up to 13 different factors decide what the “real” student count will be for a particular district*.

  • Seven factors (at-risk, vocational ed, bilingual ed, high-density at-risk, new facilities, high enrollment, and virtual students weighting) are calculated using percentages of student enrollment.

  • Four factors apply to all 286 districts. They include:

    • at-risk students (those who qualify for free lunch)

    • low or high student enrollment

    • special education weighting

    • transportation

  • The others vary in applicability from the vocational education weighting (267 districts in 2013-14) to declining enrollment weighting (2 districts in 2013-14).

Once all applicable factors are determined, the total weighted number of students is multiplied by the Base State Aid Per Pupil (BSAPP - $3,838 in 2013-14 and $3,852 in 2014-15) to calculate that part of the amount of state aid a district receives.

These weightings are no small affair. For example, in the Elkhart School District (USD218) last year, the weighting factors increased the student count from 502.6 (actual enrollment) to 1,668. 2, a 231.9% increase. In dollar terms, that increased Elkhart’s BSAPP funding by $4,473,573 from $1,928,979 to $6,402,552. That's an effective BSAPP of $12,739! And that’s not an isolated case. Nearly half of Kansas’s 286 school districts realized at least a doubling of the effective BSAPP due to weighting.

People in the education establishment are quick to lament that BSAPP is down from the pre-recession figure of $4,400 in 2008-09 to the current $3,852 for the 2015 fiscal year. However, you never hear them speak of the all the weightings that significantly add to the dollars actually received. In fact, when all students statewide are included, the real BSAPP for 2013-14 was $6,640. In a recent Lawrence Journal-World article it was reported that Lawrence Superintendent Rick Doll said the district is still suffering from cuts in base state aid. According to Doll, “We are operating basically at about 1999 school funding levels.” That’s not even close to being accurate. According to KSDE, state funding per pupil in 1999 was $4,533. That figure rose to an estimated $7,052 per pupil for last school year. Local support has more than doubled since ’99 (from $2,238 to $4,809 per pupil). Likewise for federal support.

It is important to understand what a difference in the level of funding the weighting of students adds. Last school year, the weightings provided $1.3 billion over and above BSAPP to the state’s 286 districts. But some Kansas politicians, particularly those more interested in protecting institutions than serving children, and the education establishment don’t like to talk about that part of state aid to education. Instead, they like to focus only on the BSAPP figure. That’s why we hear statements made like Superintendent Doll’s.

If I were still a math teacher and they were my students, their homework assignment would be learn and understand this formula. And yes, it would be on the test.

*There is one change in the formula from the 2013-14 school year. The low-proficient, non-at-risk factor was removed during the 2014 legislative session.

Posted by David Dorsey on Wednesday, July 30, 2014

There has been a marked increase in the attention given to teacher evaluations in recent years. Most of that attention surrounds the results of those evaluations; how it is teachers are scored or rated. But what is missing from most of those reports is the actual process of how a teacher is evaluated. How is that rating determined? Or even more fundamental: How is a teacher evaluated?

To those outside education it would seem reasonable that an evaluation would go something like this: the principal and teacher meet to review what the teacher has done over the past school year, maybe include goals/objectives previously identified. They discuss what worked and what didn’t. The principal might review what he/she found during a few classroom visits. The teacher would get some kind of overall score/grade and the principal would determine if the teacher should be rehired for the next year.

That’s not even close.

Remember that first date? The one when you were really out to impress that special someone – you know, hide the real you? While concurrently having unrealistic expectations of the other person? Teacher evaluations are a lot like that.

One dirty little secret of public education is that teachers aren’t really evaluated, not in a sense that other professionals are. Teachers are observed, mostly on their terms, and it’s their behavior that is judged.

Here’s how they generally work. For a tenured teacher, the principal comes into the classroom for what is termed a “formal observation,” which is typically a 30 – 40 minute visit. A probationary teacher usually gets two such visits. And those are times determined by the teacher. (In my experience it wasn’t unusual for the principal to leave early, attending to some emergency, so the observation timed was actually shorter.) Naturally, the teacher is going to pick a subject or a class that will make him or her look the best. The classroom visits are followed by a meeting to discuss what the principal observed and put in writing. Of course, most of what the principal recorded is positive, because the teacher cherry-picked the setting. The process is concluded when the principal rates the teacher using a rubric based matrix (this is the one used in Topeka Public Schools) – a tool that attempts to turn the subjective into the objective. This is a key component because the matrix/rubric is used to place the teacher in a performance category.

And there’s one more very important point that I’m sure most Kansans don’t realize. Our state is one of 22 states that does NOT require tenured teachers get evaluated annually.  After only four years in the classroom, Kansas teachers are evaluated every three years. Indeed, that’s two full years with no formal appraisal. In what other profession do you get two years off for good behavior?

You may be wondering how our public school educators get such a sweetheart deal. Two words: collective bargaining. As I will detail in Part 2, the unions have played and continue to play a key role in the evaluation process and the inflated ratings teachers are getting around the country.

Ratings that are as inflated as your expectations of that first date.
Posted by Dave Trabert on Monday, July 28, 2014

It’s far too early to call tax reform a success in Kansas but claims of its failure are based on a number of factual distortions.   Tax reform opponents understand that controlling spending is the key to tax reform – and they will not let facts get in the way of their disdain for limited government principles.  The only real problem with Kansas tax reform is that Governor Brownback and most legislators have been squeamish about spending controls.  In fact, FY 2015 is scheduled to set a new spending record!

This Wall Street Journal article explains how states that spend less, tax less…and grow more.  New spending data shows states that tax income spent 49% more per-resident in 2012 providing essentially the same services as those that do not tax income. 

Paul Krugman made a number of unfounded allegations in the New York Times.  The data clearly show the superior economic performance of states that do not tax income and/or have a low overall tax burden, as well as how Kansas has trailed its income-taxing peers.  Trailing national economic averages is not evidence that tax reform is failing; it’s the reason tax reform was implemented! 

The economic performance disparity for states that don’t tax income has a significant impact on the 50-state average.  For example, the 50-state average for private sector job growth between 1998 and 2013 was 8 percent, but states that don’t tax income grew by 18.3 percent compared to 5.6 percent for states that tax income.  Kansas grew by only 3.9 percent.  Kansas’ long-term stagnation can’t be reversed overnight.  Comparing Kansas to its income taxing-peers and the states that don’t tax income may be more telling, as Kansas must first catch its peers before taking on the high-performing states.

It will be years before an honest analysis of tax reform can be made, but there are some early positive signs.  Kansas averaged 70% of the private sector job growth over the last fifteen years but is running neck-and-neck with its income-taxing peers so far in 2014.  That is not enough to say the trend has been broken, but still encouraging.  Kansas’ private sector GDP growth in 2013 was ahead of the national average and also ahead of its income-taxing peer group.  Kansas’ rate of Private Sector GDP growth increased in 2013 while most states saw declining growth.  Granted, 2012 was a pretty rough year for Kansas, but it’s noteworthy that Kansas bucked the national trend in 2013.  Again, this is only one year but nonetheless encouraging.

Kansas has also seen two consecutive years of record-setting New Business Filings.  Research conducted by Dr. Arthur Hall at the Center for Applied Economics at the University of Kansas found that, if not for jobs created by new startups in their first year of existence, Kansas would have only had two years of net job growth between 1977 and 2010.

Finally, claims that Kansas is facing large budget deficits are complete fabrications by politicians who know better. Current revenue projections show that a modest $315 million / 5% spending adjustment in FY 2016 will balance the budget.   We think current revenue projections are a bit low but will not be an issue.  We are developing a plan that has already identified $1.6 billion that can be made available over the next five years without any reduction in services or tax increases. 

Bottom line: Kansas will have no problems with tax reform once legislators abandon the “just spend more” mentality and adopt a “better service, better price” mindset.

Posted by Patrick Parkes on Thursday, July 24, 2014
June’s private sector jobs numbers show minimal changes from last month’s numbers. Kansas’ income-taxing peer states did post some slight growth (registering a rate of 1.66%) over the period, bringing this group’s year-to-date growth rate to 1.57% (up from 1.55% last month).  Nevertheless, these states continue to lag significantly behind states that don’t tax income.  The job growth in states without an income tax did slow slightly (down to 3.25% from 3.27% last month), but the year-to-date growth rate in these states continued trending upward (to 3.08% from 3.04% last month).


Kansas’ growth rate inched up ever so slightly (from 1.33% last month), but its year to date growth rate remained unchanged. Thus, Kansas grew a bit slower than its peer group of states that tax income but still kept pace (achieving 91% of the group’s year-to-date growth compared to 92% last month).

 

Check back next month for July’s update.

Posted by David Dorsey on Tuesday, July 22, 2014

Much has been written and spoken in the national media recently about the dire economic conditions that are perceived to exist in Kansas with an outlook even more dismal.  The New York Times and MSNBC have taken a rather curious interest in the affairs of the Sunflower State; a curiosity driven by a significant reduction in the state income tax that was passed by the legislature and signed into law in 2012.

Buoyed by a report from the Center on Budget and Policy Priorities (CBPP)  and some questionable local revenue forecasting, the Times and MSNBC say the Kansas economy is about to fall off a fiscal cliff because tax revenues are falling and it is going to get much worse in the next few years.

But that’s not the reality. Kansas’ economy is growing. In 2013, the first full year of the tax cuts, real GDP for the private sector grew at a rate of 2.4%, compared to the national average of 2.2%. And this followed a year in which private sector GDP in Kansas rose only 0.5%. To date, the tax cuts have returned nearly a billion dollars to the taxpayers.

And contrary to the doomsayers, the tax cuts have not led to a reduction in essential services such as education. CBPP reports that spending on K-12 education has been reduced by 2% since the income tax cuts.

Really? Apparently they didn’t communicate with the Kanas State Department of Education.

In a document published in November of last year, KSDE reports that in the year previous to when the income tax cut went into effect (2010-11 school year) expenditures per pupil were $12,282. In the most recent school year reported (2012-13) expenditures increased to $12,776, roughly 4%. That’s a total dollar increase of more than $263 million or $574 per pupil.

And there’s more. In the last legislative session, Governor Brownback signed into a law a $129 million increase to education and an increase in the base state aid that will translate into an additional $6 - $7 million.

Doesn’t sound like a reduction to me.

One of the favorite talking points among the pessimists is the cut of base state aid by $550, as Kansas State Senator Anthony Hensley told MSNBC. Senator Hensley likes to use the per pupil base state aid rate, which was enacted under the previous governor, to show how education support has been “cut.” If he were correct, again using KSDE figures, a decrease of $550 per pupil would have translated into a decrease in spending of over $250 million for the 2012-13 school year.  That didn’t happen. Senator Hensley is being fast and loose with the numbers.

So the truth is the income tax cut hasn’t led to a cutback in education spending, in fact it continues to increase. And support for education will continue to be strong. I am confident of that because for the past 17 years I taught in two Kansas districts, one rural and one urban, under leadership of all sides of the political spectrum. I taught when funding increased during good economic times and funding decreased during the two recessions.  Funding levels were never a real concern for those of us in the classroom. That was a subject left to administrators and a few die-hard union members (both who, naturally, always complained there wasn’t enough money). Regardless of funding debates on the outside, teachers focused on engaging students inside the classroom where the real impact of education resides.

Posted by David Dorsey on Tuesday, July 22, 2014

At the regular July meeting the State Board of Education voted unanimously not to release the scores attained from the newly revamped 2014 state assessments, assessments that were transitioned to meet the new Common Core standards. Instead, the board decided to allow KSDE to provide families and schools with a verbal descriptive report of the results focusing on overall strengths and weaknesses.

Although it’s almost always better to have access to test data, especially “high stakes” testing as state assessments have been called, the uniqueness to the overall circumstances make this the rare case when it is better off not to know.

This was the right decision, given the events that unfolded before and during the testing period.

I say that, because as a math teacher at Lowman Hill elementary in Topeka, I was in a position to witness first-hand those events.

At the beginning of the school year, we were cognizant that the state assessment to be given in the spring would be much different from previous years as we transitioned to Common Core (more on Common Core later). We were told that the coming test would be the new “Smarter Balanced” test, no longer created by KU’s Center for Educational Testing and Evaluation (CETE).   We at Lowman Hill spent professional development time, as I’m sure other schools did, to familiarize ourselves with the new test.

Then a funny thing happened on the way to testing: the State Board of Education voted in December to withdraw from the Smarter Balanced consortium and continue with CETE. Needless to say, this put schools all across the state in a bind. In our case at Lowman Hill, we were particularly distressed, having been designated a focus school by the KSDE in its No Child Left Behind waiver agreement with the U.S. Department of Education. And the only way off this list is a predetermined improvement in state assessment test scores.

So this was our situation as we headed toward the testing window that was to begin in February. If this were an episode of the Batman TV series, it would have at this point the announcer would say: But wait! The worst is yet to come!

How prophetic.

Immediately after testing got underway the computer system got hacked, which led the whole testing process to be called off and then on again. Once testing resumed other technical problems surfaced. It was a mess. The problems ultimately brought into question the reliability of the test results statewide. So it was indeed a wise decision on the part of the State Board to use this as “a learning experience,” as one board member put it.

However, the State Board must assure that the 2015 assessments have reportable data to ensure that accountability doesn’t fall through the cracks. I have felt from the outset of Common Core that the way the standards were hastily adopted and forced upon states by the feds, similar to ObamaCare, is not only bad policy, but would lead to an opening to avoid accountability.  Eric Hanushek, writing recently in the Wall Street Journal echoes my concern warning that Common Core standards are being used to shield teachers from accountability. He says “teachers unions are working behind the scenes across the nation to gut teacher evaluations and to "suspend" school test accountability under No Child Left Behind so that teachers can prepare for the new tests—however long that might take.”

My worry is that KNEA will try to do exactly that and convince the State Board to hide behind the new standards to suspend accountability for years. Let’s hope the State Board doesn’t fall for it. We can’t afford more than one year of not knowing exactly how our students are performing and the accountability that accompanies. Because, as Hanushek offers,  educational improvement “requires strong accountability systems, rewarding teachers who are effective, eliminating teachers who are harming students, and providing added choice to parents about where their children go to school.”
Posted by Dave Trabert on Thursday, July 10, 2014

Local and national media are reporting that Kansas will have a $1.2 billion deficit for FY 2019, quoting legislators who reference information prepared by the Kansas Legislative Research Department (KLRD).  Media is accurately quoting those legislators and there is a report from KLRD showing the numbers that legislators are citing, but Kansas will not have a budget deficit in FY 2019 or any other year.  How can that be? 

Budget deficits are constitutionally and statutorily prohibited.  KLRD confirms Kansas cannot have budget deficits and we believe it is a misrepresentation of their work to say there will be deficits.

This is how budget deficits are fabricated in Kansas.

Table 1 shows the May 30, 2014 profile prepared by KLRD using their standard methodology (except as noted below the table).  According to KLRD Director Raney Gilliland, “The out-year projections for revenue are based on historical trends adjusted for legislation.  Expenditures for the out-years are based on the previous year expenditures adjusted for human services caseloads, school finance payments and KPERS increases.”  If expenditures exceed the amount of predicted available revenue, KLRD shows the expenditure reduction needed to maintain a zero ending fund balance.

 

For example, KLRD lists a reduction of $211.2 million for FY 2016 so that expenditures are equal to total available revenue.  Their standard methodology shows the annual legislative action necessary to adjust expenditures, maintain a zero ending balance and have no deficits.  If legislators chose to balance the budget by annually adjusting expenditures, a total of $482.3 million in reductions would be required over four years.  (As explained below, Director Gilliland says the reductions would total $1.258 billion instead of the sum of the four years’ of expense reductions.)

The KLRD profile being used by legislators to make false claims about deficits was produced “at the request and direction of a legislator and does not follow standard KLRD methodology.”  Gilliland attributes this profile to Senator Laura Kelly and contacted her “…to ask for permission to release the profile we had done for her.…she requested that you contact her to get the profile you are requesting.”  Senator Kelly has not responded to that request.

The profile designed at Senator Kelly’s request is likely the same or similar as the one shown in Table 2.  The negative ending balances shown for FY 2018 and FY 2019 very closely match multiple media reports.  Also, Table 2 was built using a former KLRD methodology that was dropped – partly, they say, because leaving negative ending balances gave a false, albeit unintended, impression of deficits in the outlying years.

The only change in Table 2 is the elimination of $482 million in annual reductions needed to maintain a zero ending balance.  This gives the appearance of a $1.258 billion deficit because the expenditure base is not being reset in accordance with balanced budget requirements.

While KLRD agrees there can be no budget deficits, Director Gilliland maintains that the required expenditure reductions are not the $482.3 million sum of the annual changes in their May 30 profile, but the larger amount of $1.258 billion.  To get there, he counts the annual reductions in Table 1 not just in the year made, but every year thereafter.

Spending changes that reduce the base don’t magically re-appear once eliminated but that’s the assumption required to say that $1.258 billion in adjustments are needed in this scenario.  Agencies might ask for more money but once cut, the money is gone unless legislators put it back.

KLRD agrees that there are many possible solutions beyond the one in their standard methodology.  Two other solutions prepared by Kansas Policy Institute are shown in Table 4 and Table 5 to demonstrate the action needed if the changes were all made in FY 2016.

Table 4 shows that, instead of $482.3 million in annual adjustments, a one-time expense reduction of $315 million in FY 2016 would provide higher ending balances in the first three years and still be slightly positive in FY 2019.  Table 5 leaves expenditures alone, increases base revenue by $305 million in FY 2016 and allows the adjusted base to grow by the same percentages as assumed by KLRD in Table 1.  

 

Understanding that budget deficits are being fabricated in Kansas is one thing, but House and Senate leadership should take action to prevent future fabrications being presented to citizens.  Any KLRD report prepared at the request and direction of a legislator and gives the appearance of deficits should have a disclaimer along the lines of “The State of Kansas will not have deficits and this report should not be used to claim or infer anything of that nature.”  We also suggest that once a legislator-directed profile or other report is publicly used or referenced, it should be immediately subject to Open Records requests and made available by KLRD.

There are many options to balance the state budget going forward that would not require any tax increases or service reductions.  State spending can and should be reduced but it can be accomplished by providing existing services at a better price.  Kansas Policy Institute is compiling a list of such options as well as several ways to boost General Fund revenue without increasing taxes.  We expect to publish the results in the fall.

In the meanwhile, know that any claims of future deficits are deliberate fabrications.

 

P.S.  KLRD was asked to review this prior to publication and identify any inaccuracies.  They suggested no changes to the data as presented other than to stipulate a difference of opinion on the total amount of reductions needed relative to Table 1 as we have noted above.  KLRD does not endorse any portion of this blog.


Posted by David Dorsey on Thursday, July 03, 2014

It was reported Tuesday in the Lawrence Journal-World that the KNEA still plans to file a lawsuit challenging the new Kansas law that, among other things, restricts teacher tenure rights. According to the article the lawsuit could come as soon as sometime this week.

KNEA is buoyed by a recent judge’s decision in North Carolina that found a new law that eliminated teacher tenure in that state unconstitutional. However, the North Carolina law is as different from the Kansas law as Roy Williams and Bill Self.  As reported by the Charlotte Observer, tenure in North Carolina would have been eliminated in exchange for multi-year teacher contracts and teachers would lose the right to administrative hearings to challenge a dismissal. In other words, it would have been easier to fire teachers. The Kansas law differs in that it allows local districts to negotiate tenure and administrative hearing rights into teacher contracts (a point often not reported by media outlets). And according to that Lawrence Journal-World article, the new contract between Lawrence Education Association and the Lawrence school board contains a modified form of tenure.

Meanwhile, legal developments in California and New York provide a stark contrast to the concept of protecting teacher tenure and job protection rights.  On June 10, a Los Angeles County Superior Court judge ruled in Vergara v. California that five teacher job protection laws were unconstitutional. Yes, that’s correct: a California judge ruled that teachers have too much job protection. The suit was brought by nine students who contended that California’s teacher protection laws saddled them with teachers who shouldn’t be in the classroom. Superior Court Judge Rolf Treu agreed, including in his opinion that the negative impact ineffective teachers have on students is so powerful that it “shocks the conscience.” Judge Treu applied the concept of the state providing students an adequate education to include the quality of the teachers as part of adequacy. (It should be noted that the judge‘s ruling included a stay of the five statutes overturned, meaning the laws are still in effect pending appeals.)

Spurred by the California case, a similar lawsuit will be filed in New York. Lead by former NBC and CNN anchor Campbell Brown, who founded the education reform group Partnership for Educational Justice, six New York state families announced last week they intend to sue the state this summer. According to Brown, “at its core, the suit seeks to end laws that keep ineffective teachers in the classroom, restrict schools from dismissing them and prioritize seniority over quality when teachers are laid off.”

In light of lawsuits in New York and California, is the pending KNEA lawsuit a case of a Kansas union swimming against the stream? Maybe, but Kansans should welcome the debate they had in California where children ultimately prevailed. Keeping incompetent teachers in the classroom is a violation of the fundamental right to equality of education by forcing children to (try to) learn from someone who can’t – and shouldn’t – teach.

Stay tuned.

Posted by Patrick Parkes on Thursday, June 26, 2014
As a follow up to last month’s post on private sector job growth, May’s private sector jobs numbers from the Bureau of Labor Statistics tell a similar story: Kansas is growing near the rate of its peer group of income-taxing states. Yet, states without an income tax continue to lead the pack in private sector job growth.

Kansas still trails its income-taxing peers but is doing better this year than in the past.  Over the past fifteen years, Kansas’ job growth rate was about 70% of its peer group; so far in 2014, Kansas has achieved 92% of its peer group's growth (1.43% vs. 1.55%).

We will continue to update these numbers monthly as they become available.

Posted by David Dorsey on Thursday, June 19, 2014

Every student deserves an excellent teacher.

A line often quoted, but what does it really mean? The National Council on Teacher Quality (NCTQ) believes that how a teacher is prepared to teach prior to entering the profession is a critical factor. In 2013 NCTQ took on the arduous (and, according to them, a sometimes contentious) task at judging teacher preparation programs across the country. As an encore, they have just released its 2014 Teacher Prep Review in which NCTQ reviewed and ranked 1,668 teacher preparation programs across the United States.

Kudos to Fort Hays State University, which ranked third nationally in its undergraduate secondary education program (and only one of 81 programs across the country that earned a Top Ranked status) and 12th in the nation in the undergraduate elementary category (one of only 26 with a Top Ranked status).

In assessing the quality of a teacher prep program, NCTQ focused on these key standards:

  • the selection criteria an institution uses to allow teacher candidates into a program
  • content knowledge (in the elementary programs this included the foundation to teach reading and math)
  • student teaching

In addition to FHSU, four other Kansas elementary programs received national rankings: KU (63), K-State (144), Emporia State (165) and Pitt State (327). Six are ranked in secondary programs: K-State and Pitt State (127), Bethany College and Newman University (193), Emporia State (285), and Benedictine (394).

Heretofore, teacher prep programs have not been part of the landscape in the teacher quality debate. But things are starting to change. As NCTQ points out, “(e)ver so slowly, the United States is taking a harder look at how its teacher preparation schools are improving the quality of the teachers they produce.”

That is good news for a nationwide “industry of mediocrity,” a term coined by NCTQ. As the map shows, 33 states are moving to get better by having passed “significant new oversight laws or regulations.” Kansas is not one of those but is in the group of seven states described as making steps in the right direction. Recently passed legislation targeted to improve teacher quality is evidence that Kansas is committed to the cause. 

 

 

Reflecting on this report, I couldn’t agree more with the key standards NCTQ measured. Colleges and universities need to be pickier about who they let enter their education programs. Speaking as a former elementary teacher, they are spot-on focusing on the importance of being able to teach reading and math, especially in the primary grades. And the student teaching component is paramount.

Reading this report brought back memories of my student teaching assignment some 20 years ago.  My experience cut both ways. My cooperating teacher (as we called them) was truly an outstanding educator and I learned a lot by observing and participating. However, she was very reluctant to give up control of the classroom, which had an effect on my ability to be ready to manage a classroom when I entered the profession.

My hope is NCTQ keeps it foot on the pedal and Kansas jumps on board to improve the quality of teachers before they enter classroom.

It’s time to start using this line: Every student deserves an excellently prepared teacher.

Posted by David Dorsey on Thursday, June 19, 2014
My most recent post on teacher compensation expressed skepticism of the salary schedule (matrix) system of paying teachers. I dropped a teaser for outlining a more effective way to pay teachers that includes raises based on merit. The concept of a merit-based component  for teacher salaries has been around for decades, but in the past few years the idea has gotten more traction, especially the concept of wedding performance pay with student test scores. According to the Center for Education Compensation Reform (CECR) most states have adopted some kind of compensation reform  for teachers. (Notice which state in the middle of the country is conspicuously absent. Hmm….)

But merit pay based only on test scores is a lightning rod of controversy. Rightfully so.  A significant percentage of teachers out there are not directly involved in students’ test scores. How would the band instructor impact reading scores? I understand full well this concern, because in only four of my 20 years as a teacher was I directly involved with administering a standardized test or No Child Left Behind- type assessment.

Perhaps the highest profile effort at merit pay is in Newark, New Jersey. A performance bonus system supported Mayor Corey Booker (now Senator and prominent Democrat), Governor Chris Christie (of national Republican repute) and Facebook founder Mark Zuckerberg (with a $100 million pledge to fund it!) was approved by the local teacher’s union in late 2012. This, despite bitter opposition from many union members who saw it as pitting teachers against teachers and thus undermining union solidarity. Notwithstanding the hullaballoo, only 5% of Newark teachers got bonuses in the program’s first year.  A mere one hundred ninety teachers (0.3 of 1%) earned the maximum allowable amount of $12,500.

The National Education Association (NEA) is even on board, sort of, for merit pay. But like every other plan it believes in the matrix as the core. According to the NEA, merit should be based on “experience, knowledge and skills…and you should move through the salary system for things that actually improve teaching and student learning.” Really? Should a mechanic get a raise just for getting a new set of tools?

If we are to move toward a true merit/performance-based pay system for teachers instead of just nibbling around the edges like now, the first step is to recognize that not all teaching assignments are the same. You cannot work within the status quo salary schedule and have effective merit pay system. Can’t happen.

 Considering all these factors, here is an alternate way to define how to compensate teachers.

  •  Foremost, scrap the salary matrix. Research shows the two premises of that system, years of experience and educational attainment, have no positive impact on student performance, and in some cases those with Master’s degrees can be less effective. Each teaching assignment (e.g., 2nd grade, middle school math, physics) should have its own base pay range because not all teaching assignments are the same. Let the market decide the economic values of each position.
  • Schools should also have a pay differential for teaching at targeted schools within the district. The Newark approach got that one right. Teachers should be rewarded for teaching in failing schools or others that are tough to staff.
  •  The last component in this trifecta is the performance of the teacher. Performance should be judged on goals set by the teacher and the principal. They must reflect the needs of the students and the individual teacher’s place in meeting those needs. Inherent in effectively judging performance means the current way teachers are evaluated must go.

The way teachers are evaluated is a joke. Bulky and bloated rubric-based evaluations like this appear to provide an exhaustive judgment of a teacher’s ability (just look at its intimidating size!). But alas, like the dirigible of a bygone era, its girth is packed with empty space.  Look closely and you’ll see the rubric attempts to be a one-size-fits-all approach that fails to recognize differences among teachers and fails to address student outcomes. Without question, the deck is stacked in favor of the teacher. That’s all I am going to say here because I will be writing a piece just on how nonsensical the entire teacher evaluation process is.

If evaluations are going to determine merit pay, they have to be flexible enough to reflect what individual teachers are doing to improve student achievement at every level. There is no one-size­-fits-all for evaluating teachers.

But…and I can’t emphasize this enough, before this can happen, the crop of principals needs to be drastically improved. If principals are going to be responsible for determining merit pay, they have to know what it means to be an effective educator. In my stint as a teacher, I worked under 11 different principals. Upon reflection, I would have trusted only two of them to be able to evaluate my performance as it related to my impact on student performance. The other nine…no way.

Graphically, this approach would resemble a scalene triangle like the one below. The base, the longest side of the triangle, represents the market-based base salary. The shortest segment is the amount a district would have to pay for a difficult to fill position. The third leg symbolizes raises/bonus based on performance.


Paying teachers in this manner reflects the uniqueness of individual school districts and recognizes differences among schools within larger, more diverse districts. The key is responsibility and accountability, with both teachers and principals, and even extended to district administrations and BOEs. Teachers should be judged on their ability to help students by their direct supervisors – principals – who will in turn be evaluated on their ability to run a school by administrators who will be held to account by officials – local board members - directly accountable to the public. We often pay lip service to this idea but a matrix-based pay schedule (which is negotiated in an us-versus-them environment by a union that drives a wedge between the players) is a ready example where platitudes don’t match the incentives actually influencing the behavior of teachers, principals, et al.

Is it naïve to think this or something similar could actually happen?  Even up to just a few weeks ago this may have been considered far-fetched. Then came the Vergara  decision in California, a ruling that has the potential to relieve the stranglehold of the teachers unions and fundamentally change the rudiments of teacher employment, including how they are compensated.

Stay tuned.

Posted by David Dorsey on Friday, June 13, 2014

Someone stops you on the street and asks this question: “Of all the public high schools in the U.S. where do you think the highest ranking school in Kansas would fall?

What would you answer? Somewhere in the top fifty? Top one hundred? Five hundred? Thousand?

If your answer is 1,235th you should buy a lottery ticket.

That’s correct, according to the just released U.S. News & World Report ranking of 19,411 public high schools across the country, Wichita East High is the 2014 top performing school in the Sunflower State. The Blue Aces trailed only 1,234 other high schools across the country in getting students prepared for college. U.S. News used this three-step process to determine the rankings:

The first two steps looked at overall student performance on state-mandated assessments, as well as how effectively schools educated their black, Hispanic and economically disadvantaged students. We then used participation in and performance on AP (advanced placement) and IB (international baccalaureate) exams to evaluate how well schools prepared students for college-level course work. (emphasis added)

Just as it isn’t fair to compare Blue Valley North High School to Dodge City High School in this state, U.S. News controlled for demographic differences among high schools across the nation.

