Tag: Carryover Cash

Kansas Ranked 6th for State School Funding

New data from the U.S. Census Bureau shows Kansas had the 6th highest share of school funding provided by state government in 2015.  State school funding comprised 66 percent of total funding in Kansas, while the national average for state school funding was 47 percent.  The national average for local taxpayer support was 45 percent but Kansas local taxpayers only provided 26 percent of funding.  The federal taxpayers’ share of funding was 8 percent in Kansas and across the nation.

No other regional state comes close to Kansas for state school funding.  The next highest share among neighboring states is Oklahoma at 49 percent, followed by Colorado (45 percent), Missouri (42 percent) and Nebraska (32.5 percent).

Kansas also made the Top Ten list for Capital Outlay spending per pupil and Bonded Indebtedness per pupil.  Kansas’ $1,939 per pupil on Capital Outlay was the 5th highest spend in the nation and almost double the national average of just $1,075 per pupil.  Kansas was #8 nationally for Bonded Indebtedness at $10,865 per pupil.  Census uses headcount enrollment rather than full time equivalent enrollment as does the Kansas Department of Education for its per-pupil calculations, so the averages are a little lower than Kansans are used to seeing.

At $12,418 per-pupil, Kansas is ranked #25 for total spending and is #32 for current spending (excluding Capital Outlay, Debt Service, Interest and other amounts designated by Census) at $10,040 per-pupil.  Kansas had the 14th highest per-pupil Cash & Securities holdings in the nation, which, as explained recently, includes a little over $1 billion in unspent bond proceeds.

Kansas also has relatively high rankings for growth rates since 2001.  Total spending per-pupil growth of 70 percent was ranked #16 and far exceeded the national average of 51.6 percent.  The growth in current spending was just below the national average (54 percent versus 56.4 percent) but Kansas could easily exceeded it if local school boards hadn’t put so much money into cash reserves.

Kansas added $781 million to its Operating and Capital reserves between 2001 and 2015; diverting just 10 percent of that increase to current spending would have increased current spending per-pupil to the national average and still left $775 million in operating reserves and $412 million in capital cash reserves.  And Kansas would still have had the 2nd highest Cash & Securities growth rate in the nation.

Carryover Cash Reserves

School districts have operating cash reserves in many different funds, which function like a personal checkbook; the balances only increase if more money is deposited each year than is actually spent.  Every entity needs some degree of reserves but most school districts have dramatically increased their cash reserves over the last ten year.  Operating cash reserves (excluding federal funds and money set aside for capital projects and debt service) totaled $468 million at the end of the 2005 school year but grew to $911 million at the end of the 2016 school year; that $443 million increase is state and local aid given to districts that wasn’t spent.

school cash reserves

Some school districts say they set extra money aside because the state was late making payments during the recession but the majority of the increase occurred long before payments were delayed, and during a time when funding was significantly increasing.  There is no legislative record of school districts saying they had insufficient reserves prior to 2009.

Upon learning that some operating reserve balances were in restricted funds, the Legislature changed the law in 2012 to allow school districts to use up to $250 per student annually in several previously restricted funds, including At Risk, Bilingual, Driver Training, Parent Education, Professional Development, Summer School, Textbook and Student Materials, Vocational Education, Pre-School At Risk, Special Education and Virtual Education.  There is no limit on the use of funds from Contingency and other unrestricted operating funds.

The Department of Education publishes fund balances by district, which have been compiled into comparative multi-year reports here, here and hereThis report shows districts’ annual Carryover Ratio, which is the percentage of operating cash on hand at the beginning of the year expressed as a percentage of that year’s actual operating expenditures.

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