Mythbusters: School Tax Edition

Got this comment on CSDWeAllWin’s Facebook page today.

Today I had a friend say all the programs and cuts Christina school district was making is nuts. All because people wont sign a referendum. My answer was Christina School district asked for almost 100% raise in funding on their first attempt. This was highway robbery. They then asked for I believe a 15% increase and it was shot down… You know why??? Everyone I talked to who googled the referendum, saw the previous request. They thought their taxes were doubling. The district did this to its self… So lets do a little math and see if the money is spent correctly. 2014 budget 228 million dollars. 16255 students. That is $14,026.45 / student. I googled the “average private school tuition 19711″… the answer was $11970.00. If it can be funded privately for 2000 less per student and provide a better education… Something isn’t adding up. We cant continue to throw money at a mismanaged program. I really don’t want to hear go to a budget meeting. I want to hear my math is either incorrect or why we should pay $2000.00 more per student for your education. What is better? I’m beginning to think the whole system should be private. Talk me off this ledge please.

So let’s go.  Sorry they don’t want to hear “go to a budget meeting”.  But GO TO A BUDGET MEETING!  Public school finances are too damn complex to talk about on Facebook and really get a solid handle on them.  But why not try again?

Their math isn’t wrong but it is the wrong kind of math. Districts do not determine per student funding by adding up the budget and dividing by the number of kids enrolled, although that seems like a much better way to do it than the way it’s done now.

Christina, and all districts in Delaware, have little control over how much money is spent on each student. Nearly all the formulas used to figure that out come directly from the State of Delaware. However much money the State determines each student “deserves” *in total*, Christina foots approximately 35% of it through property taxes.

In previous years, the District was responsible for <30% of the cost. Over the last 8 years the State has continued to chip away at the amount of money spent on education. This year is no different. The State raised the amount each student must get by 0.52% and at the same time said they wouldn’t be funding that increase, which means local money from each District has to cover that increase.

Christina School District per student general ed funding

This is the breakdown of our non-special services, regular education per student funding for 2015-16 school year. This is the amount of money, collected through our property taxes, that Christina School District spends per student. We, in this District, do not pay $14,000 per student. We pay an average of $3,913 per student in grades K-12. So what the hell is that $13,000 cost per student number you find on the District profile on Delaware Dept of Ed’s website? That’s an average of ALL sources of funding for our students, that’s all money that comes from the State + all money that comes from the District + all money that comes via the Federal gov’t that rolls up to an AVERAGE cost per student in our District.  It is NOT what we pay from property taxes per student.

You can pay $12,000 to send your child to a private school in Newark. But you, the parent, are paying that entire $12,000 for your child. Send your child to a public school, and you’re paying a fraction of what it costs to deliver an education to your child.

My property tax bill for schools last year (on my $189,000 townhome assessed at $50,000 ) was around $1,120. I have two children in the District. I paid $560 in taxes for each of their educations last year. If I had both of them in private school, my school tax would still have been $1,120. Plus $24,000 for private tuition. I don’t know about you, but I sure as hell can’t afford $25,120 a year for school right now.

The current total *school tax* rate is $2.09/$100 assessed value of property. Of that $2.09, $1.42 of it is the *Operating Tax* rate. The Operating Tax rate is what was up for referendum twice. (I won’t get into the New Castle County Tax Pool dipping into that $1.42, that’s another discussion).

The first increase that the BOARD wanted (not the District) was, I believe, $0.65 phased in over 3 years. OMG THAT’S 46% INCREASE IN TAX……RATE. Increase in your tax RATE. That does NOT = a 46% increase in your taxes paid. Why?

Let’s say that $0.65 was approved, and it all went into effect right away. The rate went from $2.09 to $2.74. The tax RATE is now $2.74/$100 of assessed value. For my house @ $50,000, my NEW school tax bill this year would be: $50,000/$100 = 500. 500 x $2.74 = $1,370

$1,370 is not double of $1,120. So what % increase is that in my ACTUAL taxes paid? $1,370-$1,120= $250 $250/$1,120 = 0.223 x 100 = 22.3% increase. Not even close to doubling.

Well we know the first time failed hard. So what if the second time passed? The DISTRICT asked for and the Board approved a $0.37 increase phased in over 3 years. Let’s take the same scenario. It passed, and all $0.37 went in right away. Our new tax RATE is $2.46/$100.

