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Education Budgeting - A Game of Blind-Man’s Bluff - Thursday, May 31, 2012

Hear the Echoes No. 44

 

      Education Budgeting

A Game of Blind-Man’s Bluff

 

 

                Louisiana’s Minimum Foundation Program (MFP) formula, for the fourth-straight year, remains unchanged. It had previously been increased annually by 2.75 percent. Local school board officials face increases in health care and other benefit costs that have to be absorbed by local taxpayers when the MFP isn’t increased.

                But even more hurtful than the absence of the growth formula is the historic addition to the Minimum Foundation Program of vouchers, and all of the state-run schools that are not under the control of local school districts.

            Emergence of 5,100 private, mostly church-run, schools offering seats to voucher-supported students can be expected to remove between $31.1 and $43.5 million from the MFP resources earmarked by the Legislature and the Board of Elementary and Secondary Education for public school support.

            Study of the MFP budget letter simulation for 2012-13 reveals that in the current year the MFP supported formula-weighted students amounting to 924,654, a number that rises for 2012-13 to 944,017.  While student enrollment increases by 8,600, the weighting for at-risk, career and technical, special education, and gifted students more truly reflect school district costs.  Local budget developers might well wonder "Where’s the beef?”  How to pay for such enrollment increases with deeply cut appropriations is the mystery to be solved.

            The budget letter presents an appropriation, in 2011-12, of $3.388 billion.  The $12 million increase contained in the current MFP resolution acted upon this session is dwarfed by the increase in voucher payments alone. 

            Distributions of the state share to local districts project $12.1 million more with 34 local school boards getting less in 2012-13 than the current year.  This disaster looms even before the impact of vouchers on local disbursements.

            The budget letter proposal contained a line item amounting to $9,679,889 for vouchers.  Should all 5,100 seats be filled in those private and church schools at an average tuition of $6,100 (as presented by John White), there will be a raid of another $21.3 million from local shares.

            The budget proposal also reveals transfers to charters. Juvenile justice operated schools, lab schools and RSD direct run schools.           In all, the budget proposal calls for total local fund transfer to pay local share of schools not operated by local districts amounting to $172.3 million. 

            That figure underestimates the potential cost for increased voucher spending.  The budget letter likely also underestimates the allocation for the two state-wide virtual charter schools.  They are budgeted for $7 million.  During the current year about 2,400 virtual charter students were enrolled.  K-12, Inc., one of the two for-profit virtual charters boasts more than 4,000 potential enrollees on a waiting list.

            Without considering the increasing cost of retirement and employee benefits, or the rising cost to fuel school bus fleets, the MFP being put into force for the next school year is a starvation diet for local schools.

            That, however, is not the end of the bad news.  The new teacher evaluation system being brought into play, statewide, is a costly diversion of dollars away from classrooms.  While the legislative fiscal office has not produced a budgetary fiscal note for the teacher evaluation program, the cost to one Iowa County that hired a company to handle its value-added teacher evaluation averaged $2.83 per student.  With next year’s enrollment, Louisiana public schools might expect to absorb another $2 million in unfunded costs for teacher evaluations.

            If the financial burdens outlined here are insufficiently challenging, local schools will meet new competition from for-profit charter operators that can now use the "parent trigger” to pressure conversion of public schools to charters.  Without having to seek, or gain, local school board or BESE approval, these "parent trigger” charters can be established by simply convincing 51 percent of parents in a school that a for-profit charter would improve performance.

            Such competition can be costly to local school districts.  A drive through New Orleans this summer will provide some insights in the form of competing yard signage promoting competing school solicitation for students.

            Should Gov. Bobby Jindal’s reform and MFP stand vindicated, Louisiana’s improving public schools will face forthcoming    revisions to the Common Core Standards, new student achievement test regimes, and ever higher bars to describe acceptable school performance with far from adequate resources.

            Perhaps many locally-elected school board members will not be disappointed with the passage of term limits if voters choose to accept them in November. 

 

Don Whittinghill

LSBA Consultant


 

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