JAG-K program shows improving graduation rates both costs and pays

Kansas legislators are receiving a report from a program called Jobs for America's Graduates – Kansas (JAG-K) that shows significant promise as a model for raising the state graduation rate. It also shows why improving these educational outcomes will cost more - and how the payoff will be worth it.

Spending $1,230 per year to help an at-risk student finish high school results in $5,229 more in annual earnings and $235,000 over 45 years working – even more if the student continues education after high school.

Jobs for America’s Graduates is a nationwide initiative that seeks to help at-risk students succeed in jobs and careers. Thirty-three states had JAG programs in 2016-17. The program works through an in-school elective class that focuses on workforce competencies. It also includes community engagement activities, academic remediation, summer support and a 12-month follow-up period for seniors.

JAG-K is primarily funded through the Temporary Assistance for Needy Families (TANF) grant but is also supported by corporate and individual donations. Executive Director/CEO Chuck Knapp said its Kansas student/teacher ratio is 15:1.

The program results are impressive: according to testimony, the JAG-K Class of 2016 had a graduation rate of 93 percent, positive outcomes of 89 percent, and full-time placement (college and/or work) of 95 percent.

According to testimony, this year JAG-K has 68 programs in 33 school districts, serving approximately 3,100 students. According to JAG-K website, the average investment is generally less than $1,400 per student per year. The national JAG website says the cost per participant in the national network is $1,230.

How does the 3,100 students currently served compare with the need? Over the last four years, ninth grade public school enrollment in Kansas has averaged 37,384, according to Kansas State Department of Education Date Central reports. With an "adjusted cohort graduation rate" of 86 percent, 14 percent of those ninth graders, or 5,234, will not graduate. That is four times the number of students currently served by JAG-K, and would require an estimated $4.8 million more for each class.

However, JAG-K actually provides assistance to students in all grades of high school. To provide JAG-K programs for 14 percent of students in grades nine through twelve currently not completing high school in four years would mean serving nearly 21,000 students, at a cost of about $24 million.

Providing JAG-K (or similar) services to 21,000 students currently expected to drop out of school at a cost of $24 million would certainly be possible as part of a plan to increase school funding by $600 million. In fact, it would be completely consistent with the results of a survey of district leaders reporting that they would spend $2.4 million specifically to increase the graduate rate; $2.4 million for "other" programs which could include JAG-K, and $47.2 million for unspecified "at-risk" programs. (Other funding would go to students in lower grades and other programs to help high school students prepare for postsecondary education.)

Providing this program for four years of high school would require just under $5,000 per student. Because high school graduates in Kansas currently earn $5,229 annually more than someone who has not completed high school, this investment will effectively pay for itself in economic terms in a single year. But over a typical working career of about 45 years, the difference will be $235,305 in lifetime earnings for each graduate, without adjusting for inflation or other differences in future earnings. Because many of these students will go on to complete postsecondary programs that result in much higher earnings, the impact will be even greater.

Programs like JAG-K demonstrate that increasing funding for K-12 education, especially targeted at students currently not succeeding, in order to comply with the Kansas Supreme Court is not just an expense. It is an investment that will be repaid through higher earnings of individuals who will spend and invest that additional income – which will also reduce in the long-term cost of social services and corrections.

Here are a few key facts to remember:

• Other states are doing this. Since 2011, the national graduate rate has increased from 79 percent to 84 percent, while Kansas has increased more slowly, from 83 percent to 86 percent, and Kansas dropped from 12 to 23 in national ranking.

• From 2008 to 2015 (latest data available), Kansas funding per pupil increased 4.8 percent, while the national average increased 11.7 percent. Only 11 states had a slower rate of investment in K-12 education per pupil.

• Preparing students to complete with other states academically and in the job market is one of the seven "Rose" capacities identified by the Kansas Supreme Court to determine adequate funding, and adopted by the Kansas Legislature as an educational goal.

• The Governor's budget calls for increasing K-12 funding by $600 million over five years to address the Supreme Court ruling, and also calls for reaching a 95 percent graduation rate. The state’s Every Student Succeeds Act (ESSA) recently approved by the U.S. Department of Education, also sets that goal. Achieving it would make Kansas the highest in the nation (based on current state graduation rates).

