Boards of Education Spending More Than We’re Sending Them for FY14

Our Alabama boards of education are planning to spend a whole lot of money in the next fiscal year. Fiscal Year 2014 (FY14) begins October 1 and ends September 30, 2014. With five districts’ budgets not yet available, the total of the other 130 school districts’ revenues is nearly $7 billion.

The interesting part, though, is that they’re planning to spend nearly $7.5 billion. And while no one is planning to spend more money than they actually have (cause that would be against the law), many districts (60 to be exact) are dipping into their “fund balances” in order to pay recurring expenditures. [The fund balance is the total amount of money available to a board to spend. Recurring expenditures are all expenditures except capital expenditures.]

I know that if I dip too far into my savings account, my family’s financial future is threatened. But many districts seem to not be worried with doing that this year.

To be fair, I don’t know how many districts did it last year or the year before that because pulling financial information off of the ALSDE’s web site is cumbersome, and each spreadsheet put together to write this post was hand-entered and hand-manipulated. (I really need a good computer programmer.)

And don’t forget that the budget is a planning tool. Boards are not required to follow budgets to the penny (or even tens of thousands of dollars, as far as I can determine).

What follows are a few charts and tables to help you get a grasp of the various districts’ revenue and spending habits. Remember, these figures are for FY14.

Expenditures are broken down very differently, and we’ll get to those in a future post.

Table 1 shows what percent of a district’s total budget is made up of local revenue. Local revenue is extremely important in allowing boards of education the flexibility to provide more than the state minimum course of study and things that are paid for with state funding. State funding is a low bar. State funding only provides a bare minimum educational experience for Alabama’s 741,000 K-12 school children.

Table 1 – FY14 Local Revenue by Alabama School District
[Re-sort the table by clicking the arrows at the top of each column, though the sorting function doesn’t work in Chrome….]
Five districts’ budgets were not online as of Friday, September 20. Those districts have no amounts listed.

When you re-sort the table in rank order, there are likely no surprises. A district’s local revenue percentage is likely a sign of how well the local community supports their schools, what value they place on their schools, and also an indicator of wealth in their district, but not in every district.

Table 2 shows each district’s budgeted revenue, expenditure, and the difference after removing the net effect of capital expenditures. The dollar amount represented in the “Difference – Recurring Expenditures” column represents the total amount of revenue minus total expenditures; subtracting next the net effect of capital expenditures (money available to pay for capital expenditures minus budgeted capital expenditures). Capital expenditures did not account for all boards’ budgeted overspending. There will only be an amount in that column if a board plans to spend more money than it receives.

The percentage in the “% of Budget that $ Overspending Represents” column is a percentage of total expenditures (the measure used to refer a budget, i.e., the Alabaster City Board of Education passed a $56.2 million FY14 budget.) There will only be a percentage in that column if a board of education approved a budget expending more than its total revenue.

The term “overspending” is mine. Nowhere do you see that term in a board of education’s budget. It’s a term my mother taught me. And it simply means that you are spending more money than you are bringing home.

Table 2 – FY14 Overspending (Where Expenditures Exceed Revenues)
[Again, the table is sortable, by clicking on the arrows at the top of each column. But not in Chrome.]

Final bit of information for this post. Here’s a look at what our boards of education did in passing budgets for FY14:

Of the 82 boards of education that passed budgets where expenditures exceeded revenue:

• 6 have no capital projects planned,
• 36 have a portion of their expenditures due to spending money on capital projects that are not fully funded by existing fund balances,
• 18 have capital projects, but those capital projects are not responsible for planned overspending,
• 22 have capital projects that fully account for overspending.

Of the 43 boards of education that passed budgets where expenditures did not exceed revenue:

• 8 approved fully funded capital projects,
• 20 approved zero sum capital projects,
• 14 saw their capital projects fund increase
• 1 passed a balanced budget

Of the 10 remaining systems:

• 5 look incomplete (no slight intended here. I just didn’t want to use a budget that looked as if it was missing some numbers as of last Friday), though 3 of those 5 showed revenues exceeding expenditures,
• 5 were not yet online

What Do These Numbers Mean?

What these numbers mean is open to interpretation. Interpretation by each of the communities represented by the local boards of education who had reasons to pass these budgets.

Of course, my interest in all of this is heightened due to my local school district announcing their plans to eliminate bus transportation for students in the 2014-2015 school year. This district, who has the 4th highest percentage of local revenue in the state, is claiming it is having difficulty making ends meet. Another district is holding a property tax increase vote on Tuesday, though it boasts the 5th highest percentage of local revenue in the state.

Both districts mentioned are fast-growing districts, though, so making ends meet is likely more difficult for them. Standard of living also enters into the discussion.

School district spending is far too opaque, and it is nearly impossible to determine how our boards are spending their community’s money.

We necessarily must leave the ultimate passage of school district budgets up to each of our boards of education. While we don’t get a voice in how our money is spent, we certainly should be allowed to review and ask questions, don’t you think?

No one is saying that the money these districts is spending isn’t being spent to improve children’s education, but we, the public, should at least be given a good explanation as to why our boards can’t make ends meet. And that good explanation should include some back up information, not just opinions of those who put the numbers on the paper.

If you want to take a look at the budget summaries from where these charts and tables were created, click this link.

Further analyses of how boards of education are spending the public’s money in the coming weeks.