Can’t Balance a School Board Budget? Blame the Governor

December 10, 2013 12:00 pm

by Eric The Younger · 40 comments

Since I’ve been on an education kick for the last little bit, might as well keep the streak going. There was an interesting article in the MDJ on Thursday that covered an informational meeting about Cobb County Schools and their budget issues.

Apparently the district is going to have another budgetary shortfall for the ’14-15 school year. How much of a shortfall? $79 million.

That’s not an inconsequential number. However that is not the most glaring issue posed in the article. Indulge me for a couple quotes from the article.

Cobb school board member Scott Sweeney called on parents at a Wednesday town hall meeting to deprive Gov. Nathan Deal of another term in office if he doesn’t give the school system more money.

“Gov. Deal needs to feel uncomfortable,” Sweeney said to about 100 parents gathered at East Side Elementary School. “He needs to think the people of Cobb County will not support him unless he writes in additional funding for education. It’s a fight for dollars.”

Followed immediately by this gem.

“The second largest school system in the state of Georgia is broke. That’s alarming,” Scamihorn said.

Instead of pointing fingers at the board members for failing to balance the budget, Sweeney told parents they should be on their phones with their elected officials, asking for state funding.

So let me sum this up.

  • The second largest school district in the state is broke. Not just a little late on the bills but projecting a $79 million shortfall.
  • Cobb County is a Republican stronghold that prides itself on local control of it’s schools in order to create what used to be one of the best systems in the state.
  • The School Board, in the spirit of local control, is blaming their inability to balance a budget on the Governor.
  • Further, the school board will not address the possibility of cutting personnel at the central office. Instead they want to furlough teachers, cut direct contact jobs (teachers and para professionals), and increase class size.

The school board is shifting blame to the Governor because they can’t balance a checkbook. They also want to cut classroom time (furlough days) and teachers and not cut administration or add any similar extra responsibilities to county administration. But remember, it’s all for the children.

griftdrift December 10, 2013 at 12:08 pm

And there’s one other thing…been in the news a lot lately….give me a second and I’ll think of it

Eric The Younger December 10, 2013 at 12:53 pm

Two separate budgets and taxing authorities.

griftdrift December 10, 2013 at 1:01 pm

Understood. Strangely that same argument didn’t seem to carry much weight when I heard the vitriol coming the other way down 75 when another “large project” was recently announced.

bgsmallz December 10, 2013 at 2:42 pm

Coherency is overrated.

Chris Huttman December 10, 2013 at 12:28 pm

Cherokee County, another bastion of Republicans that btw is not building any stadiums essentially has come to the same conclusion.

http://www.cherokee.k12.ga.us/Documents/Status%20Report%20–%20QBE.pdf

saltycracker December 10, 2013 at 12:43 pm

Under QBE Cherokee is a 5 mill contributor county as fair redistribution by the rich folk while Cobb is a recipient. And Cherokee is asking Deal to fund QBE as understood.

Turnip Truck December 11, 2013 at 1:24 am

Actually, all school systems contribute 5 mills – the so called Fair Share.

Cherokee and Cobb do not receive Equalization Funding grants.

Gwinnett receives more than $60 million in Equalization.

saltycracker December 10, 2013 at 12:29 pm

And after all the drama in 2010, they learned what ?

Mark Peevy (@markpeevy) December 10, 2013 at 12:29 pm

Can’t Balance a School Board Budget? Blame the Governor — Peach Pundit http://t.co/XUWLTG7xqo

bgsmallz December 10, 2013 at 12:42 pm

If the district ‘used to be good’…
And if the district used to good at budgeting…
And if the district has seen a shortfall in funding because the state has decreased funding to the district by over $500 Million since 2003, including $72M and $66M over the past two years as cited in the article…

Doesn’t it at least seem remotely fair to pin at least some (if not all) of the problem with budgeting on the state systematically reducing funding to the district without providing any logical solution for the district to make up that funding?

Chris Huttman December 10, 2013 at 1:55 pm

Unless you’re in the bag for the Governor then yes, makes a lot of sense.

bgsmallz December 10, 2013 at 2:29 pm

The interesting thing is that the Cobb County School budgets are online all the way back to 2003. If the state hadn’t funded $70M back then, they would have had the same problem.

