Gov't can provide quality service while saving taxpayers money.

A plan for balancing the Kansas state budget

Kansas Policy Institute President Dave Trabert presents KPI's plan to balance the state's budget without service reductions or tax increases. Trabert spoke a...
Thu, 18 Dec 2014 17:34:52 +0000
Another reason to watch Seinfeld reruns. Economics lessons taken directly from the "show about nothing."

The Soup Nazi (The Economics of Seinfeld)
The Soup Nazi makes delicious soup—so good there's always a line outside his shop. He refuses service to Elaine, and by a stroke of luck she comes across his stash of soup recipes. She visits his shop and informs him that his soup monopoly is broken, while waving his recipes in his face. Also in thi…
Wed, 03 Dec 2014 16:15:10 +0000
Happy Thanksgiving and a hearty huzzah for property rights.

The Pilgrims and Property Rights: How our ancestors got fat & happy

The Pilgrims founded their colony at Plymouth Plantation in December 1620 and promptly started dying off in droves. As the colony's early governor, William B...
Tue, 25 Nov 2014 16:14:47 +0000
Last Refreshed 12/21/2014 10:01:42 PM

CLICK HERE to receive daily notification of new additions to the KPIBlog.
You must be registered to comment. Click here to log in.

Page 1 of 3
Posted by Dave Trabert on Friday, December 19, 2014

The Kansas Uniform Financial Accounting and Reporting Act – K.S.A. 72-8254 – passed in 2013 requires every school district to publish the budget summary for the current school year and actual expenditures for the immediately preceding two school years showing total dollars net of transfers and dollars per pupil.  The statue clearly says the report “shall be published with an easily identifiable link located on such district's website homepage.” 

In May 2014 I reported to a legislative committee that a random review of school district web sites showed an appallingly low compliance level with this statute and that remains true today.  KPI staff recently examined the web sites of twenty seven school districts and found just two districts – USD 443 Dodge City and USD 500 Kansas City – in compliance.  USD 470 Arkansas City provides a link but it goes to an outdated report.

We found the required report on some sites by clicking on a series of links from the home page but that is not what is called for in statute.  This screen grab from USD 443 Dodge City shows how to provide “an easily identifiable link located on such district's website homepage.”  The “Budget-At-A-Glance” link takes citizens directly to the required report.

Perhaps the Legislature should add some ‘teeth’ to laws that impose financial penalties on government entities for failure to comply.  Government penalizes citizens for failure to comply and should be held to its own standard.

Here’s a list of all the districts from our sampling, showing total spending per-pupil for FY 2014 Actual and FY 2015 Budget.  Much more information is available on the budget summary reports, which can be found on the KSDE web site.  Scroll down to the district listings for 2014-15, click on "Budget at a Glance" for each USD and go to page 3 of the report.



Posted by Dave Trabert on Thursday, December 18, 2014

Recent media reports that $648 million must be cut from the Kansas General Fund budget for FY 2016 have predictably produced ‘sky is falling’ declarations, but deeper analysis shows that service cuts and tax increases can still be avoided.  First of all, any shortfall or surplus produced in such forecasts are not absolute certainties but strictly circumstantial; i.e., they are predicated upon a unique set of circumstances and the amount of shortfall or surplus changes with each new set of circumstances.

The budget profile released by Kansas Legislative Research Department (KLRD) on December 11, for example, shows increased expenditures for school finance, human service caseloads and the government pension program (KPERS).  If one of more of those assumed expenditures does not need to be made (in whole or part), the shortfall is adjusted accordingly.

The increase for school finance in FY 2015 is driven by two aspects of the school funding formula.  The Local Option Budget is equalized based on an arbitrary formula using Assessed Valuation Per-Pupil; AVPP increased this year, causing more districts to be eligible for equalization funding, totaling $34.3 million. Another $19.8 million in capital outlay aid is included because more districts than anticipated assessed a Capital Outlay mill levy so they could collect more state aid.  

The legislature could, however, choose to modify the school funding formula so as to avoid any increases.  The State Supreme Court ruling on equalization in Gannon made it clear that spending more money on equalization was just one way to resolve the issue; the Court also indicated that the legislature could reallocate the same amount of money so that funding met the equalization test.  The capital outlay aspect of the formula could also be altered to avoid having to increase funding.

Eliminating the school funding increase is one of many adjustments that could be made to reduce the amount of budgetary change required.  The items highlighted in yellow on the adjacent table show how the $648 million shortfall for FY 2016 is quickly reduced to $261 million…and that’s assuming that $76.6 million more is actually needed for human service caseloads, another $52.4 million is needed for KPERS and no additional surplus funds are transferred from the Department of Transportation and other state agencies.

The other adjustments listed include:

  • Remove the assumed revenue reduction for Local Ad Valorem Tax Relief (LAVTR) which has not been funded since 2003.
  • Remove the assumed revenue reduction for City / County revenue sharing, which has not been funded since 2003.
  • Remove the assumed revenue reduction for a $40 million increase in KBA funding.
  • Freeze Promoting Employment Across Kansas (PEAK) at its current level rather than increase taxpayer subsidies to select employers.
  • Eliminate the Job Creation Fund allocation, which is another select employer subsidy.
  • Reduce state aid to schools and require school districts to replace the funding by spending down funds provided in prior years that weren’t spent. This one-time reduction would be replaced in FY 2017.
  • Reduce aid to universities and require them to use unspent tuition dollars from prior years.  This one-time reduction would be replaced in FY 2017.
  • Place new hires in a defined contribution retirement plan.

Additional adjustments would be needed in FY 2016 and FY 2017 but these are manageable amounts that could be found by operating government more efficiently and transferring surplus agency and KDOT balances.

See the KPI Five-Year State Budget Plan and an earlier blog post for more discussion of proposed budget changes and the unnecessary revenue reductions for LAVTR, revenue sharing and KBA funding.

Posted by David Dorsey on Thursday, December 18, 2014

“Kansas has a ‘dead’ charter (school) law.”

This according to the just released “On the Road To Better Accountability: An Analysis of State Charter School Policies” from the National Association of Charter School Authorizers (NACSA). NACSA published their nationwide findings based on an analysis of the state laws that charter school authorizers follow when approving public charter schools and holding those schools accountable for high performance.

The authorizer is a key but sometimes overlooked player in world of public charter schools. NACSA summarizes their importance in this manner:

Good authorizing leads to better charter schools for children. Authorizing is the work of approving and monitoring charter schools and determining which of them are performing well enough to stay open.

Each of the 42 states plus the District of Columbia that have charter school laws, identify the organizations that have the authority to grant and monitor charter schools. Kansas is one of 17 states in which the only authorizer is the school district in which the charter school operates. Twenty-one states have a “few” authorizers and the other five have “many” authorizers.

NACSA identified eight policy categories and utilized a rubric-based scoring method on each of them for every state. It is important to note that this report is not a judgment on the overall quality of the charter schools, but an indication of how well the states have developed policies for authorizers to follow. The table below, a summary of Kansas taken directly from the report, shows that we score a zero out of 30 possible points, the only state to earn a goose egg.

The details column of this table delineates the inadequacies of current Kansas law. The sentence that bears repeating is: Creating legally autonomous schools and a viable alternative authorizer should be the primary policy goals for the state.

Amen to that.

This is why Kansas is one of five states (along with Alaska, Virginia, Wyoming and Iowa) that have had NACSA declare their charter school laws “dead.” As described on page 20 of the report, “(t)hese states are characterized  by what they lack – state law does not definitively provide charter schools with a legally independent governing board with key legal, fiscal and personnel autonomies.”

I have expressed my opinion several times over the past months in this venue on the importance of having more public school choice in this state. A first step to accomplish this would be to do just what NACSA suggested: change state law to provide an alternative, independent board to approve and oversee public charter schools.
Posted by Dave Trabert on Friday, November 28, 2014

A recent column by Dave Helling in the Kansas City Star pondered reasons why “...the Johnson County moderate, a fixture of Kansas politics for decades, is an increasingly endangered species.”  Larry Winn III, described as a charter member of the county’s moderate faction, suggested that conservatives are more ‘excitable’ and do a better job of getting their base out to vote.  Other suggestions included a variety of demographic shifts and the influence of social media, making voters less dependent on endorsements. 

Another suggestion – which is very encouraging – is that “the old model…[of]  voters quietly deferring to the judgment of business and community elites…appears broken.”  Given the preponderance of partisan, unreliable information being passed off as ‘fact’, it is imperative that citizens gather their own information and make independent, informed decisions.