U.S. News analyzed high schools with these steps to numerically rank the top 2,019 public high schools in America. The top 500 were awarded gold medals and the next 1,509 were honored with silver medals. (An additional 2,688 schools earned bronze medals without being numerically ranked.)

One thousand two hundred thirty fifth! How can that be? Great things are happening in Kansas, right?

 

Well….not compared to the rest of the country when it comes to preparing low-income and minority students for college. 

OK. But Kansas must have tons of other silver medals schools, don’t we?

Not exactly. In fact, the only other silver medal school in the state is the Liberal Redskins (which has to be the most ironic name in a politically correct world gone ‘round the bend) who checked in at 1,457. Thirty Kansas high schools received bronze medals.

To put us in perspective, the following table shows how Kansas compares to the other 49 states and the District of Columbia. It’s not good. Only two states, Mississippi and North Dakota – not exactly known as education juggernauts - have their top-ranked high schools rated lower than Kansas. And likewise, those are the only states that have fewer than two medal winners.

 KBIBestHighSchholsInAmerica

Yikes. (I’ll bet this doesn’t come up as a “success” at the next KSDE ice breaker!)

So what do the best schools in the country look like? The table below is a summary of the top 10 ranked public high schools in the country. Nine have significant minority populations. Four are Title I schools which means they have many low-income students. And half are non-traditional charter or magnet schools, a concept largely foreign to this state. 

UsNewsWorldReportTop10USAHighSchools

This should be a wake-up call. The Kansas education establishment needs to reject its everything’s-just-fine complacency stance. 

WichitaEastStateAssessmentResults2013 Because obviously everything isn’t just fine. Data clearly shows that Kansas has an achievement gap between students who are economically disadvantaged and those who are not. And it is growing. The U.S. News rankings are a grim reminder of that. Even Wichita East, our highest ranking high school has a substantial achievement gap as shown in this table.

Although getting students adequately prepared for college isn’t a singular goal of secondary education, it is certainly paramount that all students who want to attend college be prepared to the best of our collective abilities. And when our best lags behind 1,234 other schools in the nation, we aren’t doing that. Our high school students deserve better, a better opportunity to get ready for the next step in their lives regardless of what that may be.

This isn’t meant to say that Kansas High Schools aren’t adequately preparing students for higher education or that we have disproportionately low performing students. It’s just that it is time for the education establishment to join the rest of the country and offer more non-traditional settings in which our students can thrive.

It’s time this state starts offering alternatives (real charter schools, anyone?) to the 150-plus years of status quo that is Kansas education.

Then, great things really will be happening.

Posted by Dave Trabert on Thursday, June 12, 2014

Real (inflation-adjusted) GDP data just published by the Bureau of Economic Analysis shows the Kansas private sector did much better in 2013 than in 2012.

Kansas’ rate of Private Sector GDP growth increased in 2013 while most states saw declining growth.  Granted, 2012 was a pretty rough year for Kansas, but it’s noteworthy that Kansas bucked the national trend in 2013.  One year does not a trend make, but this is still encouraging.

Kansas grew faster than the fifty-state average in 2013 and also grew faster than the states that tax income and the states with the highest state-and-local tax burden (as ranked by the Tax Foundation).

This is also a good reminder that states with lower tax burdens have superior economic growth, which was the primary reason driving tax reform in Kansas.  Like most high-burden states, Kansas suffered economic stagnation over the last fifteen years with slower job growth and wage and salary disbursements. The trends won’t change overnight, but these new GDP numbers are certainly good indicators that Kansas is going in the right direction.

 

Posted by Steve Anderson on Thursday, June 12, 2014
Sound budgeting is not just about the current year’s issues but should consider long term structural issues.  Kansas Public Employees Retirement System (KPERS) is a structural issue that has not been properly addressed even as it has become more problematic financially both in the current fiscal year and in the long term. KPERS consists of several different pension systems but the two that the citizens should be most concerned about, from a state budgeting standpoint, are the State and the School systems.   The following table shows their status as of the last actuarial report.
 
The $7.6 billion of unfunded debt in the School and State plans is understated for a number of reasons. The assumptions used in the calculations to arrive at the estimate of future payments include optimistic estimates of asset growth. The assumptions used for estimated life expectancy cannot predict breakthroughs in modern science that may extend life past the current projection. And since benefit improvements for each system’s retirees are voted on by the legislature, the systems can only estimate what they believe may happen with future benefit increases.  The actuaries for KPERS admitted as much when they noted in the latest actuarial report that: “Changes in actuarial assumptions and methods, coupled with investment returns below the assumed rate and contributions below the actuarial rate have significantly reduced the funded ratio.

The graph below shows an estimate of the dedicated additional appropriated funding it will take to fund these two systems in KPERS in the future (details in Appendix A here).   These debt payments siphoned off $402 million in FY-2014 from important tasks like locking up prisoners, fixing roads and bridges, reducing the tax burden on hardworking citizens, or increasing teacher pay. They’ll approach $2 billion in FY-2033.  
 
Reforming the pension systems benefits state and school employees too.   Currently their KPERS’ plan limits the ability to change employers because of long ‘vesting’ period employees before they even have a right to any benefits.   But even when vested the employee cannot leave the service of that employer and take their benefits with them.  The benefits have issues beyond the “golden handcuffs” as the fixed retirement payments are very susceptible to being eroded significantly during periods of inflation.  
The effect of KPERS problems on the budget is felt in other areas that are not as readily apparent.  Moody’s bond rating entity warned states it was giving more weight to pension liabilities and other long-term debts in its overall scorecards for rating general obligation (GO) bonds. The agency indicated they would increase the weight to 20 percent from 10 percent.  That warning went unheeded and Moody’s lowered Kansas’ bond rating noting the pension debt as a major factor.**   

The Legislature created a study commission in 2011 to find a ‘fix’ for the pension crisis but the solution they ultimately enacted is called a Cash Balance plan.  This plan had two major flaws: 1) the ability for the state/schools to incur unfunded liabilities was not eliminated, and 2) according to the Kansas Division of the Budget the new plan did nothing to address the unfunded liability of the system.   Moody’s agreed and discounted the ‘fix’ in coming to their ratings reduction recommendation.

However, the good news is there is a real ‘fix’ and the actuarial study has already been done.    The Division of the Budget contracted a study of a conversion for new members to a true Defined Contribution system – like a 401(k) in the private sector – in FY-2013.  The conversion addressed the long term debt issue while eliminating the annual increase to the KPERS dedicated payment but additionally found there was an opportunity to provide State General Funds an additional $75 million immediately while "cash flowing" the benefit payments through an accelerated financing structure.  Freezing the contribution at the current level eliminates the need for the annual increase over the prior year of $40+ million through FY-2017 and the $50+ million required from FY-2018 on.   

There is one more area where KPERS can be a budget solution instead of a budget problem.   The School systems do not account for the state’s KPERS contribution in their payroll.   By not including this amount the schools fail to bill the various federal programs that fund salaried position for their share of the KPERS payment.   During my last year as Budget Director, the amount foregone was approximately $21 million.   If the federal programs for employee benefits had been properly billed, a common practice of most states, the state could have made that money available for other purposes.  

** Moody’s also noted that Kansas hasn’t made appropriate spending adjustments relative to tax reform, but discussions with other state budget directors indicate that the pension liability was the primary factor driving the downgrade.

Posted by Patrick Parkes on Wednesday, June 11, 2014
“Actually, high corporate taxes are great mechanisms in helping to socialize entrepreneurial risk.”

Were my ears deceiving me? Did I just hear socialism invoked at a conference on entrepreneurship?

The conference I attended recently was a diverse gathering of academics, state policymakers, and economic development officers from around the country. Even my initial reading of the event announcement got me excited imagining the diversity of minds and experiences that would converge around a single purpose: thinking about how states and localities could create ideal environments to foster market-driven entrepreneurship. These types of open, multifaceted discussions are oftentimes the best catalysts for broad coalition building leading to truly positive and substantive change. As such, the Ewing Marion Kauffman Foundation ought to be commended for its leadership in getting this particular discussion started in the name of entrepreneurship.        

This discussion—as good ones often do—challenged me to evaluate even my own understandings and convictions on the subject. I was hearing all of these hip, glossy buzzwords and catchphrases about how state and local governments could use taxpayer money to advance the nebulously defined goal of “economic development.” Heck, even well-established businesses could benefit from strategic handouts designed to help them “scale-up” and contribute to a broader local “entrepreneurial ecosystem.” One thing became clear to me very quickly: this wasn't my “grandma’s” idea of entrepreneurship! 

I have always thought of entrepreneurship as a “may the best man win” sort of scenario. Governments can maintain the playing field with strong property rights, intellectual property provisions, and other key legal protections. However, businesses’ successes and failures ought to be self-determined by their own abilities to attract customers and keep them coming back. This largely hands-off approach is akin to how my grandma used to deal with living room wrestling matches. She would depart with a single admonishing ground rule: “Loser vacuums.” It was her subtle way of maintaining the playing field without influencing the outcomes of anything that took place on it.      
State and local governments may think their use of taxpayer money to fund entrepreneurship is simply about creating and maintaining a playing field. Yet, this practice looks more like influencing outcomes by picking winners and losers. It’s no longer just about scoring points (i.e. profits, community admiration) on the field; it’s also about winning the government eye tests and popularity contests (i.e. subsidies) off of it. The issue is even more fundamental than that though. Put simply, entrepreneurship doesn't and should never discriminate. Ideas for new businesses can strike anyone at any time. But, when governments take money from countless potential entrepreneurs and hardworking families and use it to subsidize a few politically connected firms, these governments start to— perhaps unknowingly but inherently—discriminate. The game becomes rigged, and entrepreneurship ceases to be entrepreneurship. It’s only a government-sponsored former shell of itself.

New York Times columnist David Brooks mused about this changing nature of entrepreneurship long before I did here. His analogy focused on the statue in front of the Federal Trade Commission building. It depicts a muscular man restraining an unruly horse. Brooks notes how the horse and rider used to epitomize modern-day liberalism. The horse was capitalism, and the rider was government. The rider kept the horse in line much like (liberals believed) government harnessed capitalism and made it work for the masses. Today, Brooks laments, the relationship has changed. Government wants to be the horse…not just reining in business and job growth…but driving and being the sole purveyor of such growth. To be clear, this is not an endorsement of Brooks’ view on what constitutes appropriate liberalism amidst the changing nature thereof. The essence of liberalism—regardless of its scope—still tends to work against the all-important power of consumers to engage in free markets in order to best meet their needs via voluntary exchange.  

Brooks’ analogy is instructive though because it depicts the same Orwellian morphing of entrepreneurship I observed a number of attendees celebrating and advancing at the Kauffman conference. 

One conference bright spot was a presentation of research by Dr. Nathan Jensen on the Promoting Employment Across Kansas (PEAK) incentive program. Jensen’s main findings (I will blog more in-depth about them soon.) point to the fact that firms receiving government subsidies through the PEAK program do not add any more jobs than non-subsidized firms do.  These findings call into question not only the efficacy of the PEAK program but also the need for its existence at all.     

Outside of this presentation, however, I came away the conference largely disappointed. I attended hoping to be energized, hoping to help nurture a broader sense of understanding that entrepreneurs can lead this country’s cities and states to great new heights if only city and state governments will stand back and let them innovate freely. Instead, I left the conference alarmed by the expansive role even these smallest of governmental units felt they could play in not only regulating but also generating “free” enterprise.

What ever happened to “loser vacuums” in entrepreneurship?

Posted by Dave Trabert on Wednesday, June 04, 2014

A June 4 press release from Johnson County once again demonstrates county officials’ propensity to stick it to residents. 

“The county manager’s proposed budget includes what would be the first mill levy increase since 2006.”  This pull-the-wool-over-taxpayers’-eyes attitude is how local government has tried to pretend that they weren’t raising property taxes.  The truth is that Johnson County property taxes increased 132 percent between 1997 and 2013 according to the Kansas Department of Revenue.  That’s just the county portion of property tax; cities and schools districts are not included.

People pay their taxes with dollars, not mill rates.  Government should be honest with taxpayers and talk about how much tax dollars are increasing each year but they are loathe to do so.  (FYI, thanks to new legislation just passed, beginning July 1 local governments will have to take a public vote to increase tax dollars by more than inflation.)

Now here’s the ‘again’ part. 

County Manager Hannes Zacharias is quoted in the release saying that the partial loss of mortgage registration tax “creates a structural imbalance in our on-going budget and, therefore, needs to be addressed with a commensurate increase in property tax revenue.”  No, Mr. Zacharias, it doesn’t need to be addressed with a property tax increase…that’s just what you are choosing to do according to your own budget documents.

Here’s a hat tip to my eagle-eyed friend Luke Bell at the Kansas Association of Realtors for pointing this out in the Johnson County budget.  He says, “…ad valorem property tax revenues are projected to increase from $169.7 million in 2014 to $186.5 million in 2015, which is a 9.9% increase. In dollars, this is an increase of $16.8 million.

According to the Kansas Legislative Research Department, Johnson County is only supposed to lose $1.7 million in mortgage registration tax revenue. Even by Johnson County’s own flawed analysis of the bill, they are only budgeted to lose $3.9 million in mortgage tax revenue in 2015.”

The county even admits in its press release that $10.3 million of the property tax increase comes  from increased valuation in property.  Johnson County could more than cover the decline in mortgage registration tax without raising the mill levy, but government is not about to pass up an opportunity to blame legislators for something they are choosing to do.  (Another new piece of legislation is phasing out a discriminatory tax on people who take out mortgages to buy a house; those who can afford to pay cash pay no tax.)

Johnson County could choose to operate more efficiently.  After all, it’s hard to imagine that a 132 percent property tax increase was really necessary.  But quite the opposite, county officials are hiring more staff for the Parks & Recreation District, the Library District and the County Taxing District.

That’s a whole lot of entitlement mentality.

Posted by Patrick Parkes on Thursday, May 29, 2014

States without income taxes add jobs at rate far superior to that of their income-taxing counterparts. Put differently, if there were an income tax-themed version of the 1989 baseball film Field of Dreams, its mantra might read as follows: If states eliminate their income taxes, private sector jobs will come. That’s the takeaway from Bureau of Labor Statistics data comparing private sector job growth of states with and without an income tax.  States that don’t tax income saw their private sector jobs grow by 18.3 percent between 1998 and 2013 while states with an income tax saw growth of only 5.6 percent.  Kansas’ private sector job growth was only 3.9 percent. The average growth rate for all fifty states was 8.0 percent.

Kansas has historically gone into recessions later than most states and is also slower to come out of them. Kansas’ private sector jobs growth rate, which has consistently trailed even that of the income-taxing states, got closer to these states in 2001 and again in 2008 at the beginning of these respective recessions. However, the growth gaps widened again as the timing difference resolved. In short, all states are impacted by recessions, but the states that don’t tax income have fared much better even in tough times.


In addition to its comparative lagging in private sector job growth, Kansas has also trailed in private sector GDP, wage and salary distribution, as well as domestic migration for quite some time.  This long period of economic stagnation will take time to overcome, but as evidenced by the superior economic performance of states with low tax burdens, Kansas’ tax reform holds promise for better things to come.

Given the remarkable difference in performance of states that do not tax income and/or have lower tax burdens, it may provide more perspective on Kansas’ economic progress to compare to states that tax income rather than the national average.  The goal is to match the superior performance of low-burden states, but Kansas must first catch up to its income-taxing peers.

The first four months of 2014 may be showing the beginnings of the turnaround. Kansas’ private sector job growth is within rounding difference of its income-taxing peer group (1.54 percent vs. 1.49 percent).  That is significantly better than the first four months of 2013 when, compared to 2012,the income-taxing states grew by 1.9 percent and Kansas grew by 1.1 percent.


Kansas has been very close to its peer group every month and even did a little better than the group in March.  We’ll continue to track the data and provide monthly updates.


Note: Comparisons for the two groups of states come from the sum of jobs data reported for each state under the Bureau of Labor Statistics’ State and Local Employment at http://www.bls.gov/sae/ downloaded on May 28, 2014. The sum of the fifty states data varies from the BLS National Employment data, which includes the District of Columbia and is developed independently of the State and Local Employment data.  BLS does not force the sum of the state estimates to equal the national total.  See page 10 of the BLS technical note at http://www.bls.gov/news.release/pdf/laus.pdf

Posted by Steve Anderson on Wednesday, May 21, 2014
The Kansas Turnpike Authority (KTA) is one of those quasi state agencies that tend to fly under the radar with citizens and legislators. Despite being a component unit of the state, KTA is not included in the All Funds Budget of the state. Meaning the KTA budget is not reviewed and approved by the Legislature. Effective and efficient government will only exist when politicians and citizen begin to examine ALL state spending.

Reductions in spending are too often associated with service reductions (which government unfortunately often promulgates) but it doesn’t have to be that way. A ‘better service, better price’ mentality finds ways to provide essential services at a better cost to taxpayers, and that’s exactly what can be done by examining overlaps or synergies in the operations of KTA and KDOT.

Good stewardship of citizen’s dollars requires that wasteful spending be controlled in ALL state operated or sanctioned operations. This task is best accomplished by taking an approach that views government as a ‘whole’ instead of viewing state agencies as individual stand-alone entities. The long standing approach to government where each function is considered a ‘silo’ has created difficulties in identifying potential savings, synergy or unnecessary functions between agencies and other state entities.

The most recent comparisons show that KTA was operating238 miles of highway versus 9,503 miles of KDOT highways . KTA operated with approximately 500 employees while KDOT employed 2917 meaning every KDOT mile of road is ‘covered’ by .3 employees while at KTA seven times as many per mile were required. Toll booth operators were the only different requirement in the work force and didn’t explain the size of the disparity. Similar large inequities in spending were found with maintenance at about 3 times the cost per mile for KTA versus KDOT (here and here).

These large cost differences coupled with visual examples such as identical maintenance yards just a few miles apart near Emporia showed that taking a bigger picture approach to the Kansas road system could generate savings.

After the legislature reacted to these red flags for waste by designating the Secretary of Transportation as Executive Director of KTA, more understanding of those disparities in maintenance costs came to light. An audit of KTA (Page 25) found that “In prior years, the Turnpike’s capitalization policy did not conform with generally accepted accounting principles for the following reasons: 1) cost of major repairs, replacements and improvements not financed by or expected to be financed in part by bond proceeds were paid by the replacement reserve fund and were not capitalized, 2) depreciation was not provided on capital assets, 3) the modified approach for reporting infrastructure assets had not been utilized in the absence of recording depreciation and certain capitalized costs, 4) interest costs were not capitalized, and 5) amortization was not applied to the other costs capitalized” . This required the unusual step of having to restate prior year’s KTA financial statements. In other words the ‘information’ that citizens and legislators had been receiving to judge KTA operations all these years has been incorrect.

There are opportunities for significant savings for taxpayers and toll road users from a more coordinated approach to KTA and KDOT operations. A properly coordinated strategy does not require the loss of autonomy of either entity or major changes in operations. Here are a just a few examples:
  1. Coordination in planning to meet future needs. The ongoing expansion of Johnson County suburbs to the west and south could increase even further the congestion on I-435. Toll roads have filled the role in OKC and DFW of offering alternatives to congestion and been well received by citizens. A KTA loop which delivered faster access in the Johnson County and surrounding areas would allow KDOT to focus on keeping its roadways maintained rather than big bond issues for new road building. 
  2. Coordination of resources. Both KTA and KDOT have significant physical resources. Re-purposing for short term projects, emergencies or major work would only require that each entity be fairly compensated as ‘renter or contractor’ when providing those assets for use by the other.
  3. Coordinate of purchasing. Bulk purchases of insurance, equipment, and supplies can reduce cost per mile of construction costs of both entities. Engineering software and shared research expenditures are just two examples of many opportunities of possible administrative function savings.
  4. Cooperative operations. KTA could pursue an aggressive path towards driving customers to their toll roads through cooperative maintenance and new construction of key KDOT feeder roads to KTA toll roads.
The ability to find savings in cooperation between KTA and KDOT operations has many possibilities but it is just one of many examples where savings and service gains can be found by rejecting the ‘silo’ approach to government. Citizens and legislators need to continue to press for a more comprehensive approach that provides the state’s financier---the taxpayer----a delivery of “better services, at better prices”.
Posted by David Dorsey on Tuesday, May 20, 2014

I don’t have idols.

 Years ago I learned idolizing can lead to great disappointment. The more you learn about people, the greater the chance that, as this guy would say in his unique style, “sthumpin’s a misth.” A case in point is Michelle Rhee. If I did have an idol in education reform, it would be her.  She’s even married to one of my favorite NBA players of all time who is also an education reformer.

For those of you not familiar with Michelle Rhee, in 2007 she was appointed the first chancellor of the Washington, D.C. school district vowing to make real reform in one of the nation’s lowest performing school districts. In her first year she closed 23 schools, dismissed 36 principals and reduced central office staff by 15%.  Two years later Rhee fired 241 teachers based on poor performance and took on the teachers’ union to make significant changes in order to improve student outcomes. Saying she was controversial would be a colossal understatement.

She was a Muhammed Ali in the square circle of education reform.

But, not surprisingly, she became the victim of politics. The 2010 mayoral election in D.C. was considered a referendum on Rhee. The new guy won and she was out. She went on to start a school reform organization called StudentsFirst, and her overarching approach is to put students ahead of adults.

What could be better than that? I hadn’t heard much about her in the past few years; that is until a few Mondays ago. I was on the treadmill (seriously), trying to get through a grueling walk aided by Bret Baier’s Special Report on the Fox News Channel. He had just floated a teaser that his in-studio guest was going to be none other than Michelle Rhee and she was going to discuss Common Core Standards and charter schools. You can imagine my excitement. I even took the treadmill from 3- to 3.5 mph!

Then I was reminded why I don’t have idols.

Much to my chagrin (and also Bret’s), I learned in the interview that Michelle Rhee is a supporter of Common Core standards. Say it ain’t so, Joe! When pressed by Baier, she proclaimed, “unless we increase the standards and expectations of our kids, we will continue to fall further and further behind [other countries].” She expressed concern that the U.S. is now lagging behind the Slovak Republic. When Baier quoted a Brookings Institute study that Common Core standards have not yet produced significant gains Rhee challenged that postulate by saying that in 2013 Tennessee “blew the other states out of the water,” by “(1), implementing a rigorous teacher evaluation system and (2) they’ve been doing a very good job of investing in Common Core.”

It’s a good thing the treadmill has handles or I would have been on the floor.

That last quote brings me to why I’m writing this and underscores one of several of my issues with Common Core standards.  Why does anyone, especially one as brilliant as Michelle Rhee, believe that changing standards will improve outcomes?  What about that “implementing a rigorous teacher evaluation system” thing? You think that had anything to do with it? 

Outcomes are not going to change just because you change standards, whether it’s in business, sports, education or any other walk of life. Could the Royals win the World Series this year simply because it becomes their standard?

Baier questioned her about the “push-back” from many who complain that the standards are too tough. She brushed away those concerns with a logic that left me thinking “This is an education reformer?”

Her dismissal of the standards as being too difficult at the elementary level reminded me of a recent article in the Salina News. Soon-to-be former Education Commissioner Diane DeBacker, while defending Common Core standards at a Salina Rotary Club luncheon, cited a standard for kindergartners that requires them to count to 100 by ones and tens. She followed that with this statement. "I don't think there's anything sinister about that."

Well, here’s one of the other 21 kindergarten standards (from Topeka Public Schools) she left out:

Compose and decompose numbers from 11 to 31 into groups of ten ones and some further ones, e.g., by using objects or drawings, and record each composition or decomposition by a drawing or equation (such as 18=10+8); understand that these numbers are composed of groups of ten ones and one, two, three, four, five, six, seven, eight, or nine ones.

Everybody got that? Perhaps not sinister, but certainly something from which nightmares could spring. When I was in kindergarten (and the U.S. was number 1 in the world) our most challenging standard was don’t eat the paste

What’s frightening is that many influential individuals and organizations outside education are on the same page. Potential presidential candidate Jeb Bush is a big supporter. The US Chamber of Commerce released this video last month. They all miss the fundamental point. If you don’t have an improvement in the quality of teachers and even more importantly, better managed public schools, along with more school choice for parents, standards aren’t going to matter one bit. Period.

Rhee believes Common Core will work at producing better outcomes “as long as the adults stay strong and firm and know our kids can do this.” Huh? As an elementary teacher in a school that desperately needs marked improvement, I know I stayed strong and firm and I also know it’s going to take a lot more than that.

If that’s the best defense an education reformer like Michelle Rhee can come up with to defend Common Core standards, it’s yet another reason to dump them.

 And let me get back to the treadmill in peace.

Posted by Dave Trabert on Saturday, May 17, 2014

We continue our debunking of the Center on Budget and Policy Priorities (CBPP) latest report entitled "Lessons for Other States from Kansas' Massive Tax Cuts."  Part 1 dealt with state revenues. Part 2 covered state spending in general and school funding in particular.  Part 3 addressed claims that that tax reform hasn't boosted the economy.  Today we tackle their assertion that tax cuts won’t lead to economic growth.

CBPP claim #4 - Little Evidence to Suggest That Tax Cuts Will Improve Kansas’ Economy in the Future

Actually, there is a lot of evidence; CBPP just conveniently avoids it.  Instead, they substitute their opinion and employ their standard tactic of making claims without disclosing supporting data; they also reference predictions that Kansas will trail the nation next year in some economic indicators.

We’ll start the debunking with a brief history lesson.  Private sector job growth in Kansas trailed the national average in ten of the last fifteen years (1998-2013).  Kansas’ private sector gross domestic product trailed eight times (1997-2012) and personal income trailed eleven of the last fifteen years (1998-2013).  Indeed, Kanas’ history of economic stagnation was the impetus for tax reform.   As we explained in Part 3, the full economic impact of tax reform will take years to unfold.  It’s intellectually dishonest of CBPP to imply that tax reform isn’t working because a long term negative trend hasn’t suddenly created tremendous gains.

Now let’s look at the evidence.  The adjacent table compares the performance of the ten states with the lowest state and local tax burdens with the ten states with the highest burdens, based on the most recent rankings from the Tax Foundation.  The low-burden states are Wyoming, Alaska, South Dakota, Texas, Louisiana, Tennessee, New Hampshire, Nevada, South Carolina and Alabama.  The high-burden states are New York, New Jersey, Connecticut, California, Wisconsin, Minnesota, Maryland, Rhode Island, Vermont and Pennsylvania.

The low-burden states increased jobs at twice the rate of high-burden states.  Low-burden states have superior growth in Wages & Salaries and Private Sector Gross Domestic Product.  Low-burden states have positive domestic migration while high-burden states have negative domestic migration.  In other words, US residents are choosing to move to low-burden states and choosing to leave high-burden states. 

 

Tax reform critics like to attribute the superior economic performance of low-burden states to weather and access to ports and natural resources.  But you’ll notice that both groups have states with good weather, bad weather, coastal, land-locked and natural resources.  But there is one category which really separates the two groups of states – spending.  High-burden states spend 40 percent more per-resident to provide the same basket of essential services.  States with an income tax spend 49 percent more than those without an income tax. 

The key to having low taxes is to keep spending under control by providing services at a better price.  A state could be awash in oil revenue and still have a high tax burden if it spent more.  Texas, by the way, gets less than 3 percent of revenue from oil; they have a low tax burden because they only spent $2,293 per-resident to provide the same basic basket of services on which Kansas spent $3,409 (2012 actual per NASBO).

 

The moral of the story is pretty clear: states that spend less, tax less – and grow more.     

Posted by James Franko on Tuesday, May 13, 2014
This piece originally appeared in the Oberlin Herald newspaper. It is authored by Kansas State Representative Ward Cassidy and is republished here with the author's permission.

Letter from Topeka
By State Rep. Ward Cassidy

Every year at this time, the news from Topeka is about education funding. It was March 7 when the Legislature received the Supreme Court’s Gannon decision. The task was before us – a requirement to establish equity and adequacy – and only a short time to get it done.

Building consensus between the House and the Senate on any topic is difficult. The House passed a bipartisan bill that would have met the Gannon equalization mandate. The Senate leadership wanted policy changes attached to the bill, however, so back and forth we went.

My biggest concern was money. I saw problems developing that could have resulted in the layoff of at least two teachers in each of my districts. When the debate was on to reduce transportation expenses, I received information from most of the 120th District superintendents as to how much that would affect each district. The message was to do my best to not let that happen.

When all was done, our districts received property tax relief and more money for their classrooms. For that to happen, the House had to agree to teacher tenure being revoked and to a tax credit for corporations to grant scholarships to pay for low-income students to attend private schools.

The corporate scholarship program is capped at $10 million – not a real high price compared to the $6 billion that will be spent on K-12 education in Kansas this year. I have learned a lot about diversity of education in Kansas and how the achievement gap keeps widening between poor students and those who are better off.

Legislators are looking for ways to diversify our education. Right now, the only real school choice in Kansas is our virtual schools. These are growing rapidly, and we now have 93 approved virtual programs.

I had no problem voting for the tenure change, as I have always been opposed to that provision. What the tenure piece does is to eliminate the requirement that school districts provide a due-process hearing upon termination or no-renewal of a teacher contract – simply because the teacher has been with the district for more than three years.

Due-process hearings will remain intact for any teacher who feels they were terminated because they were exercising a constitutionally protected right in the course of their job duties. School districts can still choose to grant due-process hearings based on longevity; the bill just removes the state requirement to do so.

Teacher unions are not strong in northwest Kansas. Teachers realize their school boards and administrators are trying to provide a quality education for students and to put teachers in a position to succeed. I know all of the 120th District superintendents, and they would never give up a quality teacher just to save money by hiring a lower-paid teacher.

What I am most proud of this session dealt with higher education. I was again able to help Colby Community College and Northwest Kansas Technical College get decent funding and to curtail some proposals that would have hurt both.

What I like best of all is helping constituents with state agencies. I have good contacts, in every agency, and have helped solve many problems for people in the district this year.

