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New Comptroller Report Looks at TN Education Administration Spending

Press release from the Office of Tennessee’s Comptroller of the Treasury; August 15, 2014:

The Tennessee Comptroller’s Offices of Research and Education Accountability (OREA) has found that school districts with higher rates of administrative spending are more likely to be very small or very large districts, and to be municipal or special school districts rather than county districts.

Based on spending data from the 2012-13 school year, school districts in Tennessee spent 10.5 percent of their day-to-day expenditures (not including capital or debt service spending) on administration, which includes local school boards, central district offices including the directors of schools, and principal offices at each school. Tennessee administrative spending has increased over the past five years in relation to total spending (from 9.8 percent to 10.5 percent), but was below administrative spending rates for school districts in the Southeast and across the nation. The majority of districts’ administrative spending (57 percent) is at the school level for expenditures in the principals’ offices.

Individual district expenditures on administration ranged from between 6 and 17 percent of total current spending. About one-fourth of districts (33) spent more than the statewide rate of 10.5 percent on administration in 2012-13.

  • Seventy percent of these higher administrative spending districts are city or special school districts, which tend to be smaller than county districts and are likely to have additional sources of local tax revenue.
  • About two-thirds of the higher-spending districts fall into the bottom fifth or the top fifth of districts ranked by enrollment size.
  • Seventy percent of the higher spending districts had central office administrator-to-student ratios above the statewide median of 4.4 administrators per 1,000 students enrolled.

The report did not analyze the cost-effectiveness of districts’ spending, where district or school outcomes–like student academic achievement and graduation rates–would be compared in relation to administrative expenditures. Without further analysis of such outcomes, identification of above-average administrative spending by itself cannot be evaluated as appropriate or inappropriate.

OREA is an agency within the Comptroller’s Office that is charged with providing accurate and objective policy research and analysis for the Tennessee General Assembly and the public.

To view the full report online, go to: http://www.comptroller.tn.gov/OREA/

No Copeland Cap Changes Recommended in State’s Review

Tennessee Comptroller Justin Wilson told lawmakers Tuesday that the state’s constitutional spending cap is actually designed more to improve political accountability in the Legislature than it is to restrain government budget growth.

Wilson delivered a report from the State Funding Board, which was tasked with studying the effectiveness of the so-called “Copeland Cap.”

“It’s not my position at all that you should never exceed the Copeland Cap,” Wilson said at a meeting of the state House Finance, Ways and Means Committee. “It is my position that you should know exactly what you’re doing and why you’re doing it if you decide to do that.”

The funding board’s December report concluded that no substantive alterations or reforms to the cap are needed presently.

One group that is suggesting changes, though, is the Beacon Center of Tennessee, a think tank that advocates for free markets and smaller government. In a policy brief released Tuesday, the Beacon Center recommends boosting the vote requirement for lawmakers to exceed the cap from a majority to two-thirds. The center is also suggesting a new method of calculating the cap that it says would save the state money.

Passed by Tennessee voters in 1978 after being recommended in the Limited Constitutional Convention of 1977, the language of the Copeland Cap reads, “In no year shall the rate of growth of appropriations from state tax revenues exceed the estimated rate of growth of the state’s economy as determined by law. No appropriation in excess of this limitation shall be made unless the General Assembly shall, by law containing no other subject matter, set forth the dollar amount and the rate by which the limit will be exceeded.”

While it was conceived as a check against overspending is state government, the Copeland Cap has been criticized over the years for being too easy to skirt.

“Thanks to the leadership of (former state Rep. David) Copeland, Tennessee’s spending cap has ensured limited growth in Tennessee’s budget, but in hindsight, it could be an even more effective tool to curb state spending—allowing hard-working Tennesseans to keep more of their own money,” Beacon Center CEO Justin Owen said Tuesday in a press release, which noted that since being adopted in 1978, “the Copeland Cap has been exceeded with regularity — only 18 times in 35 years has the Legislature failed to exceed the cap.”

