Posted by David Dorsey on Monday, January 26, 2015
(w)e conclude that the Kansas K-12 school finance formula still stands as constitutionally inadequate by its failure to assure and implement adequate funding to meet and sustain a constitutionally adequate education as a matter of sound expert opinion from those with relevant and reliable expertise and experience with the Kansas K-12 school system.(emphasis added)
Thus is the opinion, filed December 30, 2014, from the Shawnee County District Court three-judge panel as tasked by the Kansas Supreme Court pursuant to their decision in Gannon v. Kansas in March of 2014.
We reported in a previous KPI blog that the unspecified underfunding of K-12 public education in Kansas identified in this decision is at least $548 million. The judges based their opinion on several categories of adequacy they deemed relevant to the case. One such category in the decision is entitled Adequacy As A Matter Of Student Performance (pp. 20-48). The judges included as its linchpin evidence an interview with Kansas City, Kansas USD 500 superintendent Dr. Cynthia Lane. Dr. Lane provided testimony regarding how a federal grant enabled Emerson Elementary, a USD 500 school, to significantly increase student performance.
In short, Emerson Elementary is a small K-5 school. Several years ago, it gained notoriety for being declared the lowest performing elementary school in Kansas. As such, it was awarded a School Improvement Grant (SIG) from KSDE, authorized by the No Child Left Behind law. The school was given nearly $3 million over a three-year period (2010-11 to 2012-13 school years) to improve state assessment test scores. Dr. Lane testified that “fewer than 30 percent” of the students met state standards in math and reading prior to receiving the grant. According to demographic data published by KSDE, Emerson has about 95% economically disadvantaged students. While Dr. Lane testified that Emerson is ethnically “about 50 percent African American and about 48 percent Hispanic,” KSDE reported that the ethnic breakdown is about two-thirds Hispanic, one-quarter African American and less than 10% white. She told the court that over the life of the grant Emerson’s students performed “on both the reading and math state assessment to have more than 85 percent…meeting or exceeding expectations just in the last three years. It’s a remarkable story.”
Apparently the court agreed, afforded to say:
Given the continuing grade advancement and migration upwards of K-12 schoolers during their school careers, it seems but obvious that for educational advancement, much less the maintenance of results accomplished prior with the earlier funding initiatives implemented, but now abandoned, that the revenue streams which supported those results in that period of favorable funding needed to be continued to be provided in order to properly educate the continuing stream of new faces going forward, either initially entering the school system or advancing in grade. No evidence or proffer of evidence supports otherwise. (pp. 39-40, emphasis not added)
Translated: More money = greater student achievement, and there is no evidence to the contrary.
I will now proffer contrary evidence, a much less remarkable story that should have been proffered in the original court case: Northwest Middle School.
The same year Emerson Elementary was awarded its SIG, another USD 500 school, Northwest Middle School, was awarded a similar grant with a higher amount of $4.77 million. Northwest has similar minority and economically disadvantaged populations to Emerson Elementary (just over half African American and just over one-third Hispanic and 98% low income). But the outcomes pursuant to the SIG were very much dissimilar, indeed.
The following table and the accompanying graph show how Northwest Middle School scored on the state reading and math assessments for the three years prior to receiving the SIG and during the three-year implementation of the grant.
As the graphics show, achievement at Northwest had an uptick in both math and reading the first year of the grant, but then fell off dramatically the following two years. To put their performance in perspective the following graphs compare Northwest to Rosedale Middle School (the USD 500 school most comparable to Northwest according to KSDE) and the USD 500 district as a whole.
In reading, Northwest underperformed both Rosedale (which did not get a SIG) and the district as a whole both prior to and after receiving the grant. The trend and gap between Northwest and Rosedale remained amazingly consistent throughout this period. The picture in math is a little different. Northwest students maintained a slight advantage over Rosedale throughout the grant period and nearly eliminated the gap with the district as a whole. However, the overall trend is downward, with just over 40% of the Northwest middle schoolers proficient in math as of the last recorded state assessments.
It is safe to say that in terms of achievement, that $4.77 million granted to Northwest Middle School in Kansas City, Kansas didn’t buy much. This is evidence that, once again, more money does not inherently make a difference in student outcomes. This nationwide study conducted by the Heritage Foundation supports that contention. Even Kansas’s own Legislative Post Audit says in this report (p. 107) that a correlation between increased funding and increased outcomes is inconclusive.
As a 20-year teaching veteran, I know it’s not the money that makes a difference in student achievement. It’s commitment by students, parents, teachers, principals and administrators to make it happen. Trying to quantify that in dollar terms is a fool’s errand. If the increase in education funding prescribed in the most recent Gannon decision were to become a reality, it would mean a nice raise for teachers and likely more administrators, but student outcomes would remain flat and achievement gaps would continue. Think of it as Montoy redux.
