Monday, January 18, 2016

The Myth of the 65%

On January 12th during his State of the State address, Governor Sam Brownback stated the following:


Teachers need money to care for their needs.  That’s why Kansans invest in education: so good teachers are able to do their calling and teach.  Yet today, of the more than $4 billion the state puts into education funding, not nearly enough goes toward instruction. That’s highly inefficient, if not immoral, denying Kansans from putting their education dollars where they want it…behind a good teacher.  I call on the legislature to design a new education funding system that puts more of our money into instruction.


Brownback is referring to the Kansas law dealing with having at least 65% of spending go towards the classroom rather than administrative expenses.  Anyone following Kansas education over the past several years has no doubt heard about the 65% law, but it’s likely that many have not seen the actual language in the law.  Here it is:  


K.S.A. 72-64c01. Sixty-five percent of moneys to be spent on instruction. (a) It is the public policy goal of the state of Kansas that at least 65% of the moneys appropriated, distributed or otherwise provided by the state to school districts shall be expended in the classroom or for instruction.


This does not mean that each district is expected to spend 65% of their revenue “in the classroom.”  As Mark Tallman notes in a recent blog linked above, “Contrary to some claims, there is no legal requirement that each Kansas school district must spend 65 percent of its budget on instruction.”  The language of the law describes the 65% as “a public policy goal,” and only asserts that for the state as a whole, 65% of money going to education should be spent “in the classroom.”


But what does spending “in the classroom” really mean?  


Looking at federally reported data from NCES, I find the following dollar amounts for Kansas for 2011-12:
  • Total revenue:  $5,796,536.55
    • From Federal:  $485,234.98
    • From State:  $3,209,526.87
    • From Local:  $2,101,774.70
  • Total Expenditures:  $5,759,773.41
    • Expenditures for Instruction:  $2,960,225.03
      • Salaries:  $2,082,097.74
      • Employee Benefits:  $632,726.25
      • Purchased Services:  $84,449.35
      • Supplies:  $138,981.08
      • Tuition and Other:  $21,970.61
    • Support Services:  $1,680,455.92
      • Student Support:  $288,452.95
      • Instructional Staff:  $203,500.05
      • General Administration:  $144,033.25
      • School Administration:  $280,207.03
      • Operation and Maintenance:  $456,008.60
      • Student Transportation:  $191,668.44
      • Other Support Services:  $116,585.61
    • Food Services:  $230,699.72
    • Capital Outlay:  $682,545.75
    • Interest on School Debt:  $201,522.26


Typically, using this data, most would take “Expenditures for Instruction” as synonymous with “Spending in the Classroom” and divide it by “Total Revenue” to see the percent spent on the classroom.  Doing this, you come up with 51.07%.  This looks bad for Kansas until you realize that the range of percents for the states is from 46.56% to 62.07%, and the U.S. average is 53.45%.  So if we assume that “Spending on Instruction” in the federal definition is the same as “Spending in the Classroom” in Kansas law, we can assert that Kansas is not meeting this goal, but neither is any state in the country.    


But looking at the language again, note that it says 65% of money from the state should be spent in the classroom.  Not all money, but money from the state.  What does this mean?  Some would argue (and Judge Bullock did argue in the early 1990s) that all money is “provided” by the state because the state authorizes everything local school districts can raise.  But others might argue that money raised by local governments below the state level should be spent at the discretion of those local governments.


So let’s do the same calculation minus local revenue.  Doing so, we get 80.12% for Kansas, we see that the range of values is 50.54% to 140.30%, and the U.S. average is 96.53%.  If we exclude federal revenue as well, we get 92.23% for Kansas, a range from 58.00% to 183.43%, and a U.S. average of 118.24%. Some of these percents come to more than 100% because the amount being spent in the classroom is more than was received in state and/or federal funding.  To summarize:



Percent Based on All Revenue
Percent Based on Federal + State Dollars
Percent Based on State Dollars
Kansas
51.07%
80.12%
92.23%
Minimum
46.56%
50.54%
58.00%
Maximum
62.07%
140.30%
183.43%
U.S. Average
53.45%
96.53%
118.24%


That means if we interpret the state law to be referring to state and/or federal funding and excluding locally raised taxes, Kansas is exceeding the goal by 15 to almost 30 percent.  


But let’s go back to Brownback’s claim:  “...of the more than $4 billion the state puts into education funding, not nearly enough goes toward instruction. That’s highly inefficient, if not immoral, denying Kansans from putting their education dollars where they want it…behind a good teacher.”


Let us not overlook the fact that the Governor is suggesting school districts are being immoral in the way they are spending money.  Let us look at how this money is being spent and decide if it looks like our schools are trying to cheat the students of Kansas.


We’re going to go back to assuming that the law and the Governor are looking at all education funding, including local revenue, and we’re going to re-examine the assumption that the federal category of “Spending on Instruction” and the phrase “Spending in the Classroom” are synonymous.  


What is included in the federal category of “Spending on Instruction”?
  • Salaries
  • Employee Benefits
  • Purchased Services
  • Supplies
  • Tuition and Other


“Salaries,” “Employee Benefits,” and “Supplies” seem to fit without question.  But what about “Purchased Services” and “Tuition and Other”?  These are at least worth examining further.  


