Education financials are all over the map

Across the country we hear strident complaints from teachers and other educators about supposed under-funding of the nation’s public education system. Supposedly, funding is lower now than it was back in 2008 before the Great Recession started.

The latest entrant in the “we demand more dollars” fray is the American Federation of Teachers (AFT), which just released a large, accusatory report titled “A Decade of Neglect, Public Education Funding in the Aftermath of the Great Recession.”

Proclaims the AFT:

“Today, a decade after the Great Recession, investment in public education in every state remains below what is required to provide our nation’s people with the education they need to thrive.”

And, the report is loaded with data from all 50 states, Kentucky included, used to support this assertion.

But, there is a serious credibility problem here. As the graph below shows, the AFT’s numbers don’t exactly match those from the US Census Bureau’s annually released Public Education Finances reports. That is interesting because the Census is cited by the AFT as its data source. Much more importantly, neither the Census nor the AFT figures agree with audited financial statements from the Kentucky Department of Education either.

In fact, fairly recently the Kentucky education expenditures per pupil numbers launched off into an entirely different, and much higher, orbit than either the AFT or direct Census numbers show.

So, what’s going on? Are there credible financials to support any claims about education spending in Kentucky? For more on that puzzle, click the “Read more” link.

The AFT’s new report contains a section exclusively about Kentucky. It is on electronic Page 61 in the Adobe PDF document, but the page isn’t actually numbered, so you have to use the Adobe Acrobat’s electronic page system to find this quickly (grade that a “Novice” for report writing skills).Anyway, on the first Kentucky State Reports page the AFT presents a graph titled “K-12 Spending Per Pupil” which, according to information on Page 3 in the front of the report (where they did include page numbers – go figure), says this is actually “current spending” per pupil. You have to dig all the way into the technical data notes to learn that the numbers have all been converted to constant 2017-dollar equivalents to allow for inflation. That would have been nice information to include in the graph title, but we are already at “Novice” for report writing, so what more can you do?

By the way, current spending leaves out capital expenses for facility construction, something some education researchers like to omit, arguing it doesn’t fund current classroom activities even though there isn’t much education likely to happen without taxpayers providing facilities.

The AFT report also says on Page 3 that the figures include a total of local, state and federal dollars and the numbers come from the US Census Bureau.

Now, the Census puts out its own report each year called “Public Education Finances” (Find access to these reports here). The latest release is for 2015. Each annual report shows Total Current Spending per Pupil data in Table 11. After converting the Census figures into 2017 constant dollars using the very neat CPI inflation calculator from the Bureau of Labor Statistics, I assembled those numbers for you in the graph with the green line marked with triangles. Compare the green line showing the directly reported data from the US Census Bureau to the red line showing the AFT’s numbers. They are close, but not the same. Go figure.

The Census data shows a bit more pronounced increase in spending over time than AFT does. I ran a statistical calculation known as a regression of the change in funding versus time for the AFT and Census data. The AFT trend from 2005 to 2015 is nearly flat, an overall average improvement of only $40 dollars per year per student. The Census shows a bit larger funding increase of $52 per year per student. That $12 per student difference works out to a dollar difference across our approximately 650,000 students in Kentucky of $7.8 million.

These are not huge differences, but it still seems surprising that there would be any differences since the Census is supposed to be the source of the AFT data.

But, it gets a lot more curious.

The Kentucky Department of Education has issued annual education funding reports, known as Revenue and Expenditure Reports, since the very beginning of KERA. These Kentucky reports are built around audited final spending figures from the districts, by the way. They are not guesses for the future such as found in state budgets, which get created before the actual tax collections and resulting spending occur.

I pulled up the R & E reports for the same years covered in the AFT’s spending graph. I then converted the numbers into constant 2017 dollars as the AFT did. The results are shown by the blue line in the graph.

It is clear that the department’s figures don’t agree with what AFT is saying and recently, post 2012, started to sharply diverge even more from the AFT and Census numbers, as well. By 2016 Kentucky was spending $14,323 per pupil in constant 2017 dollars while the AFT said we only spent $10,116, a difference of over $4,000 per student. With 650,000 students, that equates to a LOT of money – about $2.6 billion that Kentucky says it spent in 2016 but the AFT doesn’t consider.

How do we explain this? Before 2012 the department’s figures might include some spending outside of what is considered current spending. And, the department might have included still more formerly omitted spending in its reports after 2012. But, how would that explain the further divergence in the spending numbers for the period from 2014 to 2016? And, how can the differences now be so huge?

Anyway, as to which financials, the AFT/Census numbers or the department’s R & E report, provide the most accurate trend picture, I simply don’t know. I’m not sure we have any financial reports with accurate trend data on spending, and I am far from alone with that concern. Several months ago, Kentucky Board of Education member Kathy Gornik raised her own concerns about the state of the financial reporting in the commonwealth.

By the way, the AFT report doesn’t include school revenue data, but Public Education Finances: 2015 does have that, and so does the department’s 2015 R & E report. Census says the state got $10,963 total per pupil that year. The department reported revenue per pupil of $12,918. I have no idea how to explain the difference of almost $2,000, but once again the state is showing a LOT more money coming in than the Census reports.

For certain, the department’s total numbers are now on a different plane from what we are hearing from the US Census. And that is a major concern. Does Kentucky really have an education spending shortfall, or have we pumped a huge extra amount of dollars into our schools in recent years that even our educators don’t seem to know about – or at least want to admit?

I don’t know.

But, before we panic about school spending, I think we need to get the financial reports sorted out. Right now, I don’t think we have enough solid information to confidently claim anything.