Last year the General Assembly passed legislation on near unanimous votes in both chambers calling for an inquiry into whether some kind of redesign of the Copeland Cap is warranted. Nashville Democratic Sen. Douglas Henry, the longest serving lawmaker in the General Assembly, said studying and potentially recommending changes to the Copeland Cap would better enable it to “hopefully do what it was designed to do.”

Since it was enacted in the late 1970s, the Copeland Cap has been busted 17 times, according to state budget figures, most recently by 1 percent, or $132.5 million, in 2013.

But the funding board’s report notes, however, that it’s something of a “misconception” that the Copeland Cap is actually meant to “restrain spending.” Really, it is more accurately understood as a tool for transparency in state budget writing, the report indicated.

“The Cap is actually meant to create accountability and to let the General Assembly know when spending is growing faster than the economy that supports it,” according to the report. State law calls for economic growth to be measured by Tennesseans’ personal income, which includes wages, rental, and dividend and interest income.

To that end, the state finance commissioner, Larry Martin, said in a Dec. 17 memo contained in the funding board report that in order to improve transparency, the department will prepare a report when Gov. Bill Haslam presents his budget indicating whether the Cap will require busting, at least with respect to the governor’s proposed budget.

Usually, there is no clear indication whether the Copeland Cap will be set aside until late in the session just before a final budget is passed.

The Beacon Center says in its report that the personal income measure allows the government to spend too much during good economic times. The center favors using a measure of population growth plus inflation.

“Population changes most significantly influence government spending. If Tennessee becomes more populous, the number of people using government services (driving on roads, receiving welfare services, etc.) will therefore likely increase. Such population growth could drive up government spending as a result. Further, inflation also impacts the value of the dollar, therefore affecting government expenditures.”

The Center estimates its method would have saved state taxpayers $38.4 billion.

Beacon Center Releases New Report on Education Funding, Results

Press release from the Beacon Center of Tennessee; August 19, 2013:

NASHVILLE – A new study released today analyzes taxpayer spending on public education in Tennessee. In the study, the Beacon Center of Tennessee, the state’s premier free market policy organization, looked at the amount taxpayers actually spend on education versus what is reported, where that money goes, and whether more funding equals better results.

The first of its kind in Tennessee, the report titled “Following the Money: A Tennessee Education Spending Primer,” reached some troubling conclusions. First, the amount that taxpayers already spend on public education is significantly underreported. While the average stated amount spent per pupil is $9,123 per year, the true figure is about 11 percent more than reported, or $10,088 per student.

Of that funding, less than 54 percent is directed at classroom instruction, such as teacher salaries, textbooks, and other instructional spending. And that figure is in constant decline, whereas administrative spending is on the upswing. Since 2000, the number of administrators in Tennessee’s education system has grown by 34.5 percent, while the number of teachers has increased by less than 17 percent, and the number of students has grown by just seven percent.

Administrators’ salaries have also outpaced those of teachers during that time period. In fact, when factoring for inflation, teachers make less money today than they did in 2000.

“Not only have taxpayers been misinformed about how much we spend on education, there has been a growing trend of adding administrative personnel, redirecting funding away from the classroom,” said Beacon Center CEO Justin Owen.

Finally, after comparing similarly situated school districts within the state, while also comparing Tennessee to other states, the report found no measurable correlation between spending and student performance.

“Ultimately, more spending does not equal better results,” said Owen. “Rather than allocate more money, especially on administrative personnel, public school districts should focus on spending education funds more wisely. Only then can Tennessee expect to provide its students with the quality education they deserve.”

The full report can be found at http://www.beacontn.org/wp-content/uploads/Following-the-Money.pdf.

The Beacon Center of Tennessee’s mission is to change lives through public policy by advancing the principles of free markets, individual liberty, and limited government.

The Pork Not Chopped

Tennessee Republicans this year had a window of opportunity to trim $23 million from the budget’s pork-barrel buffet that’s annually lain before them in the late hours of the legislative session.

But as often happens, the home-cooked political victuals proved too toothsome to pass up. They opted instead to heap their plates and hand taxpayers the tab in advance of hitting the exits and heading for yonder hills, dales and campaign trails.