Clearly, the judges got it wrong. Let’s hope their decision gets overturned on appeal and an end is put to this seemingly endless carousel of education funding lawsuits. The citizens of Kansas deserve better.
Posted by David Dorsey on Monday, January 26, 2015
As I discussed in the first blog in this series, the state of Kansas provides almost $400 million additionally each year for at-risk funding to K-12 education. But what is the philosophy behind spending more taxpayer dollars to educate economically disadvantaged students? What does the research say? And how have states responded in their particular “at-risk” funding formulas? In this blog I will briefly answer address these questions.
It may sound like a dumb question, but why is it that it should cost more to adequately educate students who are disadvantaged? Sure, it seems intuitive, but where did that idea start and where is the research to back it up?
The genesis of the premise that it costs more to adequately educate the economically disadvantaged comes from a 1969 article in the National Tax Journal by three economists who attempted to explain why the cost of all local public services was outpacing inflation in post-World War II America. (Sidebar: their article is proof that the concern over rapidly expanding government spending is not a recent phenomenon.) The researchers suggested that differing costs for public service across jurisdictions could partially be explained by environmental factors. Specifically regarding education, they say that outcomes might be a function of “the ‘basic intelligence’ of pupils, home backgrounds and neighborhood conditions.” That seems to be the phrase subsequent researchers have locked onto to justify the need for what has become commonly known as at-risk funding.
Many studies since then, including this 1997 study and this one from 2004, focused on spending disparities and “outcome” disparities among school districts within states. Again, without getting too “wonky,” studies showed school districts that were property poor, and as a parallel had lower per pupil spending (since school financing is primarily a function of property values), had lower outcomes than their counterparts with higher property values. And of course, those property poor districts had a disproportionate share of low income families/students. Therefore, the studies concluded that poor school districts needed more money to bring their students up to an acceptable minimum outcome standard. Researchers typically defined outcome as an index of a combination of standardized test scores and other indicators such as graduation rates.
But these studies have remained academic exercises. Even though it is now a given that poor students require more money to reach a given outcome, most states now have some form of additional funding based on economic status of students. However, the amounts states have allocated are all less than the research concludes are necessary.
Yes, politics and budget constraints trump academia.
The Kansas At-Risk Timeline
In 1992 a new law entitled the School District Finance and Quality Performance Act included a 5% weighting for students who qualified for free school lunch. That percentage was increased to 6.5% in 1997 and increased seven more times in the next decade to its current level of 45.6%. In 2006, two more categories of at risk were added. One was for schools with high percentages of at risk populations and/or an enrollment density of at least 212.1 students per square mile. The other additional category targeted money for students non-proficient in math and reading, but not eligible for a free lunch. (The non-proficient category was eliminated in 2014.) In dollar terms, the 5% in 1992 generated just over $13 million. That amount is now nearly $400 million.
The situation in Kansas is not dissimilar to those in other states. At least 35 states have a mechanism for additional funding generated by economically disadvantaged students. Most of them use some variation of the number of students who qualify for free OR free or reduced lunches through the National School Lunch Program (NSLP). NSLP has been the choice because it is an expedient and convenient proxy for determining economically disadvantaged students since qualification for free/reduced lunches is predominantly income based. And like Kansas many have weight values that are not static. A 2004 study out of the University of Wisconsin reports that nationwide the weights range from 15% in Vermont to 62.5% in Illinois, while a presentation last year to the Nevada state legislature showed a low of 9.15% in New Mexico to 180.0% in Georgia. The thing to keep in mind here is that it is nearly impossible to compare Kansas to other states because not all states use the same definition of disadvantaged and some use multiple factors to determine additional spending.
So how did Kansas go from a relatively modest 5% at-risk weighting in 1992 to a hefty 45.6% (with two additional categories) by 2006? That is the topic of the next blog.
Next: The political history of at-risk funding in Kansas
Posted by David Dorsey on Tuesday, January 20, 2015
There’s an old saying in education that when changes happen it’s like a pendulum swinging; things go from one extreme to the other. How much testing given to students is a current prime example of the back and forth. Testing, especially at the elementary level, was scarce prior to No Child Left Behind (NCLB). But in the last decade the combination of federally mandated tests and schools’ new and sudden focus on data-driven curriculum decisions have left students, parents, teachers and the public assessment weary.
So what seems to be the answer? Find some middle ground that can ensure accountability but keep the community from burning out? That’s not how a pendulum swings.
The backlash over being over-tested is well documented. Even President Obama and Education Secretary Arne Duncan have complained that there is an excess of testing. A bill passed the Ohio House of Representatives that would limit the amount of time students spend on testing in the Buckeye State. Google “too much testing in schools” and the results span the political and educational spectrum.
The pendulum is swinging back. But this time there is a new hand that providing the impetus: Common Core.