The Legislature returns for the veto session on Wednesday, April 30, and I will have a wrap-up column at that time.

Posted by David Dorsey on Friday, May 09, 2014

In my last post regarding teacher pay, the focus was on the question of whether teachers are over- or underpaid. The theme of this piece is HOW teacher pay is determined and ultimately the negative impact it has on education.

Typically, the salary schedule for teachers takes the form (and name) of a matrix. Here is the current salary schedule from Topeka Public Schools. The matrix is structured with columns representing the educational attainment of the teacher while the rows sort of stand for the number of years of teaching experience.  Where the column and the row intersect is how much a particular teacher is compensated.

Seems sensible, right? Just kidding. It’s a terrible way to pay teachers and there are several reasons why.

One reason this system needs be put on the scrap heap is that it is strictly an INPUT model.  To put it simply, no consideration is given to the performance or the ability of a teacher.  That just doesn’t matter when it comes to paying teachers. Furthermore, there is substantial research evidence that educational attainment of the teacher does not impact student outcomes. A research synthesis paper by the Center for Education Compensation Reform (CECR) concluded: “The preponderance of evidence suggests that teachers who have completed graduate degrees are not significantly more effective at increasing student learning than those with no more than a bachelor’s degree.”

Another rationale for running the matrix through the paper shredder is that it is not market-based. It assumes all teachers across all grades levels and all disciplines have equal value.  In other words, an elementary school P.E. teacher is valued the same as a high school physics teacher. Does anyone really believe those two positions would be considered economic equals in a free market? That is emblematic of the overarching theme that has polluted virtually every aspect of public education: egalitarianism.  And the supporting argument goes something like this: “Well, the P.E. teacher has a very important function in the physical well-being of the child. And we all know a healthy body is necessary for a healthy mind.”

True…but there is NEVER a discussion of the RELATIVE value of teachers within the system. That, of course, would violate the egalitarian canon.  If we were all making widgets on an assembly line, it would make sense that we all get essentially the same pay. But regardless of what teachers’ unions like to convey, not all teaching subjects are equal. Much has been written and discussed in recent years about the difficulty public education has in attracting and keeping quality teachers in the fields of math and science. The salary matrix is Exhibit A in that concern.

A third reason the matrix needs to go the way of the 8-track tape player is that it serves to restrict the amount of money a teacher can make.  It’s metaphoric that a matrix is designed in the shape of a net because, speaking as a teacher, working under the salary matrix is like being caught in a net. So, what happens when a teacher wants to make more money in the organization? He or she can only escape the constraints of the net by getting into administration, principally as a principal. And that’s why most teachers become principals: to make more money – not to manage a school effectively.

So, the salary matrix approach rewards mediocrity while failing to recognize teachers monetarily for good performance, doesn’t promote improved student outcomes, keeps schools from attracting quality teachers in STEM (science, technology, engineering and math) subjects, and forces people out of the classroom to make more money.

How does such an ineffective system endure?  Because it is easy. It’s easy for the parties on both sides of the bargaining table to have a Three Musketeers approach. Coupled with the lack of accountability that has shielded public education, there is no internal incentive to change.

Reformers outside education have been trying for years to inject merit pay for teachers into the system without much success. Does that mean we are stuck with the matrix for eternity?

It doesn’t have to be that way, and in my next piece on teacher pay, I will outline a comprehensive approach that can lead teacher pay to be market driven and merit based.
Posted by Patrick Parkes on Friday, May 09, 2014

Ever since Kansas officially ushered in its momentous January 2013 tax reforms, local governments and media have persisted in claiming that Kansas’ state tax reforms will cause local tax rates to increase. For example, at a University of Kansas gathering last year, Johnson County administrator Hannes Zacharias lamented that state tax changes put Johnson County in a pickle. “Indeed, we are at the end of the food chain, and we’re the ones who have to clean up the mess,” Zacharias said.

In order to gauge the validity of these and other related claims, we invited all 105 Kansas counties to substantiate them by participating in a survey. Seven counties responded, but not a single one cited tax reform as their reason for raising property taxes. Several, in fact, offered no explanation. 

KPI President Dave Trabert offers a different perspective on the idea of a state-local taxation “food chain.”  “It is taxpayers, not local governments, who are at the end of the food chain,” Trabert points out. “In fact, it’s Johnson County that has really been cleaning up on taxpayers. Johnson County increased property taxes by 132% between 1997 and 2013, while inflation was 42% and county-wide population increased by about a third. Cities in Johnson County also dramatically increased their taxes (Overland Park +162%, Olathe +153%, Leawood +147%). Local government is simply using tax reform as an excuse to continually raise taxes unnecessarily.”

While most counties declined to go on record, it was noteworthy that all eight respondents answered “Yes” to the question: “Do you believe your county made efficient and effective use of all taxpayer money in 2013?”  It would be interesting to know if the citizens of these counties would answer the same way. 

There is, however, evidence that tax reform is beginning to boost local government revenues. Sales tax payments to local governments from the Kansas Department of Revenue show a 6.25 percent increase for the first four months of 2014. (Note: KDOR collects all sales tax and remits local governments’ allocation on a two-month time lag, so the 2014 payments reflect retail activity from November 2013 to February 2014.) KDOR reports no change in tax rates during the activity period. As we predicted in “Tax Reform gears Kansas for Growth,” lower state income tax rates allow individuals to keep more of their hard-earned money. This money flows through local economies in the form of new purchases, savings, and/or investments. In turn, this influx of new cash spurs new demand for products and labor (i.e. employees), which helps make up a broader tax base capable of producing higher revenues despite lower tax rates. 

 It will take several years to be able to assess the full effects of Kansas’ tax reform package, but one thing is already clear: there is no evidence that state tax reform is hurting local governments. Contrarily, tax reform is, as expected, providing local governments with increased sales tax revenue.


Posted by Dave Trabert on Tuesday, May 06, 2014

We continue our debunking of the Center on Budget and Policy Priorities (CBPP) latest report entitled "Lessons for Other States from Kansas' Massive Tax Cuts."  Part 1 dealt with state revenues and Part 2 covered state spending in general and school funding in particular Today we debunk their claims that tax reform hasn't boosted the economy.

CBPP claim #3 – Kansas’ tax cuts haven’t boosted its economy.

While tax reform hasn’t produced the “shot of adrenaline” predicted by Governor Brownback, the problem is one of political enthusiasm rather than economics.  Most elected officials are prone to effusive optimism for their ideas, just as opponents to their ideas can often be counted upon to distort and deliberately misstate information in pursuit of their own beliefs.   

The data pretty clearly shows that states with lower tax burdens have much stronger economic growth and job creation over time; we’ll review the facts in Part 4.  Today’s post covers some of the reasons why the benefits of Kansas’ tax reform will unfold over several years rather than overnight  and explain a number of misleading claims by the Center on Budget and Policy Priorities (CBPP). 

First of all, tax reform was implemented while coming out of a recession.  It’s impossible to know the extent to which this impacts employers’ decision-making on adding jobs or relocating, but having run a few businesses, I can appreciate how the initial benefits of tax reform might be used to shore up the business while continuing to work through the recession.

Concurrent federal changes are also a factor.  Pass-through income on LLCs, Subchapter S corps, partnerships and proprietorships was not subject to state income tax in 2013 but those employers were simultaneously hit with higher federal income taxes (marginal rates and on capital gains) and multiple changes related to Obamacare.   

Predictability is an important element of tax policy, and some of the mixed signals coming out of Topeka over the last two years may also be prompting taxpayers to proceed cautiously.  The 2012 tax reform legislation would have reduced income taxes by $4.5 billion over the first five years but changes implemented in 2013 took back about $700 million.  While still a very positive net effect, the 2013 changes sent a number of mixed signals.

Many employers are also well aware that a majority of legislators and Governor Brownback have not yet made the necessary (and quite feasible) spending reductions that will be required to fully implement tax reform.   Kansas’ General Fund budget in 2012 was 25 percent more per-resident than states with no income tax; total budgeted spending was 39 percent higher on a per-resident basis.  Every state provides the same basic services - public education, highways, social services programs, etc. – but some states provide those services at a much better price and keep taxes low.

The FY 2015 General Fund budget of $6.273 billion is a new record for Kansas and is 2.9 percent higher than the 2012 budget.  Until government is made to operate more efficiently, taxpayers must consider the possibility of further modifications to the tax plan – and that uncertainty will continue to impact economic growth. 

Relocating a business is also not something that happens quickly.  For starters, leases might have several years to run before a move is feasible. 

CBPP uses a combination of unsubstantiated claims, fails to put a lot of information in context and exploits the unrealistic notion that tax reform would have an immediate, explosive impact on the state’s economy.  “Data from” is not how intellectually honest people substantiate a position; they show you all their data or at least tell you exactly what data they used and where to find it.  Claiming that a one-year change in jobs or earnings is proof that something as complex as major tax reform failed is just a political statement; it is certainly not an intellectually honest economic analysis.

Yes, private sector job grew a little slower in 2013 than in 2012, but that was not a Kansas phenomenon.  In fact, private sector job growth nationwide in 2012 was 2.2% but dipped to 2.1% in 2013.[1]  This is a good example of CBPP ignoring context.

It’s also important to examine the underlying factors that contribute to a state average.  The adjacent table shows that Kansas did better than all but one adjacent state in 2013.  Colorado did better, but then Colorado has historically had a better tax structure than Kansas and also did a better job of controlling spending.  Less favorable tax and spending policy has been introduced in Colorado over the last few years but, just as it takes time for upward momentum to build, it does as well for the full measure of bad policy to be seen.

Digging deeper, we find that the Kansas City, Kansas metro area not only outperformed the national average but also grew at five times the rate of the Kansas City, Missouri metro area.[2]  The Wichita metro lost jobs in aerospace but that is a reflection of the global economy; the balance of the Wichita metro was almost at the national average.

CBPP dismisses the increase in new business filings but if history is any guide, these gains are quite significant.  Research conducted by the Center for Applied Economics at the University of Kansas found that, if not for jobs created by new startups in their first year of existence, Kansas would have only had two years of net job growth between 1977 and 2010.

Dr. Arthur Hall, who conducted the research at KU, says "Economic development is a numbers game.  The more that an economic environment motivates entrepreneurs to try new business ideas, the more likely a gazelle will be born." Dr. Hall cites Garmin Industries as an example of what he calls a 'gazelle' - a company founded by two people in Lenexa, Kansas in 1989 that is now a multi-billion dollar company.

Hall's views are similar to those of Carl Schramm, former CEO of the Ewing Marion Kauffman Foundation, a leading entrepreneurial think tank in Kansas City.  In 2010, Schramm told Forbes Magazine “The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.”[3]

The initial economic signs are encouraging but the true economic impact of tax reform won’t be known for several years.  Snap judgments based on partial one-year data are the hallmark of politicians and special interest groups looking for justification to support their beliefs – whether in support of or opposition to tax reform.


[1] Bureau of Labor Statistics, average annual private sector employment not seasonally adjusted.

[2] The Kansas City, Kansas metro is comprised of Franklin, Johnson, Leavenworth, Linn, Miami and Wyandotte counties.  The Kansas City, Missouri metro is comprised of Bates, Caldwell, Cass, Clay, Clinton, Jackson, Lafayette, Platte and Ray counties.

[3] "What Grows an Economy," Forbes Magazine.  

Posted by Patrick Parkes on Monday, May 05, 2014
 “Of course, I want people to have healthcare; I just didn’t realize I would be the one who was going to pay for it personally.” 

     That’s what Cindy Vinson—a retired California teacher and proud supporter of President Barack Obama—told the San Jose Mercury News when she learned of the insurance plan substitution and corresponding premium hike she would face under the Affordable Care Act (aka Obamacare). Kansas legislators ought to commit Vinson’s realization to memory.  This year’s legislative session has ended without having to address murmurs calling for Medicaid expansion in the Sunflower State. However, this does not mean that the issue is a dead one in Kansas. With the 2014 elections on the horizon and Governor Brownback on the ballot, proponents of Medicaid expansion could very well attempt to revive the issue by thrusting it into the election season policy spotlight. Thus, an understanding of the true fiscal implications of Medicaid expansion in Kansas remains of the upmost importance to Kansans.

  At is core, expanding Medicaid eligibility to those living at 138% of the federal poverty level is Obamacare’s answer to the rising tide of healthcare costs that often go uncompensated when uninsured individuals visit emergency rooms for treatment. In turn, when medical facilities cannot count on compensation for these costs, they must resort to driving up the costs of both emergency and non-emergency care for all individuals (both insured and uninsured) to cover potential shortfalls. Place Medicaid expansion alongside Obamacare’s “individual mandate,” and it becomes obvious that the law “bets” heavily on closing the uncompensated care gap to bring down overall healthcare costs.

     Enter the June 2012 Supreme Court ruling on Obamacare, which gave states autonomy over whether or not to expand their existing Medicaid programs as envisioned above, and the Medicaid expansion question Kansas faces begins to crystallize. Nationally, the split between states choosing expansion and forgoing expansion to this point remains even (with Kansas still in the non-expansion camp). Proponents of expansion in Kansas have been enticed by the federal government’s offer to fund the full costs of expansion until 2016 and 90% of the costs thereafter. They are touting it as a “win-win,” “no-brainer” scenario tantamount to “free money.”  Yet, anyone familiar with the old adage about a purported “free lunch” can probably guess that there is no such thing as free money or free healthcare either for that matter. 

Even if a healthcare provider serves a patient “free of charge,” the services rendered are never truly “free.” Instead, the associated costs (time, supplies, etc.) are simply assumed or absorbed by an entity other than the patient. The concept of “free money” is a similar illusion. As the old sayings go, money never truly appears spontaneously by “growing on trees” or “falling out of the sky.” Some person or entity must earn it through work, production, and value creation. This fact makes the idea of “free federal money” doubly illusory because the federal government cannot create value or wealth on its own. Rather, it can only confiscate wealth already earned by U.S. taxpayers to pay its bills. Thus, even the federally funded portion of a potential Medicaid expansion in Kansas cannot be thought of as cost-free to Kansans. It is simply a redistribution of tax money Kansans and others across the country have already sent to Washington.                 

  Setting aside this logical fallacy that is “free federal money” for the moment, let’s look at the work of current Social Security Advisory Board Member Dr. Jagadeesh Gokhale—who is also KPI’s own Adjunct Health Policy Fellow and a Senior Fellow at the Cato Institute in Washington, D.C. Dr. Gokhale has explored the fiscal implications of Medicaid expansion in Kansas specifically. His results (in the table below) show that the enrollment dynamic Obamacare’s “individual mandate” creates is already costing Kansas more than $4 billion in added healthcare expenses over the next ten years. That equates to almost $1,400 per Kansan  in new healthcare costs over the period. Add in the Medicaid expansion element if Kansas choses that path, and our state will add another $624.5 million to its Obamacare debt tab. This brings the tally of new healthcare costs per Kansan to more than $1,600 over the aforementioned ten-year period.

     

     And that’s assuming the federal government makes good on its offer to use federal revenue to foot the rest of the bill as promised! For just Kansas’ expansion alone, the “rest of the bill,” will amount to more than $12.4 billion (or nearly $4,287 in new healthcare costs per Kansan). Admittedly, some Kansans may be inclined to dismiss this possibility of the federal government reneging on its funding promise as purely hypothetical. However, recent history proves that this possibility is in fact closer to reality than to conjecture at this point. 

     During the U.S. Congress’ now infamous “Supercommittee” deficit reduction talks of 2011, President Obama proposed simplifying and streamlining the funding formulas that determine how much federal money states receive to administer their Medicaid programs. He touted his “blended rate” idea as a cost-saving measure poised to reduce federal Medicaid spending by $100 billion over the next decade.  Yet, even the left-leaning Center on Budget and Policy Priorities in Washington, D.C. decried the measure as one that would shift significant costs to states; exacerbate barriers to specialist care that Medicaid recipients already face; and create few—if any—of the administrative cost-efficiency  savings it advertised. 

     Aside from these obvious flaws though, perhaps the most fundamental lesson of relevance to this blog post is that the federal government already has a penchant for cutting Medicaid funding to states.  What’s more, it hasn’t exactly displayed an identical penchant concerning Medicare cuts to healthcare providers serving seniors, but its involvement in that process features a similar ominous sense of uncertainty.   

     In 1997, the Congress passed the Medicare Sustainable Growth Rate Program (SGRP) as a federal cost control mechanism designed to cut Medicare reimbursements to participating doctors if per-patient treatment costs exceeded federal spending targets for any given year. Yet, as the AARP points out in a recent blog post on the issue, Congress has ultimately delayed these cuts seventeen times in the last eleven years in a process known cheekily around D.C. as the “doc fix.”  This year, Congress waited until March 31, 2014 (just one day before a 24% cut in reimbursement rates was set to take effect) to pass its annual fix. The AARP laments the legislative reticence and procrastination constantly surfacing around this issue and considers these elements to be chief drivers of uncertainty for seniors about whether their trusted treatment professionals will be able to continue seeing them.  Indeed, the organization cannot help but to point out the striking resemblance the dynamic bears to the repetitive time warp on display in Bill Murray’s 1993 comedy Groundhog Day. Each year, Congress promises to revisit the “doc fix” issue in a deeper, more permanent, and bipartisan way to no avail. 

     Taken together, the above anecdotes from both Medicaid and Medicare are not just obligatory history lessons to be tossed aside later into the proverbial “ash heap” or “dustbin” where such lessons often go. Rather, they should cause Kansans to wonder why our same federal government that seems to crave financial uncertainty when it comes to healthcare costs should be trusted to act any differently when it comes to Medicaid expansion in Kansas under Obamacare.

     Kansans beware: This offer of a Medicaid expansion-themed “free lunch” invitation from an already cash-strapped Uncle Sam will more likely turn into a federal “dine and dash.”

[1] “Cost Per Kansan” figures calculated using 2013 U.S. Census Bureau Population Estimates for Kansas

 




Posted by Dave Trabert on Tuesday, April 29, 2014

We continue our debunking of the Center on Budget and Policy Priorities (CBPP) latest report entitled "Lessons for Other States from Kansas' Massive Tax Cuts."  Part 1 dealt with state revenues.  Today we debunk their claims on school funding and other state services.

CBPP claim #2 – School funding is 17 percent below pre-recession levels and funding for other services is way down and declining.

This is simply an outright fabrication – and not the first time that CBPP has done so.  CBPP shows a graph of how they calculate what they claim is a reduction in school funding but, true to form, they provide no supporting data.  The only source provided says “CBPP analysis of state budget documents and Kansas Governor’s Budget Reports.”  CBPP routinely plays this game and they have refused to give us their data every time we requested it.   I’ll get to school funding shortly but let’s start debunking this claim with a total spending review.

Here are the facts from the Governor’s Budget Reports cited by CBPP.[1]  General Fund spending would decline a mere 1.8 percent this year (FY 2014) but it is still 6.3% higher than just three years ago.  Next year, Kansas will set a new record for General Fund spending without even counting the education money that was just added to next year’s budget.  FY 2013 was the highest level of General Fund spending on record.

 

The next table breaks total spending down into the primary functions listed in the Governor’s Budget Reports.  

Of course, Kansas should have reduced spending last year and this year rather than spend down reserves but the fact remains that spending is not ‘way down and declining’ as claimed by CBPP. 

Their bogus claim on school funding may be grounded in an earlier collection of falsehoods published last year – and thoroughly debunked on this blog.  CBPP often makes unsubstantiated claims which they attribute to their “analysis of data” but the data is not made available for review – even when requested.

 The first thing to understand is that CBPP deliberately misleads readers by only talking about state funding of schools while ignoring the fact that Kansas, like many states, has a foundational funding formula that provides multiple funding sources, including local money that does not flow through the state budget. 

But that is just the beginning of the deception.  Their statement that “Kansas is still cutting school funding” on page four of their report is an outright lie. 


This data provided by the Kansas Department of Education shows that State funding of public education has increased for four consecutive years.[2]  As CBPP is fully aware, one cannot get the full picture of school funding in state budget documents; the money reported as Local funding is provided on state authority but doesn’t run through the state budget.[3]  Property taxes (including the 20 mills mandated by the Legislature) are sent directly to school districts by county treasurers.[4]  Even the Kansas Supreme Court acknowledged (three weeks before CBPP’s report) that “…funds from all available resources, including grants and federal assistance, should be considered” when evaluating school funding.[5]

The following inflation comparisons are based on total school funding from the adjacent chart and shown on a per-pupil basis to also account for enrollment changes.  The first comparison shows that actual school funding continues to run well ahead of inflation.  Per-pupil funding increased from $6,985 per-pupil in 1998 to $12,781 in 2013; 1998 funding adjusted for inflation would be only $9,768.  (Funding for the Kansas Public Employees Retirement System was not included in KSDE calculations of school funding until 2005; they provided the data for prior years and we adjusted spending accordingly.)

 

CBPP claims that school funding has not kept up with inflation since 2008 but that is misleading at best.  Again, they provided no data to support their claim but we’ll lay it all out here.

Note that every chart shown above references ‘spending’ instead of ‘funding’.  KSDE arrives at their Local number each by subtracting State and Federal aid from districts’ reports of total expenditures. Total expenditures is different from total funding because districts report on a cash-basis fund accounting method and those figures do not reflect any aid received that was not spent.  That information can be obtained by comparing the change in ending unencumbered cash balances of districts’ operating funds (excluding capital and debt).[6]

The above table shows that total inflation-adjusted spending between 2008 and 2013 was $85.3 million greater than actual spending, but districts could have spent $345.9 million more if they had used all of the aid provided during those years. 

It should also be noted that school spending is not based on what schools need to meet required outcomes while also making efficient use of taxpayer money.  To this day, not a single superintendent, legislator, KSDE employee, policy analyst or judge can identify that amount because no such analysis has been performed in Kansas.  The cost study upon which previous court rulings were made was found to be deliberately skewed so as to provide the courts with inflated numbers.[7] The Kansas Supreme Court also recently abandoned the ‘actual cost’ method of determining adequate funding in Gannon and substituted new standards (Rose), against which no cost or funding measurement has been conducted.[8]

In conclusion, CBPP’s claims about school funding in particular and state funding of services in general are merely a collection of false, misleading and inconsequential statements. 

Kansas does need to reduce spending a bit in the coming years in preparation for the next tranche of tax reduction but there is ample ability to do so without reducing current services.  There are tax transfers out of the General Fund that should be reconsidered and there are also multiple opportunities to significantly reduce the cost of providing current services.

The opportunities are there, and we’ll cover them separately in the coming months.  The only question is whether Governor Brownback and a majority of legislators will stand up to the bureaucracy and special interests.  

Stay tuned for Part 3.

 


[1] Kansas Division of the Budget, Governor’s Budget Report for FY 2015 published January, 2014, page 22 http://budget.ks.gov/publications/FY2015/FY2015_GBR_Vol1--UPDATED--01-28-2014.pdf

[2] Kansas Department of Education; school years 2003-04 through 2012-13 located at http://www.ksde.org/Portals/0/School%20Finance/data_warehouse/total_expenditures/d0Stateexp.pdf. All other years provided by KSDE via email; copies in author’s possession.

[3] CBPP published a response to my September 13, 2013 blog post that provided this explanation. http://www.offthechartsblog.org/the-price-of-kansas-costly-tax-cuts/

[4] Explanation of property tax distribution with a quote from Dale Dennis at http://www.kansaspolicy.org/KPIBlog/Default.aspx?min=2013-01-01&max=2014-01-01.

[5] Gannon v. State of Kansas, page 77 at http://www.kscourts.org/Cases-and-Opinions/opinions/SupCt/2014/20140307/109335.pdf

[6] See KSDE explanation at the link for Endnote #2.

[7] Caleb Stegall, “Analysis of Montoy v. State of Kansas” published by Kansas Policy Institute in 2009 at http://www.kansaspolicy.org/ResearchCenters/Education/Studies/d65168.aspx?type=view

[8] Ibid, pages 76 and 77.

Posted by Dave Trabert on Monday, April 28, 2014

If Ronald Reagan were alive and saw the latest piece from the Center on Budget and Policy Priorities (CBPP), he would say, “Well, there they go again…not letting the facts get in the way of the story they want you to believe.”

The premise of their March 27 piece is that “Kansas’ huge cuts have left…schools and other public services stuck in the recession, and declining further – a serious threat to the state’s long-term economic vitality.”  That’s not true, of course, but it’s what the way-left-leaning CBPP wants you to believe….and what the big-government interests in Kansas are only too happy to repeat.

CBPP and their allies seem to believe that government needs an unlimited supply of taxpayer money and could not possibly operate with a penny less.  It’s a classic entitlement mentality and the premise is laughably false.

The volume of falsehoods and misleading statements in “Lessons for other States from Kansas’ Massive Tax Cuts is so great that we will address each of their five ‘lessons’ in separate blog posts this week.  Today's post will focus on their claim about state revenues.

This isn’t the first time we’ve debunked CBPP tales about Kansas and sadly, probably won’t be the last.  

 

CBPP claim #1 – Kansas’ revenue loss will rise to 16 percent in five years if the tax cuts are not reversed.

As is typical for CBPP, they don’t explain how they arrive at their 16 percent figure but it probably has something to do with their entitlement focus (what government could/should have rather that what it needs).  Regardless, the facts from Kansas Legislative Research (KLRD) show otherwise.

KLRD estimates that General Fund revenue will be 9.6 percent higher in five years.[i]  FY 2014 is the first full year of income tax reform; revenue is 7.1 percent lower this year than the record-setting level of 2012 but it is actually 1.3 percent higher than three years ago!  Even more remarkable, a new revenue record is predicted to be set in FY 2018 – just four years after historic tax reform was fully implemented.

I dare you to find one media outlet in Kansas reporting these remarkable facts.  To the contrary, most media and their big-government allies cling to versions of CBPP’s ‘sky is falling’ mentality.

CBPP is flat out lying when they say Legislative Research “…estimates that Kansas received $803 million less revenue this year because of the 2012 tax cuts….”  It should be noted here that CBPP provides no citation for their outrageously false claim.  Here’s the truth.  KLRD did predict that much of a loss in personal income tax revenue (not total revenue as claimed by CBPP) two years ago when tax reform was being discussed but they did so on a static basis using the parameters of a particular proposal.  Changes to that proposal have since been implemented and consensus revenue estimates have dramatically improved.   CBPP wants you to believe that an outdated, static estimate is current despite having access to information that contradicts their claim.

The November 2013 Consensus Revenue estimate for FY 2014 was $5.857 billion or just $484 million below last year’s total revenue.[ii]  Tax revenue (which comprises the vast majority of General Fund revenue) was predicted to be down $466 million and Other Revenue was projected to be $18 million lower. 

But tax revenue has been running well ahead of November projections so official revenue estimates were increased in April (after the CBPP publication) by $103.3 million for FY 2014 and $74.3 million for FY 2015.[iii]  Later years were not adjusted upward but that's just a function of the Consensus Revenue process; we will hopefully see an even brighter revenue forecast soon from Legislative Research.

Whenever you see CBPP’s false claims repeated by media, legislators or others who are opposed to tax reform, ask them why they are spreading false claims in light of these facts from Kansas Legislative Research:

  • FY 2014 revenue will be 1.3 percent greater than just three years ago.
  • Revenues will hit an all-time high in FY 2018, just four years after full implementation of tax reform (and maybe sooner, if revenues continue to run ahead of projection).
Tomorrow's post will deal with their fairy tales about education and other state spending.

Editor’s Note: Three days after this blog was posted, the State of Kansas announced a shortfall in April tax receipts attributed to ‘balance due’ payments.  In their press release, the Kansas Department of Revenue (KDOR) said balance due payments declined 45 percent from April 2013, when those payments increased by 53 percent.  The swing is believed to result from an increase in the capital gains rate for 2013 that was implemented in December 2012, prompting taxpayers to pull gains forward into 2012 to avoid the tax increase.  As cited in the KDOR press release, similar declines are happening in many other states.

While FY 2014 revenues will likely now be lower than official revenue estimates, the April drop is a national phenomenon and not attributed to Kansas’ tax reform efforts.  Kansas revenues are still expected to be very close to the 2011 levels and on track to set a new record within the next five years.




[i] Kansas Legislative Research, General Fund Profile published by KLRD on April 6, copy in author’s possession. Actual revenue for FY 2011 and FY 2012 and estimated revenue for FY 2016 through FY 2019; FY 2014 and FY 2015 revised per April Consensus Revenue at   http://skyways.lib.ks.us/ksleg/KLRD/Publications/2014_CRE_ShortMemo-4-17-14.pdf

[ii] Kansas Legislative Research, http://skyways.lib.ks.us/ksleg/KLRD/Publications/2013_CRE_ShortMemo-11-6-13.pdf

 

Posted by David Dorsey on Saturday, April 26, 2014

In a recent post, I wrote a reaction to the Gannon v. Kansas decision by the Supreme Court. I built on the Court’s statement that “total spending is not the touchstone for adequacy” by concluding the need to change the education perspective from the focus on dollars to the focus on outcomes.

Now, in the shadow of Gannon, how can that happen?

Don’t hold your breath waiting for the educational establishment/bureaucracy to have an outcomes epiphany. That’s about as likely as KU agreeing to play Wichita State in a basketball game. The entire public school system is preoccupied trying to satisfy the common core standards gods. And, as Mr. Saturday Night (Billy Crystal) would say: Don’t get me started on that! 

But what if there were public schools out there that followed a different set of standards, schools that could provide an alternate look at adequacy? Charter schools could do that.

True charter schools do NOT exist now in Kansas. Oh sure, the law provides for “charter schools,” but ours must be sponsored and approved by a local school board. That’s why, according to the Kansas Department of Education, there are currently only eleven charter schools across the state.  Putting school boards in charge of charter schools is like putting Gregg Marshall in charge of Bill Self’s schedule.

