Tuesday, June 07, 2005

Faculty Cuts, Administrative Raises, and Fiscal Irresponsibility

A solid foundation in statistics and mathematics is necessary to fully grasp recent front-page education news.

In April, blaming state funding cuts, Sunman Dearborn announced the elimination of five full time and four part time faculty positions. In May, the administration awarded nearly $79,000 in administrative salary increases. Sunman Dearborn did cut one administrator and total administrative costs will be less. All things considered, is this the time to give administrators raises?

The justification for these raises was bringing salaries to state averages. The current salary for the Superintendent is $103,416. If this is below state average, Indiana is paying it’s administrators much more than most states. The 2004-2005 Occupational Outlook Handbook lists the average Salary for Directors, managers, coordinators, and supervisors, finance and business personnel in 2002-2003 at $81,451. Indiana school administrators must have had huge cost of living adjustments over the last two years. Principals earned an average of $75,291-$86,452 and Assistant Principals earned an average of $62,230-$70,874. (See Page 35 of the OOH)

Sadly, Sunman Dearborn could replace two of their retiring teachers with new teachers and spend less than what administrative raises will cost.

Together, Sunman Dearborn and South Dearborn Superintendents brought our next bit of bad news. Our property taxes will be going up. The state is “holding a gun to the heads of local administrators” said Book.

Unfortunately the math wasn’t completed for us. So I did it myself. Sunman Dearborn will loose $457,388 in state funding over the next two years. Maybe those 9 faculty position cuts are really necessary. Maybe not! Sunman Dearborn will be raising an additional $1,473,891 in property taxes over the next two years. According to administration, the state is forcing them to do it.

Sunman Dearborn wants to be “average.” It should be noted that this increase in local tax levy likely keeps Local Property Tax Levy Per Average Daily Membership $438 less than state average. But, Sunman Dearborn will also likely receive $159 less than state average State Support Per A. D. M.

Over two years, South Dearborn will lose $262,524 in State Support. Yet they will still receive more than state average in State Support Per A. D. M. Using current figures from South Dearborn’s Statistical profile, I estimate State Support at $4,225 per Average Daily Membership. This is $373 above state average. South Dearborn will raise another $524,654 in property taxes. This still leaves the locals paying far less per A.D.M. at $2960 than the state average of $3970.

The truly terrifying fact is we don’t know what will happen to debt service and capital project tax rates. These increases will be blamed on the state. But it should be noted, both school corporations borrowed amounts exceeding $35 million for building projects on their secondary campuses.

Extracting information from City Securities Final Pricing Wire, I determined the annual interest on South Dearborn’s project to be over $1.7 million dollars. The first bond of $170,000 does not

Mature until July 15, 2007.

These bonds were issued after South Dearborn borrowed 8 Million for operating expenses due to slow collection of property taxes. These bonds were issued after the state cut transportation funding. These bonds were issued despite the fact that the State was in a fiscal mess and had delayed support payments to the schools numerous times. These bonds were issued after many were demanding the state put it’s financial house in order. The only solution to “state budget woes” is increased taxes or reduced spending. The writing was on the wall, but no one on The Board or in the Central Office read it.

Standard and Poor has a new website called SchoolMatters. The site provides detailed financial data on all public schools. The latest data available is 2002. In that year South Dearborn was paying $300 per student in interest payments. Total Debt Payments per student were $694 or 10.9% of expenditures. South Dearborn’s debt was nearly four times the state average. That is more debt than 96.8% of all Indiana Schools. And, Sunman Dearborn had more debt than 90.5 % of all Indiana Schools.

Other spending data can be found on IDEANET. The three-year average spending per student at Sunman Dearborn was $8,260. Teacher Salary per student is $2,563. The other $5,697 is spent on administration and overhead. Only 31% of that money is spent on the teacher. This is unsatisfactory when you consider Sunman Dearborn teachers rank 13th in average teacher salary.

The three year average spending per student at South Dearborn was $8,347. Teacher Salary per student is $2,779. The other $5,568 is spent elsewhere. Only 33% of South Dearborn’s spending goes to Teacher Salaries. With less than a third of education spending going to teachers, perhaps cutting administration would be more appropriate than cutting faculty.

Karen Loveland

About the Author:

Karen earned a BS in Business Administration with a Major in Finance from Brigham Young University. Karen has seven children in South Dearborn Schools.

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