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More packages and issues

By Sam Kovzan and Tim Shedor

Considering the Cuts

Clearing his throat and skipping the usual pause that precedes a presentation filled with bad news, Shawnee Mission School District Superintendent Dr. Gene Johnson addressed the auditorium by clicking to the first slide: “School Funding: A Time for Crisis – A Time for Action.”

The crowd of approximately 120, seated in the East auditorium on Feb. 16 for the Board of Education’s first of five Financial Forums, listened for an hour and a half as Johnson met every glum expectation that the meeting had promised. Designed to answer community questions about rumored budget cuts, the forums were open presentations that were concluded with a half hour of Q&A from those in attendance.

The forum was marked by slides describing SMSD’s recent budget crisis and their expected solutions. State funds had fallen short, stimulus money would be gone in two years, local and Federal support did not meet SMSD’s need this fiscal year, all while the district population was on the rise along with the demand for more support for student resources.

To counter the rapid financial losses, the SMSD Board of Education will propose a budget-reduction plan, expected to cut $9 to $11 million from the current budget, at a district-wide board meeting on March 8. As faculty and personnel costs are currently the largest expense of the district, accounting for roughly 75 percent ($20 million per month) of the district’s overall budget, most of the proposed reductions at the meeting will hover around staff.

“We’re just trying to keep our head above the water financially here,” Johnson said at the forum at East.

Johnson attributed the majority of the district’s financial struggle to the allocation of state budget funds. The amount of state funding has been declining, the district’s budget was reduced by $3.5 million, which could continue to decrease until a projected $40 million deficit by the 2012 fiscal year.

Alongside staff reductions, the Board may modify special education programs within the district. SMSD budget reports reveal a disparity in state funding for specialized programs, as the state covers only 65 percent of the district’s budget, compared to the 92 percent state-wide average.

At the meeting, Johnson stressed that the quality of education would not be compromised. The first dozen slides outlined the achievements and quality reputation that SMSD had upheld. However, most cuts will be from maintenance, teachers, or administrators as they account for the bulk of the budget expenses.

The Board of Education will consider fee increases with respect to facility rental, such as gymnasiums and all-day kindergarten and make additional cuts to department and school operating budgets. The district may also have to dip into its Contingency Reserve, currently $5.6 million, to balance the budget.

“I’m worried most about the effects of the students,” math teacher Angela Scheiferecke said. “Their opportunities are going to be impacted because we may have to cut some of the programs they are utilizing. The district will have to come to terms that we need to create new sources of revenue in Shawnee Mission.”

County-wide Concerns

SMSD’s Johnson County counterparts in Olathe and Blue Valley are witnessing the same red numbers in their budget. Olathe faced a $4.5 million state-funding reduction last year, even after downsizing roughly 250 employees by offering early retirement, creating consolidation through job elimination or forcing resignations.

Last year, Blue Valley School District announced approximately $4.8 million in proposed budget cuts, with 90 percent coming from eliminated or consolidated job positions at the district level.

“We receive a significant amount of money from the state,” Olathe School District Superintendent Pat All said in a recent podcast. “However, having a local budget option would save the district [approximately] $1.2 million [this year].”

The Blue Valley District has plans to open a new school, BV Southwest, and Olathe plans to open Mission Trail Junior High this fall. But unlike Blue Valley and Olathe, SMSD has few intentions to build new schools or to expand. It has a higher student density and a smaller capital outlay – funds raised through local taxes to pay for renovating, building and equipment expenses – than either district because of no new additions, therefore, it has a lower income.

SMSD currently holds a higher teacher-administrator ratio at 18.4-to-1 than most neighboring districts. Olathe has 13.8-to-1; Blue Valley 10.5-to-1. Despite staff reductions, however, Johnson said that the district expects only a two-to-three student increase in classroom sizes. Furthermore, no schools are expected to close.

“Teachers, no matter that the situation, hold students in their best interest,” Schieferecke said. “Whatever demands the district makes, we as teachers must rise to the challenge and continue to provide for our students.”

Under the current Kansas School Finance formula, Johnson County contributes 30.5 percent of the statewide income tax and 25.6 percent of the statewide sales tax. However, the county only receives 15.7 percent of the state support from income tax. In a process known as equalization, the state provides financial support to districts with low property values on a per student basis. Since Johnson County’s property values are the highest in Kansas, districts like SMSD, Blue Valley and Olathe are returned only half of what they contribute to the state.