The law should be changed, either through statute or constitutional provision, to allow the creation of an independent board to sponsor and govern charter schools, a board independent from local school districts. According to the National Alliance for Public Charter Schools (NAPCS) in the 2012-13 school year there were 32 states plus the District of Columbia that had charter school authorizers other than local school boards. Kansas is one of only eight states that has a charter law but restricts charter school authorizers to local school boards. According to the NAPCS, the Kansas law ranked 42nd out of the 43 states that have charter school laws.

How different might the court have decided if Kansas had charter schools like Carpe Diem in Yuma, Arizona, for instance. Carpe Diem is an example of a school that outperforms most other public schools in the state while doing it significantly cheaper. The 22 Success Academy schools in New York have received national attention regarding how at-risk students can thrive when given an alternative learning model. These examples are not anomalies.  Nationwide results are presented in a 2013 study by Stanford University’s Center for Research on Education Outcomes, which shows low-income students across ethnic lines “gained a substantial advantage in charter schools compared to their twins in TPS (traditional public schools).”

Now that the Supreme Court has remanded the case to the lower court to revisit the adequacy issue , how that court will rule in the Gannon case is anyone’s guess. The same holds true of any court in funding-based lawsuits that are almost certain to follow, but pointing to Kansas versions of Carpe Diem or Success Academy may very well bolster the case for an outcomes-based model.

But the case for charter schools should not be viewed through a legislative or legal prism.  Nor should it be about institutions. It should be about opportunities- opportunities for Kansas students and families to get the best possible education. The charter school movement was borne of a desire for better opportunities. And they continue to represent a beacon for families who feel trapped in low-performing schools with no hope for improvement.  In fact, according to a recent Wall Street Journal article, half of all students in Harlem attend charter schools. Our research right here in Kansas shows significant learning gaps rooted in socio-economic status. Shouldn’t our students get the same chance?

 It’s time to shine that beacon on the sunflower state.

Posted by David Dorsey on Monday, April 21, 2014
It would be hard to find a more divisive and splintered education issue than teacher salaries. Everyone seems to have a fervent opinion that either (a) teachers are vastly underpaid, (b) teachers are actually overpaid, or (c) teachers are getting paid about what they should. And the reasons for this triad of stances are numerous. It is not my purpose to delve into those in this essay, nor is it to make a case for any of them. (You thought I was going to pick (a) since I teach!)  This is the first of several op-eds I will present on this rather complex, layered issue.  In the first piece, the perspective will be one you rarely hear from: an individual teacher.

 Me.

A funny thing about the issue of teacher compensation is the group that is most impacted – teachers – really seem to care the least. Having taught for 20 years, one thing I can say with certainty: rarely does the issue of how much we are paid get brought up in conversation.  Oh, sure, you may see teachers on television rallying for more money, but that is always union driven.  The media is also complicit in keeping teacher salaries on the front burner. A recent article in the Topeka Capital-Journal is an example of the bind between the media and the unions. It proclaims teacher pay has actually gone down 1.1% over the last decade when adjusted for inflation (yawn). Here’s a news bulletin: so has virtually everybody’s. Ever hear of that economic sinkhole now referred to as the Great Recession? According to the Census Bureau, inflation-adjusted median family income in Kansas for the same time period is down 7.6%.

I know it has been said countless times before, but it bears repeating: People don’t get into the teaching profession for the money. Duh. That’s why we don’t talk about pay among ourselves. In fact, when money is discussed, most teachers would rather see it go to improved working conditions (e.g., more/better materials, updated technology, improved facilities). A much more important issue to us is time, especially given the current teaching environment that each year sees an increased demand on ours. 

We understand the relationship between time and money. That’s another reason you don’t hear individual teachers complain much about salaries. We realize a shorter work year means less money. And it’s true that many are drawn to teaching because it is not a year-round profession.  That in itself is attractive to many, enough so to recruit and enough so to keep them. It would be naïve not to recognize that.  Consider this: Those who became teachers right out of college probably have never worked year-round. Just last week a teacher friend of mine said she didn’t think she could work a twelve-month job. 

Twenty years ago I changed careers to become a teacher. Why? I was drawn to being around kids to help shape their lives. I also have a very creative side, and I saw teaching, in part, as a way to express myself creatively. And I knowingly took a pay cut to do so.

So next time you read an article that “definitively” proves teachers are underpaid (or overpaid) remember this: We knew what we were getting into.

But having said all this, would I like to see teacher salaries increase? That depends. It will be the subject of my next piece.

Coming next: it’s time to remove the shackles of the salary matrix.
Posted by Steve Anderson on Monday, April 21, 2014
In January 2011, when I was first appointed State Budget Director, the state was on the verge of what appeared to be a financial meltdown. Under the previous administration, the first negative ending balance in state history had been allowed exist. Kansas was $27.6 million ‘in the hole’ and this headline was on the front page of the Wichita EagleShortfall for ’11 State Budget Tops $500 million." Much of the first six months was spent trying to not bounce checks and finding areas to cut spending immediately. We also spent considerable time giving agencies more flexibility to spend down unencumbered funds as agencies had previously been allowed to overspend available funding, a typical policy of Gov. Mark Parkinson and his Budget Director Duane Goosen.  However, even as I was using the power the Budget Director holds to operationally limit spending I realized the media’s claim of a $500 million shortfall was an exaggeration.  

At the end of the first six months Kansas had $188 million in the bank and within eighteen months the state ended FY-2012 with a $502.9 million ending balance. This would have been lost to citizens who weren’t doing their own research. They never would have known that the “budget” crisis had passed because the media had moved onto their next “crisis” without revisiting the initial headlines and, in the process, calling into question their first reports.  

The media’s next “crisis” was centered on the individual income tax cuts that were passed in 2012. The bill to reduce the tax burden on citizens “would slash income taxes and is expected to produce a $2 billion deficit within five years” according to the Wichita Eagle’s article. The Kansas City Star led with this quote of “state fiscal analysts projecting budget deficits reaching $2.5 billion in 2018." Just to further emphasize the dire situation the Star added this scare from a representative of a special interest group with no known expertise on the economic impact of lower tax burdens by saying that the tax cuts, “have an enormous impact on everything from public education to public health coverage to infrastructure to other vital social safety-net services.” 

Who are these “state fiscal analysts” that the media used to fan the flames and from where did this version of a looming fiscal crisis arise? The state fiscal analysts are staff of the Kansas Legislative Research Division (KLRD) which presents their projection of the impact on the state’s finances of any change in tax regulations. Here are the numbers from KLRD’s analysis of Senate Bill Substitute for House Bill 2117 - the tax cut bill – and the impact on the state’s budget:***



The approach used by KLRD to generate these numbers is not consistent with the realities of state finances. There are three fundamental problems with KLRD’s analytical techniques which create these illusions of fiscal crises where none exists. 
  1. It is impossible for the state to have a negative ending balance of this size because the state cannot print money (unlike Washington) which precludes the ability to carry such huge imbalances forward year after year. 
  2. The projection of spending growth the KLRD staff uses ignores the reality of the first issue.  Spending cannot continue at a rate that exceeds revenue once the first negative balance occurs. KLRD’s analysis ignores options to control spending that are available to the state’s elected officials and instead shows increasing negative balances. In reality, shortfalls, and surpluses, are dealt with each year through a multitude of available options.
  3. KLRD uses a static view of what will happen to revenues when money is returned to the state’s citizens. For example, the assumption is that if the Smith Family pays $100 less in taxes then Kansas will receive $100 less in revenue (same with a $500 million tax cut package). To believe that one of two things would have to happen, 1) either the money would be buried in a jar in the back yard, or 2) every dollar would have to be spent out of state. In reality, that $100 tax cut means that the Smith Family will reinvest some part of that money in their business and wage earners will spend some of it in the local economy.    

A more realistic view of Senate Bill Substitute for House Bill 2117 puts things in perspective. The following chart shows what has transpired, to date, based on the effects of the tax cuts. It is very good example of why citizens should take media accounts based on KLRD’s numbers with a full shaker of salt.  

Kansas Division of the Budget

 

Actual

Actual

Actual to Date

 

FY 2012

FY 2013

FY 2014

Beginning Balance

$    188.3

$    502.9

$    709.3

Revenues

$ 6,412.7

$ 6,341.2

$ 5,846.8

Excess Revenue over Estimates

$         ---

$         ---

$    140.7

Total Available Revenue

$ 6,601.0

$ 6,844.1

$ 6,696.8

 

Total Expenditures

$ 6,098.1

$ 6,134.8

$ 6,025.6

Ending Balance

$    502.9

$    709.3

$    671.2

The net difference between KRLD’s ending balance and what the current actual receipts show is $913.4 million. The crisis of the “enormous impact on everything from public education to public health coverage to infrastructure to other vital social safety-net services” that the Kansas City Star’s ‘expert’ on the tax cuts predicted hasn’t occurred. But, we have not yet heard the Eagle or the Star report these facts.

Kansans simply haven’t heard that, after returning $231.2 million to taxpayers in FY-2013 and ANOTHER $802.8 million in FY-2014, ending balances were actually up nearly a billion dollars over the estimates! Estimates that directly led to some dire headlines upon their initial release. Returning nearly a billion dollars to Kansans’ pocket books while ending balances have been steady or increasing is an incredible story of success that media would want to share with readers.

Citizens of Kansas have a right to hear forecasts of disasters but they also deserve to be told by those same media outlets that those forecasts didn’t match what actually took place and that things are going well. Citizen should insist that their legislators request that KLRD begin a policy of only producing projections for a reasonable number of future years based on the realities of the Kansas Constitution. This would limit the use of statistically flawed data being used to fuel for the fire of those who are playing politics under the guise of “news reporting.”

I will follow up shortly with part two of this story on where the state’s finances are headed including commentary and possible adjustments to April 2014 Consensus Revenue Estimates.    

*** Kansas Legislative Research Division Senate Tax Plan with Adjusted Severance Tax Receipts 2/15/2012 -  full version on file.   Expenditures and Revenues Totaled in order to fit the page

Posted by David Dorsey on Friday, April 18, 2014

If the legislative session had a theme regarding education policy, it would be the title of Dr. Leo Marvin’s book Baby Steps from the movie What About Bob?. Because even though great strides at improving education fell short, at least it’s a beginning.

The lawmakers in Topeka wrapped up a lengthy, contentious weekend session last week, but then again,  aren’t all marathon sessions led by the sleep-deprived contentious? The highest profile, most controversial piece of legislation to move on to the Governor is House Bill 2506, a law that contains several education policy provisions.  The most controversial section is the provision that, in some cases, allows school districts to more easily terminate teachers.  This, of course, got KNEA to rally teachers to the statehouse. At least the legislature got their attention. Typically, teachers are about as interested in the legislative session as casual fans are interested in college basketball after their March Madness brackets go bust.

The irony is, regardless of the ballyhoo raised by KNEA and the gauntlet of teachers lining the hallways of the capitol clad in their red unification t-shirts, most of us good, enlightened teachers are also opposed to teacher tenure. And many I know would be tougher on incompetent teachers than this new legislation allows. Believe me, there is nothing more frustrating and indefensible as watching groups of students, year in and year out, being deprived of a solid education because of a weak teacher. This is especially true for those teachers who inherit the students the following year. It’s one of the reasons I don’t belong to the union. It expends too much energy shielding incompetent teachers. So, in my opinion, the teacher tenure provision of House Bill 2506 is a good start.

There are a few other sections of the bill worth noting. One is the alternate teacher licensure provision that will allow some to qualify to teach without going through a traditional licensure program. This is targeted to math and science in the middle and high schools. In its current form, it won’t have much of an impact on alternate licensure at a macro level, but it is a step in the right direction toward getting additional qualified people in the teaching profession.

Another proviso that made the final cut is the creation of a tax credit for corporations to give scholarships to at-risk students from low achieving public schools to attend private schools. This means some families will have a choice to leave low performing schools.  Full disclosure here, I am finishing my teaching career at one of those schools and I welcome the opportunity for some of our students to get a better chance. I would have liked to have seen even more students and families get the opportunity, but maybe next session.

After all, “baby steps,” right?


Posted by Dave Trabert on Tuesday, April 15, 2014

The 2014 edition of Rich States, Poor States released today ranks Kansas at #15 for Economic Outlook and #32 for Economic Performance.  Economic Outlook is a forward-looking forecast based on each state’s standing in 15 important state policy variables, whereas Economic Performance is a ten-year backward-looking measure of performance.  The variables and rankings for each are shown at the bottom of this report.

The #15 rank in Economic Outlook is Kansas’ second-best in the seven-year history of Rich States, Poor States.  Kansas was ranked #11 last year.  Less-competitive positions on the top marginal corporate tax rate, personal income tax progressivity, sales tax burden and recently legislated tax changes led to the decline.  In each case, Kansas has the same or better data than last year but improvements by other states caused the decline in rankings.

The #32 rank in Economic Performance is Kansas’ best.  As shown in the ten-year history below, sub-standard performance in 2003 through 2005 creates a very negative drag on historic performance in state GDP, domestic migration and non-farm payroll employment.


 

The ALEC-Laffer Economic Competitive Index is published by the American Legislative Exchange Council.  Dr. Art Laffer, Heritage Chief Economist Stephen Moore and ALEC’s Jonathan Williams are the authors. 

P.S. Jonathan Williams is also an Adjunct Fiscal Policy Fellow at Kansas Policy Institute and Steve Moore has spoken at several KPI events.  We’re proud of our association with both gentlemen. 


 

Posted by Dave Trabert on Tuesday, April 08, 2014

Two Kansas school superintendents today asked the State Board of Education to approve their applications to become Innovative School Districts.  According to a report in the Topeka Capital-JournalMcPherson superintendent Randy Watson and Concordia superintendent Bev Mortimer want to take advantage of legislation passed last year to improve educational offerings.  

"We want to focus on students, and we want to focus on collaboration,” Watson said, adding that concern about the new law is understandable, but ultimately it holds the potential to improve schools. 

The story says board members Ken Willard and Steve Roberts voiced strong support. Willard said the state board hadn’t moved fast enough to fix cumbersome regulations, such as certain teacher licensure rules, and the innovative districts program would finally give schools more flexibility.

"These issues of more freedom to innovate have been before us for the 12 years I've been here," he said. 

But CJ reports that five board members expressed skepticism.  One board member, Sally Cauble, perhaps unintentionally got to the root of the issue.  "“I feel a little slapped in the face,” she said. “I'm not going to give up what I was voted in to do.”

And there you have it.  As I've said here many times, one of the primary problems with public education is that it's all about money and politics.  Institutional demands take priority over student needs.

Read the story.  Of all the objections posed by state board of education members, not one was about students.  Just turf.

Posted by Dave Trabert on Thursday, April 03, 2014

Senator Steve Abrams introduced an elegant resolution for the equity issues related to the Gannon school finance case this week.  The State could fully fund equity without making any changes to the school finance formula and also not have to spend any ‘new’ money.  Now that’s eating your cake and having it, too!

The plan is to use a portion of school districts’ unencumbered cash balances – representing state and local taxes that districts received in prior years but didn’t spend – as additional ‘local effort’ that is deducted from next year’s state aid.  This concept is already applied to any remaining balance in districts’ general fund; and it also applied to a few other funds until 2005.  Senator Abrams’ plan, however, would only count the amount by which each of twelve specific funds increased between July 1, 2005 and July 1, 2013.

Three years ago, the Kansas Department of Education determined that balances in the funds under consideration can be transferred to districts’ general fund as described in SB 111.  These ‘SB 111’ funds are At Risk pre-school, At Risk K-12, Bilingual, Virtual, Driver Training, Professional Training, Parents-As-Teachers, Summer School, Special Education, Vocational Education, Textbooks & Materials and Contingency.  Only one-third of the Special Education balance can be transferred.

Senator Abrams excluded districts from his analysis that were newly created through consolidation since 2005, as those districts had no beginning balance and would therefore lose all of their money otherwise.  As shown in the adjacent table, this concept would make at least $141.8 million available and as much as $258.5 million, depending upon whether Contingency increases are included and whether the base year is 2005 or 2006.  Schedules showing the impact by district for each year are here and here.  Total carryover operating cash remaining will still be substantial under any scenario.

If a school district doesn’t spend all of the aid received in one year, it makes perfect sense to reduce the following year’s aid by the amount not spent, especially if Contingency funds are excluded from consideration.  School districts are not bashful about saying they want more money, and there is no record of a district saying they didn’t have enough carryover cash in 2005…or 2006…or 2007…or 2008.  In fact, unencumbered cash balances weren’t even an issue until we discovered the existence of large carryover balances in 2009.  At that point, cash balances in districts’ operating funds had grown from $458 million in 2005 to $699 million; the total continued to grow and reached $888 million as of July 1, 2013.

Senator Abrams’ plan is exactly the type of thinking needed in Topeka, but his amendment lost on a 6-5 vote in Ways & Means. It could still be offered as a floor amendment in the House or the Senate and it will be interesting to see if this bold, taxpayer-focused idea sees new life.

Posted by James Franko on Wednesday, April 02, 2014
Yesterday will likely be remembered as a sad day for parents and kids seeking more educational choice in Kansas. Two proposals in the House Appropriations Committee died a quiet death; the committee was considering their funding “fix” to the recently decided Gannon lawsuit and the choice pieces were offered as amendments to the larger package.

However, while proponents of choice were gnashing their teeth in the House, the Senate Ways and Means Committee (working on their response to Gannon) added a property tax credit for private and homeschoolers. The concept of a tax credit for private school education has been implemented around the country but the idea of extending a credit to property taxes is new. As it stands right now, the Senate provision is a good step but it may be fleeting (fleeting defined here about halfway down the page).

But, why choice? Why not spend more money on public schools?

Well, too many kids are being left behind in the current system (starting at slide 25). Low-income and minority students consistently, and tragically, lag behind their higher income and white counterparts on state, national, college prep., and just about any other test you can name. This stubborn fact remains the case despite billions more being dumped into educational programs aimed at these very same populations. More here, here, and here.

By whatever form, school choice would provide an escape valve for students who can’t find the right fit in their zip-code-directed school. It places the focus on each student’s individual need rather than creating a system that forces each child in a specified slot…a slot determined by where that child happens to live.

The Senate property tax credit gives property owners (e.g. homeowners) a $1,000 credit on their property taxes if they document to the county that their child(ren) attend a private school or are homeschooled. It is capped at $2,500 per family (2.5 kids worth of credits) and only applies if ALL children in the home don’t attend a public school. This is a step in the right direction of providing relief to families whose kids need a different educational opportunity.

Back to the House, a public charter school program that was based on best practices from around the country failed to win enough support to be considered by the full chamber. A corporate tax credit scholarship program faced a similarly gruesome end shortly thereafter. Both of these programs would have been targeted to students in the lowest performing schools in the state (Title 1 Focus and/or Priority), as defined by KSDE, and low income kids. By way of reminder, just the sorts of kids who are being left behind their counterparts as mentioned above.

In the event anyone needed it, the past month has been a stark reminder that Kansas runs our school system as just that – a system. A system that demands for the individualized needs of each child to be subordinated to the needs of adults and their institutions.


Posted by Patrick Parkes on Tuesday, April 01, 2014
KPI has just released a “2014 County Property Tax Survey.” This survey has been e-mailed to county officials throughout Kansas. These individuals represent a broad cross-section of multiple officials in each Kansas county (i.e. treasurers, commissioners, clerks, and managers) to ensure widespread availability and awareness surrounding the survey. The survey’s purpose is to determine how individual counties altered property taxes in 2013.  There has been much speculation in the media and elsewhere regarding these changes and the underlying reasons for them but few verifiable facts.  According to data from the Kansas Department of Revenue, the average property tax increase for 2013 was 3.4 percent. Eighty five counties increased their property taxes in 2013 while only 20 counties instituted property tax decreases. Click here to view the survey and its contents in hard copy.
Posted by Dave Trabert on Friday, March 28, 2014

I’d like to clarify a few things I meant in a recent commentary about resolving the equity issues in the Supreme Court ruling on Gannon v. State of Kansas.   Here’s the part that has apparently caused some misunderstanding, which is my fault for not being more specific.

“The equity issues should be swiftly and cleanly resolved.  (We encourage legislators to avoid temptation to ‘tinker’ with the current formula to find the equity money, even though the Supreme Court says that that is one option available.)”

This statement was not intended to imply that Kansas Policy Institute supports spending ‘new’ money to resolve the equity issues.  Spending more money is one way of resolving equity, but the source of that money can be found in a variety of places in the state general fund- including within the education budget.  So even if the Legislature chooses to put ‘new’ money into equity, we encourage the Legislature to make other changes so that total spending does not increase by the same (or any) amount.

I should also have been more specific in encouraging legislators not to ‘tinker’ with the formula.  We do not believe that one aspect of funding should be arbitrarily reduced simply to make more money available to fund equity, but my use of ‘tinker’ was not intended to imply that no education funding adjustments should be considered.

For example, transportation weighting has been over-funded for several years due to a mathematical error discovered by Legislative Post Audit; correcting that error is an appropriate action to take.  It would also be quite appropriate to make education funding adjustments based on a determination that more funding is being provided in an area than is needed.  These are just two examples.  Such adjustments are entirely different from an arbitrary change for no purpose other than to reduce funding in one area simply to raise it in another (i.e., satisfy the equity piece).

The main point of the original commentary was that the equity issues should be quickly dispatched because there is an enormous amount of work that must be done on determining adequacy.  School administrators and their lawyers insist that school districts are underfunded even though funding continues to set new records,  districts have not spent all of the money they received in prior years and no funding decisions in the courts or the Legislature have ever been predicated upon efficient use of taxpayer money.  Unfortunately, I added some confusion in my haste to move forward and for that, I apologize. 

Posted by James Franko on Thursday, March 27, 2014
This post is a reprint of an e-mail sent to members of the legislature by Dr. Bart Goering of USD 230 - Spring Hill (Johnson and Miami counties). It is republished with the author's permission.

Representatives and Senators of Kansas,

I know you are extremely busy, however, the reduction in funding for virtual school students that is being discussed would have a catastrophic impact on many students across the state. KSVA/Insight is a virtual public charter school under the Spring Hill Board of Education that has offered a choice to thousands of students over the last seven years. The last four years we have partnered with K-12 to provide an excellent educational option to families across Kansas. Below are some real life situations where parents and students chose our school.

Numerous students are here because they faced ridicule in their local schools, for whatever reason, which was distracting from their education and damaging their spirits. At KSVA and Insight they are able to receive a great education in a comfortable environment.

A senior this year was hospitalized in the fall and had emergency surgery. We (teachers and administration) were able to work with the facility, the student, and her parents to allow her to continue schooling as her health allowed and she was able to complete graduation requirements at the end of the fall semester. Her parents sent this note: “We just wanted to send you and [student’s] teachers a huge thank you for all you have done for her over the last two years. We appreciate all the support, patience, and understanding and the ways you made it possible for [student] to graduate. Blessings!”

We have had students who play sports/are involved in outside activities at high levels. If not for an online option, these students would most likely not have been able to graduate from high school and continue in their sports/activities. They would have had to choose one, at least for the time being, but because they had options, they could do both and be successful.

We recently had a family join us at KSVA because they’d heard about us from another KSVA family. Their student was being bullied at the local school and they needed to get her in a safer environment. The LC reports her student loves schooling with KSVA and she cannot get her off the computer. J LC emailed, “We want to preregister [student]. She’s loving this we will be re-upping every year until she graduates!”

There was a family this year which began the year with two students at KSVA. They loved the program so much, they enrolled their older students at Insight later in the year because their local school was too big and not a comfortable environment for their students to school.

An Insight student decided to return to her local school in fall 2013. However, soon became overcome with anxiety and was missing many school days to the point she was facing truancy. LC transferred student to Insight in the fall semester and student has been attending classes and has not had to deal with anxiety in regards to schooling.

Reducing the virtual school funding could force programs to close. This would actually cost the state more money because Kansas spends an average of $5,500 per virtual student and $12,885 per brick and mortar student. Virtual schools save the State of Kansas over $50,000,000 annually (click here for details).

We are providing an actual school with curricular and co-curricular activities, advanced placement classes, counselors, advisers, and top flight Kansas certified teachers who have high expectations regarding student success. This is far different than providing one class to a student to supplement their education (click here for details).

Thanks for your consideration and all you do for our great state, Bart Goering

Posted by Dave Trabert on Wednesday, March 26, 2014

There are rumors going around the statehouse in Topeka that funding for online education may be reduced to pay part of the cost of fulfilling the equity provisions of the Gannon court ruling.  The hall talk we’ve heard is that online schools are funded at a little over $5,000 per-pupil but only cost about $2,000 per-pupil to operate, so it would seem that funding could be reduced without impacting service.   But whoever is telling legislators that online schools only cost $2,000 per-pupil to operate is either misinformed or being deliberately deceptive.

The $2,000 figure comes from multiplying the $350 cost of a single course times six.  (Some courses cost closer to $500.)  But that is only the cost of courses…there are other costs associated with operating an online (also called ‘virtual’) school.  Virtual schools must also hire teachers and purchase computers and other supplies; there are also some non-instruction costs of operating these schools.  The all-in cost of operating these schools is actually between $5,000 and $6,000 per-pupil.  By comparison, the Kansas Department of Education estimates average spending for traditional public schools this year at $12,885 per-pupil. 

Cutting funding for virtual schools could seriously jeopardize their existence (one must wonder if this is the real motive of those encouraging legislators to cut funding for virtual schools).  Online schools are the only school choice option available to Kansas parents and it would be a tragedy to take this option away from families.

And if online schools are forced to close, legislators could end up spending even more than would be saved by cutting funding for virtual education.  Many students who would be forced back into the traditional public school may qualify for many more school funding weightings; basically, these students may be worth more money to school districts in the traditional setting than in on online school.

The legislators I’ve spoken to have no interest in shutting down virtual schools.  They are only looking for ways to save money.  Fortunately, there are a great many options to do so without disrupting quality. 

Kansas parents need more school choice options.  We cannot allow their only current option to be shut down.

Posted by Dave Trabert on Tuesday, March 25, 2014

No, I’m not talking about any federal tax subsidies or mandates to buy high-cost wind energy that have forced higher taxes and electricity prices on every citizen.  This billion-dollar gift comes in the form of local property tax exemptions.  In some ways, this handout is even more insidious because the cost is borne by a relatively small number of Kansas homeowners and employers in the rural counties where wind farms exist.

Under current law, renewable energy producers enjoy a lifetime exemption from property taxes in Kansas.  I testified last week in support of SB 435 to limit their property tax exemption to ten years.  As shown on an attachment to my testimony, the Kansas Legislative Research Department says there is a $108.4 million annual difference between the small fees paid in lieu of taxes and the taxes that would be due if taxed at the regular rates within each county.  So technically, the legislation would only ‘limit’ the property tax gift to $1.1 billion over ten years on existing wind farms; more tax gifts would still be done on new wind farms and other renewable energy facilities. 

And while renewable energy producers were basically getting a free ride, property taxes on everyone else where going through the roof!  

Giving property tax exemptions to private companies, regardless of the rationale, only increases everyone else’s property tax.  Local government spending is not curtailed to absorb the exemption; cities and counties just raise taxes on everyone else.  We encouraged the Legislature to also require that local mill rates be reduced proportionately if these property tax gifts are limited to ten years so that the new revenue from renewable energy producers’ property tax is used to reduce the burden on everyone else.  (You should have seen the stink-eye this produced from the tax-and-spend crowd.)

Predictably, wind farm lobbyists lined up to protest that this legislation would increase their property taxes and send a bad message to the wind industry.  Even local governments are opposed to taking away the exemption – after all, they can get their money from everyone else and take credit for bringing jobs and investment to their communities.  They refuse to acknowledge that any economic benefit enjoyed by the green energy industry (and their own political benefit) comes out of the pockets of everyone else.

P.S. Remember this billion-dollar gift the next time you’re angered by cronyism in Washington, DC.  Bad players in Washington often learn their craft at the state level; fending off bad policy at the state level has many long term benefits.

Posted by James Franko on Wednesday, March 19, 2014
This post originally appeared on the Cato Institute's @Liberty blog and is authored by Andrew Coulson, the director of Cato's Center for Educational Freedom.

Last summer, I stumbled across a clever 1993 paper by education statisticians Mark Dynarski and Philip Gleason that proved it was possible to adjust average state SAT scores for variations in the test participation rate and demographic factors, making them comparable to one another. Barely able to contain my excitement (hey, don’t judge), I set about extending their method so that it could discern trends in state SAT scores over time, and improving the validity of its estimates by using more data, fewer assumptions, and more exhaustive methods...

Long-term trends in academic performance and spending are valuable tools for evaluating past education policies and informing current ones. But such data have been scarce at the state level, where the most important education policy decisions are made. State spending data exist reaching back to the 1960s, but the figures have been scattered across many different publications. State-level academic performance data are either nonexistent prior to 1990 or, as in the case of the SAT, are unrepresentative of statewide student populations. Using a time-series regression approach described in a separate publication, this paper adjusts state SAT score averages for factors such as participation rate and student demographics, which are known to affect outcomes, then validates the results against recent state-level National Assessment of Educational Progress (NAEP) test scores. This produces continuous, state-representative estimated SAT score trends reaching back to 1972. The present paper charts these trends against both inflation-adjusted per pupil spending and the raw, unadjusted SAT results, providing an unprecedented perspective on American education inputs and outcomes over the past 40 years.

Read the full analysis here and check out the Kansas-specific charts below.



Posted by Steve Anderson on Friday, March 14, 2014
A recent blog post from Duane Goosen at the Kansas Health Institute focused on the budgetary impact of the recent Gannon decision. Certainly an interesting read, but it paints a picture that doesn’t square with the true impact of the decision or the general state of our budget.

The Court’s specific rejection of the lower court’s order directly appropriating more money for public education has been widely seen as the most-important piece of the ruling; they also rejected the circuit court’s injunction against the the legislature from changing the relevant statute.  This fact has been widely acknowledged from across the political/ideological spectrum but was not mentioned in KHI’s blog post.

Almost as significant in the Court’s ruling was an important reversal in how the lower court was to look at funding.  ALL funding sources will now be included, including, according to the Court, grant funds, federal funds, KPERS state contributions, Capital Improvement Aid and local funding.  The Court also recognized precedent that it is an outcome-based model, not a total funding model that met the adequacy standards under K.S.A. 2013 Supp. 72-1127.