Also interesting…when you compare the 2004 budget to the 2013 budget, the budgeted expenditures have increased by about 15%…but considering Cobb’s enrollment is up 7% and 10 years of inflation, that doesn’t seem completely unreasonable. So looking more…when you realize that every category of spending has increased over the past decade except for two…General Administration and Central Support Services, which have some how been cut by almost 50%… you start to think that maybe they do know how to budget?

But, you know, it must be that Cobb has a bloated central office and can’t budget…#facepalm

Robert Lee (@rwlee2) December 10, 2013 at 1:14 pm

@sr2ndblack says “FOR THE CHILDREN!” http://t.co/SlvumTXm1M

John Konop December 10, 2013 at 2:35 pm

Increase Quality and Decrease Cost

Georgia needs to increase quality of education by combining resources between higher education system and high school. We should let the requirements and testing needs come from the colleges and or Vo-tech school based on their entrance requirements. Not only would this streamline the process and create a clear cohesive path for students future career path it would save tax payers money by reducing redundancy. Also it would allow students a clear option to track into higher education path by 9th grade with no confusion over requirements and classes.

Our higher education system could use current facilities in the high schools for classes taught all day, and for night school based on an educational track that lead to a degree and or certification for a skilled job. By cross utilizing facilities, faculty, administration…… it would increase access and decrease cost. Also it would create flexibility for students needing to work or convenience for people in the community needing updating of skills by having night school in their community.

By having curriculum and requirements coming from higher education over high schools it would eliminate a massive amount of administrative overhead since we could already use the accepted standard from colleges and vo-tech schools via curriculum and testing requirements. This would also decrease redundant testing and wasted classes since the higher education system would be creating the path for degree and or skilled certificate making much of the yearly standardized testing obsolete.

This would also lower the dropout rate by giving students the option to track by aptitude over a size fit all approach we have today. And it would accelerate students toward a 4 year degree path and or skilled certificate, creating a work ready students, which would stimulate the economy. The payment system between higher education and 9 through 12 to make this happen, already has a frame work today with the current joint enrollment option.

Finally we could coordinate curriculum needs and requirements with chamber lead input from employers. And with proper input we could not only improve the curriculum we could create a co-op/internship programs. It is time we put politics aside and do what is best for students and the future of Georgia.

South Fulton Guy December 10, 2013 at 2:47 pm

Has Cobb County experienced a disproportionate reduction in state funding relative to other metro Atlanta school systems? If the other systems manage to balance their budgets with funding reductions, isn’t it more reasonable to blame Cobb Schools than the Governor?

SPLOST to the rescue? http://cobbfootballfriday.com/pages/full_story/push?article-The+SPLOST+%E2%80%94+Local+voters+did+right+thing%20&id=22030184

Angela Palm December 10, 2013 at 3:15 pm

This will be a snoozer for some, but I hope this helps explain some things. I do apologize for the length, but details take time. The state funding formula, otherwise known as QBE, is just that: a formula. It begins in Georgia code at 20-2-160. Passed in 1985, the premise was that the costs associated with the classrooms (direct and indirect) would be calculated and split between the state and local boards.

The local share would be paid by deducting the value of five mills (as calculated in 20-2-164) from the total earnings generated by the formula. The total of the five mills for all local school districts can not exceed 20% of the total of the QBE earnings — thus the 80/20 split concept. There is sometimes confusion that this amount is sent from one district to another. That amount actually just stays in the general revenue fund and is budgeted like everything else. We have a separate formula called “equalization” (20-2-165) that is supposed to help alleviate the inequities caused by lower property wealth per student in some districts. In FY 2014, the five mill deduction for all local districts was $1,702,793,079. The equalization payment is $474,433,742. Clearly, there is not an even exchange between the five mill deduction and equalization.

The austerity cuts are related to the state’s portion of QBE (the formula earnings minus the five mill share). In 2014, the state is paying 70% and taking an austerity cut of $1,061,127,407. 82% of the QBE formula earnings is for salaries in direct instructional costs. The formula provides $55.65 per student for instructional materials, less for the lower grades. Actual costs are much higher. Keep in mind that these amounts are simply the costs in the formula. They don’t include transportation for instance. The state is funding about 17% of that.