So, what is NOT included in “Spending on Instruction”?
  • Support Services:
    • Student Support
    • Instructional Staff
    • General Administration
    • School Administration
    • Operation and Maintenance
    • Student Transportation
    • Other Support Services
  • Food Services
  • Capital Outlay
  • Interest on School Debt


Again, I would say that “Food Services,” “Capital Outlay,” and “Interest on School Debt” do not qualify as spending “in the classroom” (although you could argue that they are spending “on the classroom”).  Under “Support Services,” we can also say “General Administration,” “School Administration,” “Operation and Maintenance,” and “Student Transportation” are not “in the classroom.”  That leaves us “Student Support,” “Instructional Staff,” and “Other Support Services.”  


Here are the definitions for the ones we’ve called into question, according to NCES:
  • Purchased Services:  “Expenditures for professional and technical services and the renting of equipment.“
  • Tuition and Other:  N/A
  • Student Support:  “Includes expenditures for guidance, health, attendance, and speech pathology services.”
  • Instructional Staff (Support Services):  “Activities that include instructional staff training, educational media (library and audiovisual), and other instructional staff support services.”
  • Other Support Services:  “Expenditures for business support services (activities concerned with the fiscal operation of the LEA), central support services (activities, other than general administration, which support each of the other instructional and support services programs, including planning, research, development, evaluation, information, and data processing services), and other support services expenditures not reported elsewhere.“


Based on these definitions, let’s re-organize the NCES categories to fit into two categories; “In the Classroom” and “Outside the Classroom.”  Note that this is just my interpretation of these definitions; as you can see many of these would be open for debate and discussion:
  • In the Classroom
    • Salaries
    • Employee Benefits
    • Supplies
    • Student Support
    • Instructional Staff Support Services
  • Outside the Classroom
    • Purchased Services
    • Tuition and Other
    • General Administration
    • School Administration
    • Operation and Maintenance
    • Student Transportation
    • Other Support Services
    • Food Services
    • Capital Outlay
    • Interest on School Debt


If you accept this categorization, then we get the following for Kansas school spending:


In the Classroom
3,345,758.07
59.0%
Salaries:   
2,082,097.74
36.7%
Employee Benefits:  
632,726.25
11.2%
Supplies:   
138,981.08
2.5%
Student Support:  
288,452.95
5.1%
Instructional  Staff Support Services:  
203,500.05
3.6%
Outside the Classroom
2,325,241.27
41.0%
Purchased  Services:
84,449.35
1.5%
Tuition and Other:  
21,970.61
0.4%
General Administration:  
144,033.25
2.5%
School Administration:  
280,207.03
4.9%
Operation  and Maintenance:  
456,008.60
8.0%
Student  Transportation:
191,668.44
3.4%
Other Support Services:  
116,585.61
2.1%
Food Services:
230,699.72
4.1%
Capital Outlay:  
682,545.75
12.0%
Interest on School Debt:  
201,522.26
3.6%


So now we have 59% in the classroom instead of 51%, but it’s still not 65%.  Many say that the money not spent in the classroom is wasted on exorbitant administrator salaries and unnecessary overhead.  Looking at the table above, however, you see that only 2.5% of the funds goes to district-administration, and just under 5% goes to school-level administration.   Is it abusing your budget to spend 7.5% on administrative costs?  


And what about the other 35% or so?  


About 20% goes towards facilities (Operations and Maintenance and Capital Outlay), under 4% goes towards debt, 7.5% goes to transportation and food service, and the remainder goes to tuition and other support services.  Is spending one-fifth of your budget on facilities unreasonable?  Is spending the same amount on food and transportation as you do on administration immoral?  Can you say that these costs don’t support classroom instruction and are not necessary?


Where does that magic 65% come from, anyway?  As it turns out, the 65% solution was proposed in 2006 by Tim Mooney, a Republican political consultant from Arizona, according to the New York Times.  The percent has absolutely no basis in research indicating more money in the classroom equals better student outcomes.  


The Times article goes on to say:  “Part of the problem lies in definitions, the critics say. Athletics counts as a classroom activity, including coaches' salaries, but librarians, guidance counselors, food service workers and school bus drivers do not, under guidelines created by the National Center for Education Statistics, a branch of the federal Department of Education.”


To summarize, here’s what we’ve discussed:
  • Governor Brownback feels schools are not spending money correctly, and more dollars should be going into the classroom.
  • The Kansas law promoting the 65% spending in the classroom is setting out a policy goal and not a mandate for each individual district.
  • The 65% guideline leaves room for interpretation related to money “from the state.”
  • If we interpret the state law to be referring to state and/or federal funding and excluding locally raised taxes, Kansas is exceeding the goal by 15 to almost 30 percent.
  • Re-organizing the NCES categories to fit into two categories (“In the Classroom” and “Outside the Classroom”), Kansas spends approximately 59% in the classroom.
  • Kansas spends approximately 7.5% on district- and school-level administration.
  • Kansas spends approximately 20% on facilities, operations, and maintenance.
  • Kansas spends approximately 7.5% on food and transportation.
  • The 65% solution is not based on any research or indication that shifting money away from expenses outside the classroom will improve educational outcomes.


Granted, the 65% notion has become such a strong soundbite that it is not going away any time soon, but hopefully the discussion above will at least give you a bit more information to use when it comes up.  

For more on this topic, be sure to read John Heim's post here.