However, this percentage may quickly change along side the recent rapid flux in Johnson County socioeconomics. The number of SMSD students living in poverty this year increased 163 percent, as Johnson County as a whole saw only a 55 percent increase. Nearly a third of the district’s students are eligible for the free lunch program, a 10 percent increase in the last two years.
“It is likely that more affluent counties will continue to support other parts of the state,” SMSD Budget and Finance Manager Tim Rooney said at the East forum. “Since Shawnee Mission is currently allowed per pupil funding that ranks in the bottom 10 percent across the state, some have argued that [Kansas] should allow the district to collect more local funding where 100 percent of it stays in Shawnee Mission.”

Johnson said the Shawnee Mission Board of Education also advocates the development of a new funding formula for Kansas school districts.

“Lots of people are trying to find a new way to fund education in Kansas,” Johnson said. “But in the meantime – either on a [temporary] or permanent basis – we need to be able to control our destiny in Shawnee Mission.”

Solutions Across the State

According to SMSD Communications Director Leigh Anne Neal, state funds have struggled in recent years for a variety of reasons. First, state legislators have developed spending plans that include expenses higher than revenue, creating a deficit. Second, legislators have approved tax reductions that have taken effect over the last decade. Third, the economic downturn has caused state revenues to plummet, and since the state does not have enough balances to absorb these losses, it is being forced to reduce its expenditure budgets.

“We think the local education can best manage our budget based on our needs of the local school district,” Rooney said. “Based on the current formula, the state has to try to predict how much each district needs. There have been significant differences in what the government provides and what the state needs. We’d love to see the local option change and more local authority.”

Seventy percent of SMSD’s coffers are filled by state funds, but this percentage will face a rapid decline in the upcoming years. The state legislature is continuing to propose new and broad financial proposals, such as the recent $11 million proposed cut from the state’s educational budget. Education accounts for nearly 50 percent of Kansas’s total expenses.

Most bills currently in the legislative process concern teacher removal policy, such as advance notice standards and reactivation of retired teachers, but a handful specifically call for reductions to the school budgets. “There are quite a few bills in the legislature that directly affect school funding,” Kansas House of Representative Pat Colloton said in an e-mail interview. “We just passed one last week in the House of Representatives that allows a district to draw down some of its funds from their capitol improvement reserves under certain circumstances. Usually amendments to the budget are offered to counter school budget cuts. I have always voted to support these and have sometimes been the legislator who has brought these amendments.”

SMSD has only applied for catastrophic aid, funds that are applied to special education programs, during the 2008-2009 fiscal year. The district plans to apply again this year, and hopes to receive $3.1 million again like last year. However, the a legislature bill may change the catastrophic aid requirements by tightening guidelines and qualifications, which may make SMSD ineligible

Capital outlay and construction funds will be reduced by 10 percent, but the bill allows districts to re-transfer the money to a regular contingency fund. Once in the contingency fund, a reserve fund for emergency situations, the district is able to withdraw funds and attribute them to various projects in need of funds.

According to Johnson, options unavailable to the district include increasing the level of state funding that Shawnee Mission receives and suspending the requirements of the No Child Left Behind Act, a federal legislation that requires states to develop assessments in basic skills to be given to all students at each grade level.

Johnson also disputed the idea that a statewide tax increase would automatically improve SMSD’s deficits, referring to the plan Kansas Governor Mark Parkinson developed in November 2009.

Parkinson proposed a 1 percent increase in state sales tax and an increased cigarette tax. If implemented, it would add $50 to BSAPP (Base State Aid Per Pupil) for all school districts in Kansas, providing SMSD an additional $1.7 million. Since the district’s reduction plan is expected to defer roughly $11 million from the current budget, this means that the district would still be reducing its budget by around $9 million. Thus, state sales tax would inadequately address the problem.

“When you hear this idea of ‘Let’s support a state sales tax,’ you have to know where that’s all going to go,” Johnson said at the forum. “We’re going to still be reducing our budget for next year by $9 million.”

Rather than rely on state legislature, Johnson believes the district must be able to control its own destiny by means of a greater local authority, which would permit local fundraising to stay in Shawnee Mission and allow the district to finance the programs the Shawnee Mission community desires. Through SMSD’s local option budget, raising $1 million locally equals $3.2 million for the district, whereas $50 per pupil provides only $1.7 million. Currently, the local tax authority allows SMSD to raise taxes to 31 percent of the state’s budgeted income.

Johnson said the Shawnee Mission Board of Education also advocates the development of a new funding formula for Kansas school districts.

“Lots of people are trying to find a new way to fund education in Kansas,” Johnson said. “But in the meantime – either on a [temporary] or permanent basis – we need to be able to control our destiny in Shawnee Mission.”

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