Recent efforts to reduce testing that have been reported in Education Week document the influence Common Core state standards are having in reducing the number of assessments districts are administering. Some schools in New Jersey are eliminating midterm and final exams. And they are doing it because “they view the state's new standardized tests—the PARCC exams (Common Core-based state testing)—as more time-consuming, and they want to cut back before those are given.”
That may seem an isolated occurrence, but according to this article, it shows just how widespread and organized the effort is to restrict district-based tests in order to focus on new statewide tests aligned with Common Core state standards. Two Washington-based school leader groups, the Council of Chief State School Officers and the Council of the Great City Schools (which represents 67 big-city school districts) are going to “review the array of state and district tests being administered in public schools, report their findings, and work to eliminate redundant assessments.”
Are we to be surprised that Common Core has now spread to control testing? It was only a matter of time until the combination of Common Core and the two partner testing consortia (PARCC and Smarter Balance) would dominate the testing landscape.
Welcome to trickle-down education. What started as a de facto federal mandate for states to adopt Common Core’s uniform national standards is now swelling into a big-brother control of how often districts test students and swinging the pendulum in the process.
Even though these specific efforts haven’t seeped into Kansas yet, recent local and national events could put the entire testing issue in flux in the Sunflower state. Last March, the Kansas Supreme Court ruled that an adequate education in this state is to be measured against the Rose standards, a much broader and less specific set of criteria than Common Core. The potential problem became evident when several Kansas superintendents testified before the K-12 Student Performance and Efficiency Commission that they didn’t know how to operationalize Rose standards for measurement purposes. Clearly, the potential is there for additional testing with a new layer of standards. At the very least it sets up the strong potential for districts being forced to serve two masters – Common Core and Rose. And regardless of KSDE’s efforts to meld the two, attempting to force Rose and Common Core standards onto two sides of the same coin are misguided and serve neither kids nor the two standards regimes.
However, the newly Republican controlled Congress is ready to advance a long overdue reauthorization of NCLB which could impact requisite testing. A recent Politico article described the bi-partisan support that exists for an update to the 2002 NCLB law. Not surprisingly, one of the sticking points regards testing. The strange bedfellows of congressional Republicans and teachers’ unions would like to see annual testing eased, while congressional Democrats tend to want to see a continuation of annual testing. One potential change reported by Education Week is a Republican push to test students every two years.
How all this will play out is anybody’s guess, but the fundamental issue doesn’t change. Assessments, both formative and summative, should be primarily in the hands of local school districts, with collaboration with the state to find a happy medium for testing purposes.
Sure, too much testing takes away from instructional time and other aspects of the educational experience, but like it or not, testing is a necessity. Teachers need data (especially derived from formative assessments) to help make better curriculum decisions (e.g. lesson reteach and differentiation) in their classrooms. Districts need testing results to help judge effectiveness of teachers. States need testing results to assess whether standards are being met. And the most important group – students – needs testing data to know what they are learning. Somehow, the positive impact testing can have on student achievement is always left out of the discussion.
And taxpayers need testing to ensure accountability.
Ultimately, assessment decisions should be made in light of how they will help improve student learning, not how it fits within the scope of what amounts to a federal mandate: Common Core standards. The efforts by the Council of Chief State School Officers and the Council of the Great City Schools only work to support the heavy hand of federal government interference in local education. If education is to continue the tradition of pendulum swinging decisions, let’s sway it back by eliminating the ever-expanding control of Common Core standards.
Posted by Dave Trabert on Friday, January 16, 2015
There is a lot to like in Governor Brownback’s budget proposal for FY 2016 and FY 2017 but there are also a few disappointments.
It’s good that the Governor is keeping most elements of the tax reform plan in place but we’re disappointed that he wants some income tax and excise tax increases. Instead, the Governor should push for more cost reductions and use of unnecessary carryover cash reserves. Kansas does not have a revenue problem. 2014 tax revenue was ahead of the ten-year inflation pace; it was 28% higher than in 2004 while inflation was 24%. And the gap is expected to grow wider in the near future. If inflation maintains the current pace, FY 2017 tax revenue will be 39% greater than inflation-adjusted tax revenue from FY 2004.
The proposed spending reductions from this year’s record-setting level of $6.322 billion are very encouraging. Other may criticize the decline in spending, but it should be noted that FY 2016 and FY 2017 spending will still exceed that of any year prior to this year’s record. Still, there remains much more to do in reducing the cost of government. As shown here, proposed FY 2017 spending will be $547 million greater than inflation-adjusted FY 2004 spending.
(Using FY 2004 as the base is merely to show what occurred with spending over the same time fram that tax revenue out-paced inflation. The real gap between proposed and necessary spending is even greater than $547 million, as there is no evidence indicating that FY 2004 spending was efficient.)
