From Kansas Policy Institute.
Why Kansans Should Care about School District Cash Reserves
By Patrick Parkes
The combined balance of all school district carryover cash (also known as unencumbered cash) accounts in the state grew by 64% from 2005-2013. The 30 taxpayer-funded accounts work much like the average Kansan’s checking account in the sense they can only grow when more money is put into them than is spent out of them. In short then, the positive balances reported over the past eight years indicate that school districts in Kansas are spending less than they are taking in. Click here to explore the statewide and individual school district data on our state spending transparency portal, KansasOpenGov.Org.
The sheer magnitude of the aforementioned upward trend in carryover cash balances may be enough in itself to spark the intrigue of some Kansans. Others are probably still wondering why the increase matters and why they should care about it.
School officials across the state have offered what at first glance seem like reasonable explanations for the trend. One of the most prominent hinges on the idea that these carryover cash reserves will be needed as “back-up” funds to maintain current school funding levels if state aid to schools declines in the future. Yet, Dave Trabert points out in his recent paper on student-focused school funding solutions that this explanation — along with many of the others offered frequently — doesn’t necessarily tell the whole story surrounding the reserves. For example, if the reserves are indeed intended to make up for potential declines in funding, why did the 2010 and 2011 non-earmarked reserves in the “All Other Funds” account increase even as overall aid to schools declined slightly.
The above instance is just one of the many undergirding the fundamental question of how school districts can be underfunded if they continue to meet their students’ needs while simultaneously making a habit of not spending all of the yearly funding they receive. This consideration should illustrate the importance of carryover cash balances as signals of a broken school funding system. What’s more, it should also signal the importance of starting a conversation about how we can all work together to craft a new, more efficient, and student-focused school funding system for Kansas.