Late in April, GOP lawmakers in both the House and the Senate appeared to identify more than a dozen local projects deemed worthy of consideration for removal from the state’s $31.5 billion budget.

As legislators entered the final stages of drafting the spending plan, bickering broke out over the relative merit of a series of “local projects” that had somehow meandered into the funding mix– despite a supposed informal “agreement” to spend taxpayer dollars solely this year on projects with obvious statewide or regional impact. At one point, the Senate even voted to cut $22 million worth of local pork that had crept into the budget after their brethren in the House had cut $1.8 million in suspicious spending they’d sniffed out.

But it was all just a show, little more than political theater. Ultimately, after an all-too-surreal House-Senate conference committee hearing, only $1 million in spending previously on GOP lawmakers’ wish lists was no longer in the final budget document.

House Finance Committee Chairman Charles Sargent, R-Franklin, admitted that the late-stage discernment of waste in the budget ultimately amounted to legislative “gamesmanship” — that, truth be known, there wasn’t much taste on anybody’s part for reducing tasty government handouts sure to wow the folks back home when it comes time for incumbents to brag on what they brung em’.

“It always happens at the end of the year. These are the things you just have to work out and take care of,” Sargent told TNReport.

Nevertheless, Lt. Gov. Ron Ramsey, who presides over the Tennessee Senate, said he doesn’t think voters of a fiscally conservative bent ought to be of a mind to make the GOP’s big-spenders pay come election time.

Ramsey, a “huge believer in preserving history, preserving our roots,” suggested it’s natural to make taxpayers pick up the slack when private-sector fundraising for cultural-heritage conservation comes up short.

“I think that fits right into my basic philosophy in general,” said the Blountville auctioneer, who often sells himself as a friend of Tea Party conservatives.

Still, Ramsey conceded not everyone may agree with every aspect of discretionary government spending in the coming year’s budget, especially when you get down to details.

He acknowledged that one of his own rather infamous pet projects — the Birthplace of Country Music Museum — probably “sounded awful” to those of a mind to zero in and identify the particulars of potential government waste. But GOP legislators even in the House rallied around the proposal to capture $500,000 from taxpayers’ wallets to help fund the $13 million as-yet-unfinished tourist trap located in Bristol, Virginia, just across the street and the state line from Bristol, Tennessee.

House Democrats had something of a field day ridiculing the fact that Republicans were willingly sending Tennessee tax dollars to Virginia. Later, though, their leadership acknowledged the outrage was calculated more to raise awareness of their own projects that didn’t get funded than any principled stand against spending money outside state borders.

“That never would have happened in a Democratic administration — at least not until we took care of our own projects first,” conceded House Democratic Caucus Chairman Mike Turner.

Ramsey noted, though, that what is, or is not, a “local” project is mostly a matter of perspective.

“You can argue the same thing of the Civil Rights Museum in Memphis: Doesn’t help the state, it only helps Memphis. You could argue that Stax Museum (of American Soul Music) doesn’t help the state — it only helps Memphis,” said Ramsey.

During House floor debate on the museum, Rep. Richard Montgomery, R-Sevierville, argued that taxpayer resources allocated toward tourism is almost always money well spent.

“I live in the center of tourism — the most active tourism area in the state of Tennessee, and we understand that,” said Montgomery. “We understand, too, that when you spend money on tourism it is a proven fact that every dollar you spend will get you $13 in return. Sometimes it is even more than that.”

But to the Tennessee Beacon Center’s bacon detector, things really aren’t all that complicated: If it looks and smells like pork, it probably is.

“It was sort of surprising that he came out with $500,000 for the museum in Bristol. And I think the most egregious part of it is it isn’t even in Tennessee, and this shows that taxpayer waste doesn’t even stop at the state line,” said Justin Owen, president of the free-market think tank that each year takes it upon itself to root out unnecessary and ill-advised government spending in the Volunteer State.