Part of the cost reductions come from proposed changes to the state employee retirement program – KPERS. The Governor proposes the issuance of $1.5 billion in bonds, with the proceeds going to reduce the unfunded KPERS liability; he also proposes extending the amortization period for the remaining liability. Bonding is a good idea if, AND ONLY IF, all new hires are placed in a defined contribution plan rather than the cash balance plan scheduled to go into effect this year. The cash balance plan has a potential future liability for taxpayers that would not exist in a DC plan. Extending the amoriization plan is what some might call an ‘accounting gimmick’ that should be avoided. To his credit, the Governor indicated that he is open to other ideas on KPERS and it is hoped that a defined contribution plan for new hires would be viewed favorably.
Governor Brownback also proposes sunsetting the school funding formula and block-granting K-12 funding while a new formula is being designed over a two-year period. Creating a new formula is a very strong student-focused approach and is long overdue. As explained in our 2013 publication of Student-Focused Funding Solutions for Public Education, we believe the school funding formula is irreparably broken. The current formula funds districts rather than students and is providing more money than is needed to efficiently operate schools. It is based on an old cost study that was deliberately skewed to produce inflated numbers and it is well-established that schools are not operating efficiently.
Developing a new formula is a complex undertaking but it should approached with extreme urgency. Every effort should be made to complete the process in the current legislative session for implementation on July 1. If that cannot be done, block-granting the amount each district was scheduled to receive this year (based on the dollar amount of equalization agreed to by the Legislature last year) would be appropriate.
All told, it's a fairly good plan that would be greatly improved if the Legislature strips out the tax increases and further reduces the cost of government.
Posted by Dave Trabert on Friday, January 16, 2015
A 'tax fairness' report released this week released by the Kansas Center for Economic Growth (KCEG) and the Institute on Taxation and Economic Policy (ITEP) contains a number of serious flaws, as explained in the following analysis from The Tax Foundation's Joe Henchman.
"This week, the Institute on Taxation and Economic Policy (ITEP) released their fifth edition of Who Pays. While the report purports to measure the regressivity of state tax systems by looking at effective tax rates by income groups, the report surprisingly concludes that all states are regressive.
My colleagues Liz Malm and Kyle Pomerleau looked closely at some of the flaws of Who Pays and offer their comments in a new piece we released today. Key findings:
- The study isn’t actually focused on the distribution of taxes by income group; instead, it’s focused on how well state and local tax systems redistribute income. If the report was really about “measuring the state and local taxes . . . paid by different income groups,” ITEP would rank states by effective tax rates of the poorest residents. Instead, states are ranked based on a complex formula that compares various measures of pre- and after-tax income for various income groups.
- The report -- supposedly a study of state taxes -- includes the most regressive feature of the federal income tax, and leaves out all other features of the highly progressive federal income tax. Including the federal offset makes effective tax rates look more regressive than they actually are.
- ITEP assumes that business property taxes are partly passed on by business owners to renters and that some are exported across state lines. However, the same logic should also apply to several other tax types. Corporate income and sales taxes are partially exported, because a portion of them are paid by businesses. ITEP does not assume tax exporting for any tax other than property taxes.
- ITEP does not include taxes such as severance taxes, business license taxes, and other types of business taxes (such as gross receipts taxes and modified gross receipts taxes) in its analysis. This is problematic, because in some states, these taxes make up a significant share of the state budget and significantly alter the over distributional impact of a state’s tax system.
- ITEP cites a new S&P report that likely overstates the connection between inequality and state tax revenue growth.
- ITEP’s idea tax system (no sales tax, very progressive income tax with lots of taxation of capital gains, and heavy reliance on individual income taxes) would lead to volatile tax systems that dampen economic growth.
Overall, fairness is a subjective term and largely depends on how you define it. Whatever ITEP's definiton of fairness and attempt to measure it, there are methodological concerns with the way ITEP presents data that should be addressed, and should be kept in mind when discussing the Who Pays study."
Posted by Dave Trabert on Friday, January 9, 2015
President Reagan famously joked that “the most terrifying words in the English language are: I'm from the government and I'm here to help.” To be sure, there are some very good people with honest intentions in government, including public education. But too often, variations of ‘it’s all about the kids’ really means ‘it’s all about the money.’
The latest example comes from Rod Stewart, President of Kansas Association of School Boards. His January 2 op/ed says, “The recent school finance decision by a three-judge panel in Shawnee County will no doubt increase debate over money, taxes and formulas. The underlying focus, however, of the decision should be on our Kansas students and the long term future of our state.” That sounds noble, but he ignores basic facts and distorts others in an effort to justify entitlement to more taxpayer money.