By recognizing that ALL FUNDING should now be taken into consideration the Court recognized that public financing of K-12 is more than simply a function of the State General Fund. In remanding both a review of the $129 million at play in the equity piece of the lawsuit and the larger issue of adequacy, it is clear that “adequacy” claims of $417 million cannot possibly accurate. In fact, the Court’s new test of “Rose Standards” has never been applied in Kansas so any cost estimate is dubious, at best. This will be an issue for the legislature and the lower court to review in the coming months.

Mr. Goosen is correct that “the court gave a straightforward ‘no’” on the equalization questions.  It is also noteworthy that both of these equity items were created or exasperated during his tenure as the State Budget Director.

From the FY2004 budget book, “Kansas continues to experience remarkable growth in the state’s share of local option budgets adopted by school districts.”    The Capital Improvement Aid is a fairly recent creation which allowed certain school districts to fund part of their new buildings with statewide tax dollars.   Even as this fund has grown from $46.9 million in 2003 to $130 million in 2014 those funds were not counted by most of the ‘just spend more’ crowd as part of state aid.  

Mr. Goosen warns that adopting the Governor’s budget recommendations and adding $129 million to equalize school funding would leave the state an ending balance of just $118 million – far less than is statutorily required.  Ending balances are an important piece of the state budget but it should be noted that ending balances were lower the 7.5 percent statutorily-required level many times during Mr. Goosen’s tenure and even included the first publically available NEGATIVE ending balance in state history.

More important, Mr. Goosen neglects to include in his calculation that state revenues are running $128.3 million ahead of estimate this year.  He also assumes that the Legislature will approve all of the Governor’s spending enhancements; the Corrections budget will likely be included in the final budget package but no assumptions should be made about the rest given the need to add $129 million for school equity.

 

The potential ending balance is actually more than double the amount stated by Mr. Goosen. 

In short, it is doubtful that the current leadership in Topeka will put the state at risk by raiding the ending balance requirement instead of redirecting money already within the state budget.

If anything, the Gannon ruling may end up with property tax relief for many local patrons around the state.  As the inequity issues are addressed there may be many citizens who see a slight property tax reduction since districts that qualify for equalization will get more money if they have an LOB election below 30%, but districts at 30% or 31% will get no more money.  In the case of those at 30%+ who qualify, equalizing LOB will simply result in lower local property taxes in those districts.  Funding to those districts will not change; they will get more in state aid and less in local aid.

When you look at this ruling and the options available it appears that citizens, students and the state Constitution were all winners. 
Posted by Dave Trabert on Tuesday, March 11, 2014

A recent piece in the Lawrence Journal-World perfectly underscores the need for a cultural shift in (at least) media's approach to K-12 education.  “Court ruling may be political success, but educational failure” makes the case that the Kansas Supreme Court ‘failed’ education by “…backing away from the “actual cost” model of determining adequate funding…. [and] lowered the bar for what can be deemed a constitutional level of funding in Kansas.”

By the way, the school lawyers’ definition of ‘actual cost’ has nothing to do with efficient use of taxpayer money; it’s basically whatever schools say they want to spend.

It's not surprising that the author thinks money is how one should measure education standards; that is representative of the notion that has dominated education policy in Kansas wherein institutional wants take priority over student needs.

The Supreme Court said that outcomes matter more than money.  Funding is certainly important but adequacy should be measured by opportunity to learn instead of dollars.  It's quite noteworthy that the author equates giving higher priority to learning with a lowering of standards.

In adopting the Rose standards as the constitutional minimum required to meet adequacy, the Court noted that those standards are already very nearly in statute.  They simply said the state already has student-focused standards and outcomes matter more than inputs.

It's high time that this notion of more money being the litmus test for support of education and other services be set aside.  "Show how much you support X by spending more on it" is no way to run a government - or meet citizens' needs.

Posted by Dave Trabert on Monday, March 10, 2014
The Kansas Supreme Court ruling on school finance has some very good news for citizens and also raises some interesting questions that legislators and citizens will have to address.

First, the good news. The Court upheld what we have constantly maintained – education is about outcomes rather than money. They specifically said “…total spending is not the touchstone for determining adequacy.1

Instead, the Court says adequacy “…is met when the public education financing system provided by the legislature for grades K-12—through structure and implementation—is reasonably calculated to have all Kansas public education students meet or exceed the standards set out in Rose and presently codified in K.S.A. 2013 Supp. 72-1127. This test necessarily rejects a legislature's failure to consider actual costs as the litmus test for adjudging compliance with the mandates of Article 6. For example, even if a legislature had not considered actual costs, a constitutionally adequate education nevertheless could have been provided —albeit perhaps accidentally or for worthy non-cost-based reasons. And actual costs from studies are more akin to estimates than the certainties the panel suggested. Nevertheless, actual costs remain a valid factor to be considered during application of our test for determining constitutional adequacy under Article 6.2

This statement alone represents a sea-change in how education funding will be viewed going forward.

Those claiming that schools have not been adequately funded base their assertion on Base State Aid Per Pupil, which is only about 30 percent of total funding. The Court put that claim to rest by declaring “…funds from all available resources, including grants and federal assistance, should be considered.3

The Court also said, “…state monies invested in the Kansas Public Employees Retirement System (KPERS) may also be a valid consideration because a stable retirement system is a factor in attracting and retaining quality educators—a key to providing an adequate education. The panel may consider the restrictions on the use of these federal, pension, and other funds and determine that even with the influx of these additional monies the school districts are unable to use them in the manner necessary to provide adequacy under Article 6. But regardless of the source or amount of funding, total spending is not the touchstone for adequacy.4

Now that total spending from all sources is to be considered, it would logically follow that consideration of money provided to schools for education purposes but instead used to increase cash reserves should also be considered. Total spending as reported by the Kansas Department of Education does not include $430 million in state and local taxes that was used to increase current operating cash reserves between 2005 and 2013.

Efficient and effective use of taxpayer money also should get more attention in this new outcome-based approach to adequacy. Districts should not be allowed to claim they are underfunded if they are spending money inefficiently; in fact, the Legislature should convene a thorough review of school spending to get schools operating efficiently and identify money being spent that is not effective in moving students toward academic goals.

Legislators will have to resolve the equity issues on Supplemental General State Aid and Capital Outlay identified by the Court, but it should be noted that the SGSA issue is a classic case of ‘no good deed going unpunished.’ Beginning in 2010, the Legislature allowed districts to calculate their Local Option Budgets as though Base State Aid is $4,433 instead of the actual, lower numbers. The state didn’t equalize the higher spending authority but has actually increased the amount of aid provided for equalization; districts therefore didn’t lose any money, they only ‘lost’ an opportunity to get even more money.

The Supreme Court ruling also raises some interesting questions on how adequacy will be determined. Does “reasonably calculated to have all Kansas public education students meet or exceed the standards” mean that every student must meet or exceed standards or that adequate funding is provided so that every student reasonably has the opportunity to meet or exceed standards? The Kansas education community acknowledges that No Child Left Behind created an ‘impossible’ task of having every student be proficient, so we hope the Court intends the measurement to be on opportunity.

Other interesting questions include:
-   How will state assessment scores be used to measure adequacy? KSDE continues to say that scores will significantly decline with the transition to Common Core.

-   If state assessment scores must be used, is it therefore impossible to fairly measure progress until a new ‘normal’ is established with new testing? Or is it in the state’s (and students’) best interest to stop the transition to Common Core and return to pre CC-standards and testing?

-   The Supreme Court ruling clearly says that the Legislature may not reduce adequacy standards, declaring “…only the people of Kansas—at the statewide ballot box after a two-thirds majority vote by both the House and Senate—have the authority to lower the standards in their constitution.5 Does it therefore follow that the State Board of Education or the Legislature may not arbitrarily increase standards? And if so, is adoption of Common Core standards therefore unconstitutional?

Sharp legal minds will have to provide the answers to these and other questions. Speaking of which, we’re pleased to be able to share a brief analysis of Gannon v. State of Kansas by our friend Mike O’Neal. In addition to being an attorney and CEO of The Kansas Chamber, Mike was former Speaker of the Kansas House of Representatives and has great institutional knowledge of school finance. You can read his comments here.

It’s impossible to know if our tireless work to demonstrate that simply spending more money does not translate into higher achievement, that outcomes matter more than money or that all funding (including KPERS and local dollars) should count had any influence on the Court; regardless, the hard work ahead will be well worth the effort now that the Supreme Court says student needs take priority over institutional demands for more money.

_________________
1 Gannon v. State of Kansas, page 77 at http://www.kscourts.org/Cases-and-Opinions/opinions/SupCt/2014/20140307/109335.pdf

2 Ibid, page 76

3 Ibid, page 77

4 Ibid

5 Ibid, page 72


Posted by David Dorsey on Monday, March 10, 2014
Once again, the Kansas Supreme Court has made a ruling on public school financing. In the much anticipated Gannon case, last Friday the court ruled that certain aspects of public school funding in Kansas are unconstitutional. Many are asking a simple question in response to the decisions - Does this mean the legislature (through Kansas taxpayers) will be forced to pony-up more money for schools across the state?

Only time will tell what Gov. Brownback and the legislature choose to do in this regard.

From the perspective of this teacher, this is the second time in a decade the court has ruled that the legislature is incorrectly funding public education. The decision in Montoy in 2005 infused hundreds of millions of additional dollars into schools across the state. I was a teacher in Topeka 501 when the increase was made.

Of course, all this new money went directly to improving student achievement by putting more teachers in buildings and providing them with more resources and programs, right?

Not where I teach.

Actually, it resulted in many of my colleagues and me getting a nice big raise. And to that I say “thank you.” Did more money make me try to do better by my students? No. Did more money somehow make me more dedicated to my profession? Huh-uh. In short, did more money make me a better teacher? Of course not. These raises were not based on merit, by any definition. They were handed out evenly through a compensation system that does a disservice to the profession. "Merit pay" is certainly controversial amongst many teachers but is simply a way, properly structured, to reward those best able to help students. Dumping more money on everyone as was done post-Montoy, while certainly appreciated individually, does nothing to change the basic structure of how teachers are compensated.

Coincidentally, the state assessment scores in our building and across the state also increased. Some have credited this to the Montoy money. But this must be taken with a note of caution because, as any decent research analyst can tell you, there is a difference between correlation and causation.

At my school, Lowman Hill, and probably in most other Kansas schools, I am certain that test scores increased not because of Montoy money, but because of increased attention paid to student achievement. We were more focused on outcomes over process, and we used our resources more wisely to increase student performance.

At this point, no one can definitively say what the financial bottom line of the Gannon decision is going to be. Trying to understand the court’s ruling, what the legislature’s response might be, and what the lower court will do with what the Supreme Court remanded to them, which will then be layered over the complexities of the school funding formula is more mind boggling than a David Cronenberg movie (The Fly for those who rely on 80s cinema references or A History of Violence or Eastern Promises for those with shorter memories).

But, what I do understand is that the court recognized that simply the amount of money does not define what makes an adequate education. Specifically the opinion read, “total spending is not the touchstone for adequacy.” This should be taken as an opportunity - an opportunity to give the approach to education a parallax view. Education of all Kansas students could start to be looked at from the perspective of outcomes (i.e. student achievement) instead of inputs (i.e. money). Let’s hope so.

I’ll end with this thought: no amount of money will improve education without accompanying systemic changes. And those changes will come when the perspective changes.
Posted by Steve Anderson on Friday, February 28, 2014
This is the first in a series of posts about the Kansas Dept. of Transportation

Most people would probably be surprised to find that the Kansas Department of Transportation (KDOT) has its own bonding authority.  This authority is separate and independent from the Kansas Development Finance Authority (KDFA) which does the bonding for all other state entities.  

The KDFA was created after a legislative study revealed the need for a more comprehensive approach that was to be housed under one agency.1   KDOT was excluded from this consolidation of issuers of bonds for reasons that were not fully delineated by the study.   However, when one looks at the past behavior of administrations, legislatures and KDOT, a pattern starts to emerge that may explain that exclusion.

My interest in KDOT’s bonding began during my service as Budget Director when I discovered that KDOT, under Secretary Deb Miller, issued bonds in FY-20112 for highway projects that only required interest payment until 2032, at which point principal payments would begin.  I contacted friends in the contracting industry who informed me that concrete highways would have a life span of approximately 15 years and asphalt would be 7 to 8 years.   The useful life of those highways built with borrowed money would be over before the first penny of principal was paid! 

These bonds were issued without my knowledge despite the fact I served the same Governor as did Ms. Miller.   Ms. Miller was unresponsive to the Division of Budget for requests to explain the rationale for issuing interest-only bonds but KDOT did inform me that these bonds were authorized under the prior administration and KDOT could issue bonds as they saw fit within that authorization.  

The process of allowing KDOT to issue their own bonds at their discretion within a ‘transportation plan’ authorized by the Legislature and Governor has a long and interesting history. 

In FY-1989 KDOT was authorized to issue bonds to begin a ten year transportation plan financed by an increase in motor fuel taxes, sales tax and registration fees.   This was repeated in FY-1999 with another ten year transportation plan which did not remove the prior tax increases from KDOT’s budget but instead merely added an increase in fuel taxes and sales tax on top of those already existing increases.   Next up was the T-Works project authorized in FY-2010 which included another tax increase dedicated to KDOT of .4 percent of the sales tax that was scheduled to go into effect July 1, 2013.   And once again, this new tax increase comes in addition to the other tax increases over the prior decades which remained in place. 

There is another issue with KDOT bonding authority that is troubling.  Since KDOT is permitted to bond without having the full taxing power of the state behind those bond issues, they must hold a significant amount of funds as ‘honest’ money for bond holders.  This requirement would not exist if those bonds had been issued through KDFA.  KDOT often brags about their bond rating being slightly superior to the state’s but when you look at the hidden cost to the taxpayer that brag is not only false bravado but this behavior actually puts the state at risk in bad economic times.   The following chart shows the KDOT ending balance and the minimum required ending balance that KDOT’s self-bonding creates.3

$ in Thousands
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
 Ending Balance
 $599,584 $596,943 $363,889
$723,677
$400,313 $564,212 $452,199 $356,615
 Minimum Ending Balance Requirement
 $158,837 $222,031 $214,837 $509,746 $350,270 $352,270 $182,459 $266,346

Now compare the KDOT ending balances with the Kansas State General Fund balances, which represent the state funding source for almost every other program the state operates from schools to social programs to public safety?4

$ in Thousands
 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
 SGF Ending Balance
 $526,600 $49,700,000 $(27,100) $188,300 $502,900
$709,300 $530,500 $247,600


When the state was in a negative ending balance situation in FY-2010 and Governor Sam Brownback was struggling to restore fiscal stability to the state upon taking office in FY-2011, KDOT had over $363 M and $723 M respectively that was flying under the radar.   It is time to remove this self-bonding authority and move all bonding to the KDFA.  That simple move alone will help the state of Kansas weather economic downturns to the economy and provide a more complete picture of the state’s finances to citizens and legislators.  
_______________
1  http://www.kdfa.org/History
http://budget.ks.gov/publications/FY2015/FY2015_GBR_Vol1--UPDATED--01-28-2014.pdf page 151
3 http://budget.ks.gov/publications/FY2015/FY2015_GBR_Vol1--UPDATED--01-28-2014.pdf
4 http://budget.ks.gov/publications/FY2015/FY2015_GBR_Vol1--UPDATED--01-28-2014.pdf page 22

Posted by David Dorsey on Monday, February 24, 2014
Greetings!

My name is David Dorsey and I am excited to be the newest member of the Kansas Policy Institute team.

It has been my pleasure and privilege to be a public school teacher in Kansas for the past 17 years. My tenure has included eight years in a rural district (Garnett) and the most recent nine years in Topeka USD-501, all seventeen at the elementary level. I have had so many wonderful experiences with students, parents, extended families and, of course, other teachers and staff over this time.

But all is not right, that is why I have become part of KPI’s effort to improve public education in this state. There are significant achievement gaps that exist among demographic groups - gaps that have not and are not being addressed. And, certainly, gaps that leave many of our graduates ill-prepared for life after school.
The public education funding explosion that has occurred since the 1970s has been effective in equalizing dollars spent across school districts. However, this money has had virtually no impact on reducing the achievement gap between the socio-economic “haves” and “have-nots.” Furthermore, test scores have remained flat. Our goal is to improve the education outcomes for all Kansans, with a particular emphasis on closing that achievement gap.

I am writing this to ask fellow teachers (and anyone else) to share ideas, practices and approaches that will help make this happen. Because one thing quality teachers understand is that it’s not about the money. Ask an administrator what it takes to improve education and the answer is almost always this: more money. Ask a quality teacher the same question (which I frequently do) and almost never is that the response. But, I’m amazed at how often the answer involves spending money more wisely.

Over these past 17 years I have known many excellent teachers with great ideas in how to improve student achievement. I have even been lucky enough to help see a few move beyond simply a topic of conversation. I’ve also seen subtle and not-so-subtle changes in the administration of public education. School districts, particularly large ones, have become highly centralized with administrative edicts that govern virtually every minute of every school day. Teachers have become handcuffed and creativity is thwarted - something we'll explore in this space down the road.

My point is this: in order to truly make a difference in improving educational outcomes, ideas are going to have to come from those who deal with students on a day-to-day, hour-to-hour, minute-to-minute basis.

Teachers.

Also, I’ve taught long enough to know teachers can be somewhat reticent when it comes to challenging the status quo. I respect that. That’s why we are creating a forum for which teachers can share their thoughts, ideas, and even frustrations without fear of consequence.

With that in mind, I am soliciting your ideas, suggestions, and comments to help improve teaching and provide each, individual child with the right opportunity. I will be using this forum as a sort of clearinghouse to share your input. And I will do so respecting your right of privacy. No names, school, or school district will be mentioned. Send e-mails to David.Dorsey@KansasPolicy.Org.

I want to be very clear that Kansas Policy Institute fully respects individuals’ right to privacy and anonymous free speech; this is the same constitutionally-protection freedom offered to our supporters and extended now to those with ideas on helping each child reach their full potential.

Can’t wait to hear from you!
Posted by Dave Trabert on Monday, February 17, 2014

Readers of this blog are well aware that Kansas has a two-tiered education system.  About half of students are doing well but the other half – those considered low income based on eligibility for free or reduced lunch – are several years’ worth of learning behind.  Honest reviews of national rankings show that Kansas’ scores are about average.

But citizens are told that student achievement is very high in Kansas – and that false sense of high achievement is a tremendous barrier to getting students the help they need.

So it was particularly disturbing to see this postcard from the Kansas Board of Education painting a distorted view of ACT scores.  Basically, they say that if one only considers certain states, Kansas has the second highest score in the nation.

Now here are the facts from ACT.  Kansas’ White students’ composite score of 22.6 is the 21st highest score among states.  Hispanic students’ composite score of 19.3 is the 24th highest score among states.  Black students’ composite score of 17.5 is the 19th highest score among states.

The gap between White students and those of color has gotten wider over the last ten years.  To put that in perspective, ACT reports that 35 percent of Kansas’ White students scored well enough to be considered college-ready in English, Reading, Math and Science – but only 14 percent of Hispanic students and only 7 percent of African American students are college-ready.

I went to the February Board of Education meeting and expressed concern over the contents of their mailer in the public comment forum.  Their reaction: “meh”

By the way, Kansas has 34,778 teachers according to the Kansas Department of Education...not 101,578 as claimed on the Board of Education postcard.

Pretending to have high achievement is another sad example of institutional interests taking priority over student needs.  It doesn’t matter how the ‘state’ or a ‘district’ is doing; what matters is how every student is doing.  And a lot of them aren't doing very well.

Boy, do we need a cultural shift in Kansas. 

Posted by Dave Trabert on Wednesday, February 05, 2014

I had the good fortune earlier this week to attend a presentation by Dr. Eric Hanushek, the Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University.  His impressive credentials are available here but for the sake of brevity, I’ll just say he’s “the guy” on economic analysis of educational issues, the impact of teacher quality on student outcomes, high stakes accountability and equity and efficiency in school finance. 

Dr. Hanushek testified before a joint meeting of the Kansas House and Senate Education Committees on a number of education policy issues.  Highlights of his testimony follow; his entire testimony can be found here.

“If you want to promote achievement, there is no substitute for focusing on achievement.  Most specifically, virtually all attempts to encourage or promote achievement that try to do it by promoting other things are not particularly effective.  For example, trying to ensure that there is a good teacher in the classroom is not accomplished by adding more education school courses to the requirements for teacher certification.  Nor do we insure high achievement by mandating class size reduction.”

There was broad agreement among legislators in the room (including those who are educators) with Dr. Hanushek’s belief that “…getting effective teachers in all classrooms is the key…” to raising achievement.   Yet Kansas has several policies aimed at improving teacher quality that are not particularly effective…and at least one that is counter-productive.  Dr. Hanushek said that a U.S. Department of Education study shows that professional development training for teachers does not translate into higher student achievement.  He also explained that having teachers with advanced degrees or national board certification doesn’t systematically translate into better achievement results.  As a whole, teachers are dramatically different in their impact on student achievement, and these differences are much larger than differences that come from training or advanced  certification. 

Dr. Hanushek also said Kansas’ LIFO (last-in-first-out) tenure policies “…actively work against aiding student achievement.”  Employment decisions should be based on teacher effectiveness rather than how long one has been employed.  In other words, focus on what is best for students rather than the adults in the system.

“Just focusing on achievement is, however, not sufficient.  A second point is that we need to get the incentives right.  We have to point everybody toward the outcome that we want.”

For example, instead of paying more for teachers with advanced degrees, the incentive should be based on improving student outcomes.  Highly effective teachers should make six figures.  Effective teachers should receive bonuses to a lesser degree.  Ineffective teachers should not be in classrooms.

Incentives also apply to funding decisions, especially in ensuring that incentives do not encourage over-identification of students who qualify for extra funding.

“There are many similar kinds of problems that can develop.  If schools are rewarded with extra funds for all special education students who are identified, it might not be surprising to find that some schools tend to increase the numbers of students who are identified – particularly if the cost of providing programs for them is relatively less than the funding level.   These examples are brought up intentionally because they identify conflicting sentiments in policy making.  Of course we want to do something about failing schools.  Of course we want to do something about special education students who bring various handicaps to school with them.  At the same time, we do not want to encourage inappropriate behavior.  We do not want to encourage over-identification of special education students.”

 Kansas’ At Risk funding may be an example of this phenomenon.  There were 134,592 At Risk students in 2005 when the additional At Risk weighting was 0.10 (i.e., At Risk students carried a 10% funding premium).  But by 2007 when the funding premium was 28.7%, the number of At Risk students had jumped by 22% to 164,812.  At Risk qualification is determined by eligibility for free and reduced lunches.  There was not an economic downturn in 2006 and 2007; in fact it was quite the opposite.  But districts certainly had an incentive to get more kids signed up.  FYI, the At Risk premium for 2013 was 45.6% and there were 192,568 students identified. 

Poverty is a good measure to use for consideration of additional funding but applications for free and reduced lunch should be verified against income records at the Department of Revenue.  Of course, when we put extra funds into aiding poor children, we should monitor and evaluate whether schools institute programs that successfully pull up poor kids and close achievement gaps.  Just putting funds into the schools does not insure that schools use it well to bring up student achievement.

Dr. Hanushek’s book Schoolhouses, Courthouses and Statehouses – Solving the Funding-Achievement in America's Schools includes ideas for pulling these concepts together.

“That existing puzzle is a simple one:  As we have provided increasingly larger funding for our schools, we have not seen improved achievement.  I assert that that the answer is directly related to the fact that we do not link school finance issues with education policy and with student achievement.  We often separate these.

School finance discussions often become contentious, because they have direct implications for teachers and other school personnel and for the funding going to each school district in the state.  That having been said, it is clearly in my mind a mistake simply to view school finance through the lens of redistribution.  Indeed, while it sounds odd, it is also a mistake to view school finance policy as an exercise in finance.

School finance should be viewed as an important element of educational policy.  At various times in the deliberations of every state – including Kansas – many have taken the position that school finance policy is separate from education policy.  In other words, we use school finance policy to address how much money schools have with which to operate, and we use a separate educational policy to help guide how the money is used. 

I think that such a perspective is likely to lead to very bad policies – policies that do not achieve the results that are possible.  To begin with, we now have ample research that indicates that there should be no expectation that just adding resources to schools will lead to improved student performance.”

To be clear, Kansas indeed has a student achievement problem.  Public discussions of achievement often remind me of The Emperor’s Clothes, but Dr. Hanushek was very direct.

“At the end of this testimony, I have attached a set of figures about how well the U.S. and the separate states are doing in advanced math performance when compared to the world.  It is not pretty, especially given that this is where our scientists and engineers of the future are likely to be drawn.  The proportion of high achieving Kansas students falls behind that in Spain and Latvia and just slightly ahead of Italy.  This is hardly the group that we should aspire to compete with.  Particularly telling is the second figure that compares children of college educated parents with all children in other countries.  Kansas is slightly below the U.S. average, but behind 24 countries.  This performance of the most privileged Kansas students puts them on par with the average student from Slovenia or Luxemburg.”

In sum, it’s a matter of priorities.  Will Kansas adopt policies based on what is best for students or will education and funding policy continue to be based on the wants of institutions and the adults in the system?

Posted by Steve Anderson on Thursday, January 30, 2014
The problem with the uninsured is not going to be solved by expanding Medicaid. Even amongst Medicaid’s staunchest proponents you’ll be hard pressed to find any who will claim it to be the equivalent of high quality private health insurance coverage. The number of federal senators and representatives that choose to exclude their staffers from Obamacare shows that many Washington politicians understand the quality of government insurance plans Medicaid and Obamacare represent. The simple fact is, that health insurance is not to be confused with health care.

Medicaid’s proponents can only claim anecdotal claims of improving health outcomes of recipients. Even in pre-ObamaCare Medicaid, beneficiaries largely do not access available preventable care services. In fact, a Harvard University study shows that emergency room visits actually increased by 40 percent for Medicaid recipients in Oregon after their expansion. Citizens would do well to remember, a “decrease in ER visits” was a key selling point of ObamaCare generally and Medicaid expansion specifically. ER visits are the most expensive form of care. When these increased visits are paid for by Medicaid, the taxpayers are picking up BOTH the state and federal portion of the high cost of emergency room visits. This flies in the face of the Obama Administration’s claim that Medicaid expansion would actually save money by limiting this sort of behavior.

It doesn’t stop there and this is the part that hardly anyone has mentioned, and what the Obama Administration would rather you not know – a staggering number of those enrolling in ObamaCare will actually be sent to Medicaid and not be in the private market. And by “private market” we mean one established and controlled by government.

The following charts are the pre-Medicaid expansion projection of revenues versus expenditures from the Congressional Budget Office. They were completed before the decision by 25 states and the District of Columbia to expand eligibility.i

The three lines with the steepest slopes and therefore the fastest growing expenditures are Medicaid, Unemployment payments (called Income Security) and Other Programs. The U.S. House of Representatives has addressed the unemployment expense growth by bringing the program back to its original intent - to provide a safety net between jobs. Other Programs will be largely controlled if current trends hold and extension of the various “stimulus” programs are curtailed. However, the one that is going to accelerate with expansion and is larger than the other two combined in total state and federal expenditures is Medicaid. At least 3.9 million of Obamacare participants are expected to be enrolled in Medicaid and 19 million nationwide overall will be added to Medicaid in the next year. A 35 percent increase in Medicaid participants.ii Picture these two charts with 35 percent greater additional costs for the Medicaid entitlement and you have an idea how problematic this is for the federal budget and deficit. Is it any wonder that President Obama has started to back track from the claim that the federal government---which let’s not forget, is funded by you the taxpayer---will pay all the costs for 3 years and 90 percent thereafter. Instead, his administration and he himself talk about blended rates that will transfer a sizeable portion of the cost to state budgets.iii Despite his promises to the contrary.

The Impact on the Kansas State Budget

Even the leftist Center on Budget and Policy Priorities, which typically finds spending citizens’ tax dollars an event to celebrate, is cautioning that the “blended rate” shift by the President will “likely prompt states to cut payments to health care providers and to scale back the health services that Medicaid covers for low-income children, parents, people with disabilities, and/or senior citizens (including those in nursing homes). Reductions in provider payments would likely exacerbate the problem that Medicaid beneficiaries already face regarding access to physician care, particularly from specialists.”iv This analysis actually left out the administrative cost of expansion that is largely being absorbed by the states. If anything, this suggests that reality will be more dire than CBPP’s predictions.

KPI’s own cost study of Medicaid expansion, conducted by a sitting member of the Social Security Advisory Board and former chief economist at the Federal Reserve in Cleveland, shows that Kansas taxpayers can expect to pick a $600 million tab if Medicaid is expanded. Hardly the “free money” that the Kansas Hospital Association has tried to foist on your family. They’ve even hired a former George W. Bush cabinet secretary to aggressively lobby for this “free money.” They’ve also yet to explain what services they recommend the state cut to fund the expansion and if their members are willing to pick up the additional costs when “blended rates” almost certainly take effect.

As a taxpayer you are going to pay for this on both the federal and state level and you deserve answers when any special interest groups come asking for more of your money.

i http://directorblue.blogspot.com/2011/01/liberals-democrat-party-will-split-if.html
ii http://www.bloomberg.com/news/2014-01-02/obamacare-s-medicaid-expansion-may-create-oregon-like-er-strain.htm
iii http://www.cbpp.org/cms/index.cfm?fa=view&id=3521
iv Ibid

 

Posted by Dave Trabert on Wednesday, January 29, 2014

A Kansan’s letter to the editor in the Wall Street Journal is a good example of what is really wrong with Kansas’ schools – false and misleading information is used to prioritize institutional wants over student needs.