My new tax bill is: $50,000/$100 = 500. 500 x $2.46 = $1,230. Well how much did it go up this time?! $1,230-$1,120= $110. $110/$1,120 = 0.098 x 100 = 9.8% tax increase. Again, not even close to doubling.

Again, total budget/# students isn’t wrong math but it doesn’t do jack to help figure out how we spend money per-student and whether or not the money is being spent “correctly”.

I said before, during, and now after the referendum, I’m available to talk to anyone about this. I’ll answer any question you throw at me. If you don’t want to come to a budget meeting (although you should), I’ll come to you. Public school finances in this State are not easy to understand. It’s way too damn complex, but I’m willing to help anyone get a better understanding of it. Google won’t do anything for you. Talk to someone who actually knows something about how it works (or doesn’t work).

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Credit Where It’s Due

Last night 6 of Christina’s Board of Education members did something extremely unsavory yet equally necessary.  The preliminary budget for 2015-16 was approved with all proposed reductions, some of which are shown here.  In what undoubtedly be one of the most challenging years in this District’s history, the Board did make the call when they had to and for that, I thank them.

Notable reductions, as mentioned by CFO Silber last night, School resource officers utilization will take the form of 1 officer in each high school, 1 officer within the City of Wilmington to be shared by Bayard Middle and Sarah Pyle, and 1 officer to be shared by the 4 middle schools in the Newark area.

Elementary counselors will have their utilization changed as well.   Each elementary school will have a counselor, but the days and hours the counselor is present will change from full-day and full-week hours.

EPER pay: the same number and type of EPER positions will be available in the District. The amount of funding to fill them will be reduced by $629,000 leaving around $900,000 to be allocated to the schools for use in filling some of the positions. The decisions on what positions will be filled is up to the each school’s leader.

As I mentioned previously, building discretionary budgets are reduced by approximately $800,000

Management and payment of all leases for multi-function copier machines has now been taken off the schools and will be paid and managed by the District business office.  Previously each school made payments for their copiers out of their building budgets.  That will not be the case this year.  Speaking of which, if you or anyone you know works in a CSD building with a leased Canon copier/printer, tell them to send all their print jobs to and do all their copying on those machines.  The lease agreements & payments with Canon cover all expenses associated with those machines except paper.  Any other printer, the District is responsible for toner, maintenance/replacement, paper, ink, etc.  Seems silly at first but toner and printers are expensive and that adds up quickly in schools.

Anyway, the analysis and breakdowns will continue.  Right now I’m trying to find someone to start an IV drip of caffeine for me.

Belting it Out

About the line item detail expenses for a school district in Delaware, where do you find them?!  The answer is:

1. A myriad of sources supply funds for just about everything and everyone in the district, there is no “single” stream of revenue. Example: $100 of a teacher’s salary may actually be $60 from the State of Delaware and $40 from local property taxes.  Or depending on the type of teacher or program they are in that $100 might be: $45 State, $45 Local, $10 Federal.  Those funding splits change all the time.  So it’s darn near impossible to continually list the splits in every document published.
2. The way the State reports District expenses is not exactly how the District reports and expends money. (That online checkbook?  Garbage. Don’t even look at it).  District Data is substantially more accurate than the State’s.
3. Different departments and operating units in the District spend funds on the same services and each unit must report its own expenses individually so they may then be rolled up to final budget totals.

Ever wonder why the federal government’s budget is thousands of pages long?  Let’s hit point #3:  Everyone has to report everything they plan to spend money on.  Money is only spent on things listed in the final budget for the district that is approved by the Board of Education every year.

Stay with me here:   Let’s visualize how Christina School District is organized in terms of the purchasing things.  Think of a tree from the trunk on up to the very tippy top branch.  Now, turn the tree upside down so the trunk is at the top and all the branches are below.  The trunk is Christina School District.  Where the trunk first divides into the real thick branches are the largest operating units within CSD:  Education, Finance, and Facilities.   We’ll climb down the Education branch called the Chief Academic Officer (Deputy Superintendent).