To be fair, Owen noted, the Legislature also voted to cut taxes this year — including reducing the sales tax on food from 5.5 percent to 5.25 percent, lowering the tax on inheriting wealthy estates and eliminating the tax on gifts. The reduction in the food tax will cost the state $22 million in “lost revenue.” And duly elected spenders of state taxpayer dollars will have about $95 million less to play around with after the three-year phase-out of the inheritance tax. Eliminating the gift tax will cost government an estimated $15 million annually.

But, clearly, the temptation to spend recklessly doesn’t stop at the party line either.

“Republicans spend just like Democrats. When you’re in control, you’re going to spend money,” Owen said. “There’s an incentive there to spend taxpayers’ money on things that really don’t benefit taxpayers as a whole, that go to benefit a select few.”

The Beacon Center’s 2012 Pork Report, due out later this month, takes special care to identify “tourist-related pork” and what Owen terms “corporate welfare,” like tax incentives for private businesses, including breaks for filmmakers shooting in Tennessee.

Andrea Zelinski and Mark Engler contributed to this report.

Haslam Signs State’s $31.5B Budget

Gov. Bill Haslam says he signed the state’s $31.5 billion spending plan Tuesday, putting into action a state budget that is $627 million less than this year’s.

In an interview with TNReport Tuesday afternoon, Haslam said he’s proud of the budget plan, which spends about $400 million more than he originally pitched to lawmakers and the public back in January.

“The ultimate budget had a lot of the things that we added back in when the revenue numbers improved,” Haslam said. The state spending plan runs from July 1, 2012 to June 30, 2013.

“I am somebody who believes in smaller government. I also think though, there’s critical services that we provide,” he said. “While we want to be really tough on how we spend taxpayers dollars, we also want to make certain we’re taking care of people we’re supposed to.”

The governor and Republicans heralded this year’s legislative session as a fiscal success story. Elimination of the state’s gift tax, phasing out the tax on wealthy inheritances and slightly trimming the tax on food were all noteworthy accomplishments, Haslam said.

The spending plan also put $133.4 million back into the budget to restore funding to so-called “core services” originally on the chopping block, such as $3.9 million fund Healthy Start and Child Health and Development programs and $1.4 million for mental health peer support centers.

This year’s budget is expected to top off at $32.1 billion by June 30, the end of the spending year, according to budget highlights from the General Assembly’s conference committee that hammered out final details of the budget.

The year before, Tennessee closed the books on $31.1 billion in spending, according to the governor’s original 2012-13 budget proposal.

The governor’s budget includes spending on projects and programs lawmakers at one point flagged as pork barrel spending, including a $500,000 for the Birthplace of Country Music Museum in Bristol, Va., across the street from Lt. Gov. Ron Ramsey’s Republican district Bristol in Tennessee.

“It’s kind of an easy target to say, oh that’s in Virginia. Why are we funding it when it’s yards from Tennessee?” he said. “It’s not like we funded something that’s in northwest Virginia.”

When asked if he was “comfortable” funding the museum, he said “I think I am… it’s a little different situation because of the way the city of Bristol is laid out.”

“Now, it is a fair question to say, ‘What are a local responsibility and what are private, philanthropy dollars,’” he said. “In the end, it’s always a judgment call on those.”

Governor’s Budget Amendment Prompts Bonanza of Spending Requests

Lawmakers have a wish list up to $500 million in projects and programs long — a pipe dream they’ll have to whittle down to about $5 million, says Senate Majority Leader Mark Norris.

The governor included $5 million in legislative expenditures in his budget, and now lawmakers are clamoring for a piece of that available money. The proposals include projects specific to lawmakers’ districts and attempts to fund favored bills or existing state programs.

Norris said it’s too soon to say what lawmakers will decide to spend that available money on, but said they so far don’t see making many changes to the governor’s proposed budget and accompanied amendment.

“Given that we only have about 1 percent of what’s requested available, all of them will not make it,” said Norris, R-Collierville. “Though worthy, there’s not enough taxpayer money available to fund everything that people would like to see us fund.”

Senate lawmakers began combing through the requests this week in a budget subcommittee and expect to decide next week which of those proposals will actually be funded.

“People think there’s more money,” said House Finance Committee Chairman Charles Sargent, R-Franklin, who said his office has 350 funding requests, an increase from last year’s 150 requests.