There is an increasing amount of frustration being expressed across the state. If the cuts had begun with the great recession, there would probably be a different attitude. Funding the education of students in local public schools is supposed to be a partnership, but one “partner” holds all the cards. Gov. Deal has stopped the increase in the cuts to QBE since he has been in office, but the existing cuts continue into each budget.

The Governor has more power over the appropriations than anyone else. As the revenue increases, his will be the most powerful voice in deciding how to allocate it among the state’s many needs. So why is it not appropriate to call on the Governor to fund a statutory formula? No one that I know expects the full amount to be back anytime soon but surely we can make a start.

Ellynn December 10, 2013 at 4:04 pm

The problem with equalization is how lower property values effect some areas. When the cost of foreclosures and short sales was required to be added to the assessed values of area homes, large systems with volatile markets ended up getting more due to extreme drops in value then the true lower value systems in rural Georgia, who’s farm land values stayed fairly consitant. Also the higher the value of the system, the less they recieve in Title I funds. Some growing systems lose more in Title I then they did in equalization.

Dave Bearse December 10, 2013 at 9:11 pm

Help me to understand. I thought overall that the state was currently paying less than half of total k-12 education, localities nearly half and the feds about a tenth. (In other words, according to state statute, the constitutionally required “provision of an adequate public education for the citizens shall be a primary obligation of the State of Georgia could be fulfilled by funding that is a fraction of what is spent now.)

My understanding also is that the 5 mill property tax is mandatory local property tax money that stays in the district and counts towards the state’s QBE “share”. Equalization from the state to local districts is from general state tax revenues.

Am I mistaken?

Angela Palm December 11, 2013 at 10:00 am

The percentages vary from year to year. In FY ’13, the latest info available, the statewide average was 51% state, 41% local, 8% federal. There’s a wide range across the state. On the extreme ends are Greene County at 7% state/77% local/17% federal and Trion City at 85% state/11% local/4% federal. Before the cuts began it was generally that QBE was 80% state and 20% local but overall costs for education were 60% state and 40% local. Federal percentages were 3-5% until ARRA and other funds kicked in.

What amount fulfills the constitutional obligation of the state is anyone’s guess. Judges across the country have come to far different conclusions about what an adequate education is. Defining the elements of an adequate/appropriate/necessary education, determining a reasonably expected cost, and the responsibility for paying those costs is the challenge of creating and maintaining an educational funding formula. Every commission we’ve had came to the conclusion that the cost is higher than the QBE formula says it is which would mean the state would be paying more under the current arrangement.

The 5 mill share counts as the local contribution to the formula. Subtracting the five mill total from the QBE formula earnings provides the amount the state should pay. The five mills do stay in the district. Where land values are high there is often frustration with how much is deducted for the local portion. The deduction for Greene County for example is 69% of its formula earnings.

You are correct about equalization.

gcp December 10, 2013 at 7:40 pm

Gwinnett spends less per student than Dekalb and produces better results. Not sure how it compares to Cobb. While Gwinnett overspends in some areas it still produces a good product. Perhaps Cobb should look at Gwinnett.

Harry December 10, 2013 at 11:41 pm

Sounds like Cobb has a budgeting problem. How does Gwinnett manage to presumably balance the school budget and avoid pulling that sort of extortion racket on the state?

Ellynn December 11, 2013 at 11:31 am

They got more money from the state out of Equalization is the first of many reasons.

Harry December 11, 2013 at 11:56 am

Seems like this program isn’t working.

Ellynn December 11, 2013 at 4:16 pm

It works just fine, as long as you don’t include forclosures and short sales in the value of property or have a major long term unemployment event.

And as I noted, it one of many reasons. I would have a better chance of explaining what the Holy Trinity is then explaing the magical math of school system funding.

Harry December 11, 2013 at 4:35 pm

It’s too complicated if you can’t explain it.

bgsmallz December 11, 2013 at 4:48 pm

So by definition, you are too complicated?

Harry December 11, 2013 at 11:23 pm

I try to keep it simple.

bgsmallz December 11, 2013 at 1:39 pm

“Gwinnett spends less per student than Dekalb and produces better results. Not sure how it compares to Cobb. While Gwinnett overspends in some areas it still produces a good product. Perhaps Cobb should look at Gwinnett.”

Just so I get this straight, your premise is that you have no clue how Gwinnett and Cobb actually compare with one another, but that Cobb must have a budgeting problem and should look towards Gwinnett based solely upon a trumped up headline, your own personal observations, and selective quotes of the article above?

