Shooting Fish in a Tank

I first planned that this post would be an update to earlier posts House Bill 2244 and A Turkish de Fright concerning our ongoing saga with the misdirection of over $20 million by the Oklahoma Tax Commission in apportioning motor vehicle collections among Oklahoma school districts.  That is because I expected that April would be an “under-collection” month and thus become the last of the twelve calendar months to “go bad” as I say it.  But it didn’t, so I must await the decision by the Oklahoma Court of Appeals where the successful challenge by eight Oklahoma school districts has been appealed by the Tax Commission.   You can see how it progresses by checking here:   http://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=SD-115678&cmid=120661

Instead I was forced again to the OCPA website (www.ocpathink.org) where I found easy prey, like shooting fish in a barrel (or in a so-called “think tank”), in an April 6 post http://www.ocpathink.org/post/10-things-youll-learn-with-our-education-finance-data-tool  by “research fellow” Steve Anderson who simply adds to his credentials as a limited-thinker.  He encourages his readers to make use of the OCPA’s “education finance data tool” and concludes, “Here are ten interesting facts I discovered on a recent visit.”  So here they are followed by the rest of the story.

1)  The Reydon school district spent $43,817 per student on 123 students while Epic One on One Charter School spent $4,786 per student on 5,631 students.

Reydon is a small district in Roger Mills County that serves live students in real brick and mortar buildings.  Epic is a virtual charter school, wholly immune from class size requirements, offering “classes” online to students who may or may not have any adult supervision while they are “in class”.  The State doesn’t negotiate with Epic over what it pays for these “educational services”, it just forks over the State Aid per student which its enrollment supports.  Back to Reydon, where students are in buildings, under adult supervision, offered meals, and transported to and from school, I knew immediately the eye-popping number, $43,817, must have something to do with a new bond project.

A little real research, instead of gratuitous attention grabbing, and we find that over half of Reydon’s FY 2016 expenditures were for a new bond project to construct a gymnasium.  We could dig further, but that’s enough to show Mr. Anderson’s “fact” is not an “apples to apples” comparison, rather it is intentionally (unless he is more limited than I suspect) misleading.  Also check out these SDE posted grade cards for Reydon and Epic; for what they are worth, maybe not much, looks like at least the good folks in Reydon are getting better value for their dollars.  Epic Elementary Grade Card Epic High School Grade Card Reydon High School Grade Card and Reydon Elementary Grade Card

One last word about Epic Charter, its Average Daily Membership and Average Daily Attendance are always the same—meaning Epic students never, never miss school.  Isn’t that amazing—and quite silly–but it actually raises its SDE grades.  It also reminds me of a barber shop conversation I had years ago when my barber told me her 15-year-old daughter was “home-schooled”, and when I inquired where her daughter was at that time, being the school lunch hour, she replied, “Oh, she’s at home with her boyfriend who’s also home-schooled.”

2)  In FY-2016 public school expenditures totaled $559,282,418 for “facilities acquisition and construction.” This is by far the fastest-growing category of school expenditures, having grown by 30 percent since 2012.

Or he could have used 2011 as the base year and touted “having grown by 18 percent” but that’s not as dramatic as 30 percent.  I think the point he’s trying to make is that all we hear from public school officials, or “ the Blob” as the OCPA likes to call schoolteachers, are complaints about not enough funding but here they are spending the money on buildings instead of teacher pay and kids.  The real “fact” is that expenditures classified as Facilities Acquisition and Construction are almost entirely financed with bond issue proceeds which cannot be used for teacher salaries–period…period…and period.  Even if they could be, it would be financially irresponsible to use one-time funding (bond sale proceeds) for recurring expenses like salaries for classroom instruction.

3)  In FY-2016 Oklahoma public schools devoted 44 percent of their total expenditures to instruction.

This requires a little explanation after which, if I explain it well, you will understand more about Oklahoma school finance than Mr. Anderson does.  The OCPA “data tool” uses the “function” categories of expenditures that are required by the State Department of Education, namely (with FY 2016 totals) Instruction ($2,931.5 million), Support Services ($2,112.4 million), Non-Instructional Operations ($419.5 million), Facilities Acquisition & Construction ($559.3 million), Other Outlays ($670.7 million) and Other Uses & Repayments ($19.0 million) for a grand total of $6,712.3 million.

Here are the real facts:  Non-Instructional Operations is entirely child nutrition services, i.e.  the national school lunch program and these funds cannot be used for Instruction; Facilities Acquisition & Construction comes almost entirely from bond proceeds which cannot (except for textbooks and other instructional equipment) be used for instructional purposes; 90% of Other Outlays is the debt service on the bond proceeds, so it’s also not available for instruction and its inclusion in the 56% (remaining after 44% above) is shabby “double-counting” that proves Mr. Anderson is a limited thinker or is intentionally trying to misrepresent the facts; and Other Uses/Repayments are not significant or available for instruction.

What is available for Instruction, by Oklahoma law, is almost entirely in school districts’ general funds.  Here’s what the FY 2016 statewide general fund totals show:  60% goes to Instruction (mostly for teacher and teacher assistant salaries), 21% goes to direct student support services like counselors, school site principals, speech therapists, school nurses, librarians, student transportation, etc., and 9% to operate school buildings (custodians, utilities and insurance).  The facts are that of the funding that is truly available for “instruction”, 90% of it goes directly to instruction or to services every classroom teacher will tell you is essential to operate a real school.  The remaining 10% does go for other services like running payroll, paying bills, district-wide administration, and including a large part that shows up as Non-Instructional Services for those districts that operate the school lunch program through their general fund instead of a separate fund.