Stewart offered several opinions for the recent lower court ruling, which, in our opinion, ignored facts and defied the State Supreme Court in declaring that funding must increase by at least $548 million. He first said, “…the court noted that after several years of improvement on state reading and math tests, scores began to drop as the impact of funding cuts were felt.” The district court did say that, but they did so absent any supporting fact connecting the two. In legislative testimony, the Kansas Department of Education said they didn’t know exactly why scores dipped in 2013 (results for 2014 were not released) but they believed it was related to the transition to Common Core; teaching was aligned to Common Core standards but the state assessment was still aligned to the old methods.
The district court was also wrong in claiming that test scores declined “…as the impact of funding cuts were felt.” Test scores did not decline until 2013. School funding (all sources of funding per the State Supreme Court) slightly declined in 2010 and 2011 but test scores continued to increase. Funding has increased every year since.
Stewart next attributed the court ruling to there being “…significant performance gaps among Kansas students. Low income students, who are also disproportionately represented among minority groups, lag behind their more advantaged peers on tests of basic skills, graduation and college preparation. This alone is evidence the state is not providing ‘suitable’ funding for all students.”
The existence of achievement gaps is not evidence of inadequate funding and Mr. Stewart’s disingenuous claim is easily disproven. School districts and their lawyers claim that funding became inadequate when Base State Aid was reduced in 2010, but performance gaps existed during the years that districts believe funding was adequate, as shown on the adjacent chart of Math scores. Indeed, performance gaps have always existed.
The Legislature’s funding of At Risk further disproves this claim. At Risk funding increased from $27 million in 1998 to $385 million in 2013, but the proficiency level of low income students (as determined by eligibility for Free/Reduced lunch) on the National Assessment of Educational Progress (NAEP) remains at 22%. By the way, KSDE says measurement of NAEP performance since 2003 is valid and reliable. State assessment scores improved a bit but not even close to the seven-fold increase in At Risk funding that occurred over the same period. (State performance standards were altered in 2006 to the extent that comparison to prior years is invalid according to the guidance report accompanying those standards.)
Stewart’s third rationalization for a funding increase is baseless and irrelevant: “…demands for educational attainment are growing as fast - or faster - than actual achievement.” Yes, there is higher demand for people to obtain post-secondary education (technical college, bachelor’s degrees, etc.) but that has nothing to do with spending on K-12 education. And to underscore how KASB’s justifications dance to the tune of the occasion, let’s reflect on 2013 legislative testimony presented by KASB’s Tom Krebs. He said the fact that only 30% of Kansas high school senior scored well enough on the ACT exam to be considered college-ready on English, Reading, Math and Science was proof that schools were doing a good job – because only about 30% of today’s jobs require a college degree!
Stewart also trotted out this false claim: “States with the highest educational attainment spend more per pupil than low achieving states.” There are some people who believe that to be true, but even Legislative Post Audit admits that “Educational research offers mixed opinions about whether increased spending for educational inputs is related to improved student performance” (see page 107). KPI also conducted research that disproves the theory in “Removing Barriers to Better Public Education,” published in 2012.
The following tables update that research with the most recent spending and achievement levels, using 2012 Current Spending Per Pupil (no capital or debt) from the U.S. Census Bureau and 2013 NAEP scores. The NAEP scale score reflects the combined scores for 4th Grade and 8th Grade Reading and Math. We compare individual student cohorts (White, Hispanic, Low Income, etc.) because comparisons of state averages are invalid, as there are achievement gaps among the cohorts and also large differences in demographic makeups of each state. State average score comparisons would only be valid if the demographics were the same for each state. KASB is well aware of this fact.
Looking first at the comparison of White students, we see that there are some high spenders in the top 25 but New Jersey spends more than twice the amount of Colorado and achieves nearly the same result. Texas, North Carolina and Florida all spend much less than most states but are all ranked in the top 15. The complete list can be seen here, which shows that high-spending states such as Alaska, Wyoming, Maine, Louisiana and West Virginia are in the bottom half of the rankings. Further, the highest spend across 50 states is 215% greater than the lowest spend, but the highest score is only 11% greater than the lowest score.
We find similar results in our comparison of Low Income students. Indiana spends 39% less than Vermont but gets virtually the same result; Maine spends 25% more than Indiana and gets the exact same result. Idaho spends $6,659 per pupil and gets 99.7% of New Jersey’s result, even though New Jersey spends $$17,266 per pupil. The highest spend across 50 states is 215% greater than the lowest spend, but the highest score for Low Income is only 7% greater than the lowest score.
Comparisons of scores for African American, Hispanic, Disabled and other student cohorts produce similar findings. It is simply not true that spending more money leads to better outcomes.
His final attempt to justify taking more money from citizens is another debunked claim that embodies the entitlement mentality: “Total K-12 school funding is projected to be just 4.42 percent of total personal income in 2015 - the lowest level since 1985.”
