Money Jitters Are Never Far Below the Surface for School Leaders

—Getty and Laura Baker/Education Week
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School and district leaders worry they may not be ready for the next recession, are ambivalent about whether spending lines up with their academic goals, and say state legislatures are the biggest obstacle to making money decisions that match their students' needs, according to a national survey by the Education Week Research Center.

The survey—which heard from hundreds of superintendents, principals, chief financial officers, and others—found concerns about how much money schools get, spending restrictions, and the prospect that new fiscal transparency requirements will produce more equitable spending.

"In my 33 years on the job, this is one of the most difficult periods I've ever had," said Todd Swanson, the director of finance and operations for the Waconia public schools in Minnesota, who spent last school year trying to convince taxpayers to pay more for schools and chopping $1.4 million out of a $46 million budget.

Administrators across the country have been under intense pressure in recent years to support a broad spectrum of priorities, including raising teacher pay, providing a safe and healthy environment for an increasingly poor and diverse student body, and boosting test scores.

Education Week's survey makes clear that public perception of districts' spending doesn't match what administrators' see as the on-the-ground challenges of managing that money.

Teachers have accused administrators of hoarding cash, taxpayers and politicians have said administrators waste money on bloated central office staff, and advocates say administrators don't know where their cash is going.

None of this is true, administrators said.

Instead, they say, budgets are being squeezed between competing political pressures with amounts dictated by outdated spending mandates and a cash flow that is insufficient and unpredictable.

Administrators contacted by Education Week described challenges that include dramatically fluctuating student enrollment, a student body with a litany of special academic and emotional needs that boost costs, ramped-up security demands from politicians and parents, and neglected, deteriorating school facilities.

The bottom line: Only half of those surveyed say their district's funding is based on its stated academic goals—and 28 percent see no match between the two at all.

Funding Levels

At a big-picture level, only 4 percent of survey respondents said they face no major funding challenges.

As state and local lawmakers cut property taxes to stimulate the economy after the Great Recession and legislatures' K-12 spending increases failed to keep up with inflation rates, pension costs and other demands, districts' budgets have become more and more volatile, administrators said, making it difficult to plan ahead.

As a result, many districts have depleted their savings. If another recession were to happen, there would be severe consequences, more devastating than the last recession, administrators warned.

"I think the heaviest lift for us is to educate people about how far behind we are," said James Sheldahl, the superintendent of Yuma Elementary school district in Arizona. Even with Arizona Gov. Doug Ducey's infusion of cash to boost teachers' pay, he said, other costs continue to climb. "It's been more difficult to get us back to where we were before the recession."

In animated interviews, administrators described hours-long meetings where they're forced to decide which demand they can and cannot meet for the next academic year. It's become an annual ritual, they say.

After Minnesota lawmakers this year changed the amount of money the state pays for special education services, Swanson brought all his principals and department heads into a room and provided them a long list of things they could cut. (About 65 percent of survey respondents say principals have at least some say over how money is spent in their district.)

"The principals are the only ones who are doing the day-to-day work," Swanson said. "They need to be the ones making the decisions on reductions."

High on the list for potential cuts among those surveyed? Administrative hiring (42 percent), savings and "rainy day funds" (38 percent), and extracurriculars (36 percent). On the more-spending side, the top items include teacher salaries (47 percent), buildings and maintenance (39 percent), and school counselors (38 percent).

Conflicting Perceptions

Administrators describe deep frustration with politicians who they say have little comprehension about administrators' actual needs and yet have straitjacketed them with what seem like endless spending categories.

"It's hard to not be mad," said Judy Erekson, the business manager of Haines Burrough School District in southeast Alaska. Amid steep oil revenue shortages, the governor there has tweaked things the state pays for, such as its share of capital bonds, resulting in deficits in many districts across the state. "It all just seems so unreasonable," said Erekson.

State legislators, in particular, get singled out for criticism: 51 percent of those responding called lawmakers "the biggest obstacle" in the way of spending decisions that would meet student needs.

If politicians want to help, administrators say, they can start by paying for what they've already promised. That includes making good on the commitment to funding for special education, which has consistently fallen short of goals set in the federal law, as well as state help on the pensions promised teachers in lean times in lieu of pay increases. Those costs gobble up an increasing share of districts' budgets.

"It's their law," said Swanson in reference to the Individuals with Disabilities Education Act. "They have the responsibility and the power to create a new tax and pay for it."

Persuading the Public

Since politicians resist raising taxes, administrators say they find themselves going on the road, asking taxpayers to fork over more money. It's the hardest and most frustrating part of their job, they say, in part because the public discourse is saturated with myths about school spending, many perpetuated by politicians themselves.

A new requirement under the Every Student Succeeds Act to report school-by-school spending will only add to that confusion, survey respondents said in follow-up interviews.

That runs counter to the argument policymakers and civil rights advocates have made: that breaking out spending by school instead of by average per-pupil cost will allow parents and taxpayers to better understand why some schools perform well academically while others falter.

But many administrators say school spending is largely dictated by the experience level of teachers, rather than by their students' performance (a spending strategy they mostly support). Parents and school board members, they fear, will respond to new transparency data by demanding that districts spend more money on one school instead of another without understanding the complications behind upending an entire district's budget.

The majority of administrators surveyed said they already spend their money equitably and that they already know how much is being spent at each individual school. They generally give high marks to the technology they rely on to manage that funding. Counterintuitively, many said in interviews they have a hard time tracking the hundreds of things districts spend their money on.

In tackling that task, administrators described a range of coping strategies, including making the budget process collaborative and interactive across the district, using software to track and display purchases, and reaching out to superintendents and business managers in neighboring districts for tips.

That last point is seen as crucial.

"We're constantly communicating with each other," Swanson said of business managers across Minnesota. "You pick up new strategies over the years and you get a little smarter. If you're trying to do this all alone, by yourself, sorry, but good luck."

Vol. 39, Issue 06, Pages 3-4

Published in Print: September 25, 2019, as Educators' Money Jitters Never Far Below Surface
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