Admin Over Adolescents: 7 Ways Illinois' Bureaucracy Is Siphoning Money From Classrooms

Authored by Ted Dabrowski and John Klingner via Wirepoints.com,

Listen to education officials’ demands for more money and it’s easy to believe Illinois grossly underspends on K-12 education. A $7.2 billion funding lawsuit to double state contributions to classroom spending, a $40,000 minimum wage demand for teachers, and lawmakers’ rejection of limits to school district borrowing might bolster that impression.

But the truth is Illinois already spends a lot on education – more than any other state in the Midwest. It’s just that much of the money is going to all the wrong places.

At $14,180 per student, Illinois spends far more than its neighbors on education – 44 percent more on a per student basis than Kentucky and Indiana, 22 percent more than Michigan and 21 percent more than the national average.

Billions of dollars are being siphoned away from the state’s poorest districts by the state’s burgeoning education bureaucracy.

The problem arises when all those dollars are doled out.

Just look at the facts:

  • Illinois’ non-teaching staff has ballooned by 50 percent in the past two decades, while student enrollment has grown just 11 percent.

  • Illinois has more school districts than the nation’s four most efficient, big-population states (Florida, North Carolina, Virginia and Georgia) have, combined. That means thousands of excess administrative and non-teaching staff in Illinois.

  • Pension costs have grown so quickly they’ve devoured nearly 50 percent of the state’s contribution to downstate education in recent years. In 2017 alone, the state spent $11 billion on education for downstate districts – $5 billion of that went to pay for downstate teacher pension costs.

Illinois is spending billions on district offices, administrators and multi-million dollar pensions instead of providing more classroom funding. That isn’t fair to poor districts like Taylorville CUSD 3, which only spends $7,400 per student and is one the plaintiffs in the lawsuit.

Illinois’ high per-student spend shows why the state doesn’t need to hit up Illinoisans for more education money. Instead, the state just needs to redirect the money it already has to the places and students that need it most.

The education establishment knows there isn’t enough money to both preserve their system and fund Illinois’ neediest districts. But officials don’t want to give up the system they benefit from.

So, they mislead Illinoisans into thinking more money is the only solution. The $7.2 billion lawsuit is the most egregious example of that – it’s all about the self-preservation of Illinois’ education bureaucracy.

Here’s what the education establishment doesn’t want changed:

1. Growing bureaucratic bloat

The growth of non-teaching staff in Illinois has skyrocketed compared to the growth in the number of students being taught.

Between 1992 and 2015, school administrators and other non-teaching staff grew by nearly 50 percent in Illinois. In contrast, teachers grew just 20 percent and student enrollment grew just 11 percent.

The state would have 33,000 fewer staff today if Illinois administrative and non-teaching staff had simply grown at the same rate as student enrollment since 1992.

At an all-in cost of $60,000 per staff member, that’s some $2 billion annually that non-teaching staff takes away from classrooms today.

Some officials might defend the growth of non-teaching staff as a result of the development of integration, special education and social services in schools. However, Ben Scafidi of Kennesaw State University found the expansion of those programs – and a massive hiring boom – occurred from 1950 through the 1980’s, long before the more recent 1992-2015 surge in administrative hiring.

2. Expensive, duplicative district administrations

The growth of non-teaching staff has also resulted in bloated district administrations across the state.

Take the New Trier Township, for example, which has six different K-8 school districts that feed into it. Seven separate districts means lots of superintendents, assistant superintendents and other district staff – people that don’t work in schools.

In total, 136 district office administrators work across seven separate district offices. Many of their positions – from bookkeeping to technology to HR – are duplicative. They could be consolidated if New Trier became a unit district.

The area’s seven superintendents are among the highest paid in the state. Each receive compensation packages ranging from $210,000 to $360,000annually, according to the Illinois State Board of Education’s salary database.

District office staffs are expensive, too. In total, salaries in the seven districts average $92,000 and cost over $1,000 per student. And that doesn’t include pensions and other benefit costs. Career employees in district offices can expect average pensions worth $2 to $4 million.

Unlike the district’s salaries, those pensions are paid for by taxpayers across the state through their income taxes.

This type of excess is not just in areas like New Trier. Even less wealthy communities like Homewood-Flossmoor have overlapping districts and executive-style pay for its administrators. Overlapping districts are particularly common in Cook, the collar counties and some areas in southern Illinois. 