However, one reason for the declining power of moderates wasn’t considered, and it’s one that applies to all factions of all parties – the possibility that voters are rejecting their self-serving false choices.

Winn says moderates are “…more interested in practical problems than ideology.”   That is a classic false choice; one can be interested in practical solutions and have an ideology.  Note to Mr. Winn – whatever beliefs underlie your moderate philosophy constitute an ideology, which is nothing more than a set of ideas and beliefs. 

Helling’s column gets to the core of the moderate ideology – preference for high-quality public education and infrastructure over a lower-tax, smaller-government approach.  That’s another classic false choice; Kansans can have high quality public education and other services while also benefiting from a low-tax, smaller government.  Indeed, the states that tax income spend 49 percent more per-resident providing the same basket of services as those without an income tax.  And they don’t pass the costs on to local government; per-resident local tax collections are 9 percent higher in the states that tax income. 

Dick Bond, another Johnson County moderate leader, condescendingly suggested that moderates didn’t vote the ‘right’ way because they just didn’t understand the issues.  He can’t fathom that some former moderates may be tired of being told they must accept false choices…or how they should think.

Despite mountains of evidence to the contrary, moderate leaders equate better outcomes with higher spending and claim that spending less will force quality to decline.  That’s another false claim intended to keep citizens supportive of higher taxes.

Moderate leaders at the state and local level aren’t opposed to lower taxes per se, but to the cultural shift necessitated by a smaller, low-tax government.  Providing the same or better quality service at a better price means there are far fewer spoils to divide among those who profit from government spending, and it’s the power to pick winners and losers that they crave most. 

The ‘winners’ include single companies that receive targeted subsidies or tax breaks, industry categories that profit from targeted policy (e.g., “expanding Medicaid is good for hospitals and "renewable energy mandates and property tax exemptions are good for the wind industry”) and government entities that benefit from proposed spending increases.  The ‘losers’ are citizens who must pay higher taxes to fund the largesse.  The false choices perpetrated by moderate leaders favor institutions over individual citizens and students.

Citizens certainly want more jobs and high quality services but they are tired of being told that paying higher taxes is the only option.   Citizens want real solutions – not false choices.

Posted by Patrick Parkes on Wednesday, November 26, 2014

New private-sector jobs numbers from the U.S. Bureau of Labor Statistics point to a growth surge in October for Kansas. Comparing October’s jobs mark this year to that of October 2013 shows a 1.24% increase. If this uptick holds, it is a noticeable improvement from September 2014’s growth of 0.81% relative to September 2013. To be sure, examining year-to-year growth in one-month snapshots such as these certainly cannot tell the whole story of job growth in Kansas or anywhere else for that matter.  Still, the magnitude of October’s year-to-year growth is noteworthy here even if we just consider it a starting point in helping to determine whether Kansas’ performance for the month will usher in a new growth trend or will prove instead to be a one-time statistical anomaly.


Having examined October’s jobs releases for Kansas, let’s now take a deeper look at job growth in our state with an eye toward comparing its recent growth trends post-2012 tax reform to its trends pre-reform.


From 1998 to 2012, prior to tax reform, private-sector jobs in Kansas increased by 2.31%, or just 63.45% of job growth for its income-taxing peers. In just the twenty two months following tax reform, Kansas’ private sector jobs increased by 3.02%, or 92.43% of the growth rate for Kansas’ income-taxing peers. So, while Kansas is still trailing its peers, it has become much more competitive since income taxes were reduced.

Check back for next month’s update.

Posted by Steve Anderson on Tuesday, November 25, 2014

There has been much ado in media outlets and from “people that matter” about whether Kansas has enough revenue after the tax cuts of recent years. Unfortunately, few of them make an honest effort to examine and understand Kansas’ full financial picture. They focus on just those funds currently in the appropriation process and feed the claim that the state is short on revenues. These same pundits and politicians have either chosen to ignore the billions of special interest tax ‘deals’ which have been made over the years or are woefully naïve on their existence and fiscal impact on the state treasury.

Kansas has a significant amount of revenues that don’t flow through the appropriation process. These ‘off the tops’ primarily come in three forms. They are either a deduction, credit or an exemption that an individual or company can take to reduce the tax burden. Or, they are a dedicated directed revenue to a specific agency for either a specific purpose or the general use of the agency. In short, these are spending mandates or revenue loopholes that have a very real budget impact but rarely go through the legislative process. The $8.3 billion in annual budget impact is a staggering sum as the following chart shows for the last fiscal year the data is fully available.*

The volume of deductions, credits and exemptions that either reduce or eliminate the amount of tax owed by an individual or company favors those who can hire high powered lobbyists to manipulate the legislative process. These are often the same individuals and companies with the means to hire tax attorneys or CPAs to navigate the complexities of the state’s tax rules. The result is that the average taxpayer carries the load while billions of dollars go to those fortunate enough to have lobbyists and tax experts on their payroll. We can level the playing field for the average Kansan by eliminating their income taxes altogether largely by removing or reducing the special interest tax breaks that currently exist for the political class.

This is a free market approach to tax reform that avoids the use of the tax code to pick and choose winners and losers – usually winners and losers amongst the well-connected. However, the issues with these special interest ‘deals’ goes further than just the inherent unfairness of the tax code. The well documented long term economic malaise that Kansas has suffered through shows the ineffectiveness of the special interest approach to economic growth. In fact, KPI’s Dave Trabert has repeatedly said this stagnation is the reason FOR lower taxes across the board. Conversely those states that simply have no individual income tax have prospered with vastly superior private sector job growth (more below on specifics).

Individual Income Taxes

The individual income tax deductions, credits and exemptions present an immediate opportunity for the Legislature to reduce the size and complexity of the Kansas tax code. This begins the process of leveling the playing field for individuals and industry located in Kansas. The first step on that path is as easy as eliminating those tax credits that where not used in the last fiscal year. Because even if they aren’t “used” by taxpayers the official revenue estimates must assume that they are and the budget picture looks scarier still.

One of the realities in tax reform in Kansas is that every piece of tax legislation requires a fiscal impact study on the ‘cost’ to the state coffers and under the “pay and go” rules of the House of Representatives requires an offsetting expense reduction or revenue. The special interest tax credits listed in the following chart had no filers using them during the last year that data is available. Their removal from the tax code would have no fiscal impact nor require “pay and go” offsets thus making the process relatively easy. Again, this simple adjustment would immediately reduce both the size and complexity of the state tax code. 

However there are a significant number of tax credits that are being used, some of which favor only a small number of filers. The following chart shows the nearly $503 million in tax credits that were used on 2012 individual and fiduciary tax returns and the number of filers claiming them.*

An examination of this list provides lots of opportunity to reform or eliminate questionable credits. The credits vary in size, usage, and stated goal but each is worthy of review. As with all government programs, we should examine each credit to determine if it is actually achieving the broader policy outcome rather than simply relying on their stated goal.

Other issues abound in these tax breaks including the lack of information, due to confidentiality rules, on several of the tax credits. These disbursements affect all citizens and it should be a transparent and accountable system. Their size and scope should be known including who receives these taxpayer-funded handouts. Any program that cannot be transparent should be a target for elimination. We are unable to estimate the amount of saving, precisely because of their opaque nature, but regardless of the dollar amount these programs should be discontinued or the statute should demand transparency. Those receiving the credits should be aware their use of taxpayers’ funds will be revealed. It is not unreasonable for the financier (e.g. taxpayers) of the credit to know the recipient. Once the amount of funds expended and number of filers using the credits are known, citizens can make it known to their legislator if they object to a particular credit.

The numerous credits with smaller amounts of expenditures and claimed by very few filers would better serve Kansas if they were discontinued and the savings---$31 million in 2012---used to fund the elimination of the individual income tax for all taxpayers. Why not use the elimination of these credits to help accelerate the buy down of the income tax now as they will ultimately need to be removed when the income tax rate hits zero?

Corporate Income Tax

Unused credits for corporations should be eliminated just the same as they should for individual filers. Eliminating these corporate credits would have a significant impact on the size and complexity of the state tax code. The chart below shows those which had no usage in 2012.

