What do the Governor's School Efficiency Proposals Mean?

The Governor’s School Efficiency Task Force recommendations will be presented to the House and Senate Education Committees Monday at 1:30 p.m. by task force chair and State Board of Education member Ken Willard, R-Hutchinson, and to the Senate Ways and Means Committee Tuesday at 10:30 a.m.

The Task Force final report is available here: http://www.kasb.org/assets/Advocacy/SchoolEffTFFinal012113.pdf

Several of the recommendations are relatively minor proposals, generally supported by KASB.  Recommendation #1 is a two-year school funding cycle.  KASB supports development of multi-year school funding and many superintendents say budgets longer than one year would improve planning and efficiency.  Recommendation #2 calls for timely payments of state school aid, which would help districts manage cash flow.  But the recent recession years demonstrated the state can’t make payments if it doesn’t have the revenue itself.  Governor Brownback has proposed a two-year budget, but the actual revenues for the second of those years will not be known until after June of 2015 – 30 months from now.  A two-year budget will be a guide, not a guarantee.

Recommendation #4 call a study on implementing a state data management and accounting system for streamlined educational reporting.  Of course districts would appreciate an improved reporting system, but it will take a study to determine how the current system can be improved and at what cost.  Recommendation #9 calls for “financial management” courses to be required for district leadership licensing, but that seems to be already in place.  Recommendation #11 proposes a limit on the length of special education due process hearings, but KASB special education lawyers say that would probably be against federal law (except in gifted cases, which are controlled by state law).

Recommendation #7 calls for the Legislature to eliminate, reduce or consolidate the various cash reserve accounts school districts are required to use, with a “modest” carryover limit from year to year.  School boards appreciate additional flexibility in the use of funds.  But the funds with the largest cash balances each year are bond and interest funds used to pay anticipated costs and scheduled payments; capital outlay, special reserve, textbook and other funds where districts accumulate money for long-term needs; and areas like special education and food service where districts need balances for cash flow until scheduled revenues are received (even when paid on time).  The largest other fund – contingency reserve – was given a higher carryover limit just last session by the Legislature.

Potentially more substantial proposals concern bond and interest and capital outlay, the two major means for districts to address buildings and equipment costs.  Recommendation #3 calls for a study of bond and interest state aid to maintain the current equalization system but place an annual or bi-annual cap on new obligations incurred.  That is highly preferable to attempts in recent years to either eliminate the program entirely, or simply reduce the percentage of aid paid by the state, regardless of need.

Recommendation #5 makes three proposals for restructuring the operating parameters associated with the capital outlay fund.  However, the report does not propose restoring state equalization aid payments for capital outlay.  As a result, the first proposal, an annual cap on the amount of money transferred from the general fund to capital outlay, would have a disproportionate impact on lower property wealth districts that raise little or no money from their capital outlay levy.  Higher wealth districts can raise much more money per mill or per pupil, and have less need for transfers.  Likewise, the second proposal, broadening the definition of allowable capital outlay uses, would be helpful to districts that can raise greater amounts of revenue per pupil from the capital outlay levy.  But it would do little for those with limited or no capital outlay revenue to spend on other purposes.  The third proposal, requiring districts to have a published five-year rolling maintenance plan, seems like a useful planning tool that most districts are already doing to some degree.

It should be noted the three-judge panel in the Gannon school finance case ruled earlier this month that the current capital outlay levy system is unconstitutional unless the state restores equalization aid, at an estimated cost of $22 million per year.  The same principles would certainly apply to the bond and interest program if efforts to end it are renewed.

An even more controversial proposal is Recommendation #6, which would narrow the Professional Negotiations Act to “prevent it from hindering operational flexibility/resource assignment.”  This recommendation includes proposals to review teacher tenure, replace the current salary schedule for teachers, and narrow the number of mandatorily negotiable items.  While tenure is not part of the PNA, legislation has already been introduced to address the other topics (HB 2085).  We will discuss these issues in more detail in a future post about that bill and related issues.  Suffice it to say these changes will be strongly opposed the Kansas National Education Association and its allies in the Legislature and labor movement, and likely be controversial even among school boards.

Perhaps the most potentially far-reaching proposal is Recommendation #8, which calls for a study of school district administration, and development of a state plan for district-level administrative reorganization and alignment, including regionalization of administrative structures and changing district boundaries for administrative efficiency.

Although this proposal carefully avoids using the term “consolidation,” which Governor Brownback seemed to take off the table when the Task Force was appointed, these concepts go farther than anything else in the report toward a major change in the current structure of K-12 schools.  Many legislators and other observers say Kansas school districts simply have too many administrators and could operate more efficiency through significant consolidation of administrative programs.  On the other hand, KASB reported to the House and Senate Education Committees this week that Kansas ranks 7^th in the nation for educational achievement, but 27^th in current spending per pupil.  Every higher achieving state spends significantly more.  The current system is delivering very high results at a moderate price – a more effective indicator of efficiency than the number of districts or administrators.

Recommendation #10 calls for developing a commonly-accepted definition of “instructional” spending and reviewing the goal of spending 65% of education funding on instruction.  According to federal reports, Kansas spends 61.2% of its current operating expenditures per pupil ($9,715) on instruction, ranking 13^th in the nation in 2010.  The only three states spending at least 65% on instruction are New York (69.7% of $18,618), (66.3% of $10,685) and Nebraska (66.0% of $10,734); which means every” 65% state” spends more per pupil than Kansas, and only one ranks higher in achievement (Minnesota).  Nebraska ranks 14th in achievement and New York 23rd. Finally, recommendation #12, for an efficiency audit of the Kansas State Department of Education, was a late addition to the task force report with little discussion during public meetings.

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