Before lawmakers can go home for the year, they need to approve a budget. Gov. Bill Haslam proposed a $31.1 billion spending plan, which the Republican-driven Legislature is so far keen on.

Federal Cash Funding Sidewalks, Bike Trails

While the state is bracing itself for a possible downgrade in its bond rating, Gov. Bill Haslam is handing out jumbo checks to fund quarter-million-dollar courthouse sidewalks, $600,000 bike trails and other such “non-traditional transportation projects.”

“Programs like this will be a lot harder to come by in the future,” Haslam said after announcing a $69,700 walkway project in Spring Hill. “Already, the amount of money we have for enhancement grants are a lot less than it was five years ago.”

The governor has lately been swinging through West and Middle Tennessee to pose for photo ops with local elected leaders as he doles out roughly $12 million in “transportation enhancement grants.” Similar announcements are expected to continue through September, according to the state Department of Transportation.

One announced Wednesday included $279,000 for a sidewalk improvement project in Chester County. Another $360,000 will help the city of Bells begin revitalizing its downtown with new sidewalks, lightpoles and landscaping. And another $600,000 will go toward a three-and-a-half-mile hiking-biking trail from Cookeville to Algood.

Something just doesn’t feel right about that in the current economic climate, says Justin Owen, executive director of the free-market Tennessee Center for Policy Research.

“At a time when our state and nation face a fiscal crunch, it appears that spending on ‘aesthetic’ and ‘cultural’ aspects of transportation is code for wasteful spending on political pet projects. Now is not the time to be spending millions of taxpayer dollars on pretty flowers and fancy lights,” he said in an e-mailed statement.

In Washington, of course, a high-stakes political debate is raging over how much deeper into debt the United States government should plunge, and what projects, programs and entitlement benefits should be shut down or scaled back to try and get the country’s fiscal house in order.

Murfreesboro Republican Bill Ketron, who helped Haslam hold up a gigantic check in Spring Hill for the walkway project, said he was torn.

“This will enhance the quality of life right now for $69,000 in Spring Hill, and I’m glad that they’re getting it. But in the future I think we’re going to have to re-prioritize the way we spend our money coming in from the federal government,” said Ketron, the GOP caucus chairman in the Senate.

The grants are funded entirely with federal dollars that have been flowing into the state since the transportation enhancement program’s inception in 1991. They can only be spent on “transportation enhancements” such as restoring historic facilities, bike and pedestrian trails, landscaping and other non-traditional projects, according to TDOT spokeswoman B.J. Doughty.

The state has cut more than $259 million in checks for 180 total projects since the project launched and the money is given to the state on a use-it-or-lose-it basis, said Doughty.

Haslam: We Can’t Rush To Spend

Statement from Gov. Bill Haslam, May 16, 2011:

To my fellow Tennesseans:

Today I filed my budget amendment with the Tennessee General Assembly, adjusting next year’s budget proposal to reflect increases in state revenues. More importantly, the amendment continues to reflect the practical, conservative policies I’m committed to and was elected to govern by.

In March, I introduced my administration’s first budget. It was based on early revenue estimates and accounted for the loss of hundreds of millions of dollars in one-time money from the federal government that is no longer available to Tennessee.

The initial proposal took into account the “new normal” of government: that we must do more with less, exerting more energy and spending fewer dollars. My administration is transforming how we set priorities and make choices, and in our short time in office, refocusing the Tennessee Department of Economic and Community Development’s job growth strategy on existing Tennessee businesses and specific industries is an example of that effort.

The budget proposal made in March projected conservative revenue growth mostly consumed by TennCare, the Basic Education Program (BEP) funding formula and state employee health care.

The proposal included a 2.5 percent average reduction throughout state government but also a 1.6 percent pay increase for state employees – the first such increase in four years. We also proposed restoring $69 million to the state’s Rainy Day Fund.

The budget amendment I filed takes into account the modest revenue growth the state experienced during the last year but stays true to the principles of our March proposal.