Those credits that were used are revealing both in their size and usage. As the following chart shows, nearly half of the $114 million known tax credit filings for corporate filers goes to a relatively small number of filers---170 in total---for the High Performance Incentive Program (HPIP). HPIP provides a training tax credit and a 10% income tax credit to eligible companies for capital investments (i.e., facility or equipment purchases or upgrades) and is by far the largest credit in terms of cost. In fact, HPIP has come under fire for issues of non-compliance. This is compounded by very little evidence that the credits are cost effective for Kansas citizens in creating economic growth. HPIP receives 51% of the total of known corporate tax credits and the small number using the credit is indicative of a program that is benefiting a few with a high cost to the overwhelming majority of taxpayers.

Even without knowing the amount of the credits that are listed as confidential, simply eliminating the $114 million in existing known credits in 2012 could have been used to significantly reduce other tax rates. Be they individual income taxes, small business or corporate taxes the elimination of credits used by the few would benefit all Kansans by lowering their burden.

Just as with the individual income tax, the lack of information on several of the tax credits creates a troubling lack of transparency. These disbursements affect all citizens and the size and scope should be known.

Payroll Withholding Tax Exemptions

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.

Programs such as IMPACT, PEAK, the “deal closing fund” of the Job Creation Fund and the Kansas Bioscience Authority were covered in some detail on this blog earlier this year. In short, “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 types 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.”

The Consumption Part of the State Revenue Puzzle: Sales Tax

Surprisingly, in the not too distant past Kansas had a more consumption tax based revenue system. Kansas Legislative Post Audit noted that “the percentage of State revenues provided by income taxes tripled between 1960 and 2009, rising from 15% to 45% of the total. During the same period, the percentage of State revenues from sales and excise taxes declined from 71% of the total to 49%. This reduction occurred even though the State’s sales tax rate more than doubled, from 2.5% in 1960 to 5.3% in 2009”.

One of the ‘causes’ of that reduction is evident when you examine the Summary Table of ‘Off the Tops’ at the beginning of this section. Over $5.6 billion---yes that is a billion---in exemptions, deductions or credits were claimed on sales tax in 2012.* Conceptual or General Exemptions alone were just over $4 billion. The second largest area of exemptions is actually the government excluding itself. The amount of tax income removed from state coffers by category is show in the following chart.

The list of each category is far too voluminous for listing here but the size and scope of the sales tax statute exemptions provide opportunity for legislators to consider if they seek consumption based tax policy using a more broad based approach.

Measure the Policy by the Results

How effective has the approach of the aggressive use of credits, deductions and exemptions for special interests in the income tax code coupled with increased sales tax exemptions been on the Kansas economy? The real answer is that Kansas’ economy has lagged behind our region for most of the 21st Century. A May 2014 commentary from Dave Trabert, “Media has often reported over the years that Kansas typically goes in and out of recessions later than the rest of the country. Private sector job growth in Kansas trailed the national average in ten of the last fifteen years.” A commentary from across the pond makes the same point, a July piece from London’s Daily Telegraph, ““Delve a little deeper, however, and you find growing cause for optimism. Kansas has been an essentially stagnating economy for a long time now – substantially agrarian in its make-up but with some important manufacturing industries, particularly aerospace, which have been the subject of repeated downsizing. Trailing the national economic averages therefore doesn’t really amount to evidence that tax cutting has failed; it was the reason the reforms were introduced in the first place.” Or, The Wall Street Journal stateside, “Economic growth in Kansas has trailed the Great Plains region and nation for decades. Between 1982 and 1997, Kansas’ private GDP growth ranked 43rd in the country—ahead of only West Virginia, Oklahoma, Montana, Louisiana, North Dakota, Wyoming and Alaska. While some of those states have since boomed, Kansas has plodded along. Between 1997 and 2012, Kansas’ private economy grew by 4% a year compared with 4.3% nationally, 4.9% in Colorado and Nebraska, 5.3% in Oklahoma, and 6.1% in Texas.”

The answer to solving these problems isn’t in giving more handouts to selected individuals or businesses. The answer is in giving each Kansan the chance to keep a little more of their own money in their own pocket. As income tax rates continue to come down we’ll see this in real time. It likely will not be “a shot of adrenaline” but it will, over time, make Kansas a regional leader in job creation, population growth and faster wage growth.

This isn’t an experiment but a study in facts. Data from U.S. Bureau of Labor Statistics show this fact in stark detail – state with no income tax have grown jobs by 18.25% since 1998 while state with an income tax have grown jobs by only 5.63%. The question isn’t whether Kansas will see the same benefits in the long run, but whether Kansas has the will to stop giving handouts to the politically connected and focus on creating a better overall environment in which each Kansan has a chance to succeed.

*Kansas State Tax Expenditure Report, Calendar Year 2012

Posted by David Dorsey on Friday, November 21, 2014

Public school teachers are being “chewed up and spit out,” according to a recent opinion in The American Thinker. The article  paints a dismal picture of the high turnover rate in teachers, especially the alarming rate in which new teachers leave the profession. The author, Bruce Deitrick Price, places the blame squarely at the feet of what he calls the Education Establishment.  Although he doesn’t specifically define Education Establishment, he implies it consists of principals, administrators and university level schools of education. He claims that high teacher turnover is due to a lack of support by the Education Establishment to new teachers. Price even goes so far as to say the Education Establishment actually has a vested interest in high turnover because there will be a continuous crop of “starry-eyed rookies who’ll need classrooms, books, and lots of instruction.”

It would be easy for me to agree with Price’s conclusion since I spent two decades in public school classrooms with little or no support from principals and administrators.  Looking back, many decisions made by principals and administrators were actually worse than getting no support at all. However, the explanation for high turnover isn’t that cut and dried.


While reading the article, I reflected on how I was able to avoid the pitfalls that would lead to me forsake the teaching profession prior to joining KPI.  Perhaps the biggest advantage I had is that I didn’t start teaching until my late 30s. This helped me in two ways. First, I had a previous career and had experience dealing with, shall we say, less than stellar management types. It helped me realize that I had to be the one responsible for solving most problems that arose. Second, I had gained a maturity I didn’t have in my early 20s, the time when most teachers start their careers. This probably holds true for most adults. Think back to the person you thought you were at 22 compared to how your present-self would deal with the same idealistic whipper-snapper you were at 22.


Also, I specifically chose to become a teacher, as opposed to many who, I am convinced, do not. I take issue with Price’s notion that a teacher who quits has “dreamed about being a teacher for as long as (he or she) can remember.” I was first licensed to teach in Arizona and it was without a teaching degree. I went back to college to get the requisite hours to become certified under what was called a “post baccalaureate” program. There were many twenty-somethings who were doing the same. I was surprised to learn how many decided to get into teaching because a) they didn’t like the job they got out of college, or b) got a degree that didn’t get them a career that interested them. Teaching wasn’t their first choice. And whether or not one likes to concede this, a teaching degree is often a “fall back” choice for many of those coming out of college. Admit it, how many times have we heard someone, somewhere in our past say: “Well, I can always teach.” Not everyone is like me who willfully chose to follow their calling to help kids succeed in school.  

Even many of those who do truly want to teach come out of college unprepared, which is another factor in high turnover.  The typical education degree/teacher prep program offered by colleges and universities is a flawed process in adequately preparing one for the rigors of being in charge of a classroom of students.  The typical college degree track  that includes the one semester student teaching requirement just doesn’t cut it. A single semester doesn’t allow a student teacher to experience all that goes into the complexities of becoming a teacher. It hardly allows one to make a connection with the students in a classroom, let alone learn everything else that goes on outside the four walls that you don’t learn about in college. At a minimum, one needs an entire school year to prepare for the rigors of running a classroom.  Perhaps American Federation of Teacher’s president Randi Weingarten put it best:

"It's time to do away with a common rite of passage into the teaching profession—whereby newly minted teachers are tossed the keys to their classrooms, expected to figure things out, and left to see if they and their students sink or swim. This is unfair to both students and their teachers, who care so much but who want and need to feel competent and confident to teach from their first day on the job."

A more effective approach would be to make a teacher prep program be like an apprenticeship, one in which a teaching candidate would be partnered with a school and be assigned to a designated master teacher throughout the apprenticeship. College classwork would be tailored to prepare for the appropriate level of teaching. For example, those who want to teach high school would take classes that focus on subject matter while those on an elementary track would take classes focusing on pedagogy and classroom management.

This would unquestionably reduce the number of people who leave the profession early because teacher candidates would get a taste of the realities of the entirety of being a teacher, including all those outside-the-classroom distractions and challenges that one cannot comprehend beforehand. This approach would not only better prepare teacher candidates, but it would also serve to filter those who would come to realize that teaching isn’t what they anticipated.