Game On For Kansas Schools’ Executive Director Judith Deedy’s claim that “…overall increases in school funding in our state have largely been for makeup payments for an underfunded employees retirement program and bond and interest payments for capital expenditures” is simply not true.  Spending on the retirement program has increased, but most of the increase is for the current portion of employee benefits rather than paying down unfunded liabilities.  Still, even if one subtracts pension, bond and interest payments, the legislature’s full provision for finance increased each of the last three years and total taxpayer support continues to set new records.

She says operating budgets are down, while ignoring that operating (total less capital and debt) spending continues to rise – and set a new record in 2013.  Budgets are just plans to spend more money.  Government and institutional interests prefer to talk about their plans to spend more money rather than actual spending.

Local school boards and administrators may be making decisions with which parents and teachers disagree on the hiring of teachers or money available for supplies, but here are the facts.  Districts used $430 million of taxpayer money to increase their operating cash reserves since 2005; that means they aren’t even spending all of the money they receive!   Districts may have chosen to lay off some teachers, but classroom teacher employment is still growing faster than enrollment.  Enrollment increased 3.8% since 2005, classroom teachers increased 4.5% but non-teacher employment increased 11.5%.  (FYI, hiring more employees causes pension costs to rise.) 

Ms. Deedy and other institutional interests also refuse to acknowledge that no school funding study has ever taken efficient use of taxpayer money into account.  She claims funding levels were established by a study funded by the Legislature while ignoring that those numbers are deliberately inflated.  As we explained in “Student Focused Funding Solutions for Public Education,” not a single funding decision in the courts or the legislature has been based on efficient use of taxpayer money.

Their explanation of student achievement is also misleading.  The truth is that Kansas has a two-tiered education system.  About half the students are doing pretty well but the other half – those considered economically disadvantaged – are not improving and are several years’ worth of learning behind.  Results from the 2013 National Assessment of Educational Progress (NAEP) show that only 22% of low income 4th graders (based on eligibility for free or reduced lunch) are Proficient in Reading, while 54% of those who are not low income are Proficient.

And despite a seven-fold increase in aid intended to close achievement gaps for low income students, their NAEP scores are flat while the achievement gap is getting wider.

 

 There are viable solutions for these problems but Kansas needs a major culture shift first.  Student needs, not institutional ‘wants,’ must be the focus of every decision. 

Posted by Dave Trabert on Monday, January 20, 2014

During a presentation last week for the Greater Kansas City Chamber of Commerce, I learned that one of their legislative goals is to “support increased opportunities for equalized local control of public education funding.”  I’m not sure how Johnson County residents came to believe that their schools are not equitably funded, but data from the Kansas Department of Education shows funding to be quite equitable.

Johnson County schools have 19.4 percent of student enrollment and 19.1 percent of state and local taxpayer support.  The tiny variance is due to the fact that extra support is provided for economically disadvantaged students, and Johnson County has a much lower percentage of students classified as such.

Parents in Johnson County believe their schools are not equitably funded based on the amount of State Aid but as every school district knows, every dollar of local property tax goes directly to districts even though it is raised on state legislative authority.  I’ve heard a lot of Johnson countians say that their property taxes are supporting schools in rural Kansas; I’m sure they believe that to be true but I can’t imagine why local school districts haven’t set them straight.

You see, state aid dollars are adjusted based on the amount of local property taxes collected by each district to ensure equalization of funding across the state.  

Posted by Dave Trabert on Tuesday, January 14, 2014

A recent op-ed in the New York Times ironically titled “What’s the Matter With Kansas’s Schools” contains six deliberate distortions of the truth about school finance in Kansas.

(1) Governor Brownback has not "made draconian cuts in school funding;" funding has actually increased each of the last two years according to KSDE and is going up again this year.   There was a tiny decline (0.04 percent in total dollars / 0.38 percent per-pupil) in the Fiscal 2011 budget but that hardly qualifies as ‘draconian’.  In fact, the Kansas Department of Education reports that taxpayer support of public education set records in 2012 ($5.771 billion) and 2013 ($5.852 billion) and predicts more new record this year ($5.911 billion and $12,885 per-pupil.  Historical data from KSDE can be found here; the 20104 estimates were sent to me by email.

(2) The cuts were not "accelerated by a $1.1 billion tax break;" again, funding has increased every year.  The schools suing taxpayers for more money actually filed their suit on November 2, 2010...long before tax reform was even introduced.

(3) KSDE data clearly disproves the claim that "the Legislature slashed public education funding to 16.5 percent below the 2008 level;" KSDE data shows that public education spending for 2013 was 1.7% below inflation-adjusted spending for 2008 but spending would be above inflation if districts hadn't used $301 million in aid to increase operating cash reserves since 2008.

(4) "Parents" did not file the Gannon lawsuit; the lawsuit was filed in the name of a student as a legal technicality but it is being funded and managed by school districts with taxpayer money.   “Parents” aren’t even involved; just school administrators and their lawyers.

(5) Base funding amounts were not established in the Legislature's "own education cost studies;" Augenblick & Myers deliberately gave the court inflated numbers that admittedly ignored efficient use of taxpayer money and page 2 of the LPA study plainly states that their work was not to be used as any recommendation, as it was simply based on one possible set of variables and also was not based on efficiency.  See my paper on "Student-Focused Funding Solutions for Public Education" for the full explanation.

(6) The court didn't order "per-pupil expenditures" to be increased to $4,492; they ordered one small piece to be increased to that level; their order would have put per-pupil taxpayer support of public education at $14,216 for 2013.

Now here’s the ironic part.  The authors’ deliberate distortion of the facts is part of the real problem with Kansas’ schools – institutional wants take precedent of student needs. 

Kansas, like every other state, has a serious student achievement problem that isn’t shared with citizens.  About half the students in Kansas are doing pretty well, but those who are eligible for Free & Reduced Lunch are several years’ worth of learning behind – and the gap isn’t closing.   The National Assessment of Educational Progress (NAEP) shows that only 22 percent of Kansas’ 4th grade students who are low income (free and reduced lunch eligibility) are Proficient in Reading, compared to 54 percent Proficient for those who are not low income.  Nationwide, proficiency levels are 20 percent and 51 percent, respectively.

Institutional interests demand more money from taxpayers even though history shows that ‘just spend more’ hasn’t raised proficiency levels for low income kids and overall achievement is basically flat on independent national tests.  Kansas schools spent nearly $3 billion between 2006 and 2013 that was specifically targeted to At Risk students; the amount spent last year was 153 percent higher than in 2006.  Still, low income kids are several years’ worth of learning behind their peers and the gap isn’t closing.

It costs a lot of money to fund public education, but it’s how the money is spent that matters – not how much.  To this day, no one knows what it costs for schools to achieve required outcomes while making efficient use of taxpayer money because no such analysis has ever taken place in Kansas.  Not a single court decision or legislative funding decision has taken efficiency into account.  That has to change.

We must get schools organized and operating in a cost-effective manner and put the savings into classrooms.  We must also determine which At Risk programs are the most effective and ensure that money intended to help low income students is actually reaching them.  Most importantly, we must put students’ interests first in every education decision.

Posted by Dave Trabert on Sunday, January 05, 2014

About a year ago we asked the Kansas Department of Education to verify our calculation of the Local Option Budget (LOB) property tax increase that would result if Base State Aid Per Pupil (BSAPP) was increased from $3,838 per-pupil to $4,492 in accordance with a final Gannon ruling in favor of the plaintiffs/against Kansas taxpayers. KSDE verified our calculation but didn’t mention that the Legislature had already authorized districts to calculate LOB based on a hypothetical BSAPP of $4,433.  Therefore, our reporting that increasing BSAPP to $4,492 would prompt an LOB increase of $154 million was inadvertently inaccurate, since most of that increase has already taken place.  Upon learning of the potential mistake, we immediately contacted KSDE for clarification and issued this correction.  We apologize for our role in this inadvertent reporting.

It should also be noted that the authorization to calculate LOB at a hypothetical rate of $4,433 expires on June 30, 2014; if not re-authorized, LOB calculations will be based on the actual amount of BSAPP, which currently is $3,838.

Setting LOB aside, let’s revisit the potential impact on citizens and the state budget if the Gannon ruling is upheld and implemented.

The Shawnee County District Court initially ruled that Base State Aid Per Pupil should be $654 higher than current, which would cost about $443 million.  The Kansas Department of Education says even that is not enough; Deputy Superintendent Dale Dennis says the total state portion should be $657 million instead of $443 million.  We’ll use the KSDE version of how much more should be spent on public education to explain the impact.

The following three tax increase options show the impact of funding the entire $657 million by property tax, sales tax or income tax.

If Legislators chose to reduce other General Fund spending instead of raising taxes, the following table shows the impact of a pro rata reduction.  (Our recent public opinion poll found this option of reallocating the state budget to be the most popular (36%) with Kansans if school funding is to be increased, followed by 31% who prefer making schools operate more efficiently; only 27% would prefer some sort of tax increase.)

 

Regardless of the amount, it’s safe to say that there will be little, if any, impact on student achievement.  That’s not a prediction; it’s history.  Billions more in funding, even adjusted for inflation, has had no real impact on independent measures of student achievement. 


 For reasons explained in “Student Focused Funding Solutions for Public Education,” we believe the Court should make a student-focused decision that requires legislators to determine what it costs to achieve required outcomes while schools are operating in a cost-effective manner and fund them accordingly.  To this day, not a single legislative or judicial school funding decision has been based on efficient use of taxpayer money. 

Posted by James Franko on Monday, December 23, 2013
Many politicians prefer to avoid controversial issues in an election year, so with the Kansas House of Representatives, governor, and other state-wide officers facing voters next year, conventional wisdom would predict the 2014 legislative session to be a yawner.

But, that thinking flies in the face of results from a SurveyUSA poll conducted last week for KPI (cross-tabs included at the link). On issue after issue, Kansans seem unhappy with the status quo and may even welcome substantive debate on the biggest challenges facing our state. Far from an endorsement of a politician or political party, our reading suggests that Kansans want to be treated as responsible, intelligent adults. Adults who understand that our state faces challenges and what’s been done thus far hasn’t gotten the job done.

If the State Supreme Court orders another large school funding increase, 67% of Kansans want to re-allocate current state spending or spend existing education dollars more efficiently to comply with a ruling for more education cash. Just over 1 in 4 Kansans (27%) want to see that potential ruling be paid for with higher taxes. Those findings hold across self-identified liberals, Democrats, moderates, conservatives, etc.

Further on education, a majority of Kansans (53%) support allowing certain students (i.e., low income, special needs) the ability use public dollars to find the right educational fit outside of the traditional public school and only 30% are opposed. A plurality support (40% support v. 31% opposed) a full voucher system. Public charter schools (schools that trade fewer regulations for higher achievement standards) are popular with Kansans to the tune of 3 to 1.

That desire for more parental and student choice in K-12 is based on the fact that only 36% of those polled think student achievement in on the right track. So, despite being told that all is well by media and special interests, citizens seem to realize that things aren’t hunky-dory. Kansans seem to understand that despite countless dedicated teachers and a 32% increase in inflation-adjusted K-12 spending since 1998 , many kids are not being served and equipped to succeed.

Folks also want local and state officials to stay in charge of education standards and believe that locals are better able to determine who is suited to teach their children than someone in Washington.

        -   80% believe curriculum standards should be set by local districts or KSDE.
        -   90% want teacher certification decisions to be made by their local districts     or the legislature.

Lastly, Kansans apparently don’t like their tax dollars being used to sue them for more money or to lobby in Topeka.

        -    70% of Kansans believe cities, counties and school districts should not be allowed to use taxpayer money to lobby.
        -   71% of Kansans believe school districts should not be allowed to use taxpayer money to sue for more money.

Maybe voters don’t want to be pandered to and realize that our state faces real challenges. Politician hopes of a quite year may amount to little with Gannon’s potential $800 million price tag hanging over the citizens’ heads. “The Americans can always be trusted to do the right thing, once all other possibilities have been exhausted,” is most-often attributed to Winston Churchill and maybe, just maybe, our elected leaders in Topeka will be proactive and buck Sir Winston’s truism.
Posted by Dave Trabert on Thursday, December 19, 2013

Data provided by the Kansas Department of Education shows that school districts again allocated a much smaller percentage of their total spending to Instruction in the 2013 school year than called for by state policy.  Total Instruction spending (including capital outlay that districts consider part of Instruction) was $3.212 billion, or 54.9 percent of the $5.582 billion spent in total last year.  K.S.A. 72-64c says “It is the public policy goal of the state of Kansas that at least 65% of the moneys appropriated, distributed or otherwise provided by the state to school districts shall be expended in the classroom or for instruction.”

The Kansas Legislature put that policy into statute in 2005 following a court-ordered spending increase (Montoy).  Legislators agreed to increase funding by $775 million to avoid a court shutdown of schools, but wanted schools to put most of the money into classrooms.  (‘Instruction’ is the description used in the KSDE Accounting Handbook.)  The statute is a public policy rather than a mandate and schools are therefore not required to comply, but it’s still a rather cavalier attitude toward state policy with broad bi-partisan support.  After all, the policy was passed by a somewhat conservative House, a pretty moderate Senate and signed into law by Governor Kathleen Sebelius.   

To be clear, there is nothing magical about hitting the 65 percent target; the point is that local school boards and administrators blatantly ignored the Legislature.

As Kansas taxpayers wait to hear if the State Supreme Court will uphold Gannon and order a $434 million increase in state aid, it’s noteworthy that schools would have spent $592 million more in classrooms last year if they followed the Legislature’s public policy.

Posted by Dave Trabert on Wednesday, December 11, 2013

A recent story in the Lawrence Journal-World about results of PISA international student achievement is yet another example of local media ignoring facts in pursuit of a political agenda. 

“Those findings may be politically important in Kansas, where Florida is often cited by conservatives as a model for implementing vouchers, charter schools and other kinds of “school choice” reform programs.”   

The ‘findings’ were that Florida had lower scores than Massachusetts and Connecticut (the only three states that participated) and below average for industrialized nations.  That part is technically true, but the reporter doesn’t mention that the PISA scores are based on overall averages, not individual cohort scores (e.g., White, Hispanic, Low Income).  The reporter also doesn’t disclose that there are significant achievement gaps for low income students and minorities, and that disparate demographic student body compositions will therefore produce average scores that cannot be fairly compared. 

Full demographic breakouts of PISA scores are not available, but the National Assessment of Educational Progress (NAEP) shows the importance of disclosing the potential impact of this information.

Ten points on NAEP is considered a years’ worth of learning, so there is nearly a three-year learning gap (29 points) between low income and other 4th grade students in the U.S.  The gap is even wider in Massachusetts and Connecticut (32 points for each).  Florida 4th graders actually outperform the U.S. average, Massachusetts and Connecticut for Low Income; Florida students who are not low income perform at the same level as Connecticut and only trail Massachusetts by 3 points.  So why does Florida have a lower average score than both states?

The answer of course (which LJW and the education establishment know full well) is that Massachusetts and Connecticut are much more affluent than Florida, so their scores for Not Low Income count more toward their overall average than for Florida.   For example, here are income-based formulas to calculate the average scores of Florida and Connecticut.

Florida average (227) = (.60 low income percentage x 218 low income score) + (.40 not low income percentage x 242 not low income score)

Connecticut average (230) = (.38 low income percentage x 210 low income score) + (.62 not low income percentage x 242 not low income score)

Basic middle school math demonstrates the inequality of comparing averages comprised of disparate elements, yet media and the education establishment will falsely use average scores from PISA and NAEP to promote their ‘just spend more’ theory of raising student achievement.  Sure enough, the LJW reporter got his plug for higher spending into the story.

“Florida is often cited as a model for conservative school reform initiatives such as high-stakes testing, school choice policies and an A-F grading system for schools, many of which were begun under former Gov. Jeb Bush. Meanwhile, Massachusetts and Connecticut are examples of states that spend considerably more per pupil than the national average. Kansas ranks slightly below the national average.”

Again, the education establishment and LJW are well aware of the facts that dispute any relationship between higher spending and achievement, including Kansas’ own experience.  In fact, the PISA report directly contradicts the ‘just spend more’ theory.

“Trend data between PISA 2003 and PISA 2012 shed light on how changes in spending per student relate to changes in performance.12 As shown in Figure IV.1.9, the PISA data show no relationship between increases in expenditure and changes in performance, not even for the countries where cumulative expenditure per student was less than USD 50 000 in 2003. Mexico, for example, is among the countries and economies with the greatest improvement in average mathematics performance between 2003 and 2012, but its levels of expenditure remained relatively stable between 2001 and 2011”.   – PISA 2012 Results: What Makes Schools Successful, page 42

I wonder why that quote didn’t make the story.  Or this one from the same page:

“Whatever the reason for the lack of a relationship between spending per student and learning outcomes, at least in the countries and economies with larger education budgets, excellence in education requires more than money.  How resources are allocated is just as important as the amount of resources available to be allocated.”

Florida’s student-focused reforms are certainly making a difference for low income students.  Where Florida once had some of the worst scores in the nation, their low income students have shown tremendous progress (unlike Kansas) and now are typically above the national average.  

Florida 4th Grade students who are not low income are also above Kansas and the national average; 8th grade students who are not low income are above the national average and just one point behind Kansas (a significant improvement from 1998, when Florida trailed Kansas by ten points).

Kansas students who are not low income are generally doing quite well and probably are competitive on an international scale, but low income students (who comprise about half of the overall population) are several years behind.  Sadly, that won’t change as long as the education establishment stubbornly pursues their own monetary wants and opposes student-focused reforms….or until local media does a better job of giving citizens balanced information.

 

 

Posted by Steve Anderson on Monday, December 09, 2013
It is amazing to anyone who knows the facts that one of the state’s progressive groups, Kansas Center for Economic Growth (KCEG), is blaming the tax cuts for what they perceive as funding cuts to multiple services when comparing state funding between 2008 to 2013.  It appears that not only did KCEG play fast and loose with the facts but they choose to outright ignore facts that disprove their claims. 

KCEG chooses to use 2008 as a year to start their comparison.  That is not surprising as Governor Kathleen Sebelius’s budgets were noted for spending.   The 2008 budget spent not only every dollar that came in to the state’s coffers it also consumed nearly all the huge 2007 ending balance of $935 million. This resulted in every service that state provided being at risk during the recession and a spending binge that left the state with a NEGATIVE ending balance of $27 million in 2010.   KCEG apparently believes that if is OK to spend money you don’t have! Fortunately for Kansans, more responsible budgets were passed in subsequent years.   Kansans can breathe a bit easier knowing that the last budget year ended with a substantial ending balance ensuring continuity in their services.

KCEG makes the claim “Kansas has sharply reduced state support for schools, libraries and other community services in recent years, forcing towns and cities to cut programs that Kansans depend upon or raise more money locally to sustain them. While the cuts by the state were initially prompted by the Great Recession, the substantial income tax cuts Kansas lawmakers enacted in 2012 and 2013 are draining even more resources and making it nearly impossible to replace vital aid to Kansas communities.”  The inconvenient facts are that the tax cuts KCEG blames for these spending reduction were NOT in effect in 2012 and only for 6 months in 2013 with an estimated fiscal impact of approximately $260 million according to the Kansas Legislative Research Division. 

When you begin your claims with a questionable benchmark and an outright falsehood it is tempting to just stop there but KCEG wasn’t done with their lax adherence to the truth.   Here are a few more of their ‘claims’ and some inconvenient facts KCEG would like you to ignore.

They continue to alter the facts to fit their story when they go on to say, “Total state aid to school districts has been reduced by over $263 million since fiscal year 2008, an 8 percent cut.”  But, when you check their data you find they ‘conveniently’ left out $354 million in just FY-2012 going to the teacher’s pension system in KPERs; money used to secure the funding for current teacher’s benefits when they retire.  If KCEG believes funding teacher’s retirement is not fundamental to retaining teachers I would encourage them to ask teachers if they will continue teaching in Kansas if their retirement won’t be there when the time comes. 

But they weren’t done there.  KCEG attacked Kansas governmental state spending for what they asserted was a reduction in local health care funding of 12% by the state.  This conveniently ignores the fact that state spending on Medicaid - which is almost all spent in the local community for the local citizens in their hospitals and health care system - grew in just two years from $713 million in FY-2010 to $1 billion in FY-2012.  This state spending on Medicaid created another $1.8 billion in federal funds in FY-2012 alone that were spent within community’s hospitals and health care service providers.   You would think KCEG would be pleased that the state is increasing spending on the state’s most needy citizens.  However it seems KCEG believes in funding institutions, in this case local health departments, and not services (i.e. health care for citizens).  

I could continue to point out more cases of KCEG creating their own reality but it is probably more important to mention the reality they most conveniently ignored.  What decrease in services could they show which actually negatively affected citizens?  For example, KCEG claims that mentor programs for new teachers and professional development for current teachers damaged public education but what effect on actual student outcomes can they show to substantiate that claim? 

KCEG makes statements such as “Local governments wrestling with how to stretch budgets” without showing the harm of having local governments being required to justify and allocate budget dollars with an eye to being efficient.  Let us not forget these are citizens’ tax dollars KCEG is talking about and those very citizens are having to do just that in their personal budgets every day.

Here is a question for KCEG:  Is it more important how much governments spend or how well they produce positive outcomes for citizens with the services they do provide?  I think most would agree with me it’s not about dollars but instead it should be about services that make a difference.  

KCEG doesn’t have to spend other people’s money to fund the institutions and/or programs they say are important. Here is something to consider for the supporters and members of KCEG who believe the state tax cut is creating harm - there is a provision in state tax law that allows them to pay as much in taxes as they wish.  They can choose to ignore the tax cuts and give more money to bureaucrats in Topeka.  Or, they could simply contribute to the local library, or health department directly if they believe there is a problem.   I, for one, will respect and praise any individual who voluntarily makes either or both of those two choices out of a commitment to their ideals.
Posted by Patrick Parkes on Monday, December 09, 2013
Kansans’ bold tax reforms over the past two years —which have cut taxes by more than $3.5 billion and provided Kansans with some much needed income tax relief—continue to lead the charge nationally as objects of intense interest and discussion in the tax policy spotlight. Each year, the American Legislative Exchange Council (ALEC) releases its State Tax Cut Roundup. The report highlights progress made in state legislatures across the country toward enacting pro-growth, job-creating tax measures that embody the “Principles of Sound Taxation” it outlines. Kansas’ efforts earned the follow laudatory statement in its recent 2013 edition:

"Last year Kansas made history with its tax cuts, especially for small businesses. This [2013] legislative session fine-tuned those previous changes to include a pathway to reduce the Kansas personal income tax rates even further. The legislature allowed a sales tax increase to partially expire, setting the overall rate at 6.15 percent, down from 6.3 percent. In addition, cuts to the personal income tax will phase in over several years to lower the rate to 2.3 percent on the first $30,000 of income and 3.9 percent on income over that. Overall, the extremely pro-growth reforms in Kansas will help the state become even more economically competitive.”

With the above praise in mind, let’s remember that no tax reform package is inherently perfect. Furthermore, all such packages need a few years in most cases until their impacts can be fully realized and evaluated. Nevertheless, even in their infancy, Kansas’ tax cuts are already proving ALEC’s point about increased economic competitiveness by making their presence felt both within and beyond state borders. In this vein, Oklahoma Governor Mary Fallin has alluded to being all but forced to further tweak her state’s tax code in a pro-growth direction simply by virtue of being “sandwiched” between the reform-minded tax climates of Kansas and Texas respectively.

In short, this “sandwiched” phenomenon is proof that Kansas and other individual states can play crucial roles in sparking a broader national conversation about the power of tax reform in revving the engine of private sector economic growth. Yet, the conversation is just getting started. Now is the time for liberty-loving Kansas to build on the reforms we’ve already enacted—rather than resting on the laurels of past successes—to ensure that all Kansans are able to keep more of their hard-earned money in their own pockets!

Posted by Dave Trabert on Wednesday, November 27, 2013

Many education leaders stubbornly pursue the ‘just spend more’ theory of raising achievement.  Some even deliberately mislead citizens and legislators to justify higher spending while pretending that student achievement is just fine.  Instead of focusing on the needs of individual students, they lobby for institutional wants.  It’s really not about the kids…it’s all about the money.

It’s never been popular in Kansas to go against the ‘just spend more’ mantra, and it’s especially dangerous for an elected official to say “we can’t spend our way to excellence.”  So here’s a tip of the hat to former Governor Kathleen Sebelius for daring to admit that money isn’t the path to excellence in education.

Governor Sebelius made that bold statement in her 2006 State of the State address.  Her declaration has since been proven in spades.

Inflation-adjusted per-pupil spending increased 29% over the last fifteen years without counting a dollar of KPERS money.  Yet test scores on independent national tests are stubbornly flat and achievement gaps are even wider.

Large and growing achievement gaps underscore Governor Sebelius’ point. Kansas' 4th grade students who are not low income did hit the Proficient mark on NAEP this year in Reading but low income students are nearly three years' worth of learning behind.  8th grade low income students have made no progress in Reading; they are more than two years behind their peers.  Nearly $3 billion was spent since 2006 in At Risk funding to improve low income scores to no avail.  

 It costs a lot of money to fund public education, but it’s how the money is spent that matters…not how much.  It will be interesting to see whether the 2014 legislative session is dominated by efforts to transform public education with student-focused ideas that are being implemented across the nation - or the 'just spend more' demands that want to shove student achievement problems under the rug.

Posted by Dave Trabert on Monday, November 25, 2013

“An enlightened citizenry is indispensable for the proper functioning of a republic.”  – Thomas Jefferson

I wonder what Mr. Jefferson would say about the state of today’s media.  Television, cable, print and internet media routinely ignore basic journalistic principles and openly choose sides, often ignoring the facts and perpetuating falsehoods to convince citizens that their view is the right one.  In some cases, it’s done in support of conservative causes; most often, it’s in support of ‘progressive’ ideals that strip citizens of their personal freedom.  It’s bad enough when facts are ignored in editorials but ignoring facts and choosing sides in news stories is tantamount to journalistic malpractice.

Local media gave us two examples of this behavior recently.  A November 22 Kansas City Star report said, “Kansas still had fewer jobs in October 2013 than it did in December 2012, the month before the Brownback tax cuts took effect.”  The reporter when on to say, “Put another way: Kansas has actually lost 3,311 jobs since the Brownback tax cuts took effect.”

This is a great example of media looking for ways to inject their support or opposition of policy into news stories while quite deliberately ignoring pertinent facts.  The clear purpose in that KC Star story was to show disdain for tax reform and the facts were not allowed to detract from that purpose.

The Bureau of Labor Statistics employment data quoted by the reporter (although certainly not disclosed) was Labor Force Employment, which comes from the Current Population Survey (CPS) and represents employed persons by place of residence.  The more commonly-used BLS report of non-farm employment is estimated based on the Current Employment Statistics (CES) survey of business establishments, and represents a count of jobs by place of work.   

The CPS data chosen by the KC Star is based on where people live, not where they work.  There is no way of knowing to what extent the job losses reported in the CPS data are attributable to people who live in Kansas but work in Missouri, Nebraska, Colorado or Oklahoma.  Data from the CES survey of businesses, however, avoids that issue because it is based on where people work.

And surprise! This data shows just the opposite of the story told by the KC Star.

Job growth is occurring in Kansas but that inconvenient truth gets in the way of the Star’s opposition to tax reform, so they spin a tale that suits their purpose and pass it off as ‘news’.

The Topeka-Capital Journal provided another example of journalistic malfeasance on November 24 in a one-sided recitation of school districts’ funding complaints.  Not unlike the piece in the Star, its political purpose comes through loud and clear.

“When Gov. Sam Brownback took office, schools like this one were already reeling. The recession had brought what were likely the largest cuts to their operating budgets in state history.  But once the recession faded, those funds didn’t rebound as some had hoped. Meanwhile, the governor cut income taxes — reductions meant to bolster the economy.”

That reads like an ad for a made-for-TV fictional movie, with the emphasis on fiction.  Not a shred of funding facts were provided, which would of course expose that the claims are crafted to meet the political purpose.

Let’s look at the facts (all of which are readily available from the Kansas Department of Education).   First of all, we’ll look at actual spending instead of the misleading reference to ‘budget.’  Individuals and businesses think of ‘budget cuts’ as spending reductions but when government says their budget was cut, it most often means that their plan to spend more was partly stymied.

I’ll make an assumption here that ‘operating’ means current operating costs and excludes capital outlay and debt service (it wasn’t defined in the CJ story). 

 

There was a 2.3 percent reduction in total operating expenditures in 2010, with per-pupil operating spending dipping by 3.5 percent.  Portraying reaction to this paltry decline as ‘reeling’ (or allowing school districts to do so) is hardly justifiable.  Those small declines in total and per-pupil spending came on the heels of very large spending increases between 2005 and 2009 of 35 percent and 32 percent, respectively.  (FYI, in case anyone tries to claim that schools suffered because state funding declined dramatically in 2010, remind them that nearly all of that money was replaced by legislators with federal stimulus money; the funding just temporarily shifted.)

Calling the 2010 minor spending dip the largest cut in state history makes it sound monumental and only feeds the political hype.  In reality, 2010 was the only spending reduction that occurred since 1990, which is as far back as KSDE can cite; they tell us that prior years’ data has been archived and isn’t readily available.  Details needed to identify operating spending in the KSDE online database only go back to 2004 (KPI has tracked it since 2005) but we do know that total spending did not decline between 1990 and 2010.

 

Allowing districts to claim they were ‘reeling’ and quoting a legislator as saying districts are in “survival mode” deliberately ignores well-known facts that counter the veracity of those claims.  For example, districts haven’t even spent all of the tax money received since 2005; about $420 million was used to increase operating cash reserves.  Districts are also wasting a lot of money with inefficient operations.  Every single Legislative Post Audit study on school efficiency has found that schools could operate much more efficiently.  If media is going to print ‘sky-is-falling’ claims by school districts and those who support their institutional desires, they have a journalistic obligation to also publish facts that call such claims into question.

The article also perpetuates the myth that Base State Aid Per Pupil (BSAPP) is all districts receive to operate schools.  The story allows two legislators and others to at least imply that BSAPP is the sole funding source and that the Legislature is deliberately underfunding schools despite a large body of evidence to the contrary. 