The ‘percentage of personal income’ argument has nothing to do with what schools need to meet the Rose standards, and you can bet your bottom dollar that schools would argue that funding should not decline if personal income declined. Oh, wait, they already did that during the Great Recession; it was even part of the claim in their 2010 law suit. No, this is just about entitlement.
Relevance aside, let’s examine the facts of personal income. Mr. Stewart references a KASB report that estimates school expenditures between 1975 and 1989 and actual expenditures thereafter. However, KASB acknowledges that actual expenditures are not available prior to 1990, so let’s stick with the known facts.
We ran the numbers from 1990 forward and found that taxpayer support of public education has grown faster than personal income. Taxpayer support of public education increased 182.7% between 1990 and 2013, going from $2.070 billion (adjusted upward to include KPERS between 1990 and 2004, which wasn't included in total support until 2005) to $5.852 billion, according to KSDE spending reports. Personal income, according to the Bureau of Economic Analysis, increased 181.5%.
The real gap, however, is a bit wider. Personal income includes money that is never available to pay taxes, such as the money employers spend on your health care insurance and retirement. Personal Current Transfer Receipts are also included in the calculation of Personal Income. PCTR includes “…income payments to persons for which no current services are performed and net insurance settlements. It is the sum of government social benefits and net current transfer receipts from business.” Current transfer receipts of individuals from businesses “...consist primarily of personal-injury liability payments to individuals other than employees.” Personal income available to pay taxes (wages and salaries, proprietors’ income, dividends, interest and rent less employee / self-employed contributions to social security) increased 171.4%.
Again, the personal income story is just an irrelevant attempt to justify more money, but an honest examination of the facts even disproves their contention that school spending hasn’t kept up. There are many dedicated educators who put student needs above all else but for the special interests and others, it’s really all about the money.
Posted by David Dorsey on Wednesday, January 7, 2015
Note: this is the first blog in a series on the issue of at risk funding and accompanies a comprehensive KPI at risk research project.
Funding for public schools is a complicated proposition.
There are many factors that go into determining just how much money school districts will receive and where it will come from every year from state and local sources. There are property taxes, state equalization, local options, and so many more considerations that it takes 93 columns on the master spreadsheet used by the Kansas Department of Education to sort it all out! And that doesn’t even count federal money.
One piece of this funding puzzle is the “weighting” formula the state uses to adjust (increase) the amount of money that will go to each district based on certain characteristics of a) students (e.g. the number in vocational education) and b) the district (e.g. low or high enrollment). I presented the weighting formula in an earlier blog where you can see the formula in its entirety.
One part of that formula determines how much extra money goes to districts under the banner of “at risk.” So what is this at risk funding? It provides extra dollars to schools based on the number of economically disadvantaged students enrolled. It is rooted in a philosophy, and research has attempted to support, that it costs more to adequately educate poor students. That ideal is operationalized (quantified) by using the number of students who qualify for free lunch under the United States Department of Agriculture’s National School Lunch Program (NSLP). Some states also include the number of students who qualify for reduced lunch cost under NSLP. Nearly all states use the school lunch program in some form as a basis for determining their versions of at risk population.
This graphic shows how it works under current Kansas law. Base state aid per pupil (BSAPP) is $3,852. A student who qualifies for a free lunch is presently weighted at an additional 45.6% of BSAPP and generates $5,609. (I say presently because at risk weightings have increased over time – more on that in the next blog.) Additionally, if more than half the students in a district are free lunch students a supplementary 10.5% weighting is added ($6,013). Currently, that applies to 57 of the state’s 286 school districts. One hundred four districts get a smaller, sliding scale additional percentage because they have between 35% and 50% at-risk students (more than $5,609 but less than $6,013). One hundred twenty five districts get no ADDITIONAL at risk money. Then, in order to determine the exact dollar amount a district will receive, the total weighted percentage is multiplied by the current BSAPP ($3,852 per pupil for 2015).
I told you it’s complicated.
Coincidentally, it is actually simpler than previous years because the legislature passed a law that eliminated a small at risk category in the 2014 session.
To show exactly how free lunch turns into at risk dollars, I present the following table that shows at risk funding for seven selected school districts that reveals the funding impact at risk dollars can have.
2014-2015 At risk data for selected districts
Total At risk
Source: Kansas Department of Education
Wichita, by far the biggest school district in the state, gets over $72 million per year. Pittsburg and Hays have virtually identical enrollments, but Pittsburg gets nearly $2.3 million more at risk money than Hays because Pittsburg has nearly twice the number of free lunch students, but more than twice as many weighted free lunch students. For the entire state the total at risk funding is just over $395 million.
That’s a lot of money, even in government terms.
One of the core issues associated with at risk funding is how it impacts student achievement, especially in light of the numerous and significant increases in at risk funding over the years (to be presented in the next blog). We will examine in depth what previous KPI research has shown to have limited positive effect. Next: How did we get here? A look at the research and realities of additional funding for educating the economically disadvantaged.