There is thing called Google…I’d suggest you and Harry should take a class on it.

Anyway, you don’t have to believe me…there seems to be “some disagreement” over whether Cobb has a ‘budgeting problem’ as stated by the author above.

“Or even better, Gwinnett could reduce its spending on central office to Cobb County School System’s per-student average….If Gwinnett would trim its $579 per student spending on central office to Cobb’s $228 level, Gwinnett could afford to reduce class sizes by two students, eliminate the two-day teacher furloughs and pay the $7.8 million its teachers earned for training and experience increases.”

That’s a article from Jan Jones’ website on 6/12/2012…
http://www.janjonesforgeorgia.com/newsentry.aspx?entryid=1130

Does that count as a ‘gem’?

Just so I get this straight, Cobb is literally the model state leadership uses for effective budgeting at the central office level one year, then Cobb criticizes the Governor/State, now Cobb doesn’t know ‘how to budget.’ Durrrr…

gcp December 11, 2013 at 7:54 pm

My point is that increased funding does not necessarily result in better performance. Gwinnett is the largest district in the state and has seen quite a change in its population but still does well. Wilbanks has been in charge since 1996 which is unusual for a school chief. This stability benefits the system. Also there are no furloughs or increased class size for the 13/14 year (check your info).

My problem with Gwinnett is the too generous pension system which was only recently partially reformed and a few other issues that I won’t detail.

Could the state funding mechanism be changed to benefit Cobb? Well sure but problems can always arise when you depend on other levels of government for money to run any system.

bgsmallz December 12, 2013 at 10:54 am

Cobb spends basically the same amount per pupil as Gwinnett…Last I checked it was $8,200 vs. $8,100. …Gwinnett relies on more state funding than Cobb…significantly more….despite the fact that the indicators for kids requiring lunch assistance, etc. are basically the same. Gwinnett receives the most state funding out of any district in Georgia. In fact, the discrepancy was made greater under changes in the law (HB 824) in 2012 that reduced the state funding to schools while protecting the state funds to Gwinnett. (The bill was written and sponsored by Gwinnett Co. Pols…)

The whole premise of using Gwinnett as an example shows the benefits of adequate state funding. It cuts completely the opposite direction of the argument you and the author are trying to make.

WesleyC December 10, 2013 at 11:10 pm

This commentary comes off as pretty shill-y for the governor. The state has cut K-12 education to the bone the last few years. The total austerity cut statewide is currently about $1 billion per year – sorry I don’t have the Cobb specific number in front of me. But the idea that the state is blameless and Cobb just needs to learn to add and/or maybe fire a couple of janitors is simply ludicrous.

Turnip Truck December 11, 2013 at 2:11 am

To: Eric the Younger;

Cobb’s saddled with a 100% senior school tax exemption for ages 62+ on their principal residence. The school board has no control over this senior school tax exemption which is enshrined as “local legislation” in Georgia’s Constitution. That’s $60+ million in forgone revenue annually.

Cobb could raise its school tax millage rate from 18.9 mills to the state cap of 20 mills and generate about $20 million. Alternatively, they could petition voters in Cobb to raise the state cap.

Cobb receives no state equalization funding grants. On the other hand, Gwinnett receives more than $65 million this school year.

Cobb’s also less thick at the top than most of the 10 largest systems within Georgia. Here’s the breakdown per FTE (i.e. essentially a per student count) based on figures available from the Georgia Department of Education expenditure reports for 2012;

System Name – Per FTE General Administration
Gwinnett County – $542.66
Cobb County – $284.68
DeKalb County – $410.97
Fulton County – $396.75
Clayton County – $335.32
Atlanta Public Schools – $2,330.02
Henry County – $170.82
Cherokee County – $196.54
Forsyth County – $226.39
Chatham County – $394.14

System Name – Per FTE School Administration
Gwinnett County – $607.79
Cobb County – $478.93
DeKalb County – $612.88
Fulton County – $598.46
Clayton County – $409.01
Atlanta Public Schools – $624.67
Henry County – $518.49
Cherokee County – $512.21
Forsyth County – $437.24
Chatham County – $567.12

John Konop December 11, 2013 at 9:08 am

You make a very good point as demonstrated the current system does not make sense…..Money flows to the state from a local district and they reallocate local money not based on any real fiscal control….This goes against zero based budgeting concept….when the revenue is disjointed from the service provided with no real controls you have what is going on now….