Mr. Price is correct that the Education Establishment needs to be held accountable for their role in high teacher turnover. Nevertheless, it is just as critical, if not more so, that those entering the profession are sincerely committed to teach and have the chops to handle the job.
Posted by Patrick Parkes on Tuesday, November 18, 2014

September’s private-sector jobs picture inched forward ever so slightly from August’s. States without an income tax maintained their sizeable job-growth lead over their income-taxing counterparts, posting 3.14% growth through 2014 thus far when compared to the same stretch of time in 2013. This represented an increase from the 3.11% rate posted in August.

Comparatively, the income-taxing states also experienced a slight uptick in their rate of job growth. Their job growth rate of 1.61% thus far in 2014 versus the same time period in 2013 represented an increase from the 1.59% rate they posted in August.


Kansas continued its trend of posting growth similar to that of its income-taxing peer states. Its growth rate of 1.30% was down only slightly from the 1.36% growth rate it posted in August.


Check back soon for October’s update.   

Posted by Dave Trabert on Saturday, November 15, 2014

Taxes are the source of most Kansas General Fund revenues but one other component, Net Transfers, is artificially suppressing revenue estimates for FY 2016 and FY 2017.  As Steve Anderson explained here a few months ago, some tax revenue is taken “off the top” and transferred out – never being available for General Fund services and functions.  The upshot is that these ‘tax expenditures’ cause revenue and spending to be understated and obscures tax expenditures from citizen scrutiny.

Our review of the new revenue estimates discovered a very large increase in revenue transfers out the General Fund for FY 2016 and FY 2017, a large portion of which are merely there for procedural reasons and will not occur.  Kansas Legislative Research Department (KLRD) lists the items shown in the adjacent table because the amounts are identified in statute, but that does not mean that the transfers will occur; two of the transfers haven’t occurred for more than ten years.

Local Ad Valorem Tax Relief (LAVTR) and City/County revenue sharing were last paid in 2003, but the provision for each was never removed from statute.  Transfers out to the Kansas Bioscience Authority had been capped at $35 million in prior years (with actual transfers being smaller) but the statutory cap is $75 million beginning in FY 2017.  KLRD confirmed that the combined $183 million for these items was not included in previous revenue estimates.

Legislators should remove funding amounts from statute and handle each item individually in the appropriations process (as real expenditures, not tax expenditures).  Alternatively, non-recurring transfers such as these should simply be referenced in footnotes and not shown as revenue reductions.

Since the focus is on total revenue and these artificial revenue reductions are not planned to take place, citizens and legislators have been given a distorted impression of tax revenue growth.  Total General Fund revenue for FY 2017 is estimated to be 4.0% greater than in FY 2014 but tax revenue is estimated to be 8.5% higher.

Much has been made of the revenue decline as marginal tax rates were reduced but total tax revenue is still running ahead of inflation over the last ten years.  As shown here, General Fund tax revenue for FY 2014 was 28.4% higher than in FY 2004, while inflation was only 24.3% (Midwest Urban Cities on a fiscal year basis).  Further, the gap between actual and inflation is expected to widen over the next three years.  Estimated tax revenue for FY 2017 would be 39.3% higher than 2004 but inflation would only be 29.2% higher (assuming inflation to grow at the same pace for FY 2015 through FY 2017 as it did for FY 2014).

It’s often been said that Kansas has a spending problem – not a revenue problem – and this chart of tax revenue growth certainly bears that out.  The problem is even more apparent when examining state spending history.   KLRD projects FY 2015 spending to be $6.43 billion (before adjustments to maintain a zero ending balance; had General Fund spending increased by the combined rate of inflation and population, FY 2015 spending would only be $5.43 billion. 

Fixing this very real spending problem is the key to balancing the budget going forward.  Not by simply cutting spending, but by implementing a “Better Service, Better Price” culture and providing services at a better price. 

The conclusion of the KPI Budget Plan for Kansas published in September still holds, even with the new spending and revenue estimates: the budget can be balanced without service cuts or tax increases.  Implementing the KPI plan with the new revenue and spending estimates would only require state government to operate 7% more efficiently over a three-year period and finish FY 2017 with $457 million ending balance.  The real efficiency requirement will likely be even less once legislators review agency carryover cash balances, additional unnecessary tax expenditures and other spending.

The adjacent table follows the KLRD profile format (final spending each year becomes base spending for the next year), but revenue estimates have been increased by the amount of the transfers not intended to occur.  The other shaded items are from the KPI budget plan; K-12 excess carryover is adjusted based on 2014 fund balances that were not available at publication of the KPI plan.

Spending is adjusted each year to achieve targeted General Fund ending balances.  The impact of those adjustments is shown as the percentage by which government must operate more efficiently (3% this year, 3.1% next year and 0.9% in FY 2017.   

Finding a few percentage points of efficiency, additional unnecessary cash reserves and tax expenditures will not be the challenge; the real issue for legislators will be finding the courage to resist pressure from the bureaucracy and special interests and take responsible action to provide the same or better quality service at a better price.
Posted by David Dorsey on Friday, November 14, 2014

You may have never heard of the American Association of Educators(AAE).  When I was teaching, I knew of the Kansas chapter, known as KANAAE(the acronym is pronounced ‘kuh-NAY’), but thought it was just another teacher’s union. Boy, was I wrong.

Being the non-union person that I am, I dismissed them as nothing more than a different version of KNEA. But AAE is definitely NOT a union. AAE touts itself as the largest non-union teacher association in the country. And that is more than just semantics. AAE is recognized by the IRS as a 501(c)(6) organization, making it a professional trade association (much like the American Bar Association) as opposed to a labor union (like KNEA and AFT). I wish I knew then what I know now.

There are two very tangible differences between AAE and the NEA or AFT.  The first is that AAE does not see itself as a replacement for the other two major unions. Inasmuch, AAE does not get involved in collective bargaining for teachers. The other major difference is that AAE does not make political contributions, and as such is non-partisan.

Last week I had the pleasure to attend and make a presentation at KANAAE’s annual conference in Manhattan. It was quite a learning experience for me. Among many other things, I find out that the AAE is celebrating its 20th anniversary this year, having been founded as an alternative to NEA and AFT. It now has members in all fifty states and, as KANAAE Executive Director Garry Sigle indicated, there are nearly 1,500 members in Kansas (more than doubled in the last 3 years). AAE’s mission statement declares itself as an organization that believes teachers are true professionals and deserve the recognition and respect that goes with being a professional. Whereas a union sees all its members doing the same thing and therefore being treated all as one, AAE does not. Colin Sharkey, AAE’s Director for National Projects, likened teachers’ unions treatment of their members like that of a traditional labor union, like the AFL-CIO.  In doing so the union fails to recognize that teaching is a true profession and teachers shouldn’t be treated like assembly-line workers.

Gary Beckner, the AAE Executive Director spoke passionately of the organization’s vision for the future for teachers all across the nation. It would not be possible to express his zeal in a blog post, so I’ll present his vision for the future of teachers and education. He fervently speaks to a future with:

  • Teachers having more control over their careers.

  • Teachers able to negotiate their own salaries (if they so choose).

  • Teachers not forced to pay for representation they may not want.

  • Innovations in public education that are in the best interest of the communities AAE serves.

  • Fully-funded charter schools, alternative paths to professional certification, and educational choice options for students, parents and teachers.

AAE has taken positions on several relevant education policy issues. Here is a brief summary of how AAE stands on some of those:

  • Forced unionism – teachers should be able to decide whether union membership matches his or her beliefs, not be forced to join because of state laws.

  • Collective bargaining – AAE is not anti-collective bargaining, but finds the model outdated. AAE recognizes that the one-size-fits-all approach to paying teachers does not work in the modern workplace. AAE will never engage in collective bargaining for teachers.

  • Tenure – an overwhelming majority of AAE teacher members believe tenure is not necessary for one to be an effective teacher.

  • School choice – members agree that the status quo is not working and changes must be made for the sake of the students. AAE supports any policy that gives teachers a choice of career opportunities.

  • Charter and Virtual schools – AAE support fully funded charter schools, lifting caps on charter schools and the expansion of virtual and blended education.

  • Paycheck protection – AAE supports a policy that prohibits unions from collecting dues via payroll deduction for political purposes.

  • Common Core State Standards – AAE as an organization does not endorse CCSS, but AAE members are split on their opinion of CCSS.

My presentation to the group addressed issues surrounding the concept of school choice and I was preceded with an update on education related legislative issues   Without getting into specifics, it is clear that my fellow KANAAE members need more information to keep abreast of issues that are important to educators. That is something I hope to address in my capacity with Kansas Policy Institute.

