Administrators: Accounting quirk inflates spending picture

Illinois Capitol News

Illinois Policy Institute report based on misleading numbers, paints incomplete picture, administrators say

ILLINOIS (WCIA) — A recent report published by the conservative think tank Illinois Policy Institute skewered local school districts for “administrative bloat” and claimed they “waste millions” in taxpayer money on “unnecessary layers of administration.”

However, according to school administrators who submit the expenses, and the State Board of Education that transmits the data to the National Center for Education Statistics, the report is based on misleading data and paints an inaccurate contrast between Illinois and neighboring states.

“Our per-student spending on education is a few thousand dollars higher than the national average, between two and five thousand dollars higher than neighboring states,” Adam Schuster, the Illinois Policy Institute’s Budget and Tax Research Director, said Friday in an interview with WCIA.

According to the most recent federal education statistics, Illinois ranked 15th nationwide in the cost of per-pupil education expenses and spent nearly eight thousand dollars per student less than New York, which topped the list spending $22,231 on education per student each year, according to the National Center for Education Statistics.

Dr. Brent Clark, the Executive Director of the Illinois Association of School Administrators, said the overall dollar amount cited by the think tank could be up to 30 percent too high, because unlike other states, Illinois includes risk management expenses in the category of “general administrative costs.”

“Anything [school districts] did with safety and security to the facilities, buying the insurances, training people on CPR, training people on responses to an intruder, any of those things that are related to tort, some of those are being charged as administrative fees or costs under the required law. That’s how they code it,” Clark explained.

During the interview, Schuster said he was not aware the state was counting administrative costs differently than other states and insisted that the Census Bureau was “consistent data across states.” Later, the Illinois Policy Institute conceded on Twitter that the accounting variation was “possible,” and said in an email, “we can’t confirm for sure that a reporting error isn’t occurring.”

Clark predicted that “if the State Board adjusts those accounting procedures and coding, I would expect we would see our administrative costs in Illinois drop probably 25 to 30 percent,” which would bring Illinois in step with per-student administrative expenses in nearby states instead of the outlier it appears to be on paper.

Jackie Matthews, a spokeswoman for the Illinois State Board of Education, confirmed the state counts expenses made using tort levy funds as general administrative expenses.

“Non-comparable data might be contributing to these results,” Matthews said. She said ISBE is “in the process” of “looking at how to code” those expenses. However, Matthews offered no further details to illustrate the scope or extent to which those funds might contribute to the total amount Illinois spends on education.

Clark said “there definitely is some element of spin” in Illinois Policy Institute’s analysis, “because it’s not presented in a whole capacity.”

The Illinois Policy Institute, whose President also operates a political action committee that takes dark money and gives campaign donations to lawmakers, used its questionable research to argue in favor of a bill that would likely accelerate school district consolidation.

State Senator Andy Manar (D-Bunker Hill) said he opposes their plan, and called it “mind-boggling.”

“It would force consolidation at the local level where local voters have no say-so whatsoever in decisions that are made,” Manar said. “It would put the legislature, the 118 members of the House and the 59 members of the Senate, in charge of deciding who can have a school district and who can’t.”

House Bill 3053 would not automatically force school districts to consolidate — an incredibly unpopular idea that faced a torrent of boisterous opposition during former Governor Quinn’s administration — but it would create a bureaucratic panel of state lawmakers who could vote to fast track consolidation questions and put them directly onto a local ballot.

“We think it’s a waste of state energy, time and resources to force everyone to go through those gymnastics,” Clark argued. “We think it’s bad public policy to get the communities all fired up and forcing it down their throat with a vote.”

Current state law already allows local parents to organize petition drives and consolidate overlapping school districts into larger ones if the community approves of it in the election. Gallatin County, for example, consolidated all the districts in the county into one central unit.

Schuster’s study claimed consolidation could save state taxpayers $708 million annually. While the solution sounds simple — combine organizations to eliminate overhead — a 2011 study commissioned by the state found that combining certain smaller school districts could actually cost the state an additional $3.7 billion over a four-year span.

The main finding of the study was that education cannot be formatted into “economies of scale,” as the Illinois Policy Institute suggests, mostly because school children still require people in the classroom running the schools. Reorganizing the district into a larger hub would simply reshuffle the staff, the study found, and would likely result in higher salaries and contribute to more logistical headaches, such as sending buses on rural routes that could take several hours to complete each day.

“I think the effort and the push to mandate votes to consolidate school districts really undervalues the intelligence and the perceptiveness of local people and local communities relative to their schools,” Clark said. “The efforts are really disingenuous and undervalue peoples’ competence and intellectual abilities to take care of their kids and their communities.”

Schuster, who previously served in former Governor Bruce Rauner’s administration, claimed local petition drives are too difficult to organize and face opposition from superintendents.

“It has to go through the regional superintendent, and they have the ability to veto that and say, ‘no, we don’t want to do this.’ So it’s essentially giving administrators control over whether they keep their jobs or not and whether they keep this waste or not,” he said.

Clark said Schuster’s description of the local consolidation process was “absolutely false.” He said a superintendent’s role is perfunctory only, and, “They have zero capacity to veto that effort.”

While most lawmakers and policy experts acknowledge it could make sense to consolidate overlapping school districts, especially those in well-funded, heavily populated districts, the Illinois Policy Institute’s article also took specific aim at how much those administrators make.

“Everybody can agree six figures is a comfortable living,” Schuster said, “especially if you’re talking about somewhere in rural Illinois.”

However, incomes for school administrators vary vastly between downstate rural districts and wealthy districts in the Chicagoland suburbs.

“The Illinois Policy Institute has done a fantastic job to paint every administrator the same way,” Manar responded. “But in Illinois, you can’t do that. I thought they would have learned that by now.”

“I would argue that administrators in the district that I represent, given the work that they have to do, aren’t paid enough in many cases. Not in every case, but in many cases,” Manar said, “because in smaller districts, underfunded districts, that person also takes over because there is a part-time nurse, they are also the social worker, they are the grant writer, they are the school business officials, they are the CFO, they are the accountant, they are the secretary. They are all of those people in that office.

“When you go to better funded districts, those administrators are paid more,” Manar said. “Not necessarily larger districts in many cases. But they also have all of these people that are in administration. So, to say that it is a one-size-fits-all thing with administrators, which the Policy Institute has done effectively, is a complete mistake.”

“They are just after public education I believe,” Manar said. “They are after teachers. They are after anything that spends a tax dollar that they don’t believe directly benefits them.”

Clark suspects Illinois’ second highest property tax burden in the nation helps “feed the drumbeat” against public education, especially since school districts rely so heavily on local property taxes. He said school administrators share those concerns and the pain of paying the expensive tax bills.

The study accurately reported Illinois has the fifth most school districts in the nation, though it is also the sixth largest state in the nation.

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