The story cites no other per-pupil amount and fails to disclose that BSAPP is only about 30 percent of total funding provided by taxpayers.  For the record, KSDE reports that per-pupil support of public education set a new record last year at $12,781 and is expected to hit $12,885 this year.  District administrators know (and we’ve certainly informed media quite often) that they receive a lot more money than BSAPP to fund general operations.  Local Option Budget (LOB) funds, which are provided through legislative authority, have increased 71% between 2005 and 2013, going from $341.7 million to $585.3 million.

Contrary to the claim made by one legislator quoted in the story, BSAPP was not put into statute as what the Legislature deemed to be “…the appropriate number to fund our schools.”  The Legislature made no such declaration.  The Legislature increased funding based on a court order and under threat of having the State Supreme Court close schools.  But the facts don’t fit the story that some people want to perpetuate, so rhetoric is substituted to fulfill a political purpose.

Kansas Policy Institute and other have published the facts surrounding school funding cases, including a full legal analysis of Montoy vs. State of Kansas.  We most recently published “Student-Focused Funding Solutions for Public Education,” which again cites many facts that explain why every court case on school funding is based on deliberately-inflated figures.  Despite all the rhetoric, supposition and claims to the contrary, the simple proven truth is that no one – not a single legislator, superintendent, reporter, policy analyst or judge – knows how much money schools need to achieve required outcomes while operating efficiently.  No such study or analysis has ever been conducted in Kansas.

Having spent more than twenty years managing news operations in several states, I have great respect for journalism and those who diligently work to honestly inform citizens.  I also know that reporters are sometimes forced to cover stories by editors and managers in ways they find objectionable and have misleading headlines slapped on their stories.  But to paraphrase Jefferson, our republic cannot properly function when citizens are deliberately deprived of information.  It is not the duty of media (or policy analysts) to make decisions for citizens, but to inform them so they can make their own decisions.

 

Posted by Dave Trabert on Thursday, November 21, 2013

A large body of research shows that nothing benefits students more than having effective teachers in the classroom.  With that in mind, we thought it would be interesting to see how Kansas school district employment has changed over the years – comparing changes in regular classroom teachers to enrollment and other employment trends.  All of the data was provided by the Kansas Department of Education (we appreciate their cooperation in helping to locate historical data) based on reports they receive from school districts. 

The results are actually quite surprising and prompt a number of questions that legislators and parents may want to pose to school districts.  But first, let’s look at the trends.

The first two tables show the changes in full time equivalent (FTE) employees over several time frames during the last twenty years.

1993 – 2005: These are the pre-Montoy years, during which time KPERS-adjusted school funding increased at a compound annual growth rate of 3.9 percent and FTE employment increased at a compound annual growth rate of 1.3 percent.  KPERS retirement money was not included in reported funding until 2005, so we’ve added the annual amounts for 1993 through 2004 as provided by KSDE.

 2005 – 2008: Large court-ordered funding increases began in 2006.  School funding increased at a compound annual growth rate of 7.9 percent (from the 2005 base year) and FTE employment increased at a compound annual growth rate of 2.9 percent. 

 2008 – 2013: While the economic impact of the Great Recession began in 2009, school funding actually increased 4.0 percent that year.  Total funding per KSDE dipped slightly in 2010 and 2011 (1.4 percent and 0.04%, respectively) and then increased in 2012 and 2013 (3.3 percent and 1.4 percent, respectively).   We examine this period in total in the first table and then break it out by year in the second table.



Annual employment changes in the second table are compared to total school funding per-pupil as reported by KSDE and our own calculation per-pupil funding provided on state authority with all KPERS amounts removed.  The state-provision calculation uses all funding sources provided to school districts through the state legislature’s statutory provision (except for KPERS as noted).  This excludes all federal money and property taxes for bond levies that are approved by local voters.  We exclude KPERS in this calculation to demonstrate that, contrary to claims in some circles, school funding increases are not totally driven by retirement spending.

Regular teacher employment has generally kept pace with enrollment over the years. Twenty years ago, there were 17.8 students per teacher, compared to 17.7 students per teacher in 2013.  But the growth in non-teacher employment (40 percent since 1993) has significantly reduced the student-to-employee ratio from 8.0 to 6.7.  Regular classroom teachers comprised 45 percent of school district total employment in 1993 but only represent 38 percent of employment today.

 

School district employment trends raise a number of thought-provoking questions.

  • Do district hiring practices (aides vs. teachers) indicate that district administrators and local school boards believe aides are more beneficial to students than hiring more teachers – or perhaps using the money to pay teachers a better salary?
  • What do parents and teachers think about this development?
  • Upon what analytical basis are such staffing decisions made?
  • Staff increases in the early Montoy years followed significant increases between 1993 and 2005, which, other than classroom teachers, were much greater than enrollment changes.  Upon what analytical basis were decisions made to further increase staffing?
  • Do districts have any historical analysis that shows what necessary staffing levels should be?  I.e., have districts been moving toward specific targets or are they just adding staff? 

It's critical to understand how districts resources are being allocated so that student-focused decisions can be made, especially since student achievement is relative stagnant and large, persistent achievement gaps exist for low income kids and students of color.



Posted by Dave Trabert on Tuesday, November 19, 2013

There is no question that many students receive a fine public education and go on to success in college or career, but there is also no question that thousands of students are left behind every year.   Continuing to pour money into the current broken system– whether ordered to so by courts or by choice – will not close the large achievement gaps that exist for students of color and those from low-income families. 

Yet institutional demands for more money continue to drive the debate.  Many mission statements effectively say ‘it’s all about the kids’ but in reality, the wants of institutions and the adults in the system often prevail over student needs.

A recent blog post from Mark Tallman and the Kansas Association of School Boards (KASB) is loaded with more examples of institutions misrepresenting the facts of student achievement and school funding to justify the extraction of more money from taxpayers. 

Here’s the first example.  “KASB research has shown that the percentage scoring at Basic is a good indicator of the state’s graduation rate, i.e. the percentage of students who complete high school.  The percentage scoring at Proficient is a rough indicator of the percentage of students who will meet college readiness benchmarks on the ACT test.  In other words, the percent at Basic might be considered the percentage of student “on track” to graduate, and the percent at Proficient indicates those “on track” to be ready for college-level academics.”

First of all, a high school graduation rate says nothing about actual achievement.  In fact, the Kansas Board of Regents reports that 30 percent of 2011 Kansas high school graduates who attended a public college in Kansas actually signed up for remedial training – keep in mind that students voluntarily sign up for these courses and cannot be made to do so by the college. These students apparently know that they aren’t ready to take credit-bearing courses in college.  Also, only 30 percent of the 2013 class who took the ACT test scored high enough to be considered college-ready in English, Reading, Math and Science.  (Incredibly, KASB representative Tom Krebs testified earlier this year that the ACT college-readiness measure shows that local school districts are doing a good job – because only 30 percent of today’s jobs require a 4-year degree!!!)

Also, the KASB research that purports to find ‘good indications’ is called a bivariate analysis, meaning that only two variables are considered.  This reminds me of something the late Senator Daniel Patrick Moynihan (D-NY) once said with tongue firmly planted in cheek.  He noted that northern states tended to have the best student achievement, so we should move schools closer to the Canadian border to improve achievement.  His point was that simple bivariate analyses and non sequiturs are no substitution for honest analysis.  A bivariate analysis doesn’t control for other factors that may (and frequently do) make a difference.

Note also that KASB continues to lower the bar and now often speaks of the percentage of students at Basic+ instead of Proficient+ on the National Assessment of Educational Progress (NAEP).  They referenced high rankings on Proficient+ until people became aware that Kansas’ proficiency levels are in the 30 percent and 40 percent range.  Now they talk about Basic+ so they can use higher percentages and make the institutions look better.

Example #2

On October 7, Mr. Tallman wrote, “KASB absolutely agrees that differences in student characteristics must be considered in evaluating educational performance…the most important factor…is socio-economic status.”

But that ‘belief’ is largely ignored on October 11 when he writes, “To measure overall state performance, we calculate the average of the percentage of students scoring at both Basic and Proficient on the four tests (Grade 4 reading and math; Grade 8 reading and math).  We then rank the average percent for each state.” Two of the four percentages he averaged are based on All Students, which brings the mostly-White states to the top of his list.  You see, students of color are two to three years’ worth of learning behind White students, so the states with highest overall average performance are those with the lowest levels of minorities.  (This is the essence of Senator Moynihan’s observation.)

Similar achievement gaps exist between low income students and others.  And since Census data shows that minorities are twice as likely to live in poverty as Whites, KASB’s deliberate decision to not control for race and income produces very predictable results that are favorable to their overall point (it's all about the money).  Every state in the KASB calculation of the Top Ten states in Reading and Math has Free & Reduced Lunch Eligibility levels below the national average of 48.1 percent.  Most of them are well below.  The point of KASB's exercise is of course about money.  The states chosen to appear in their top ten all spend more than Kansas.

Example #3

“The State Board of Education has continued to set higher standards.”  That’s a real whopper.  Our research shows how and when the Kansas Board of Education chose to reduce performance standards, to the point where the U.S. Department of Education reports that Kansas has some of the lowest performance standards in the nation.  Before publishing our findings, we asked KSDE and KBOE to let us know if there was anything factually incorrect in our work.  They didn’t respond.

Example #4

“Economic data indicates Kansas must increase the percentage of high school graduates and college-ready students to meet future employment needs and provide “middle class” incomes.” It’s true that people with more education are able to earn more money but that speaks to the important of getting an education.  It has nothing to do with the amount taxpayers are expected to spend on public education.

Example #5

“New national reports have indicated Kansas has further reduced spending compared to most states.”  This is a reference to a bogus claim made by the Center on Budget and Policy Priorities, which we completely de-bunked in a separate blog post.  CBPP does not publish their data; they only share their ‘conclusions.’  Our request to see their data has gone unanswered.  Meanwhile, KSDE data shows that new records for school funding were set in 2012 and 2013 and are predicted to be broken again in 2014.

Example #6

This final example represents the culmination of all the previous misrepresentations.  “The totality of the evidence indicates that funding does play an important role in state student achievement and that it will be extremely difficult - and, in fact, unprecedented - for Kansas to improve achievement on NAEP results without additional revenues.”  The data, however, tells a much different story.

No change on NAEP scores despite a 32 percent inflation-adjusted increase in per-pupil spending since 1998 (even with all KPERS spending removed, it’s still a 29 percent increase).

 

ACT scores are flat overall, although White scores slightly increased over the last ten years while scores for Hispanic and African American students are flat or down a bit.  ACT doesn’t publish income-based scores.

 

 And after nearly $3 billion in targeted At Risk (low income) spending, there’s virtually no improvement in those students’ achievement. 

 

Yep…it’s all about the money.  It’s all about demands to put more money into a system despite voluminous evidence that large funding increases have not closed student achievement gaps and roughly half of all Kansas students are clearly not leaving high school ready for college or careers. 

These large achievement gaps do not exist because those students cannot learn, but because they do not have equal access to educational opportunities.  Kansas has tried ‘throwing money at the problem’ and it has not worked.  Until elected officials and citizens support implementation of student-focused funding and other policy initiatives, they are tacitly choosing to place a higher priority on institutional wants than on student needs.

  P.S.  We’re working with legislators and school districts to show how a lot more money can be made available to classrooms by improving district efficiency.  It costs a lot of money to fund public education, but it’s how the money is spent that matters…not how much. 

 

 

Posted by Patrick Parkes on Monday, November 18, 2013

The combined balance of all school district carryover cash (also known as unencumbered cash) accounts in the state grew by 64% from 2005-2013. The 30 taxpayer-funded accounts work much like the average Kansan’s checking account in the sense that they can only grow when more money is put into them than is spent out of them. In short then, the positive balances reported over the past eight years indicate that school districts in Kansas are spending less than they are taking in. Click here to explore the statewide and individual school district data on our state spending transparency portal, KansasOpenGov.Org. 

The sheer magnitude of the aforementioned upward trend in carryover cash balances may be enough in itself to spark the intrigue of some Kansans. Others are probably still wondering why the increase matters and why they should care about it.

School officials across the state have offered what at first glance seem like reasonable explanations for the trend. One of the most prominent hinges on the idea that these carryover cash reserves will be needed as “back-up” funds to maintain current school funding levels if state aid to schools declines in the future. Yet, Dave Trabert points out in his recent paper on student-focused school funding solutions that this explanation—along with many of the others offered frequently—doesn’t necessarily tell the whole story surrounding the reserves. For example, if the reserves are indeed intended to make up for potential declines in funding, why did the 2010 and 2011 non-earmarked reserves in the “All Other Funds” account increase even as overall aid to schools declined slightly?

The above instance is just one of the many undergirding the fundamental question of how school districts can be underfunded if they continue to meet their students’ needs while simultaneously making a habit of not spending all of the yearly funding they receive. This consideration should illustrate the importance of carryover cash balances as signals of a broken school funding system.  What’s more, it should also signal the importance of starting a conversation about how we can all work together to craft a new, more efficient, and student-focused school funding system for Kansas.

Posted by Dave Trabert on Thursday, November 14, 2013

The Kansas National Education Association’s slogan is “Making public schools great for every child.”  It may be a coincidence that their slogan seems to emphasize institutions over students, but many of their actions quite deliberately put institutional interests first.  My belief has nothing to do with individual teachers.  Kansas is blessed with thousands of dedicated teachers who get up every morning thinking of ways to help students and they deserve citizens’ gratitude and support for everything they do.  My comments are not directed at teachers, but at the institution of the KNEA.

The most recent example of this teacher union (the organization) putting institutional interests ahead of student needs was in an email blast they sent last week about hearings held by the Special Committee on Education.  It began with their usual vitriolic put-downs of people with whom they disagree and concluded by saying, “…that everything we know from student assessment – … Kansas continues to improve and that Kansas continues to perform in the top tier of states….”

KNEA knows that that is a deliberately misleading statement.  In fact, they wrote it following a detailed presentation for the Committee showing that, while many Kansas students do quite well and likely are very competitive internationally, roughly half of Kansas students (those who qualify for Free & Reduced Lunch) are two to three years’ worth of learning behind.  Even more disheartening is the fact that those achievement gaps are getting wider.

The National Center for Education Statistics says that 10 points on NAEP is the equivalent of a year’s worth of learning.  The gap was 24 points (roughly 2.4 years) in 1998 when Kansas first participated in NAEP.  It was 22 points in 2005 before funding was dramatically increased.  But now, after nearly $3 billion in targeted At Risk spending, the gap is wider than ever at 28 points.  The gap for 8th grade students in Reading is 24 points…three points wider than it was in 2005.  The gaps for 4th grade and 8th grade Math are 18 points and 24 points, respectively.  FYI, the Kansas Department of Education (KSDE) is on record saying that NAEP is the “gold standard.”

Similar patterns exist on the state assessment.  the gaps between 2006 and 2012 for Reading and Math both grew slightly.  Unfortunately, performance for low income students declined in 2013.  (We've submitted a request for the 2013 data on students who are not eligible for Free & Reduced Lunch.)

 

These performance statistics reflect students who are at Exceeds Standard and above.  You see, KSDE doesn’t require students to be able to read grade-appropriate material with full comprehension (as defined by KSDE) to Meet the Kansas Reading standard.  Students are not required to usually be accurate on all grade-level Math tasks to be Proficient and Meet the Kansas Math standard.  KSDE and the State Board of Education reduced performance standards to the point where the U.S. Department of Education says Kansas has some of the lowest performance standards in the nation. 

By the way, if you’re disturbed by the alarmingly low achievement levels of All Students who are low income, you’ll be appalled by the results for 11th grade students.  One year away from entering the workforce or going on the post-secondary work, only 37 percent of low income 11th grade students can read grade appropriate material with full comprehension.  Math drops off to 29 percent.

As is often the case with institutional interests, it’s all about the money.  This little gem was included in the KNEA email. 

“Spalding's [Friedman Foundation] conclusion to his presentation comparing school finance formulas from our regional states is that there is no way to compare effectiveness of the various formulas except by looking at their results. So that begs the question, since Kansas' results are among the highest in the nation, doesn't that mean we have an effective school finance formula? What would happen if we actually funded our system?!”

Yep…it’s all about the money with this teacher union. 

As for the claim that “…Kansas' results are among the highest in the nation,” KNEA also knows that to be falsely driven by demographics.  Simply put, there are two-to-three-year achievement gaps between White students and those of color...and Kansas is Whiter than many states.  Here are the actual 2013 national rankings and scores showing that Kansas is actually just slightly above average overall (although White and Black students are slightly below average).

 

Pretending to have high achievement based on low performance standards and demographic skews is harmful to students, and ignoring that tens of thousands of students are falling farther behind is downright shameful.  But that’s what happens when institutional interests prevail over student needs.

 

P.S. I shared this information and our school staffing data with KNEA leadership and offered to get together in a public or private setting to discuss the facts.  I thought they would at least be interested to explore the fact that regular classroom teachers have only increased 7 percent over the last twenty years, while students increased 6 percent and non-teachers increased 40 percent.   So far…crickets.

 

Posted by Dave Trabert on Tuesday, November 12, 2013

Kansas taxpayers will again set records for support of public education in 2014, according to data provided to KPI by the Kansas Department of Education.

 

Total expenditures are estimated at $5.911 billion for the current school year, which will be the fourth consecutive year that total taxpayer support has increased, with 2014 being the third consecutive year in which new records have been set.  Per-pupil expenditures are predicted to hit $12,885 and eclipse the previous record set last year.  

 As explained in "Student Focused Funding Solutions for Public Education", the Legislature’s provision for finance is much greater than the amount shown as State Aid.  In 2013, nearly $1.9 billion of the $2.2 billion listed as Local Aid was made available through state legislative authority; that money isn’t counted as State Aid simply because it doesn’t run through the state budget. 

Posted by Dave Trabert on Monday, November 11, 2013
Kansas Association of School Boards Executive Director John Heim recently made a pretty provocative claim about taxpayer support of public education at an event sponsored by the University of Kansas.  He said, “We are spending less than our parents spent on educating us and our grandparents spent on educating them.”  

That made for a great media sound bite but his claim is not true.  I wrote and asked Mr. Heim to substantiate his bold claim.  He never responded.  KASB Associate Executive Director Mark Tallman did confirm that their data on total funding only goes back to 1990.  I can’t speak for Mr. Heim, but my grandparents were supporting my parents’ public education in the 1940s and 1950s…not the 1990s.

Not that personal income has anything to do whatsoever with what schools need to function, but we ran the numbers from 1990 forward and found that taxpayer support of public education has grown faster than personal income. 


Taxpayer support of public education increased 179% between 1990 and 2012, going from $2.070 billion (adjusted upward to include KPERS between 1990 and 2004, which wasn't included in total support until 2005) to $5.771 billion, according to KSDE spending reports.  Personal income, according to the Bureau of Economic Analysis, increased 177%.

The real gap, however, is a bit wider.  You see, personal income includes money that is never available to pay taxes, such as the money employers spend on your health care insurance and retirement.  Personal Current Transfer Receipts are also included in the calculation of Personal Income.  PCTR includes “…income payments to persons for which no current services are performed and net insurance settlements. It is the sum of government social benefits and net current transfer receipts from business.”[i]  Current transfer receipts of individuals from businesses “...consist primarily of personal-injury liability payments to individuals other than employees.”[ii]



Here’s the comparison of taxpayers’ support of public education with their income available to pay taxes.

 

The gap between per-pupil support of public education and per-capita personal income available to pay taxes is even greater.


The case made by KASB certainly underscores an entitlement mentality but it has no relationship to funding needed to successfully operate schools in a cost-effective manner.  KASB is just trying to justify more spending.  It’s not really about the kids; it’s about the money.

Spending more money hasn’t improved student achievement on independent national exams.  Just look at the Kansas history on the National Assessment of Educational Progress (NAEP). 



Stay tuned for more episodes of “It’s all about the money.”

______________________________


Posted by James Franko on Thursday, November 07, 2013
This piece originally appeared on Cato Institute's @Liberty blog and is authored by Andrew J. Coulson, the director of the Center for Educational Freedom at Cato.

A new public opinion survey commissioned in Rhode Island by the Friedman Foundation reveals that people want to know the honest-to-goodness total per-pupil cost of public schooling.

Unfortunately, the full cost is regularly omitted from state education department websites, as revealed in a recent Cato study by Jason Bedrick. What’s more, the full figure is seldom reported by the media. Instead, newspapers and local TV news outfits usually report just a portion of the cost that excludes things like construction spending, interest on debt, and pensions. Education officials obviously have an incentive to make their operations look as frugal as possible, so it’s no surprise that they would offer reporters these partial spending figures (known as “operating” or “current” spending).

But most journalists feel some obligation to be honest with their readers—to tell them what they want and need to know. Until now, reporters might have assumed that the public didn’t really want to know the full, total per-pupil-spending numbers. We now know that’s not true. The public opinion survey data show that people want to be told the total cost of public schooling, not some fraction of that cost—by a margin of 57 percent to 34 percent. Nor is this a partisan issue. Republicans and Democrats were of like mind on this question. So were conservatives and liberals.

The people want to know. Will the media now step up and tell them?
Posted by Dave Trabert on Tuesday, October 29, 2013
Researchers at Kansas Policy Institute recently found that the Kansas Department of Education (KSDE) reported nearly $1 billion in administrative spending as ‘Other’ over the last eight years.  The KSDE Accounting Handbook identifies three categories of administrative costs: General Administration, School Administration and Central Services.  District budget reports only list General and School Administration; Central Services, which includes fiscal services, human resources, IT, purchasing and other ‘back office’ functions has historically been reported as “Other.”


District budget reports for 2012 reported actual spending of $391.6 million on Administration but total spending on Administration was really $525.4 million.

The following screen grab is from the Budget at a Glance for USD 500 Kansas City.  KSDE Deputy Commission Dale Dennis confirmed that the amounts listed as Other Costs on KSDE budget forms are actually Central Services and should be counted as Administrative spending.  Mr. Dennis says these forms will be revised next year to clearly identify spending on Central Services; hopefully, they will also specify that Central Services are Administrative costs. 


The KSDE Accounting Handbook defines Other services (Function 2900) as “All other support services not classified elsewhere in the 2000 series.”  Central Services costs are clearly identified in Function 2500.  Interestingly, the KSDE public database did properly reflect Central Services spending through 2008 (and zero spending in Function 2900 Other).  Beginning in 2009, the database showed no spending in Central Services and reflected those costs as ‘Other.’  KSDE corrected their internal records following our inquiry. 

Regardless of intention, the KSDE budget forms have historically given citizens false impressions.  As shown in the example above, a reader would logically believe that USD 500 reduced total administrative spending in 2013 by 9.4%, when in reality spending increased by 8.2%.  

Posted by Dave Trabert on Monday, October 28, 2013

Against a backdrop of a school lawsuit claiming taxpayer support of public education is insufficient, the Kansas Department of Education announced last week that taxpayers set new records for total dollar support and for per-pupil support.

 Adjusted for inflation and enrollment, funding increased by 35 percent over the last fifteen years, while student achievement on independent national tests is generally unchanged. 

Posted by James Franko on Friday, October 25, 2013
This post originally appeared at The Heritage Foundation by Drew Gonshorowski and references premium growth in Kansas for young adults of 129.0%.
 
There are literally no comparisons to current rates. That is, [the Department of Health and Human Services] has chosen to dodge the question of whose rates are going up, and how much. Instead they try to distract with a comparison to a hypothetical number that has nothing to do with the actual experience of real people.
    —Douglas Holtz-Eakin, President, American Action Forum

Enrollment in Obamacare’s health insurance exchanges has proven to be a somewhat difficult process amidst technical glitches and delays. Aside from the issues associated with actually purchasing health care, once an individual gets a quote for health insurance on an exchange, is the premium higher or lower than before?

Our research finds that for many states, the insurance on health exchanges will cost more than existing insurance. This study illustrates that the general experience for individuals shopping on the exchange is that of increasing premiums from what was available to them prior to implementation of the exchanges. Many families and individuals will face this reality as they apply for coverage, and the implications of experiencing sticker shock are important to consider if enough people choose not to sign up for coverage for various reasons.

Results
Individuals in most states will end up spending more on the exchanges. It is true that in some states, the experience could be the opposite. This is because those states had already over-regulated insurance markets that led to sharply higher premiums through adverse selection, as is the case of New York. Many states, however, double or nearly triple premiums for young adults. Arizona, Arkansas, Georgia, Kansas, and Vermont see some of the largest increases in premiums.

Read the full post here.
Posted by Dave Trabert on Sunday, October 20, 2013

The Wichita Eagle reported today that the City of Wichita doubled property tax abatements between 2008 and 2012, purportedly to create jobs.  The Eagle also reported that city officials could not say how many jobs had been created by property tax abatements. 

Wichita city government – and in fact, probably all local and state government officials – contend that tax abatements and other forms of subsidies create jobs.  They may in some cases be able to show that the recipients of taxpayer money added jobs, but they deliberately ignore the unseen consequences of their actions.  Government has no money of its own; it simply collects money from taxpayers and redistributes it.  Taxes not paid by some are simply shifted onto other taxpayers, and the money they would have spent on goods and services is instead spent on taxes.

Of course, government never reduces spending in order to fund their corporate handouts.  They just raise taxes. 

This is the picture of a large increase in the property tax burden.  Property taxes levied by the City of Wichita increased 116%, nearly three times inflation, while the population increased by only 17%.

I couldn’t locate private and public sector employment data for the City of Wichita but the Bureau of Economic Analysis has some fascinating data on Sedgwick County, which should provide a fairly close approximation.  

 

Private sector full time and part time jobs increased a mere 0.5% between 1997 and 2011 (most recent available) but Local Government jobs jumped by 18.4%. 

The takeaway is pretty obvious.  Regardless of intention, government insistence on giving away taxpayer money in the name of economic development simply hasn’t worked.  This isn’t new information.  Kansas Policy Institute and many others have reported variations of this information for years, but government officials continue to do the same thing over and over again.

 

Posted by James Franko on Wednesday, October 16, 2013
Below is the Executive Summary to KPI's newest policy brief, "Student-Focused Funding Solutions." Written by KPI president Dave Trabert this paper will be formally released later this week.

Executive Summary
A fair portion of aid to public schools may be distributed on a per-pupil basis and there are many mission statements that effectively say ‘it’s all about the kids.’ In reality, the wants of institutions and the adults in the system often prevail over student needs. That’s not to say that educators and legislators aren’t concerned about students – they absolutely do care. However, a close examination of funding and other education policy decisions (and especially the legislative debates over these issues) reveals that the current system is focused more on institutions than on students. The purpose of raising this issue is not to convince readers to agree with our reading of the facts, but to explain why we put so much emphasis on student-focused solutions. If recent Kansas history is any guide, it simply cannot be assumed that education decisions will be student-centric.

School funding has been the subject of multiple lawsuits, including one that is currently under appeal in the State Supreme Court. It’s an extremely volatile subject, both in the general public and the Legislature. Yet no one knows what is suitable funding for Kansas school districts to achieve required outcomes while also making efficient use of taxpayer funds. Not a single legislator, superintendent, policy analyst or judge knows what it should cost to efficiently achieve required outcomes because no such study or analysis has ever been conducted in Kansas.

As shown herein, Legislative Post Audit studies and other data clearly show that school districts are not organized and operating efficiently. School districts are not even using all of the tax money they receive, but still claim to be under-funded. It might be possible to take corrective action if these were the only problems with the current funding system, but there are many other serious problems with the current system. As such, we believe the current system is irreparably broken.

Kansas needs a new student-focused school funding system but not a single number can be put on paper until two foundational questions are answered:
1. What are the educational interests of the State? We cannot fund something until we define what it is we intend to fund.
2. Is it our priority to fund students or institutions? ‘Both’ is not an option; unless one is given clear priority, the other will most definitely suffer.

We attempt to provide some guidance on these fundamental questions and other important elements of a new funding system but generally speaking, there are no ‘right or wrong’ answers in funding decisions. Rather, they are subjective decisions that require great deliberation and citizen input so that legislators can write the laws – and be held to account.
Posted by James Franko on Wednesday, October 02, 2013
As the first public pieces of ObamaCare took effect yesterday, a troubled rollout was almost gleefully greeted by the law’s opponents. I was struck by the realization that the new law and user experience is almost guaranteed to continually have problems, short comings, and ultimately offer little of value to most Americans.

However, it has NOTHING to do with whether the law in question is good or bad…although it is a bad law. Simply put, the world is evolving too fast for a 1,000+ page bill or the 10,000 pages of regulations it spawned to truly affect behavior (a number open to debate but we’ll use the Washington Post’s estimate). It is a cliché, but as the pace of innovation increases an attempt to regulate 1/5 of the U.S. economy simply cannot work.

Think to yourself, the Affordable Care Act was signed into law on 23 March 2010, over 3.5 years ago, and the now-ubiquitous iPad wouldn’t be released for another two weeks (3 April 2010).

The same can be said for another new policy being implemented around the country – Common Core education standards. Again, while the efficacy of CC is very much open to debate, a system by which 40-some states (a couple of states recently pulled out of the testing regime) have to meet and agree as a group cannot keep pace with technological, pedagogical, or other advances in education.

Ask a public school teacher if they like having to wait for the “ok” from their principal or superintendent to try out a new teaching method. What is that going to look like when Kansas adheres to standards that are not set in Topeka, let alone the local USD? Sure, Kansas may have helped write the standards initially but that is already years in the past.

What are the odds of getting a simple answer from your doctor, or insurance company, about the validity of a new procedure to treat diabetes or hypertension? Not good. It would be hard enough to navigate pre-ObamaCare regulations on these sorts of questions while also seeing patients, staying abreast of medical advances, etc. but will only get more cumbersome.

In fact, people around the state, and the country, are actively saying “no thanks” to these and other laws from both Topeka and Washington. A group of Wichita doctors has been featured around the country (here and here) for offering affordable primary care without the hassle of insurance. Not only are they getting press coverage but offering 'round the clock access to your specific doctor for $50/month to someone in their 20s.*

While private school enrollment has declined from a high of 6.3 million students in 1965 to 4.1 million in 2011, the number of families deciding to home school continues to skyrocket - growing by 75 percent between 1999 and May 2012. (Interesting side note, the government shutdown has hit home. Government data websites (i.e., the Census Bureau) that are otherwise current have been closed down b/c of the impasse in Washington. Alas, I was able to find good information elsewhere.)