One final thought, if you are a teacher or just someone interested in getting involved in improving education, I highly recommend you join KANAAE. I’m glad I did.
Posted by Dave Trabert on Monday, November 3, 2014

A recent commentary by the Kansas City Star’s Yael Abouhalkah is another sad example of media not allowing facts to get in the way of their personal political beliefs.  The author noted that individual income tax collections for the first four months of the current fiscal year (July through October) are $258 million less than in 2012 and angrily says tax reform is “…stripping funds from the state budget.”   In other words, government isn’t getting what the author considers to be its due.

Kansas state government clearly can function on reduced revenue.   Every state offers the same basket of services (education, social service programs, highways, etc.) but the states that tax income spend 49% more per-resident doing so in 2012.  Kansas spent 37% more. 

KPI even published a 5-year budget plan for Kansas that shows how to balance the budget without service reductions or tax increases.  Kansas would have healthy ending balances each year and still be able to increase spending on education and Medicaid – all by making better use of existing resources.  But the Kansas City Star refuses to share those and many other facts with readers.  Last week we had to pay for ads in the Star to refute their misleading claims on education spending and state economic indicators (an editorial reply was not welcome).  We even had to run an ad to set the record straight on facts contained within our budget plan; the Star didn’t share the conclusion of our budget plan but they went out of their way to misrepresent one of its elements.

Kansas does have a structural budget issue but that should come as no surprise to the vast majority of Republicans and Democrats in the Legislature who had no interest in adjusting spending when taxes were reduced in 2012.   FYI, a reduction of $258 million over four months is about what was projected on an annualized basis by Kansas Legislative Research back in 2012. 

It was wrong to not reduce spending then but the choice now for those heading for Topeka in January will be to raise taxes on everyone or (finally) make government operate more efficiently and provide services at a better price. 

Maybe the Star’s actions are driven by their vehement opposition to tax reform and those who voted for it.  Or maybe the Star doesn't want to acknowledge the work of those with whom they have philosophical differences.  But responsible journalists would not choose sides and withhold pertinent information from readers.
Posted by Dave Trabert on Monday, October 20, 2014

The executive directors of the Kansas Center for Economic Growth (Annie McKay) and the Kansas Economic Progress Council (Bernie Koch) are going around the state with a presentation entitled “The Impacts of Kansas’ Changing Tax Policy.”  School districts in Dodge City, Garden City and Clearwater hosted the events.  It was decidedly partisan and from the perspective of people opposed to income tax reform and the efficiently-operated system of government that is necessitated by placing a smaller tax burden on citizens.

As discussed in another blog post, recipients of taxpayer funds should not promote, arrange or participate in any type of one-sided policy discussions, and government facilities should also not be used for such purpose.  This post will address the most egregiously misleading claims made in the presentation.

Annie McKay (KCEG) showed this slide attributing a $700+ million reduction in state aid for property tax relief and city/county revenue sharing to tax cuts, which is a very deliberate fabrication.  The source on the slide references a paper published by KCEG, which says, “Cities and counties across the state have lost more than $700 million since 2008 from lawmakers defunding of two important sources of local support….”[1]  Since 2008?  Tax cuts didn’t go into effect until 2013.

They list the source for that claim as “Analysis of data from the Kansas Association of Counties Research Report, multiple years.”  A search of the archived reports at KAC (no specific report was identified and Ms. McKay refuses to make her data available) found a table showing the actual and projected amounts by fiscal year.[2]

As shown by this screen grab from the KAC report, the amounts projected for 2009 through 2013 total $714 million but the actual amount received was zero!  In fact, no funding has been provided since 2004 – but that doesn’t stop KCEG from falsely blaming the 2013 tax cuts for more than $700 million in reduced state aid to local government.  The projection calculated by KAC is merely an estimate of would have been received in funding had continued; former state budget director Steve Anderson reviewed state budget documents and confirmed that no funding has been provided for Local Ad Valorem Tax Relief (LAVTR) or City/County Revenue Sharing (CCRS) since 2004. 

KCEG’s claim that tax cuts are to blame for a $263 million reduction in state aid for education is also not true;, their (unsubstantiated) calculation pre-dates the implementation of tax reform: “Total state aid to school districts has been reduced by over $263 million since fiscal year 2008.”[3]  The truth, according to the Kansas Department of Education, is that state aid has increased by $249 million since income tax reduction was implemented in 2013. (The amount shown as state aid does not fully represent the state’s provision for finance of public education.  Total school funding for 2014-15 is estimated by KSDE at $6.15 billion, the vast majority of which is raised on state authority.  Federal funding is only estimated to be $510 million.)

KCEG also claimed that tax reform caused those earning less than $36,000 to pay more taxes while providing a large savings to those with high incomes; their claim is based on information from the Institute on Taxation and Economic Policy (ITEP).  As is often the case, no data is provided to substantiate the claim, and ITEP wouldn’t release their calculations.  Refusing to provide substantiating data is a common practice of KCEG, ITEP and other organizations with a big-government perspective; the Center on Budget and Policy Priorities has also repeatedly ignored our requests for data.

ITEP did, however, share some eye-opening information about their methodology.  They acknowledge that legislative fiscal analysts in most states use income definitions based on Adjusted Gross Income (AGI) but ITEP adds their own estimation of non-taxable and partially-taxable income from sources such as Social Security benefits, Worker’s Compensation benefits, unemployment compensation, VA benefits, child support, financial assistance, public assistance, and SSI in their measure of Total Income.[4]    They also make this astonishing claim: “It’s widely understood that taxpayers at all income levels tend to under-report certain income categories, especially capital gains, pass-through business income, rental income and farm income. For this reason, ITEP’s model makes estimates of the amount of unreported income of each type. This unreported income is included in our “total income” estimates for each state.”

Aside from accusing farmers and other entrepreneurs of being tax cheats, the folks at ITEP believe they can reasonably estimate the degree of ‘cheating’ by income class in Kansas!  By doing so, ITEP is able to assign a much higher value of tax savings for those in upper income brackets.  Imagine the media outrage if a free market organization was caught ‘cooking the books’ and refusing to disclose the ‘proprietary’ data upon which their allegations are based. 

It’s true that those with higher incomes received a larger percentage reduction in their tax liability, but that is merely a reflection of Kansas having a graduated income tax.  Prior to 2013 there were three income brackets; the first $30,000 on a joint return was taxed at 3.5%, the next $30,000 was taxed at 6.25% and income above $60,000 was taxed at 6.45%.  Those with higher incomes had a much larger portion of their income taxed at nearly double the rate of those earning less $30,000; the higher percentage reduction in their tax liability is merely a byproduct of Kansas’ graduated tax rates.

KCEG makes several other claims about “education cuts” that they attribute to tax cuts.  Two of the claims cite a survey they conducted of Kansas school districts, but Ms. McKay refuses to disclose the survey instrument, the number of districts that participated in the survey and any of the supporting data.  One image in their presentation says “nearly 50% of districts have seen average class size grow” and another says schools “gained more than 19,000 students but have 665 fewer teachers.”

As shown in Table 3, the facts refute the claim about student increase and teacher decline since the 2013 implementation of tax reform.  Comparing the 2012 school year to the 2014 school years, KSDE reports an increase of 5,088 students, an increase of 586 classroom teachers and an additional 112 other teachers (all full time equivalent per KSDE methodology).  One would have to go back to 2006 to claim an increase of 19,000 students.

There are many anecdotal reports of class sizes growing but that cannot be attributed to tax reform, as the classroom teacher / student ratio has actually declined since 2012.  If class sizes have significantly increased over the last few years it can only be attributed to management decisions at the district level, as there has been very little change in the teacher/pupil ratio.  Those same management decisions seem to have prioritized the hiring of management and other non-teaching positions over classroom teachers.  Table 4 shows that non-teaching positions grew by 11.5% since 2005, or nearly three times the rate of enrollment.  District management jumped 8.4% (on top of a 21% increase between 1993 and 2005).[5]  There simply is no data to support KCEG’s claim that tax reform caused class sizes to increase.

Ms. McKay also falsely represented per-pupil spending as having declined by $1,000 since 2009.  As clearly shown in Table 5, the Kansas Department of Education says per-pupil spending will be $609 higher this year and set a third-consecutive record.  It should also be noted that districts used $388.6 million in aid to increase carryover cash reserves between 2005 and 2014, or $843 per-pupil based on 2014 enrollment.  Aid used to increase cash reserves is not included in KSDE reports of district spending.