Here is the actual SDE data I have used:  FY 2016 Expenditures

4)  Since 2012, instruction has grown by 2 percent while non-instructional operations have grown by 5 percent.

So what?  Remember from above that “non-instructional operations” is the function that is entirely districts’ school lunch programs, mostly financed by parents and earmarked federal funds.  So this just means that student population (up 3%) and food costs have risen faster than the Oklahoma Legislature’s willingness to fund education in Oklahoma.  Again either Mr. Anderson is a limited thinker or he believes he can fool his readers.

5)  The state’s two largest school districts (Oklahoma City and Tulsa) were given $1,171,697,399 to spend in 2016—but they spent only $912,953,502, leaving 22 percent of the funds citizens gave them sitting in their accounts. 

This is just a regurgitation by Mr. Anderson of his lame post last summer asking “Why are school districts sitting on so much cash?”  I answered his question in two August, 2016 blog posts, Where to Begin? and Paradox of Thrift.  In a nutshell the general fund part of that 22% “sitting in their accounts” on June 30, 2016, was fully encumbered to teacher salaries the next day, July 1, so the general fund balances, i.e. unencumbered cash, are really an illusion, are also needed to manage cash-flow till January property tax revenues are received, and using one-time funding for recurring expenses is stupid, especially in this OCPA/Legislatively-imposed funding recession.  Other fund balances outside of the general fund, by law, are not available for teacher salaries.

6)  Schools are also tax collectors: In 2016 they spent $16,774,312 on “tax assessment and collection services.”

These are payments required by law to the 77 County Assessors statewide for annual “revaluation expenses”.  Cities, school districts, and other recipients of local property taxes, are all required to pay these costs.  This one seals it, Mr. Anderson is truly a limited-thinker and probably believes all the deceptive calculations he presents to his readers.

7)  Last year public schools spent $151,069,368 on “vehicle operation services” and another $46,920,407 on “vehicle servicing and maintenance.” Perhaps it’s time to start leasing vehicles and sharing them between districts.

Duh—how’s that???  I’ve been part of many discussions about how to save on pupil transportation expenditures.  Leasing doesn’t reduce costs, it’s just another way of paying for them.  And how do districts share school buses?  Do we have the Union Public Schools and Broken Arrow Public Schools stagger their start times so the same buses and drivers can run multiple routes?  Sorry, I just don’t get it, nor do I think parents would either.

8)  Since 2010, the amount of direct federal funding to the Oklahoma City school district has fallen from $99,313,879 to $61,683,025, despite increasing federal requirements for schools. Perhaps citizens should be complaining about the former Obama Administration instead of pointing solely to our state’s political leaders.

Earth to Mr. Anderson, did you ever hear of the Great Recession which was in full force when Barak Obama was sworn in as President in January, 2009?  Shortly thereafter Congress, I’m sure over the objection of the OCPA and like-minded limited thinkers, passed the American Recovery and Reinvestment Act (ARRA) to provide a quick infusion of economic stimulus that helped stop the nationwide bleeding of jobs and output.    Public school districts were greatly favored by President Obama under ARRA and substantial new federal funding flowed into schools nationwide.

Here’s the total federal spending for each year, remembering a district fiscal year ends June 30, in Oklahoma:  2008 $470 million, 2009 $587 million, 2010 $777 million, 2011 $775 million, 2012 $574 million, and most recently in 2016 $482 million.  The OKC’s federal funding is lower than in 2010 because ARRA was intended to be a limited time stimulus, and it worked.  Mr. Anderson, Oklahomans who care about public education in Oklahoma owe President Obama and the 2009 Congress a huge “thank-you” for preventing the losses that Oklahoma schools would otherwise have suffered, and for having the good sense to implement macroeconomic policies that brought the United States to recovery far ahead of international partners that relied on “austerity” plans.

9)  The single largest cash item on statewide public school revenue sheets is account balances from prior years.

As we lawyers say “asked and answered”.  See my earlier posts Where to Begin? and Paradox of Thrift.

10)  In terms of spending per student, 11 of the 12 lowest-cost districts are charter school districts, ranging from $6,688 to $4,786.

I had the experience and privilege of providing legal services to three of Tulsa’s charter schools over the first dozen years of the Oklahoma Charter School Act.  They get 95% of general fund revenues and are eligible for the federal lunch program.  They do not have access to bond funds or to building fund revenues so they are at a revenue disadvantage compared with our school districts; my quick and dirty estimate is that a charter school student is funded at roughly 80% of her regular school district peer.  My somewhat educated guess is that they close that gap primarily by paying lower average salaries, not providing student transportation services and serving a student population with fewer disabilities on average.  My guess is not a fact, but is a reminder of what is so frustrating about the OCPA and its so-called “research fellows” like Mr. Anderson.  It might be useful to policy-makers to have such insight about charter schools in Oklahoma that is factual, not just shallow regurgitation of preformed and uninformed conclusions.  But such real research does not come out of the OCPA tank.

As always lunch on me for the first to ID the photo location.