There is funding for: disaster relief grants; use of HOPE Lottery scholarships during the summer semester; mental health services; the Civil Rights Museum in Memphis; a state veterans home in Clarksville; payments to the Memphis Regional Medical Center, Nashville General and Jellico Community Hospital; the University of Memphis for operations on the Lambuth University campus in Jackson; smoking cessation assistance; and badly needed building maintenance at state and higher education facilities, among other areas receiving funding in this proposal.

I believe this amendment is a sensible adjustment to my March proposal given the new estimates of state revenues. It reinvests what we can in the areas of education and health care for our most vulnerable neighbors, and as I’ve often said, the experience of governing is not choosing between a good idea and a bad idea but it is choosing between two very good ideas.

When our economy declined, decisions were made to position our great state for recovery as quickly as possible. Money became scarcer and scarcer, and just as families across Tennessee had to do, state leaders found themselves having to choose – often between good ideas.

As our economy comes back and we adjust to the new normal, we must make sure we do not rush to spend but that we are continually mindful in our effort to save, use tax dollars smartly and offer Tennessee taxpayers a government that responds to their needs and reflects their principles.

Regards,

Bill Haslam

TCPR Releases Updated Legislators’ Guide

Press Release from the Tennessee Center for Policy Research, Jan. 12, 2011:

Think Tank Releases Second Edition of its Legislators’ Guide to the Issues; Policy guide offers free market recommendations on dozens of topics

NASHVILLE – The Tennessee Center for Policy Research today released the second edition of its Legislators’ Guide to the Issues (pdf). The guide is a 90-page resource for state lawmakers as they confront various policy issues during the 107th General Assembly. A complimentary copy of the guide was provided to every state legislator.

“We are proud to provide a comprehensive policy guide to lawmakers for the second straight General Assembly,” said Justin Owen, president of the Tennessee Center for Policy Research. “No other publication offers a better roadmap to a freer, more prosperous Tennessee than our Legislators’ Guide to the Issues.”

The guide also contains citations to additional resources that lawmakers, the media, and citizens alike can use to educate themselves on a range of policy issues.

The first edition of the Legislators’ Guide was essential at promoting common sense policy solutions in the state. The General Assembly advanced legislation related to nearly one-quarter of the 43 proposals in the first guide.

“Our first Legislators’ Guide served as an invaluable tool for state legislators, and we are confident that the new-and-improved guide will serve members of the 107th General Assembly well as they conduct the people’s business,” said Owen.

An electronic copy of the Legislators’ Guide to the Issues can be found online at: www.tennesseepolicy.org or downloaded here. Those wishing to purchase a hardcopy can do so by emailing info@tennesseepolicy.org or calling (615) 383-6431.

Turner Wants Temporary Halt to State ‘Earmarks’

Rep. Mike Turner, the state House Democratic Caucus chairman who won a slim victory in his District 51 re-election bid last month, says he received one message voters were sending, loud and clear: Wasteful government spending must stop.

The firefighter from Old Hickory has a plan designed to make Republicans put legislative walk to their campaign talk, and place a statutory lid on district-level pork-barrel spending.

Turner told reporters Monday he’ll file a bill in the 2011 session that would institute a two-year halt on legislative earmarks, the projects carved out by lawmakers for their home districts and sometimes added to unrelated bills.

“Their people said no mandates, so we’re going to probably put legislation forward that says you can’t have a budget amendment, you’re not going to be able to amend your fish hatchery in,” said Turner, referring to a controversial trout-rearing facility in Independent House Speaker Kent Williams’ district that was included in Democratic budget proposals, but was eventually removed.

While hashing out the state budget back in June, lawmakers haggled into the wee hours of the last legislative day over special projects, community improvements, property-upgrades and other tax-financed goodies and giveaways that incumbents could later take credit for hand-delivering to the folks back home.

Turner has yet to introduce the bill. He made the his comments Monday after leaving a Democratic caucus meeting on Capitol Hill. The Legislature will convene after lawmakers are sworn in Jan. 11, 2011.

(CORRECTION: The video caption to the clip originally posted misidentified Turner’s caucus membership; He is the Democratic Caucus chairman. TNReport apologizes for the error.)