The Kansas Economic Progress Council is a statewide non-profit organization of businesses, trade organizations, chambers of commerce and other members that generally support higher government spending, The presentation from KEPC executive director Bernie Koch (pronounced “cook”) was generally designed to show that Kansas’ economic growth trails the region, downplay the importance of lower taxes to business and scare attendees with predictions of possible 5% to 6% state budget reductions.

To explain “How is Kansas Doing?” Mr. Koch showed just one slide, comparing Kansas to six regional states on non-farm employment growth over the last twelve months and median household income growth between 2008 and 2013.   Non-farm jobs includes government jobs, but that little detail is typically not disclosed by those who use that measure; a one-year comparison also conveniently avoids any perspective.  Yes, Kansas is still trailing on a number of economic measurements but that’s not a sign of failure…it’s the reason tax reform was implemented!  As shown in Table 6, Kansas was below the performance of its income-taxing peers in every category.  States with lower tax burdens have superior economic growth and Kansas often even trails states with high tax burdens.  It may seem intuitive to compare a state to its neighbors but those are not the only states with which Kansas competes.  It is especially important in today’s global economy that we understand how Kansas competes with all states.

But Kansas is showing progress even on a regional basis.  Table 7 lists the states KPEC used in their comparison, but here we compare private sector jobs (the point of tax reform was not to grow government) over two periods – the fourteen years preceding tax reform and the 20 months since.  KEPC is correct in saying that Kansas still trails several regional states (although Kansas fares much better when government jobs are excluded) but Kansas is much more competitive – 87% of the other states’ average -  than over the fourteen years preceding tax reform, where Kansas was only at 46% of their average.  The point here is not that tax reform is ‘working’; it’s far too early to make any declaration regarding the efficacy of tax reform.  Rather, it is to demonstrate the importance of trends analysis in honest evaluations of tax reform, which will take many years to be fairly evaluated.

Median household income growth is not a valid measurement because the median can grow or decline simply based on who leaves or enters a state.  Consider this simplistic example that demonstrates the math involved.  A state has nine households and the household incomes are spread in $10,000 increments from $10,000 to $90,000.  Total household income would be $450,000 and median household income would be $50,000.  Now let’s assume that the two lowest earners leave the state to seek better opportunities and the incomes of those remaining didn’t change over the year.  The state would have seven households remaining with total income of $420,000 (those making $10,000 and $20,000 left) so the median rises to $60,000.  It appears that median income jumped but those remaining are no better off.   Measurements of total growth rather than median or per capita eliminate such deceptive appearances.  

The Bureau of Economic Analysis just released Personal Income total growth results for the second quarter of 2014, listing Kansas as the 14th best in the nation.  Here are a few more encouraging signs that show how Kansas is doing (none of which are mentioned by KEPC):

  • Kansas beat the national average for real private sector GDP growth in 2013.
  • 7th best rate of proprietor income growth in the nation, 1Q 2013 to 1Q 2014.
  • #1 in Creighton University’s Mid-America Business Conditions Index, September 2014.
  • Private sector job growth in Kansas was only 70% of its income-taxing peers over the last fifteen years but has improved to 87% of the average between December 2012 and August 2014.

Finally, attempting to scare people by saying there could be large spending cuts coming as a result of tax reform is one of the favorite tactics of government and those who profit from government spending – implying that less spending means service reductions.   Higher taxes or fewer services is a false choice.  The KPI budget plan shows that the state budget can be balanced over the next five years without any service reductions or tax increases.  The plan includes new spending on education and Medicaid, and total spending would continue to set records.

All this is possible by making better use of existing resources – providing the same or better quality service at a better price.  Citizens do not have to make a false choice; they can have low taxes and good quality service.  But there will be fewer spoils to divide among those who profit from government…and that is what is really driving the opposition to tax reform.

[1] Kansas Center for Economic Growth, “Who Pays” page 2,

[2] Kansas Association of Counties Research Report, May 2013, Figure 6.

[3] Ibid, page 3.

[4] Email from ITEP’s Meg Wiehe dated October 14, 2014

[5] “2014 Public Education Fact Book”, Kansas Policy Institute with data sourced to KSDE.  See Table 18.  The definition of classroom teachers comes from KSDE; Kansas Policy Institute decided which positions to include under management.


Posted by David Dorsey on Wednesday, October 15, 2014
Being an unabashed education reform advocate, I am always on the lookout for those in the education establishment who consider themselves reformers. Recently I came across an opinion published in Education Week titled "Getting Beyond One ‘Right Way’ of K-12 Reform." The essence of author Ted Kolderie’s thesis is that reform should be a two-pronged effort: work to improve the schools we have while being open to trying unconventional approaches to teaching and schools. He calls it a “Split Screen” strategy.

Kolderie writes that reform has not taken root because those involved work to find a consensus on “The Right Way,” as he calls it, and then “engineer a comprehensive transformation politically.” He is absolutely correct in recognizing how it happens when “reform” is driven from within the system. Consensus is a word educators like to use because a) it works to divert attention from the real issue, in this case education reform and b) it absolves everyone from responsibility. As Margaret Thatcher once said, “consensus is the absence of leadership.” Well, how many internal education leaders are true reformers?

The modern history of “reform” was borne from the seminal 1983 publication of "A Nation at Risk." That report came from President Reagan’s National Commission on Excellence in Education and sustained the concern that the nation’s schools were failing. Kolderie points out that problems addressed were tied to organizational performance while taking the traditional school organization as a given. Performance standards, measures and consequences were adopted, but not changes to the system itself.
He follows with a statement that shows just how blinded those are on the inside of the education establishment. It bears quotation:

 “Reform” today is still about driving change into an inert system, rather than changing what makes K-12 an inert system.

He’s correct about one thing: K-12 education is definitely an inert system. But the author implies that systemic change can only come from within the establishment itself. How depressing it is that someone who considers himself a reformer can’t see beyond the schoolyard fence.

He fails to recognize that external pressures to make systemic changes to the traditional public school structure did not exist 30 years ago. The concept of school choice was still in the embryonic stage. The nation’s first public charter school didn’t open until 1992. By 2011 there were over 5,700 public charter schools educating nearly 2 million students.

Kolderie does recognize public charter schools as a “platform for innovation.” But simultaneously (and somewhat curiously) dismisses them for being guilty of just doing what traditional public schools do with better outcomes starting “around 2004.” Huh? He says that there needs to be ways “to depart from the givens of conventional school: from whole-class teacher instruction; from age-grading; from the conventional academic day, week, and year; and from the one-dimensional notion of achievement.” Mr. Kolderie should recognize that public charter schools are not monolithic. He should research the methods utilized by successful public charter school brands, for what he prescribes is the approach followed by many of them.
The weakest part of his opinion piece is the failure to recognize the biggest hurdle to systemic changes in conventional schools: incentive. What is a district’s/school’s/teacher’s incentive to make fundamental system change?

If you guess, “There aren’t any” then you’re right! If you said: “Because it’s the right thing to do,” you need a refresher course in Remedial Bureaucracy.

In fact, there are many disincentives to systemic change. Teachers’ unions fight any attempt at reform. They fear their dam will break when there are recognized differentiations within their ranks. School boards fear community backlash from change or that their funding might take a hit, causing them to have to become more efficient. Competition for students would send shockwaves through the traditional system. Even the Feds provide disincentives for improvement. Through the School Improvement Grant program (SIG) there is the potential for big money to failing schools. (I will have a much more in-depth analysis on the SIG program in a future blog.)

Kolderie concludes with a statement that sums up the weakness that is inherent in making systemic changes from within the education bureaucracy. “And, remind those who resist: Nobody will be forced to change.” Sounds like that could have come from a board meeting of Blockbuster Video or Montgomery Ward. Of course the main difference between public schools and the private sector is that schools never go out of business. And when you are never in danger of going out of business, what’s your incentive to change?

Kolderie’s “Split Screen” approach will do nothing to change the system. What we need is a different channel.

Posted by Patrick Parkes on Tuesday, October 14, 2014

August’s private-sector jobs picture looked largely similar to and relatively unchanged from July’s. With another month of numbers in the books, states without an income tax maintained the same 3.11% growth pace they charted last month for 2014 thus far.


The income taxing states also did not budge from July and their 2014 pace of 1.59%.Kansas hovered near its income taxing peers with a pace of 1.36% for 2014 in August. This represented an ever so slight decline from the state’s 1.41% pace in July.