Following down the branch it divides into 4 smaller branches:  Elementary Ed, Secondary Ed, Special Services, Enrichment.   Down the Elementary Ed branch it divides into 24 smaller branches called Elementary School Principals.   Now we’re at the bottom of the upside down tree.  At any dividing point along the tree from the trunk on down to last branch, money can be expended and it can be expended on many of the same things (copy paper, for example).  Where each branch divides is a purchase point.

To help keep all those branches straight, we’ll assign a 5 digit account code to each one so we know which branch is which.  Now, let’s say every single account code (branch) needs a ream of paper.  How does CSD (the trunk) keep track of who needs the paper, where to send it and how much is needed?  Each branch sends a requisition for paper  with their account code up to the trunk.  The District sends out for the paper and it’s brought to the branch that ordered it.  Now apply that process for absolutely everything purchased in the District.   Requisitions sent from individual account codes to the District, District converts to purchase orders (read: buys the stuff) and it is delivered to the account that ordered it.

Keene Elementary requires copy paper.  The building leader sends a requisition for copy paper to the Director of Elementary Ed, then it goes to the Deputy Superintendent (these steps happen quickly) and over to the Chief Financial Officer.  If the requisition is for something listed in the Board approved budget (copy paper is definitely in there), it is changed to a purchase order and Keene gets its paper delivered.  If it is NOT for something in the budget or is for a larger than normal quantity of something in the budget, a conversation happens between the CFO’s office and the building leader regarding the need for the requisition.   That’s how it goes for everything, including things like contracted services and consultants.

The Final Budget is all the individual account code expenses rolled up into a relatively short list of annual totals.  Monthly financial reports are the monthly expenses of that relatively short list of items and account codes.

You still don’t know exactly where to find individual line item expenses yet, do you?   That’s not a coincidence.  There’s WAY more to this than meets the eye.  Which is why I shoot down the argument comparing School District finances to household budgets or personal checking accounts every single time I hear it.  Just cinch the District’s belt, right?   Which belt?  There are 267 of them. Ok, there may not be that many but there are a lot!  Stay tuned!

 

Budget Me Some of Your Time

By now, everyone knows of the failed second attempt at a referendum by the Christina School District and its supporters.  In the last 6 months we have had many, many more residents beginning to look into the way our public schools are funded.  Even with the referendum failures, one silver lining is the renewed public interest in public school finances.  On a personal note, I am absolutely thrilled that anyone is taking even 5 minutes to look at a financial report for the District because that is 5 minutes more than they were spending on it prior to the referenda.

What I’d like to do going forward is use this blog (and anyone who might share my posts) as a platform to start bringing public school financing, particularly CSD’s, in to the spotlight and transforming it into “the real world”.  Let’s be honest, a 25 page financial report is going make 90% of the people who read it go cross-eyed.  It is chock full of numbers and terms many do not understand and does not really contain the level of description and clarity members of the public want and need to see.  I’d like to begin changing that right now.

Let’s start off by explaining what the Final Budget reports you can find on Christina’s website are not.  They are not low level, highly descriptive, line item lists of what is being spent where and why.  They are not intended to give anyone reading it information on “how much money goes to textbooks?” or “how much money is going to classroom supplies like pencils and paper” or any specific line item expense information.  They are not intended to give anyone reading it an understanding of exactly where the final destinations of all funds are.  They are not, by nature, able to be easily understood by anyone who has not committed some amount of time to learning about the processes that go into creating the document itself.

Then, what ARE the final budgets? The final budget report is intended as a decision making tool to help the Board of Education identify the main sources of revenue for the District, how much revenue is projected to come in, why, and how it will be allocated to the departments/areas within the District and whether the revenue is sufficient to cover all projected costs and if not, what is causing the revenue deficiency.  Its second major purpose is to identify any external or internal factors that will significantly impact the revenue streams or expenses of the District.   A third major purpose is to give the Board of Education an early picture of what District finances will look like at the conclusion of the next fiscal year.  All of this is for the Board’s decision making process about what changes may need to be made to revenue and/or expenses.  The final budget is voted on by the Board of Education as the District’s spending plan for the upcoming fiscal year.  Any expense the District Administration makes that is contained in the budget after receiving final approval from the Board of Education is considered “authorized and appropriate”.

You may be thinking, well where do I go to find out specific information about exactly what the money is being spent on?  Great question.  Stay tuned.