Restoring Additional School Funding for Students and Teachers: School District Survey Results

If provided an additional $600 million in funding over three years, school district leaders say they would spend $255 million to enhance programs for at-risk students, increase the graduation rate and help students better prepare to succeed after high school – all of which would address the Kansas Supreme Court’s concern about underperforming students. There would also be $90 million available to increase teacher salaries that have fallen behind several neighboring states. It is important to realize that it will cost the remainder — or $255 million over three years — to simply keep up with increasing costs and wages due to inflation at current annual rates.

Various cost studies and comparisons to other states and previous levels of Kansas funding and achievement indicate that Kansas school funding should be increased by approximately $600 million to provide constitutionally suitable funding based on student outcomes. Governor Brownback proposed $600 million to remedy the school finance case, phased in over a five-year period.

This fall, in response to a Legislative request, the Kansas State Department of Education surveyed school districts on how they would spend an additional $200 million over each of the next three years. The results were presented to the Special Committee on a Comprehensive Response to the School Finance Decision in December.

Programs to improve student success

Districts say they would spend an average of $85 million out of $200 million per year for enhancing programs and services for students, for a total of $255 million more per year after three years.

As the table below shows, most of the new money would go to direct interventions and services, such as special help for lower achieving students, early childhood and special education; proven efforts to help all students, such as hiring more teachers to lower class size, more career and guidance counselors, social workers and technical education programs; and supporting technology and curriculum materials.

Proposed District Investments in Student Success Programs from $600 million From school district survey on allocation of additional $200 million per year over three years. Remaining funding would cover inflation and help educator salaries catch up with other states.
Identified purpose for enhancements	Average Percent	Times $200 million per year	Three-year Total
At-risk Students*	7.9%	$15.8 million	$47.4 million
Lower class size	4.1%	$8.2 million	$24.6 million
Counselors, social workers	3.8%	$7.6 million	$22.9 million**
Technology	3.8%	$7.6 million	$22.9 million
Curriculum materials	3.8%	$7.6 million	$22.9 million
Early Childhood	3.4%	$6.8 million	$20.4 million
Career and Technical Education	2.4%	$4.8 million	$14.4 million
Transportation	2.4%	$4.8 million	$14.4 million
Staff Development	2.2%	$4.4 million	$13.2 million***
Special Education	1.9%	$3.8 million	$11.4 million****
After school programs	1.5%	$3.0 million	$9.0 million
Safety and security	1.1%	$2.2 million	$6.6 million
CTE counselors	1.0%	$2.0 million	$6.0 million
Other	0.9%	$1.8 million	$5.4 million
Summer school	0.4%	$0.8 million	$2.4 million
Increase graduation rate	0.4%	$0.8 million	$2.4 million
Additional nurses	0.2%	$0.4 million	$1.2 million
Expanded school year	0.2%	$0.4 million	$1.2 million
*While all investments on this list would benefit at-risk students, these programs would be targeted specifically at students who meet certain criteria, such as performing below grade level, high absenteeism and others.
**Would fund approximately 150 positions per year at teacher salary average of $50,000, for three years. Governor’s budget has a goal of 150 per year over five years.
***Fulling state professional development program would require approximately $8.5 million; fully funding the mentor teacher program would require $3 million.
****Special education state aid for FY 2019 is $84.4 million below the 92 percent of excess cost target in state law.

Keeping up with Inflation

Based on an annual consumer price index increase of 1.9 percent (which is the estimate for calendar year 2017 and 2018 by the November Consensus Revenue Estimate), it will require an increase of approximately $85 million per year in funding in the general fund, Local Option Budget and special education state aid to keep up with inflation. Over a three-year period, that would require $255 million at the end of three years.

This is based on the legal maximum budgets for school district general fund and local option budgets published by KSDE plus state aid for special education. Statewide expenditures in these funds in the current year, FY 2017-18, are expected to be $4,369.3 million.