Check back soon for September’s update.

Posted by Patrick Parkes on Thursday, October 9, 2014
Updated state agency carryover cash balances are now available on KansasOpenGov for FY2014. We take the time to request and publish these balances based on our belief that they are important pieces of the state budget about which most Kansans are not given frequent information. When state agencies in Kansas spend less than is allocated to them in a given year, the leftover sums find their way into designated cash reserve accounts that operate much like the savings accounts many Kansas families use to save for future college expenses, retirement, and/or a “rainy day” of changing financial circumstances. But this is where the comparisons should end. Family savings signal wise financial stewardship. The ability of state agencies to accumulate leftover taxpayer money in their coffers (called carryover cash) is an entirely different matter. Typically, Kansas’ General Fund gets most of the attention in discussions on state budgetary matters. However, the state and its agencies actually operate 1,416 active funds (i.e. those with non-zero balances). Regardless of the controlling agency or fund in question, some savings are certainly necessary. Solid balances allow for sound cash management, are evaluated in some bonding scenarios, and protect against unforeseen budget changes. Furthermore, some balances may be earmarked for debt service and are thus inaccessible to movement or change. Still, in many areas, these balances have grown significantly over time and constitute a much higher percentage of the state’s operating budget than historical norms suggest they should. In short, these steadily mounting, higher-than-normal savings may point to places where—if able—Kansas legislators could look to reallocate unused surpluses back into the State General Fund to be used toward more pressing expenses. 

Despite a small 5% decline in the total dollar amount of statewide carryover cash funds compared to 2013, the FY2014 amount represents a growth of nearly 237% (from just over $918.5 million to almost $3.1 billion) in the eleven years since 2003 (the oldest available data via KPI’s open records requests). Beyond this total statewide growth, the State Court of Tax Appeals is an example of exceptionally whopping growth of more than 17,000% over the period (from just over $5,000 in 2003 to over $886,000 in 2014). By themselves, the two balances highlighted in this example may seem insignificant, but the growth trend from the balance in 2003 to the balance in 2014 is telling.

Kansas’ seven Board of Regents public universities are noteworthy pieces of this topic as well. Growth in their cash reserves ranged from almost 34% (Emporia State University, with an increase to nearly $17.8 million from roughly $13.2 million) to over 480% (University of Kansas, with an increase to nearly $237.5 million in 2014 from almost $40.9 million in 2003) during the 2003-2014 timeframe. The fact that these institutions are spending less than they are taking in even as their students are facing ever-growing tuition prices and mounds of debt is a curious one to say the least. KPI’s recently released 5-year budget plan envisions a reversal of this trend through the suggestion that universities make partial use of their General Fee Funds (representing tuition collected but not spent) to offer students a one-time tuition reduction.  

At the very least, the varied examples of carryover cash reserve growth presented underscore the importance of looking at state agency carryover cash reserve balances as part of any conversation about state budgeting. View these balances for yourself here to make your own conclusions.   
Posted by David Dorsey on Tuesday, October 7, 2014

Recent concerns have arisen regarding Kansas’ only school choice program (a tax credit scholarship program  for low income kids in our state’s lowest performing schools) as it relates to the ESEA waivers granted to the state by the U.S. Department of Education (most recently extended through the 2014-15 school year).

The “Tax Credit for Low Income Students Scholarship Program Act” was signed into law in April of this year. The law allows scholarships for a limited number of students to escape certain failing public schools and attend a private school. To be eligible, students must  meet two standards:

  • They must be at-risk students as defined in K.S.A. 72-6407. In other words, they must be low-income and be eligible for free school lunches.

  • They must attend a Title I school that has been identified as either a Focus school or Priority school pursuant to the ESEA waiver granted to Kansas from the U.S. Department of Education. 

It is the ESEA waiver process that has been the source for the concern, in particular as it relates to the Focus and Priority school designations. The worry among those looking to help the kids eligible for the program is that the ESEA waiver process could  neutralize the scholarship program by eliminating Focus and Priority school designations.

No need to worry.

Those designations are set by the U.S. Department of Education. Essentially, a Priority school is one that performs in the lowest 5% of statewide Title I schools. Focus schools are the next lowest 10% of all Title I schools. In Kansas, there are 33 Priority schools and 66 Focus schools. The full definitions can be found at

Those labels are a critical component to the waiver process. One of the principal assurances a state must make to receive and continue a waiver is the improvement of these schools by decreasing the achievement gaps between Focus and Priority schools and other schools in the state. Those particulars, including a time-line are outlined in the above-referenced document.

If that is the case, then the new scholarship program should be welcomed with open arms by those seeking to close achievement gaps. School choice has been shown to close the gaps and give the kids who need the help the most a chance at a better opportunity somewhere else. Florida’s tax scholarship program is a great example of how school choice can impact the achievement gaps of special needs and other traditionally underperforming populations. Black and Hispanic students made substantial gains in NAEP scores, and shrank the achievement gap with white students, as shown in the table below.

The tax credit scholarship program also “led to statistically significant improvements in Florida’s public schools.” According to Northwestern University’s Institute for Policy Research, “(c)ompetition placed on the Florida public schools system as a result of the voucher program led to improvements in the test scores of public school students.”

The impressive numbers in Florida are reason enough to get behind the Kansas program, but our border neighbor to the south, Oklahoma, shows where this sort of school choice has the greatest impact – the individual child. KPI visited Phylicia in Tulsa, a lower income child taking advantage of a scholarship program for special needs program. She was failing in a public school that wasn’t meeting her needs (she was even cutting herself in the school bathroom) until a new scholarship was created that allowed her to attend a private school specifically tailored to children on the Autism Spectrum. Incidentally, Alicia’s brother attends a KIPP public charter school proving that choice helps all types of kids.

The only concern we should have in Kansas is how to make choice available to all students.


Posted by Dave Trabert on Friday, October 3, 2014

Former state budget director Duane Goossen published a scathing review of the KPI 5-Year State Budget Plan a few days ago on his blog, so I wrote and asked if he would join Steve Anderson and me for a public discussion of the facts and issues.  He ignored our invitation for civil discussion, just as he did when we explained how he distorted the truth about education finance.

Goossen claims we made an $802 million math error and tries to fool unsuspecting readers by saying we didn’t account for all of what is purported to be a $1.3 billion shortfall.  We didn’t account for it because there is no $1.3 billion shortfall!

As we explained in How Budget Deficits are Fabricated in Kansas, Kansas Legislative Research Department (KLRD) counts budget changes multiple times in arriving at what they call a $1.3 billion shortfall.  Once money is cut from the base budget…it’s gone.  It doesn’t have to be cut again every year into the future.

According to KLRD, the spending adjustments needed to maintain a zero ending balance total $482.3 million over five years.  

In order to get to $1.3 billion, one must count the FY 2016 change FOUR times…the FY 2017 change is counted THREE times…the FY 2018 change is counted TWICE…and only the FY 2019 change is counted once.

Goossen also mischaracterizes several proposed uses of excess cash reserves as “cuts” to transportation and education.  As clearly explained in our Budget Plan, we are proposing that a KDOT surplus of $150 million be returned to the General Fund and that sales tax transfers to KDOT be reduced so that future surpluses are not created.  We suggest that school districts and universities be required to use a portion of excess cash reserves, allowing education funding to reduced one time while excess funds are spent down.

He also falsely claims we are recommending a $100 million cut to the Kansas Bioscience Authority, when our plan merely suggests funding KBA at the same amount it received in 2014.  The budget savings comes about by removing a statutory set-aside of $25 million per year that isn’t planned to be spent.

These are just some of the outlandish claims made by Goossen, which probably explains why he ignores invitations to have a civil public discussion of the facts.  He has nothing to gain and everything to lose.

Our budget plan shows multiple options to balance the budget without service reductions or tax increases…healthy ending balances…increased funding for education and Medicaid…and record-setting spending overall.  But media won’t even look at the plan and others are spreading false claims about it. 

Kansans are being inundated with the false choice of tax increases or service reductions…all for political gain.  


Posted by David Dorsey on Thursday, October 2, 2014

In a recently published analysis of public education funding in Kansas, the Kansas Association of School Boards (KASB) used a bit of time-series trickery to make one believe that education funding has declined. In a recently published Tallman Education Reportblog KASB makes yet another case for increasing taxpayer money to schools. The gist of the argument is this: more money is needed because since 2009, education funding has not kept pace with inflation. This postulate begs two questions: (1) Why did KASB pick 2009 as the base year for their analysis?, and (2) Why do schools need more money, especially now that the Supreme Court has ruled that money is not the determining factor of providing adequate education?