Heck, The Freeman, a publication of the Foundation for Economic Education, released “Fifty Ways to Leave Leviathan” earlier today. You may not agree with some of what The Freeman has to offer by way of illustrating this point, but people aren’t even using government-sanctioned money anymore! Check out more on BitCoin here.

Continued innovation in the private sector will render big regulatory schemes increasingly meaningless. Entrepreneurs, whether for good or for ill, will always work around dictates from the political process.

Simply stated, governments cannot keep up with food trucks that exist outside of brick and mortar restaurants, doctors that offer care without insurance, Enrons or MF Globals avoiding financial regulation, someone saving East African farmers $200 per year and increasing crop yields, or parents taking control of their child’s education by homeschooling. Some ill and some good, but more complex and expansive regulations will increasingly be met with a collective yawn in the years to come.

This trend should warm the heart of those supporting liberty and freedom and keep awake at night those who offer little more than government solutions to problems, regardless of party registration.

*(P.S. KPI’s reference should not be construed as an endorsement of any product or service.)
Posted by Dave Trabert on Monday, September 30, 2013

If you think school finance in Kansas couldn’t possibly be more obtuse (or absurd, depending upon one’s perspective), consider this new wrinkle: the 20 mill property tax levied for the support of public education isn’t considered part of state aid.

[UPDATE: After further discussions with KLRD, it was clarified that while the 20 mill levy IS NOT considered part of state aid it is included in calculations of BSAPP.]

Every school district is required by statute to levy a 20 mill property tax, which according to K.S.A. 72-6431(b)(2), is “…for the purpose of paying a portion of the costs of operating and maintaining public schools in partial fulfillment of the constitutional obligation of the legislature to finance the educational interests of the state….”  It’s right there in black and white, but the $563 million generated in the 2013 school year by that 20 mill property levy isn’t counted as part of the legislature’s constitutional obligation to make suitable provision for the finance of the state’s educational interests.

The exact amounts levied by district are available at KansasOpenGov.org.

According to Deputy Commissioner of Education Dale Dennis, all property taxes (including the state-mandated 20 mills) levied by school districts are “…collected by the county treasure[r] and distributed directly to local districts.”  Since property taxes aren’t sent to the State for distribution, all of that revenue is considered part of Local aid.  The amounts identified as state aid come from revenues collected by state government, and since those property tax dollars never hit state coffers, they aren’t part of Base State Aid or any other form of state aid.

We also spoke with Kansas Legislative Research and Kansas Division of the Budget.  Both offices confirmed that local property taxes, including the 20 mills, are sent directly to school districts, are not collected or distributed by the state and are not counted as local aid rather than state aid.

The constitution does not say that ‘suitable provision for finance’ of schools shall be provided solely through the State General Fund or any other state fund.  The constitution also does not reference Base State Aid Per Pupil (BSAPP) as the determinant of whether the Legislature has made suitable provision for school funding…yet BSAPP is often portrayed as though it is the entirety of all aid for what school districts refer to as “regular education.”

The Legislature makes provision for the financing of public schools in several ways. A complicated formula, which includes BSAPP as one element, determines how funding is dispersed from the state budget. But in addition to the statewide 20 mill property tax, the Legislature also makes provision for districts to receive other funding that is recorded as Local aid.  

Total property taxes levied for the operation and maintenance of public schools last year was $1.65 billion, of which $300 million was voter-approved special levies.  The remaining $1.35 billion (which does not require affirmative citizen approval) should be considered part of the Legislature’s provision for financing public education. 

The exact amounts levied by district are available at KansasOpenGov.org.

It will be very interesting to see how this new discovery impacts the State Supreme Court’s review of the school finance decision next week.  Earlier this year, the Shawnee County District Court ruled the schools were underfunded to the tune of $443 million based on the amount of money in Base State Aid Per Pupil.  No one really knows what it costs for schools to achieve required outcomes while also making efficient use of taxpayer money.  But that aside, if the Shawnee District Court did not consider the $563 million in property taxes that are statutorily “…a portion of the costs of operating and maintaining public schools in partial fulfillment of the constitutional obligation of the legislature to finance the educational interests of the state…,” the State Supreme Court may well have justification to set the lower court’s ruling aside.

Posted by Patrick Parkes on Friday, September 20, 2013
Kansas  legislators' decision  to reduce state spending on public higher education, which amounts to a paltry 0.7% annual reduction in General Use operating resources, will take place over the next two years. Unfortunately, the university administrators’ narrative on this subject has centered on the potential tuition hikes, program closures, and service stoppages to which their universities may resort. Given the mounting debts Kansas’ university students continue to face in financing their higher education programs, it is imperative that students do not suffer the potential hardships mentioned above when universities have other options at their disposal. Our April 2013 study of state aid in higher education identified five cost-saving measures Kansas’ public universities could employ in order to operate more efficiently while shielding their students from the potential impacts of the aforementioned reductions in state aid. These recommendations suggested that the universities:

1). Tap into their cash reserve surpluses to cover potential cost shortfalls.

2). Pursue deregulation of earmarked “restricted use funds” to create the financial flexibility they need to meet their most pressing cost obligations.  

3). Free themselves up to focus on their core academic missions by outsourcing non-academic services (e.g. dining services, landscaping, campus bookstores, etc.) to private contractors.

4). Designate a portion of athletic profits, research project royalties, and other non-academic revenues to fund academic programs.

5). Revisit the state’s Legislative Post Audit Efficiency Study from 2009 to identify additional opportunities for cost savings.

 In addition to the five recommendations above, our study also pointed out that vaguely defined “institutional support costs” at Kansas’ public universities had risen to more than three times the rate of inflation from 2002-2012. This escalating cost trend was most recently the subject of an August 2013 article from KansasWatchdog.Org, which defined institutional support costs as [costs encompassing] “general administrative services costs, legal and financial operations costs, personnel record keeping costs, logistical services costs, and other miscellaneous costs.” The additional exposure of this alarming trend is encouraging. At the very least, the trend deserves further examination going forward as yet another opportunity for cost savings. Overall, well-planned and well-executed cost savings will ensure that Kansas students receive a high-quality education that is decoupled from artificially high tuition rates. Furthermore, such cost savings will also help ensure that taxpayer dollars in Kansas are used in the most efficient way possible with regard to public higher education.

Posted by Dave Trabert on Friday, September 13, 2013

The Center on Budget and Policy Priorities – an organization that is a big fan of government spending – released a report yesterday claiming that inflation-adjusted spending per-student in Kansas declined by 16.5 percent between 2008 and 2014.  Predictably, their claims are deliberately misleading.

For starters, they only look at what is recorded as state funding, not what is actually funded through state authority.  In Kansas, that’s a huge difference.  The Legislature makes provision for the financing of public schools in several ways. A complicated formula determines how funding is dispersed from the state budget. But the State also makes provision for districts to receive other funding.  For the 2011-12 school year, $3.2 billion dollars was sent to school districts out of the State budget. Another $2.1 billion was considered Local Revenue but $1.546 billion of that total was property tax money provided through State authority.

By focusing only on one piece of funding, CBPP conveniently ignores that many states, including Kansas, used ARRA stimulus money to backfill recession-driven declines in other funding.  The funding sources may have temporarily shifted but schools were nearly held harmless.  CBPP just wants to pretend otherwise.

State and local funding in Kansas is arbitrarily determined by which government writes the last check, but taxpayers write the first check… so it’s only appropriate to consider total taxpayer support when the impact on schools.  

The above chart compares actual per-pupil funding of Kansas schools (blue line, including the KSDE estimate for 2013), the inflation-adjusted funding beginning in 1998 (red line) and the restated actual spending in constant 2013 dollars.  Inflation is based on the fiscal year change in the Consumer Price Index for Midwest Urban Cities, not seasonally adjusted.

Total taxpayer support of public education clearly has remained well above the levels adjusted for inflation and enrollment changes (blue line and red line).  Districts have enjoyed a real (inflation-adjusted) increase of 33% in per-pupil funding from taxpayers since 1998 ($9,549 to $12,738).

Inflation-adjusted funding appears to have declined by 3.7% since 2008 (green line) but that is also misleading.  Total funding as reported by the Kansas Department of Education is actually district-reported total expenditures. KSDE calculates local expenditures by subtracting the amounts they funnel to school districts from state and federal sources from district-reported total expenditures.  However, local expenditures are not the same as local funding because districts often do not spend all of the state and local tax dollars they receive.  The portion not spent is used to increase their cash reserves (and not reported as funding). 

In constant 2013 dollars, total taxpayer support was $13,220 in 2008 and KSDE estimates it to be $12,738 in 2013.  With full time equivalent enrollment of 457,887, districts would have had to spend $221 million more in 2013 to have kept up with inflation in 2013…and they could have done so if they had spent all of the state and local tax dollars they received between 2008 and 2012!

Kansas school districts increased cash reserves in their current operating funds (All Other Funds above) by $301.6 million between 2008 and 2012 (data for 2013 won’t be released for a few months).  These funds function just like a personal checkbook; the only way they can increase their ending cash balances is to spend less than they take in each year.

While this analysis hopefully de-bunks the Kansas funding claims made by CBPP, I’d still like to address their Keynesian position on government spending.  Their report takes the position that reduced levels of government spending “…have slowed the pace of economic recovery by reducing overall economic activity.”  Government has no money of its own; it merely extracts money from taxpayers and redistributes it. This is a great example of CBPP’s big-government focus.  Economic activity is not increased by removing water from one end of the pool and pouring it into the opposite end.  
Posted by Dave Trabert on Thursday, September 05, 2013

Parents who want more teachers in Kansas classrooms might be surprised to learn that school districts have different priorities as measured by their hiring practices.  We collected data from the Kansas Department of Education to provide a 20-year comparison of the growth in enrollment, teachers and other school personnel – updating a model created by Dr. Benjamin Scafidi in studies he authored for The Friedman Foundation for Educational Choice.

Full time equivalent (FTE) enrollment didn’t change much between 1993 and 2013, growing just 6 percent.  Kansas school districts increased the number of teachers employed by 16 percent but employment of administrators and other non-teaching staff jumped by 40 percent.

Kansas school districts added more than one employee for every two new students over the last twenty years, based on an actual ratio is 1.8 to 1.  The student/teacher ratio in Kansas fell from 14.5 to 13.3 (one teacher for every 13.3 students) and there is now one employee for every 6.7 students.  Annual changes by district going back to 2005 are available at KansasOpenGov.org.

   

Dr. Scafidi says that every Kansas teacher could be paid $10,125 more per year if non-teaching staff had just kept pace with the growth in enrollment between 1992 and 2006 (when students increased by 5 percent and non-teaching staff increased by 43 percent).   Given the similarity in these updated numbers, it’s likely that teachers might still be eligible for a five-figure pay increase if districts were operating more efficiently. 

Posted by Dave Trabert on Thursday, August 29, 2013

School districts and their lawyers stand to collect a tremendous windfall if the Kansas Supreme Court rules in favor of the plaintiffs in their upcoming review of Gannon vs. State of Kansas.  Everyone else will pay a tremendous price; the only question is the magnitude of the impact.

The Shawnee County District Court initially ruled that Base State Aid Per Pupil should be $640 higher than current, which would cost about $434 million and would also generate an automatic increase of $152 million in the Local Option Budget.  The Kansas Department of Education says even that is not enough; Deputy Superintendent Dale Dennis says the total state portion should be $657 million instead of $443 million.  And school district lawyers say the court should have awarded $1.3 billion annually (plus $450 million more in LOB) instead of $443 million. 

Regardless of the amount, it’s safe to say that there will be little, if any, impact on student achievement.  That’s not a prediction; it’s history.  Billions more in funding, even adjusted for inflation, has had no real impact on independent measures of student achievement.


A ten-year history of ACT scores shows the same thing – spending up significantly but ACT scores are flat.

The impact on taxpayers and state services, however, will be potentially devastating.  To explain, we’ll use the KSDE version of how much more should be spent on public education, which totals $809 million.

Legislators would be faced with raising taxes or cutting other spending by $657 million.  Local property taxes would automatically increase by $152 million if BSAPP is increased to $4,492.  (Local school boards could opt to reduce their mill rates to avoid this but they didn’t do so when the last court-ordered windfall took place.) 

 The following three tax increase options show the impact of funding the entire amount by property tax, sales tax or income tax. 

Funding the entire $809 million through property taxes would result in a 20% increase in the typical property tax bill.  Using sales tax to fund the $657 million state portion would take the state sales tax rate from 6.15% to 7.79% and there would also be a 4% property tax increase to fund the $152 million increase in Local Option Budget.  Funding $657 million with income tax would require a 26% increase in the amount budgeted for Fiscal Year 2014 and there would also be a 4% property tax increase to fund the $152 million increase in Local Option Budget.

If Legislators chose to reduce other General Fund spending instead of raising taxes, the following table shows the impact of a pro rata reduction.

Legislators could also choose various combinations of tax increases and spending reductions, but there would still be a 4% property tax increase to fund the higher Local Option Budget.

Hopefully, the State Supreme Court will overturn the lower court ruling or at least tell the Legislature to do some homework to determine what it might cost for schools to achieve the required outcomes while organized and operating in a cost-effective manner.  Believe it or not – no such attempt has even been made in Kansas.  But that’s another story.

 

 

Posted by Dave Trabert on Thursday, August 22, 2013

Yesterday’s blog post explained how demographic differences can give a false impression about ACT composite scores.  Kansas, for example, has a higher state average only because its student body mix has a greater proportion of White students…and Texas has greater proportions of other races.  A superficial comparison might seem like Kansas has the better performance, but Texas students actually have slightly higher scores with all but one demographic comparison.  But you can count on the education lobby proclaiming that Kansas outperforms Texas. (It’s a money thing…Texas generally outperforms Kansas in ACT and NAEP but spends nearly $1,000 per-pupil less, which undermines the notion that money drives achievement.)   Today we’re going to expose some more ACT facts that you won’t get elsewhere.

Real Change vs. Demographic Shift

Kansas’ composite (average) score dipped from 21.9 last year to 21.8.  There were slight declines for four student cohorts but two cohorts increased and two more held steady, including the largest cohort - White.   Most of the composite score decline, however, is due to shifts in the weighting of several cohorts.  While the White score held steady, it didn’t count as much as in 2012 because a smaller percentage of those taking the test were White.  Scores for Hispanic and African American declined a little but they also counted more toward the overall average.

We can determine the impact of the demographic shift by applying the 2013 weighting to scores for prior years.  As shown in the data table beneath the next chart, the normalized composite score only declined from 21.87 to 21.84.  Note also that the 2013 normalized score of 21.84 is actually higher than in 2009 and 2010.  

 

Comparison to the National Average

The Kansas composite score is above the national average, but again, demographics account for more than half of the difference.  If the Kansas scores were weighted the same as the national average, Kansas would have a composite score of 21.3. 

Kansas isn’t the only state whose composite score gets an artificial boost due to demographics.  Iowa, for example, has lower student cohort scores than Kansas but has a higher composite because Iowa is 83% White, 5% Hispanic and 3% African American.


Can District Administrators and Legislators Play Moneyball?

Tip of the hat here to a great article in The Atlantic by Peter Orzag and John Bridgeland entitled “Can Government Play Moneyball?”  The authors said, “The moneyball formula in baseball—replacing scouts’ traditional beliefs and biases about players with data-intensive studies of what skills actually contribute most to winning—is just as applicable to the battle against out-of-control health-care costs.”

Replacing traditional beliefs and biases with data-intensive studies of student achievement and efficient use of taxpayer money is also applicable to the battle to improve student achievement.  Focusing on student cohort scores instead of state and district averages would be a step in the right direction.    

 

Posted by Dave Trabert on Wednesday, August 21, 2013

Most people understand that one cannot fairly compare average student achievement scores of a poor, inner-city school district with a suburban school district because of dramatic achievement gaps for students of color and those from low income families.  (It’s not that those students can’t learn; it’s that they haven’t had equal access to education opportunities.)  Yet the same folks – including educators who should know better – compare state average scores as though every state has identical demographic composition.

The just-released 2013 ACT Composite Scores are a good example.   The composite (average) scores for Kansas and Texas are 21.8 and 20.9, respectively, on a scale of zero to 36.  A superficial comparison might seem like Kansas has the better performance, but Texas students actually have slightly higher scores with all but one demographic comparison.

 Kansas has a higher state average only because its student body mix has a greater proportion of White students…and Texas has greater proportions of other races who have lower scores that White students (in both states).  Texas’ White score of 23.3 only counts for 39.4% of their composite score, whereas Kansas is credited for 72.2% of its White score.   Composite scores are simply weighted averages of each component.

Comparing averages of disproportionate components is mathematically invalid.  And not just across states.  One must also be aware of demographic fluctuations within a state.  That’s the subject of tomorrow’s blog post.

Posted by James Franko on Tuesday, August 20, 2013
This is a guest post that originally appeared at the Oklahoma Council of Public Affairs' blog and is written by Dave Bond.

Recently, OCPA released a new memo (a short read, with visuals) detailing the success of Oklahoma’s income tax cuts since 2005.

Couple this with Oklahoma’s data from the “How Money Walks” project (click here for the map, click on Oklahoma, then notice how the trajectory of adjusted growth income – AGI – moving in and out of the state swings upward for Oklahoma starting in 2005). Then the correlation becomes very strong, indeed: as income tax cuts have helped propel Oklahoma’s private-sector economy, overall state tax revenues have risen to record highs. (See more in the latest issue of Perspective.)

This also matches up with data from the American Legislative Exchange Council’s Rich States, Poor States, which shows no-income-tax states with higher rates of tax revenue growth than high-tax states.

In the recently ended fiscal year, Oklahoma set new record highs for total tax collections, including record highs for both income tax and sales tax collections. This, despite a total reduction of 20 percent in the state’s personal income tax rate since 2005, and despite natural gas prices – and natural gas revenues – currently far below past highs.
- See more at: http://www.ocpathink.org/articles/2442#sthash.4XnNAaeJ.dpuf
Posted by James Franko on Friday, August 16, 2013
When a United States senator's home state newspaper opens an editorial by quoting the same senator you know a controversy is likely in the offing.

Case in point, the Chicago Tribune quoted Sen. Dick Durbin in their "Durbin's Enemies List" editorial with;

"It is absolutely unacceptable to single out any political group — right, left or center — and say we're going to target them. That is unthinkable. That goes back to some of the worst days of the Richard Nixon administration."

—U.S. Sen. Dick Durbin, D-Ill., on IRS targeting of conservative groups for special scrutiny, May 13, 2013.


Funny then because the "the distinguished senior senator from Illinois" is engaging in much the same kind of targeting in a letter Kansas Policy Institute recently received. In short, Durbin wants to know if KPI has any affiliation with the American Legislative Exchange Council. He is using his position to demand information which he is constitutionally prohibited from collecting - the right for groups and individuals to freely associate and speak.

This controversy appears to have generated the response Durbin was certainly looking for - media mentions about his attempt to demand information from non-profit organizations, legislators, and corporations. Use your preferred search engine and type "Durbin ALEC" to read the fallout.

Kansas Policy Institute wrote back to Senator Durbin and let him know that we wouldn't back down from his bullying. Instead, we'll stand for the freedoms our Constitution enshrines. The same freedoms upheld by a 1950's case in which the NAACP's freedom of association and speech were protected.* You can read the full letter from KPI to Durbin here.

* Historical reminder: it was Alabama segregationists looking to intimidate NAACP donors that led to the U.S. Supreme Court decision in NAACP v. State of Alabama. The line of absurdity is well in the rear view mirror when a member of "World's Greatest Deliberative Body" is engaging in tactics used by opponents of the Civil Rights movement.
Posted by James Franko on Thursday, August 08, 2013
This post originally appeared at the Cato Institute's @Liberty blog and is written by Andrew Coulson, the director of the Center for Educational Freedom at Cato.

The Wall Street Journal
reports today that according to the latest Bureau of the Census figures there was a 0.4% drop in nominal U.S. public school operating spending from 2010 to 2011. The story then makes this unobjectionable factual observation:

Education officials say decreased spending will make it more difficult to prepare U.S. students for an increasingly competitive global marketplace. Some critics argue that public education costs are skyrocketing while academic achievement has not kept pace. They want the system overhauled before more money is spent.

What the story does not provide readers is any measure of student achievement that would allow them to determine who is right. Let’s see if we can help out. Below is an updated version of a chart some of you will already be familiar with. It shows the performance over time of U.S. 17-year-olds on the “Long Term Trends” testing program of the National Assessment of Educational Progress. The spending line corresponds to the trend in the total cost of a complete K-through-12 public school education (i.e., what it cost to send a high-school graduate all the way through public school). For good measure, it shows how the number of public school employees has roughly doubled since 1970–from about 3.3 to about 6.4 million people.

So, who seems to be right: “Education officials” or “some critics”?



Incidentally, the WSJ only gives the partial “operating” figures for per-pupil spending. Actual total per pupil spending in 2010, adjusted to today’s dollars, was $13,871. That was down from the all-time inflation-adjusted high of $14,090 in the previous year. Still, $346,767 per class of 25 kids doesn’t seem too shabby.
Posted by Dave Trabert on Tuesday, July 30, 2013

A recent story in the Topeka Capital-Journal said some districts are considering raising local property taxes because equalization aid to school districts has remained steady for several years.  Districts may want more taxpayer money, whether in equalization aid or elsewhere, but that has no bearing on what schools need.

Equalization is a sound policy - no child's education should be dependent upon the property values of a given district - but equalization should sit on top of a funding plan that gives schools what they need. That's not the case in Kansas; no study has ever been conducted that determines what schools need to attain required outcomes and operate efficiently.  The cost study cited in Montoy and Gannon was supposed to take efficiency into account but the authors chose to ignore efficiency and deliberately gave the courts inflated numbers. 

We need a funding mechanism that is student-focused, not institution-focused.  Legislators should dig deep into the spending and achievement data, determine what it costs to have schools operating efficiently and effectively and design an appropriate funding system.

But speaking of student-focused – how’s this for irony?  Districts support equalization of funding but they oppose equalization of education opportunity for students. Many low income students are forced to attend the school district their parents can afford, yet the education lobby is vehemently opposed to charter schools and tax credit scholarships for low income kids.  

Equalization should be a two-way street.



Posted by Dave Trabert on Monday, July 22, 2013

CNBC had a great interview recently with Travis Brown, the author of How Money Walks, showing which states had gained and lost Adjusted Gross Income due to domestic migration – U.S. residents moving in and out of states – between 1992 and 2010.

Travis Brown used IRS and Census data to build some great interactive graphics to show which states and counties were winners and losers. 

Unfortunately (but not surprisingly), Kansas and most counties are various shades of red on the maps…indicating losses of AGI.  The State of Kansas lost $3.15 billion in a stead outflow.  Predictably, most of Kansas’ gains come from high-tax states and most of the money lost went to low-tax states.


 (graphics from HowMoneyWalks.com)

It's worth noting that California, New York and Illinois have extremely high tax burdens.  Texas, Florida and Nevada do not have a state income tax.  

Posted by Dave Trabert on Wednesday, July 17, 2013

Remember how Pinocchio’s nose would get longer when he didn’t tell the truth?  I’m reminded of that story whenever someone in local government says they are “holding the line” on property taxes while the Honesty Gap continues to grow.

The annual increase in your property tax comes from the compounding effect of changes in your property value and the mill (tax) rate.  For example, if the county increases the assessed value of your property by 4% and the mill rate is increased by 2%, your property tax will increase by 6.08%.   But if you ask someone in government how much your property tax is going up in this scenario, you’ll likely be told, “Oh, we’re holding the line on property taxes.”  Or maybe, “We only raised the rate by half a mill.”  The best you could probably count on is “The mill rate is going up 2%.”  It would be extremely rare to be told that your property taxes were going up by 6.08%.

The difference between the truth (the actual property tax increase) and the change in the mill rate is the Honesty Gap.  Statewide, the Honesty Gap has grown to 82% between 1997 and 2012.  The average county mill rate (combined for all jurisdictions such as cities and school districts) may only have increased by 21% but property taxes jumped 103%.

Some of the larger counties in Kansas have an Honesty Gap well above the state average.  You can see the Honesty Gap for all Kansas counties here.  More detailed property tax data on each county is available at KansasOpenGov.org.

 There is a very easy way to wipe out the Honesty Gap – require elected officials to take a public vote on the amount by which they are increasing your property tax.  In fact, a piece of legislation was introduced this year to that effect.  But cities, counties and school districts fought hard to avoid having to be honest about the tax increases they’ve been imposing.  HB 2047 barely passed the House on a 68-53 vote after being watered down with exceptions and was referred to the Senate Taxation Committee, where it still sits.  (A full explanation of HB 2047 and the names of Representatives who voted for and against this simple transparency measure are included in our Kansas Freedom Index.)

What do you think?  Should elected officials be honest with you about property tax increases?  If you’d like to share how elected officials describe your property tax increase, send me a note at dave.trabert@kansaspolicy.org.  

 

Posted by Dave Trabert on Sunday, July 14, 2013

 

Here’s an interesting fact that’s missing from recent discussions on higher education funding in Kansas: we spend a bigger portion of our budget on higher education than the national average. Data from the National Association of State Budget Officers shows that Kansas allocated 12.1% of the General Fund to higher education in 2012 as compared to the national average of 10%. Kansas also has a much greater portion of total expenditures devoted to higher education, at 16.7% versus the national average of 9.9%.

Being above the national average might not rise to the level of an ‘ah-ha’ moment but it’s an important piece of the overall discussion on higher education funding, especially since the Legislature is being accused of underfunding universities. Legislative budget decisions must consider all relevant information – not just the ‘wants’ of each agency.


Posted by James Franko on Thursday, July 11, 2013
The closest NBA franchise to Kansas is in Oklahoma City so some can be forgiven for possibly missing the big story of the NBA off-season. Superstar center Dwight Howard leaving one of the league’s most historic franchises, the Los Angeles Lakers, for the second tier Houston Rockets (apologies to Rudy Tomjanovich and Hakeem Olajuwon).
 
Howard, nicknamed "Superman", at NBA Slam Dunk Contest

 
There may be very legitimate basketball reasons for a superstar like Howard to leave one of the most storied franchises in all of sports (highest all-time winning % in NBA, 11 league titles while in Los Angeles) with an equally impressive history of men playing the same position (Wilt Chamberlain, Kareem Abdul-Jabar, Shaquille O’Neal). However, as sports are defined by legacies and history it is easy to speculate that something else may have factored into Howard’s decision.

If Kansans did pay attention to the NBA it was probably limited to KU standout Ben McLemore being drafted by the Sacramento Kings…the Kings formerly of Kansas City…in high-tax California. Which brings us back to Howard leaving SoCal for Houston.

ESPN commentators on sports radio in Wichita were only a few of the folks I heard say it would make more financial sense for Howard to sign with a team in an income-tax free state compared to staying in high-tax California, even though the Lakers were able to offer Howard a contract worth more than other suitors because of league rules incentivizing players to resign with their team. Now that he’s made the decision official, Americans for Tax Reform has run the numbers on why taking a contract worth $31 million less to play in Texas actually puts more money, after taxes, into Howard’s pocket:

Had Howard decided to remain with the Lakers, he could have received a max contract of $119 million over five years. Houston, on the other hand, can only offer a max contract of $88 million over four years under the new rules of the Collective Bargaining Agreement. While the difference in pay is one year and $31 million, Howard will actually earn $2.1 million more after taxes by signing with Houston:

Team
Total Tax Burden
Total Tax Liability
Annual After-Tax Earnings
 Houston Rockets
43.4% $9.6 million
$12.4 million
Los Angeles Lakers
56.7% $13.5 million
$10.3 million

For illustrative purposes, the total tax burden is comprised of the top marginal federal income tax rate of 39.6 percent plus the 3.8 percent Medicare surtax plus the top marginal income tax rate of California (13.3%) and Texas (0%). Additionally, figures based on estimated annual pay from Lakers ($23.8 million per year) and Rockets ($22 million per year).

Forbes weighed in as well and talked about other athletes benefiting from no-income tax states (Golfers Tiger Woods and Phil Mickelson, NFL quarterback Tony Romo). While two accounting blogs looked at it to determined his annual pay would be higher in Texas than in CA (here and here).

What does this mean to us working stiffs in Kansas?

Taxes matter! A lot!

Howard has such a unique skill set that he can set his price, under league rules, and has complete mobility of labor. He’ll act rationally, just as you or I would, and maximize his earning potential. The difference is that most people don’t have complete flexibility in where they live and are “stuck” with the taxes as they find them…and where we can find a job.

Just as Howard moved to a no-income tax state, businesses are doing the same and job growth is booming along with it, see adjacent chart with data from the Bureau of Labor Statistics.

Taxes matter and while Kansas has taken some positive steps in recent years The Sunflower State has a long way to go. In short, if more businesses are started in Kansas we’ll employ more people in the private sector and a rising tide will lift all boats. Conversely, higher taxes will scare away entrepreneurs and it will be harder than it ought to find a job for work-a-day Kansans.

What’s more, for already-employed Kansans, higher taxes take money out of our pocket and send it to government bureaucrats. A machinist at Spirit AeroSystems in Wichita, a line worker at National Beef in Liberal, an accountant with John Doe Financial in Overland Park, a public school teacher in Smallville. Each will have more taken from their paycheck because of higher taxes supporting high government spending.

Taxes matter and not just for high-dollar earners like an NBA superstar. They matter for everyday folks from every corner of the Sunflower State. Lower taxes mean more money to save for college or catch an OKC Thunder game when Howard’s Rockets visit our southern neighbor. Lower taxes mean more businesses employ more people via more start-ups and expansion.

Taxes influence the decisions of the average Kansans as much, or more, than they do for the highest paid people on the planet. Our tax burden just doesn’t make front page news.
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