By DENNIS GOLDBERG, guest columnist
As Brown County Schools embarks on the challenge of securing a general fund referendum, it is important that our community understands the various methods used to compare the expenditures of school districts throughout the state of Indiana.
The design and application of the various methods that are typically used for comparing similar school districts to a single school district (in this case, Brown County Schools) needs to be carefully analyzed.
All too often we accept the foundations of a particular comparison without question and therefore allow ourselves to be misled.
It is rather easy for one to present comparative data as a statistical tool to explain or to make a point. However, not all methods or data that are used to compare school districts are valid, nor are they defensible.
In an effort to establish and explain the difference(s) between several school districts, it is important to select districts that are relatively similar in their basic demographics. The typical demographic data points used for selecting comparable school districts are:
The number of students enrolled in a school district
Community type: urban, suburban or rural
Socioeconomic status: The percentage of free and reduced-price meal eligibility
To a lesser degree, the physical proximity of other school districts to the district being discussed (Brown County Schools).
The school districts to be compared with Brown County Schools are Lawrenceburg Community Schools, Decatur County Community Schools, Greensburg Community Schools, South Gibson School Corporation, Lakeland School Corporation and Greencastle Community Schools.
The most common measurement used to compare similar school districts is some variation of a “budget dollar amount” of a school district, divided by the student enrollment of the same district.
This is a formula that we will refer to as the “budgetary per-pupil cost.” Using the “budgetary per-pupil cost” formula for comparing similar school districts is misleading and lacks validity.
Reasons for this fact include the variations of the number of school buildings, percentage of special education students, percentage of students receiving free and reduced meals, and the variations of the landscape in a given area.
All school districts in Indiana are required by state law to use a “fund-based accounting” system. This accounting system separates, by function, revenues and expenditures into a variety of funds for defined purposes.
The most common fund is the general fund. The primary use of the general fund is to pay salaries, wages and benefits; you wouldn’t expect to see bus transportation costs being charged to the general fund.
In order to draw comparisons to the funds that will be mentioned, we will use the 2016 budget orders that all seven districts received during January or February 2016. The budget order is developed by the Department of Local Government Finance.
The budgets for each school district are contained in their respective budget orders. The funds that comprise each school district’s budget are the general fund, rainy day fund, debt service fund, pension debt fund, capital projects fund, transportation fund and bus replacement fund.
Of these seven funds, only five receive local property taxes.
The general fund and the rainy day fund do not receive any local property taxes.
At first glance, if one were to add up the total expenditures of all seven funds (a school district’s budget) for each of the seven school districts, it would appear to be the foundation for a fair and equitable comparison.
Upon closer examination, one would find many aspects of each school’s budget that make it unsuitable for comparison purposes.
Two examples that demonstrate this point are:
The debt service fund: Two districts with the same student enrollment could have two very different amounts in their debt service fund. If one district just finished a major building project and is required to make bond payments of $1 million per year compared to the other district that has zero debt, one can see a major difference between the two schools based on just this one fund.
The transportation fund: Comparing two similar school districts, (Greensburg Community Schools to Brown County Schools) and using each district’s transportation fund, Greensburg Community Schools’ transportation fund levy for 2016 is $1,232,465. Brown County Schools’ transportation fund levy for 2016 is $2,483,600, which is a difference of $1,251,135. BCS’s student enrollment for 2016 is 1,976, while GCS’s student enrollment is 2,235. The difference between the two districts is the “linear density” of miles per day that students are transported. Although the two districts are very similar, their transportation budgets are vastly different because Brown County Schools’ buses travel many more miles per day to transport students.
These two examples clearly show why using the total budget of a school district for comparison purposes is flawed.
The best and most commonly used “budget dollar amount” is the actual fiscal year expenditures for each district’s general fund.
When the general fund expenditures are divided by the school’s student enrollment, a much clearer and valid comparison is derived (see table).
This is the method that the Indiana legislators use to appropriate an equitable distribution of funds for each district.
(Please note: While equitable, the distribution is clearly inadequate for rural county schools in particular.)
As can be seen in the chart above, Brown County Schools is spending a comparable amount of money per student to similar districts. At the same time, our record of student achievement is well documented. We continue to make tremendous strides as a school district, in all areas.
Dennis Goldberg is assistant superintendent and chief financial officer of Brown County Schools.
