The April Kansas Consensus Revenue Estimate has just been released: “The estimate for FY
2010 was decreased by $401.6 million, or 6.9 percent, below the previous estimate...” made in November 2008. Optimists were hoping for only a $150-200 million shortfall; pessimists feared $250-400 million. Pessimists “won.” What might this mean for education in Kansas?
Well over half of our state tax dollars go to K-12 and university education. Such a huge
revenue decrease of an estimated $744 million over these two years cannot be taken from just the state non-education sector. In spite of early attempts to “hold education harmless,” both sectors of education have already taken reductions.
Regents universities cut budgets 7.1% for next year with a general hiring freeze and no raises for faculty. They also promise not raise tuition if certain conditions remain stable. Depending on legislative actions, this larger tax shortfall may be a deal-breaker.
At the K-12 level, base state aid per pupil has already been cut $33 this year for a total reduction of almost $21 million, and this will repeat next year. One percent was also cut from special education for a reduction of $4.5 million. And another $165 million in planned and anticipated new K-12 education spending never made it into the new budget.
K-12 schools have already been working on how to cover their current reduced base. Each district is unique but their biggest expense is salaries. One option for larger schools is to increase class size. This is not an option for smaller rural schools where faculty may have to stretch to cover unfilled vacancies.
But further substantial cuts in K-12 or university funding may not be possible. In accepting federal stimulus money, Kansas must maintain the funding levels of 2006. This “maintenance of effort” provision is intended to ensure that federal money is an add-on stimulus and does not enable states to use the stimulus to fill the holes left by cutting state support further. We are just too close to 2006 budget levels in education to absorb further substantial cuts in university or K-12 education without violating the stimulus agreement that brings in $383 million.
Kansas universities can apply stimulus money toward continuing the “deferred maintenance” that was begun under state funding but recently canceled. These projects were already on the drawing board and “shovel ready.”
K-12 stimulus money, also available for only two years, is likewise not useful for underwriting ongoing expenses. Federal distribution of K-12 stimulus funds is unfolding day-by-day in the education press. The Secretary of Education has a large discretionary fund available to promote the apparent continuation of more rigorous No Child Left Behind plans, with modifications likely, but this is a one-time carrot. In recent years, NCLB has provided Kansas with $185-190 million annually for compliance with federal mandates tied to the federal funds, and this will likely continue.
With revenue falling, tax increases out of the question, and many legislators returning with a “no more cuts”attitude, how can a balanced-budget state like Kansas handle this larger shortfall? If you can’t raise taxes and you can’t lower spending, then the only short term solution may be to tax the creativity of legislators for finding ways to adjust sales tax collections or other current revenue streams.
But what can be done over the longer term, if recovery takes many more years and these tax shortfalls continue year after year? As much as we value the genuine advantages of small schools, major K-12 school consolidation (currently underway in a haphazard fashion with 2-3 USDs per year) could result in $480 million dollars less operating costs per year if done statewide under a comprehensive plan. Moving from 295 to 40 Regional School Districts would also decrease the number of out-of-field teachers and decrease rural versus non-rural disparity.
The proportion of Kansas high school graduates pursuing tertiary education has jumped from less than half in the 1980s to over 75% today. But still only a third are completing college in five years. Raising the ACT minimum for Kansas college admission would save substantial costs in remedial university coursework. It would also move universities toward a proposed Regents goal of increasing retention, without pressuring faculty to inflate grades.
Both K-12 consolidation and rasing the admissions criteria are political suicide. But the idealistic view that there is no limit to the amount of money we can spend to educate Kansas students, is no longer realistic.