Posted by Dave Trabert on Friday, January 2, 2015
Our review of school districts’ budgets for the current school year revealed some very interesting information. Seventy-seven districts are planning double-digit spending increases on Administration. The unweighted average increase on Instruction is 10 percent. We also found that 122 districts plan a larger increase on Administration spending than on Instruction.
You can download an Excel file here listing total budgeted per-pupil spending by district and actual total spending for the previous two years. The file also shows the percentage change budgeted for Total, Instruction and Administration spending.
Here is a sampling of district budgets, taken from their Budget at a Glance reports. Note that each of plaintiff districts (Wichita, Hutchinson, Dodge City and Kansas City) in the school funding lawsuit is budgeting a double-digit increase in Administration.
Posted by Patrick Parkes on Friday, January 2, 2015
New private-sector jobs numbers for November from the U.S. Bureau of Labor Statistics show that job growth in Kansas has returned to a growth rate in line with its pace for most of 2014 after the appearance of a growth surge in October. October’s update cautioned against assessing job growth in year-to-year, single-month snapshots for this very reason. Specifically, looking back to October, Kansas experienced a 1.25% job growth rate compared to October 2013. Looking now at November, the state achieved a 0.64% growth rate compared to November 2013.
Taking a longer-term view of job growth, however, shows that Kansas continues to achieve a greater growth rate in just the 23 months post-tax reform than it did in the fourteen years prior to it (beginning with 1998). The 2.64% growth rate it has posted from December 2012 through November 2014 (73.56% of job growth for its income-taxing peers) represents an improvement over the 2.31% (63.45% of job growth for its income-taxing peers) rate it achieved over the 14 years before taxes were reduced.Thus, just like in October, it remains true that Kansas trails its income-taxing peers in private-sector job growth. Yet, the state continues to gain ground and is more competitive in the wake of tax reform than prior to it.
Check back for December’s update.
Posted by Dave Trabert on Tuesday, December 30, 2014
Today’s ruling on Gannon v. State of Kansas in which the Shawnee
County District Court declared school funding to be unconstitutionally low
ignores a long list of facts that disprove school districts’ contentions. The three-judge panel may even have ignored
the State Supreme Court’s order that adequacy is to be determined on whether
outcomes – as defined by the Rose standards – are being met. The judges essentially dusted off their
original ruling (that was rejected by the Supreme Court) and added some legal
jargon to justify much of their original decision in arriving at what is
essentially a political decision.
The judges tried to pretend that they weren’t giving the
Legislature a specific number but made it very clear that anything less than
$4,654 in Base State Aid per Pupil plus associated weighting is now a “bottom
range of reasonableness.” That amounts
to a direct order to increase funding by $548 million.
Rose capacities and
The Supreme Court ruled that the “…adequacy component is met
when the public education financing system provided by the legislature for
grades K-12—through structure and implementation—is reasonably calculated to
have all Kansas public education students meet or exceed the standards set out
in Rose…” The court went on to say, “This test
necessarily rejects a legislature's failure to consider actual costs as the
litmus test for adjudging compliance with the mandates of Article 6. For
example, even if a legislature had not considered actual costs, a
constitutionally adequate education nevertheless could have been provided—albeit
perhaps accidentally or for worthy non-cost-based reasons. And actual costs
from studies are more akin to estimates than the certainties the panel
In short, if students are meeting or exceeding the Rose standards, then funding may be adequate. However, the district court didn’t examine
whether students are meeting or exceeding the Rose standards; the judges merely said the Rose standards have been
around a long time and everyone obviously knows what they mean.
But that’s not true. On
August 19, the Kansas Association of School Boards appeared before the K-12
Commission saying school districts don’t know how to measure Rose and asked for “the development of a
system to define and measure…” the Rose
standards. On September 3, Olathe
Superintendent Marlin Berry said “…the Rose standards need to be well-defined
so that school districts know what they mean.”
He went on to say, “We need to better define the Rose standard capacities.”
Dodge City superintendent Alan Cunningham (another Gannon
plaintiff district) also testified on September 3, objecting to state
intervention on “efficiencies” and said that the local school board and
community should set public school priorities “…until such time as there is
agreement on indicators for assessing a school’s, district’s or state’s
performance relative to the Rose
On September 4, Wichita Superintendent John Allison (also a
Gannon plaintiff district) said he “…would like to lend support to the
recommendations provided by USA and KASB.”
He also said, “We need clear goals” and made no exception for any USA or
KASB recommendations that he did not support.
If districts can’t measure the Rose standards, they have no legal basis for claiming they don’t
have adequate funding to achieve the standards.
The panel did note that there was some improvement in state
assessment scores while funding was increasing, but they did so to support
their premise that “money matters” rather than to determine whether the Rose standards were being met.