 As to the first question KASB picked that year because it conveniently fits their argument, as in draw a conclusion then find some data to support it. In this case, court-ordered funding pursuant to the Montoy  decision helped elevate education dollars to record levels in FY 2009. The court used a deliberately inflated cost study to help drive that decision. It had nothing to do with what schools needed to achieve required outcomes while also making efficient use of taxpayer money. There is nothing special about 2009, other than it is when education funding peaked. Simply put, KASB cherry-picked the date to make their point.

If choosing 2005 as a baseline year, a much different picture emerges. Using KASB data back to 2005 and applying their methodology, the table and accompanying graph show that when applying 2005 as the baseline year, education program funding actually outpaces inflation. Note: KASB data excludes KPERS contributions as an expense, even the Supreme Court says funding for KPERS should be considered.




Now to the second question: Do schools actually need more money? This is a particularly relevant question at this time because the Kansas Supreme Court ruled in the Gannon case that money is not the determining factor an adequate education as directed in the constitution. Now is the time for the legislature to appropriate money based on what it will do to improve outcomes pursuant to the Rose standards directed by the court. The path has been cleared for outcome-based funding to replace more arbitrary methods such as those based on inflation or “restoring cuts to education,” as the education establishment likes to frame the discussion. The truth is no one knows how much schools need to meet Rose standards.

There is also a timely second reason for questioning the “need” for more money. The K-12 Student Performance and Efficiency Commission has received testimony from those in the education establishment admitting that they are spending their money inefficiently. Presentations from Legislative Post Audit confirm that. LPA has found inefficiencies in all their school audits, yet districts do little or nothing to address them. KPI has shown that school districts’ ending balances have increased by hundreds of millions of dollars since 2005, money left over at the end of the school year.

A common saying of teachers to students is this: Choices have consequences. More than ever, districts need to be aware of the same when it comes to financial decisions. When a school chooses to hire an additional administrator, or fails to consolidate administrative services across district lines, , or any number of other examples of wasting taxpayer money, it takes dollars out of the classroom and reduces opportunities for teachers to focus on improving student outcomes.

Those are consequences we simply cannot afford.

Posted by James Franko on Thursday, October 2, 2014
It turns out that everyone is an expert when it comes to pitching changes in playoff baseball and questions of public policy. Those questioning Ned Yost on Tuesday night may have been right but most often our ideas are not put to the test.


At least when it comes to the state budget…

Put your budget skills to the test in KPI’s new interactive “Build Your Own Budget” portal. Use the latest revenue projections (read revenue as tax collections) and spending projections from Kansas’ bean counters (these are official projections from Consensus Revenue and KLRD) to find out how much more efficiently the state government needs to operate in order to align spending and tax receipts.

Most of us will never get to manage a MLB playoff game or structure the state budget but we hope this new tool will focus Kansans on a bi-partisan problem – a resistance to reducing spending to bring it in line with tax reform. We hear almost daily about Kansas’ supposed budget crisis but we often hear very little about ways to navigate the road ahead. You’ll get a chance to chart your own course based on the “5 Year Budget Plan for Kansas” that we released last week.

As Dave Trabert, plan author and KPI president said releasing the budget plan, “Our Budget Plan is designed to provide legislators with multiple options. Not every element is necessary to make the plan work; varying degrees of each element could be implemented and there are many other options that could be added.  …Even if future revenues are significantly less than currently projected, government would only have to operate about five percent more efficiently to avoid service reductions and tax increases.  And Kansas would still continue to set spending records!"

In the plan released last week we used the latest spending assumptions offered in the Build Your Own Budget (via KLRD) and retained the $215 million spending increase for K-12 education and $299 million more for an increase in Medicaid caseloads. Other key highlights of the plan include;
  • No less than a 3% ending balance moving to, and retaining thereafter, a 7.5% ending balance in FY 2017
  • Scheduled income tax rate reductions will remain
  • Full implementation of the plan still sets new spending records

Ned Yost won’t be calling us for advice on pitching or base running (a double steal thingy with Billy Butler?!) tonight but take a crack at the Build Your Own Budget so you’re prepared as the state’s fiscal future is debated in the months to come.

Oh yeah, GO ROYALS!

Posted by James Franko on Tuesday, September 23, 2014
I’ve never understood why proponents of a position can hardly deign to engage people with whom they disagree. Easier to stamp the opposition as “nonsense” or claim that public demands for accountability are “over the top” than actually treat others’ arguments as having any merit. Shouldn’t opposition, skepticism, or honest question be greeted as an opportunity to engage and persuade instead of ignore?

The latest confirmation of this near-maxim followed an event KPI hosted on the “jobs fund” portion of the Wichita sales tax proposal. One of the speakers at our event, Jeff Finkle, also spoke to the Wichita Business Journal and dismissed any pushback to the proposal as “nonsense.” A sentiment Mr. Finkle reiterated at our event on Friday. Further in the Business Journal, Mr. Finkle said he couldn’t think of one study saying incentives don’t work.

Mr. Finkle said the following at our event when discussing the transparency and accountability aspects of the “jobs fund” plan: “[The transparency piece of the jobs fund plan] is off the chart. I actually think it’s a little over the top but if that’s what it takes to be acceptable in Wichita, that’s what you should do.” Emphasis added.

He doesn’t say that Wichita shouldn’t be transparent but his belief is quite clear – “it’s over the top.” This mirrors the thrust of his “nonsense” dismissal.

Is it really nonsense that Wichitans want to make sure they understand the proposal? Or see if it offers the returns they’ve been promised? Is it nonsense that many opponents of the proposal can cite multiple studies saying incentives are, at best, a mixed bag? Is it nonsense that others may just have a different opinion than Mr. Finkle? Instead of engaging them on the substance of their arguments, he brushes them aside with a “let them eat cake” assertiveness.

To Mr. Finkle’s contention that he “[doesn’t] know of one study that says incentives don’t work,” I’d simply say he, again, needs to treat the opposition with the same amount of respect he would certainly demand for himself. Readers shouldn’t take this as an endorsement of the links below (KPI isn’t taking a position on the sales tax proposal), but numerous studies do, in fact, exist that rather clearly show incentives are not working.

One such study focuses specifically on Kansas and our statewide PEAK program, a flagship incentive program in our state, and was presented on Friday by Nathan Jensen, Ph.D.; sharing a stage with Mr. Finkle. The findings of Dr. Jensen’s paper are quite clear, “The paper’s main finding is that, when comparing firms receiving PEAK incentives to a similar set of ‘control’ firms, PEAK incentives recipients are statistically not more likely to generate new jobs than similar firms not receiving incentives.” It is completely acceptable that Mr. Finkle is unpersuaded by the findings. But, the Wichita Eagle saw fit to report on the study in July with a headline of “Business incentive packages may do more harm than good, economist says” and quoted from an equally skeptical professor of urban and regional planning at the University of Iowa. 

There’s more:
  • A 2012 article in International Tax and Public Finance cites two European economists as saying, “…there is little empirical evidence on the effectiveness of tax incentives to attract investment.”
  • On this side of the pond, a 2002 article focusing on Ohio manufacturing recipients of incentives in the Journal of Regional Science concludes, “Our analysis suggests that incentives do not substantially increase, and may even decrease slightly, the amount of employment change in the two years after an establishment launched an expansion. After controlling for other factors, we found that the effect of incentives on establishments that received incentives is a decrease of 10.5 jobs per establishment."
This is certainly not a comprehensive literature review, but proof nevertheless that studies do indeed exist.

Mr. Finkle brushed aside these sorts of studies as “nicks” in specific incentive packages  that do not amount to an actual refutation of the larger concept, again to the Business Journal. It isn’t that he disagrees with the findings, some in peer-reviewed academic journals, but that he refuses to acknowledge their very existence. Agree with the findings or not but it is impossible to argue that these studies do not exist.

We were happy to have one of the leading advocates for economic development incentives attend our event on Friday and make the case for why Wichitans should support the sales tax. We were equally happy to welcome other well-regarded experts covering differing aspects of what makes a local economy tick. However, reading Mr. Finkle’s remarks in the Business Journal and hearing his comments at our event, I have wonder if he views his trip to “flyover country” as more of an imposition than an opportunity to inform.
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 (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 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 8, 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 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 8, 2014


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 7, 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.
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
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 1, 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 3, 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.


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. 


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.