What would make more sense is money stays in local district……We should look at how we create more efficiency by combining resources, tracking students by aptitude and merging higher education/with high school. We have the resources, it is just disjointed, which lowers quality and increases cost.

Eric The Younger December 11, 2013 at 12:34 pm

I’m going to look into the Senior thing a bit more. I have a lot of the base numbers for funding but haven’t run a real analysis on them. I’m taking it you simply did (Total budget for admin/FTE)?

Ellynn December 11, 2013 at 4:36 pm

Some admin jobs are required under Title I and some fall under Pre-K alotments. Take Chatham County, 32 out of 48 schools have Title I federal funding and that funding requires system wide adminstators per so many students and or programs in each school. Cobb county I am guessing has a lower number of students receiving Title I. So unless you can break out the types (manidory fed, non manitory local, state funded, public and private grants, ect…) and amounts of funds in the total budget for admin, your compairing apples with fish…

John Konop December 11, 2013 at 5:54 pm

This goes to my point for years the NCLB act has been a disaster…….we really need to re-think education from one size fit all to aptitude based tracks……

No Child Left Behind Act – Title I Distribution Formulas

http://febp.newamerica.net/background-analysis/no-child-left-behind-act-title-i-distribution-formulas

Ellynn December 12, 2013 at 9:58 am

Title I has at least 4 different formula for distribution. NCLB is just one. The funds for a NCLB will effect only the worse or the worse on perforamce schools in the total funding. Some failing schools may get funds for coaches, tutors ect… but most systems are getting Targeted grants as their biggest source of Title I funds since a large number of rural and inner city systems have higher percentages of children from low-income families.

John Konop December 12, 2013 at 11:10 pm

The point being it is an unfounded mandate pushed down……and not well thought- out via pushing testing and administrative cost out of control. We have created a 50 billion dollar testing industry and administrative cost has tripled while real deal classroom money shrinks……this formula is unsustainable……and will crash public schools….

Turnip Truck December 11, 2013 at 8:57 pm

The administrative figures per FTE figures are straight from the Georgia DOE website. Here’s the link:

http://app.doe.k12.ga.us/ows-bin/owa/fin_pack_revenue.entry_form

Set Year as 2103, Choose a district, then expenditure report.

Here’s some other detail on Cobb’s Senior School Tax Exemption:

For Cobb County, the Senior School Tax Property Exemption is actually grandfathered into Georgia’s Constitution. The exemption legislation was originally a “local amendment” to Georgia’s Constitution during 1976. It states:

“Any other provisions of this Constitution to the contrary not withstanding, each resident of the Cobb County School District who is 62 years of age or over is hereby granted an exemption from all Cobb County School District ad valorem taxes on the full value of his homestead owned and occupied by him as a residence within the Cobb County School District. The homestead exemption provided for herein shall apply to all taxable years beginning after December 31, 1978.”

Georgia ceased allowing “local amendments” to its Constitution during the 1980’s. The continuation of constitutional exemptions from ad valorem taxes is codified within the Official Code of Georgia Annotated (O.C.G.A.) 48-5-55 which states:

“Exemptions from ad valorem taxation granted by or pursuant to constitutional amendments other than general constitutional amendments of state-wide application, which exemptions were in effect on June 30, 1983, are continued in effect as statutory law until otherwise provided for by law.”

The Georgia Constitution: Article VII, § I, ¶ IV discusses the preservation of current property tax exemptions and the process for reducing or repealing:

“Current property tax exemptions preserved. Those types of exemptions from ad valorem taxation provided for by law on June 30, 1983, are hereby continued in effect as statutory law until otherwise provided for by law. Any law which reduces or repeals any homestead exemption in existence on June 30, 1983, or created thereafter must be approved by two-thirds of the members elected to each branch of the General Assembly in a roll-call vote and by a majority of the qualified electors of the state or the affected local taxing jurisdiction voting in a referendum thereon. Any law which reduces or repeals exemptions granted to religious or burial grounds or institutions of purely public charity must be approved by two-thirds of the members elected to each branch of the General Assembly.”

South Fulton Guy December 11, 2013 at 7:07 pm

To the brain trust what is the bottom line?

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