Reliance on deliberately-inflated
As noted earlier, the Supreme Court said, “…actual costs
from studies are more akin to estimates than the certainties the panel
suggested.” But the district court ignored
that admonition and based their ruling on a 2001 cost study that is known to
have been deliberately skewed to produce inflated costs.
Former KPI scholar and now State Supreme Court Justice Caleb
Stegall wrote a 2009 legal analysis of Montoy
vs. State of Kansas that uncovered shocking facts about the cost study upon
which the court ruling was based.
The consulting firm Augenblick & Myers was hired by the
Legislative Post Audit Committee in 2001 to perform the study. Their estimate of the cost of a “suitable
education” (as A&M defined ‘suitable’) was based on their Successful
Schools Approach, which they said, “…allows for the inclusion of spending
efficiency to be used as a measure of success.”
Stegall writes, “A&M collected the list of school
districts that had already met both the input and outcome standards of the
suitable education definition. This list included 85 school districts.” He goes on to say, “A&M had hoped to further
winnow the number of “successful school” district models by examining the
efficiency with which the 85 districts spent their money. After analyzing how several factors (such as
attendance center size, enrollment, proportion of low-income students, and
local tax effort) affected spending, A&M used these results to estimate a
“predicted spending” efficiency level for each district. A&M then compared
this “predicted spending” level for each district to a district’s actual
spending, seeking to identify which school districts were spending
efficiently. But when the results
demonstrated that 50 of the 85 “successful school” districts would be
considered inefficient spenders, A&M decided not to use efficiency as a
component of a “successful school,” choosing instead to use all 85 school
districts. A&M concluded that had it used an efficiency standard to exclude
those 50 districts, this “might [have] undermine[d] the possibility that this
higher [albeit inefficient] spending is what allows districts to be successful
in Kansas.” In other words, as throughout the cost-study process, methodologies
were adopted expressly because of the results they could be expected to
After the State Supreme Court used the A&M study to
declare school funding should increase by $853 million, the Legislature had
Legislative Post Audit update the numbers from the 2001 study. LPA very clearly said on page 2, “It’s
important for the reader to understand that any study involving the estimation
of costs for something as complex as K-12 education involves a significant
number of decisions and assumptions. Different decisions or assumptions can
result in very different cost estimates.”
Later on the same page, they said, “it’s important to remember that
these cost studies are intended to help the Legislature decide appropriate
funding levels for K-12 public education. They aren’t intended to dictate any
specific funding level, and shouldn’t be viewed that way.”
The three-judge panel ignored this critical disclaimer,
blithely saying the LPA 2006 study was “framed from the perspective of what it
would cost to accomplish the goals…” in statute. That is NOT what LPA said.
spending all of the money they received
Taxpayer support of public education is run through as many
as thirty different funds maintained by school districts. These funds operate on a cash basis like
individuals’ checking accounts; the annual beginning balances only increase
when more money is deposited than is spent over the previous year. Districts finished the 2005 school year with
$458 million in their operating funds but those balances increased every year
thereafter leading up to the Gannon suit
filing in November, 2010. By July 1,
2010 those balances had jumped to $775 million; the increase of $317 million
represents state and local tax dollars that weren’t needed to meet educational
The court did not take these facts into account.
Districts continue to
Every Legislative Post Audit study of individual districts
and the state collectively has found schools to be operating
inefficiently. A number of districts
appearing before the K-12 Commission on Student Achievement and Efficiency over
the last few months have not only admitted to being inefficient, some have said
they choose to do so.
The Kansas Association of School Boards (KASB) said it may
be more efficient to buy products or services through the state or some type of
purchasing cooperative, but doing so erodes local control. Regardless of the rationale, these are
conscious decisions to divert discretionary spending from classroom instruction
and place a lower priority on student outcomes.
Districts acknowledged that it would save money to purchase
fuel, vehicles, insurance, communications, curriculum, technology, internet
service, software, supplies and other commonly utilized products from a
statewide bid; some even requested many more opportunities to purchase from
statewide bids. They are opposed,
however, to being required to participate in such efficiency
It’s preposterous to claim to be underfunded while admitting
that money is being unnecessarily spent.
It will take a long time to wade through the 139-page
ruling, but even a cursory examination makes it clear that the three-judge
panel didn’t let the facts get in the way of their decision. Instead, they made what amounts to a
political decision that says the Legislature must increase funding by at least $548
million to meet the Rose standards even though school districts don’t know how
to measure those standards.
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
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.
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.
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'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."
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
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
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 inflation, 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….” 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.
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.” 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. 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). 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.
 Email from ITEP’s Meg Wiehe dated October 14, 2014
 “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 www.ed.gov/sites/default/files/esea-flexibility.doc.
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.
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.
- 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 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.
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.
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.