Much of the increase in state spending for schools since 2005 has accumulated in cash reserve funds rather than being spent in classrooms, according to an analysis of unencumbered cash reserves held by districts.

Schools for Fair Funding (SFFF), a group of 63 districts, is suing the state in an effort to increase school funding. Lawyers for the group said in a December 23 press release (pdf), “While the Montoy court approved plan called for $755 million in new funding, the legislature and governor have thus far cut over $303 million from the schools.”

Carryover cash in accessible district funds has increased by $306 million since 2005, the year the Kansas Supreme Court’s Montoy decision went into effect. Cash in these funds grew to about $743 in 2010, up $187 million since 2008.

The carryover, or unencumbered cash, is money appropriated in previous years but not spent and with no claims against it for unpaid bills or other obligations. The cash accumulates in more than 30 distinct funds.

Opponents of using the unencumbered cash say most of the distinct funds have restrictions preventing spending the money outside of its intended use, but the Office of Revisor of Statutes in April told the Legislature which funds are unrestricted and could be used for other purposes under current law and which would require some legislative action before they could be moved and spent. The total for both was $743 million as of July 1.

The amount of unencumbered or carryover cash also varies dramatically between districts, a possible indication of inequity in school finance.

House Speaker Mike O’Neal (R-Hutchinson) told Kansas Watchdog the disparity in unencumbered funds between districts also undercuts the adequacy claims in Montoy.

“In the Montoy decision, everybody remembers what the court said we weren’t doing right, and that is we’re not putting enough money in. What they forget is what the court said we were doing right, that is equitable distribution. This was not an equity case, this was an adequacy case.”

“So, if we’re distributing the money equitably, answer the question, why is there such disparity? To me that’s a fundamental issue. The public ought to be asking it, we ought to be asking it.”

Legislators have sought to understand the unencumbered funds in order to put the idle cash to use rather than raising taxes in tight economic times.

O’Neal pointed out that some districts, like USD312 Haven, have a fiscally conservative leadership team in place that is, “Trying to cut corners, and don’t have this unencumbered cash left over.”

• Haven, in Reno County, with 1,002 students, had $115 accessible per pupil in 2010, the lowest in the state.
• USD502 Lewis, in Edwards County, with 109 students in 2010, had $8,470 accessible per pupil, the highest in the state for 2010.
• USD259 Wichita, the state’s largest district with 46,444 students in 2010, had more than $101 million in accessible funds, $2,185 per pupil.
• The state average for 2010 is $1,633 per pupil.
• SFFF member districts had $1,995 per pupil on average in accessible unencumbered funds on July 1, 2010. Those funds grew from $174 million in 2005 to almost $305 million for all 63 SFFF districts, an increase of more than $854 per student.

Twenty-four of the state’s districts have more than tripled the amount of accessible carryover per pupil since 2005. The largest increase was USD207 Leavenworth where accessible unencumbered funds increased from $66,637 ($41 per pupil) in 2005 to $5.3 million ($2,606 per pupil) in 2010.

Eleven districts have more than doubled the amount of accessible unencumbered funds since 2008, 45 have more than doubled since 2005.

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Related articles on KansasWatchdog.org

Truth Emerging on Unencumbered K-12 Education Funds

Kansas Among Highest in Education Jobs Per K-12 Student

House Panel Recommends Tapping Unencumbered School Funds

Schools Districts Tap Cash Reserves to Increase Spending

Taxpayers Look Beyond Hype to Reality in Education Funding

Unencumbered Funds Like a Mortgage Escrow Account, Maybe

More Questions — and Answers — on School Funding

Carryover Cash and Consolidation Hot Topics Before Kansas Board of Education

Districts Have Funds To Meet Projected $100 Million Shortfall

School Districts Sitting on $1.36 Billion

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