Illinois’ $30 Billion Per Year K-12 Cost Can Be Reduced Significantly

St. Libory Public School District 30 shows us how to do it.

The most costly government function in Illinois, by far, is K-12 education funding. Few realize how much we spend because that is information that could reflect badly on those who benefit the most from the $30 billion – namely teachers and politicians.

Therefore their goal is to obfuscate, fight transparency every step of the way and use cost information that conveniently leaves out billions of dollars of cost in order to make taxpayers think cost-per-student is really less than it is.

The ISBE (Illinois State Board of Education) provides a report called “Total Expenditures, Operating Expense Per Pupil” from costs collected for each of the 870 school districts. Those local school reports are in a standard, virtually undecipherable format based upon what looks like a 44 page Excel spreadsheet. Even someone who is experienced in reading financial reports will have their eyes glaze over as they plow through pages of column totals without a combined or “Grand Total.” That is because schools do everything by fund (Education Fund, Transportation Fund, Operations Fund etc.) and no one (except us taxpayers) cares how much they spend in total.

If you are up to it take a look at Stevenson High School Dist. 125’s report here.

Note that important information that taxpayers really want to see such as salaries, fringe benefits and pensions for teachers are nowhere to be found on Stevenson’s web site. In another example of obfuscation and lack of transparency the few administrative salaries they did post to their website showed Superintendent Eric Twadell with a salary of  $181,800, a seemingly modest amount considering Stevenson reported a salary of $191,124 for a Phys Ed teacher last year. The problem is they reported Twadell’s salary to ISBE as $248,243. So why is the reported salary local taxpayers see on Stevenson’s website $67,000 less than the salary reported to the state? Is this the transparency Gov. Quinn talks about?

Average cost per student is actually $16,000 not the well-advertised $11,000.

The end result of this fiscal legerdemain is an ISBE report that shows average expenditures per student for all 870 districts at $11,196.

But that number conveniently ignores the following costs:

  1. “Other Expenditures.” In Stevenson’s case this is $21 million out of $86 million.
  2. Pension cost. Since pensions are paid at the state level school districts conveniently ignore these $2.9 billion costs as not part of education expense.
  3. Pension bond interest cost. This is another $600 million/yr that does not get added into “education Expense.”
  4. State and regional education costs of about $200 million.

When we include all of these costs as part of “Education Expenses” we come up with $30.1 billion spread over 1,881,000 Average Daily Attendance (ADA) students for an average cost of  $16,002 per ADA student fully 43% higher than the number commonly thrown around by politicians and union honchos. In Stevenson’s case their website says $15,191 per student while the “Real” all inclusive education costs comes out at $23,303.

Here are the Top 10 Schools by “Real” cost per pupil including all pension and other costs. Note Chicago District 299 is above average in expenditures. It is not a poor district having 1,735 employees making over $100,000/yr.

St. Libory District 30 shows the way to hold down costs.

Meanwhile down in St. Clair county 30 miles from St. Louis lies the small town of St. Libory with the aptly named school St. Libory School District 30. Here the all-inclusive “Real” cost per student is $10,711, less than &  as much as Stevenson.

If you go to the St. Libory website (see here) you will see the teachers’ contract and the superintendent’s contract right at the bottom of the page. Teachers’ contract is 15 pages (still too long) vs. 47 pages for Stevenson’s. The St Libory’s superintendent’s contract is 5 pages. I was unable to find Superintendent Eric Twadell’s contract for $181,000 on the Stevenson website. Or was it $248,000?

There are interesting comparisons between Dist 30 and Stevenson salaries. The superintendent’s salary, with a PhD, is $76,570 in the contract and $76,570 reported to the state as opposed to Stevenson’s $181,000 and $248,000 respectively. Highest teacher salary at Dist. 30 is $44,294 while lowest salary at Stevenson is $52,454. Forty-seven percent of Stevenson’s employees make more than $100,000 and fully 77% make more than Dist. 30’s superintendent. In fact the 26 part-time teachers at Stevenson average more than the highest paid teacher at Dist. 30.

And St. Libory’s teachers are doing an excellent job too – the school rates at 92 on a 100- point scale for standardized state tests vs. a state average of 78. In addition St. Libory spends 56% of its budget in the classroom compared to the state average of 46% and Stevenson’s 47%. If all schools would cut overhead until classroom costs matched St. Libory’s 56% of budget instead of 46% state taxpayers would save $5 billion/yr.

Even taking into account the difference in cost-of-living between the two areas it is obvious that the hiring good teachers and superintendents does not require making them millionaires.

Stevenson High School has the right to pay their employees whatever they want as long as they pay all the other costs associated with them too.

Let’s make school districts pay their own pension costs including interest on the Pension Obligation Bonds. This would add $11 million to Stevenson’s budget and $157,000 to St. Libory’s. Why should the hard-working people of St. Libory be stuck with paying taxes for the outrageous pensions for Stevenson’s employees?

To show you the magnitude of the problem here is a side-by-side comparison between Stevenson’s Top 10 pension payouts and St. Libory’s Top 7. Why 7? That’s all the retirees they have.

Note that all 10 of Stevenson retirees individually have annual pensions that exceed the entire property tax income of St. Libory’s Education Fund $117,330. Additionally, the top five Stevenson pensions combined exceed the entire St. Libory budget of $742,481.

This wealth transfer from the poor to the rich should outrage St. Libory taxpayers, and indeed all Illinois taxpayers.

The time for massive pension reform is now. Transferring pension to the schools where they belong would save the state $3 billion/yr until reform is complete.

Those who cause the pension problem should pay for it.

Bill Zettler is a free-lance writer and consultant specializing in public sector compensation. He can be contacted at this email address.