Assuming an increase in the consumer price index of 1.9 percent for the next three years, it will require the following increases just to keep up with inflation:

FY 2019: $4,369.3 million times 0.019 = $83.0 million

FY 2020: $4,369.3 million plus $83.0 million = $4,452.3 times 0.019 = $84.6 million

FY 2021: $4,452.3 million plus $84.6 million = $4,536.9 times 0.019 = $86.2 million

Districts indicated they would spend the following percentages of $200 million largely on existing costs:

Teacher Salaries           33.7%

Non-licensed salaries     9.1%

Health Insurance            7.3%

Licensed non-teachers  4.0%

Maintenance                  2.1%

Utilities                           1.3%

Total                             57.5% times $200 million = $115 million

This means that school districts’ additional spending on current salaries, benefits and on-going costs like maintenance and utilities would increase approximately $30 million more than inflation. ($115 million per year minus approximately $85 million for CPI increase = $30 million per year.)

Teacher salaries: making up for lost ground to inflation, neighboring states

The additional $30 million per year for salaries and other basic operating costs after inflation would allow districts to raise salaries to make up for lost value compared to past inflation and to compete with other states.

Using data from the National Center for Education Statistics, Kansas average teacher salaries declined $4,253 from 2010 to 2017 when adjusted for inflation. (Average teacher salary 2010: $52,237 minus average teacher salary 2017: $47,984 = $4,253)

Therefore, it would require approximately $170 million to bring 2017 salaries for current employees back to 2010 levels ($4,253 times 37,812 teachers and licensed support positions in 2016-17 plus approximately 500 positions added this year = $162.9 million).

KSDE told the special school finance committee it estimated school districts increased salaries of current teacher and other positions directly involved with students (counselors, social workers, etc.) this year by $95 million. Subtracting from $162.9 million means it would require an additional $67.9 million to restore teacher salaries to 2010 levels when adjusted for inflation.

Dividing $67.9 million by three years = $22.6 million per year for teacher salaries only, compared to $30 million available after the estimated cost of inflation over the next three years.

Another way to look at salary competitiveness is surrounding states. Governor Brownback set a goal of having the highest teacher salary of the surrounding states. Using the same NCES data, in 2017 Kansas trailed the highest bordering state, Nebraska, by $4,354. Using the same process, it would require an increase of approximately $24 million each of the next three years to reach that level.

(The highest state in the region, Iowa, had average teacher salaries $7,459 higher than Kansas. Using the same process would require $63.6 million each of the next three years. Missouri’s average teacher salary was $309 more than Kansas. Colorado and Oklahoma had lower salaries.)

This assumes other states are increasing teacher salaries at the same estimated rate of inflation, 1.9 percent per year, and Kansas is adding funding to increase salaries at a higher rate. If other states also raise salaries more than inflation, Kansas will require additional funding to overtake them. Also, these calculations are for teacher salaries only, and do not factor in the need for competitive salaries for other school district positions.

Therefore, the school districts’ estimated spending for salaries, benefits, maintenance and utilities out of $200 million per year over three years would cover the estimated rate of inflation, and further allow districts to restore salaries to 2010 levels or match the highest border state, with approximately $6-7 million per year to either exceed the highest bordering states or provide more competitive salaries for other school district positions that have fallen behind inflation and other states.

K-12 aid is not taking a larger share of the Kansas state budget

Despite concerns that K-12 funding is taking a larger share of the state budget and squeezing out support for other programs, analysis of state spending shows that school funding's share of the Kansas budget has changed very little since 1994.

According to data from the Kansas Legislative Research Department's Fiscal Facts publication, state aid to school districts in 1994, when the state assumed a much larger role in school funding to reduce property taxes, was 48.2 percent of the state general fund. Under the approved budget for 2019, school district state aid will be 49.7 percent. The average over the past 25 years has been 49.9 percent.

In other words, school district aid from the general fund has increased at almost exactly the same rate as overall state general funding spending, including increased funding as a result of school finance lawsuits.

Note that state aid funding increased from about 40 to 50 percent of the state general fund from 1992 to 1994 when the Legislature raised sales and income taxes to reduce local school property taxes in most districts. The percentage of state aid for K-12 also increased following reductions in the statewide mill levy from 35 to 20 and removing the state school levy from motor vehicle taxes in the late 1990’s, and following the Montoy school finance decision in 2005.

The share of budget going to K-12 had been declining since 2011 until the current year when funding was increased to address the Gannon decision. However, the share of state general funding going to K-12 is expected to decline next year under the two-year budget approved by the 2017 Legislature.

Note: this data includes only appropriations for school district state aid from the state general fund. It does not include capital improvement (bond and interest) aid or the 20-mill statewide levy.