3. Too many school districts

Illinois has 852 school districts, many of which are overlapping and duplicative.

By comparison, Florida has just 67 districts. North Carolina and Virginia have just 115 and 132 districts, respectively. Even California, with three times the number of students as Illinois, has just 160 more districts more than Illinois.

Illinois’ overall inefficiency is due to how its districts are organized.

  • Over a third of Illinois districts serve 600 students or less. (129 have fewer than 300 students.)

  • Nearly 45 percent of districts serve just one to two schools.

  • And over half the districts in Illinois are separate elementary and high school districts, rather than combined unit districts.

An extra layer of district bureaucracy in those districts is wasteful.

Illinois could cut its districts by 40 percent immediately if it were to combine its high school districts with their corresponding feeder elementary districts. Creating unit districts would cut the need for hundreds of excess administrators and free up hundreds of millions of education dollars annually for classrooms.

4. Pension benefits (unless they’re increased)

The Illinois Constitution says that pension benefits “shall not be diminished or impaired.” The Illinois Supreme Court has defended the clause even for benefits that have yet to be earned.

Given the one-sided nature of the clause, past Illinois lawmakers should have been extremely careful about giving away any new benefits. But they weren’t.

The boosting of salaries and perks, and the willingness of politicians to overpromise pension benefits, has contributed to the wild growth of total benefits owed to teachers over the past several decades. In 1987, total pension benefits owed to active teachers and retirees totaled just $9.9 billion. Today, that number has ballooned to $118.6 billion. That’s an increase of almost 9 percent each year for nearly 30 years.

In total, benefits owed to teachers have grown 1,092 percent since 1987. That’s eight times more than Illinoisans’ household incomes (127 percent) and nearly ten times more than inflation (111 percent).

Politicians have doled out all sorts of new benefits over the past few decades: compounding COLA increases, increased benefit formulas, early retirement options, sick leave accumulation and more. Some have been given away for free. Other benefits, when charged for, were grossly underpriced.

The Teachers Retirement System publishes the entire list of changes to the pension plan since 1915, including new sweeteners and bigger benefits. The “best of” since 1957 are included below. Watch for the continuous improvement in the COLA benefits, one of the more expensive benefits.

5. Multi-million dollar pension benefits

The education establishment has created a cushy bureaucracy that is now creating millionaires in retirement. That’s not an exaggeration.

There are more than 30,000 school employees – those covered by the Teachers’ Retirement System – who get over $100,000 in total compensation, according to ISBE’s 2016 salary database. For those who work a full career – and most of them do – they’ll take in lifetime pensions, beginning in their late 50s, of at least $3 million.

And latest figures show that the average career teacher who recently retired will have a starting pension of $75,000 and earn $2.4 million during his or her retirement.

The top 10 pensioners in TRS are on track to receive far more than that. They’re all former administrators who began collecting benefits in their 50’s. All of them can expect to collect more than $8 million over the course of their retirement.

6. A regressive pension payment system

The worst part about the above multimillion pensions is they’re extremely regressive. That’s because pensions in Illinois are funded with state income tax dollars. Since wealthier districts pay higher salaries and have bigger district infrastructures, they benefit far more than poor districts from the state’s pension payments.

That scheme works against the goal of ensuring that state support goes to districts most in need. As more money goes to the wealthier districts with the most expensive pensions, there are less classroom funds for the poorer districts across the state.

7. Additional, special perks for educators

Members of Illinois’ education system also receive perks that nobody in the private sector ever gets.

For example, Illinois teachers and administrators can accumulate unused, unpaid sick leave year after year. When they retire, they can apply up to two years of that accumulated leave to their years of service credit. That, in turn, boosts teachers’ starting pension benefits.

It’s essentially letting many teachers retire two years earlier than they could have without sick leave. And it will cost taxpayers upwards of $3.4 billion over the next thirty years just for teachers who are currently retired.

Salary spiking is another perk. School districts grant employees end-of-career salary hikes designed to boost their pension benefits.

Many districts across Illinois give out automatic, multi-year, 4 to 6 percent increases to teachers when they announce their retirement. Wilmette School District 39, for example, offers the followingend-of-career bump:

Those hikes boost a teacher final salary by more than 25 percent and increase an average career teacher’s total pension benefits by about $250,000 in total.

The FY 2019 budget includes a new provision that cuts the “allowed” amount of salary spiking to 3 percent a year from the previous max of 6 percent. Districts that provide raises higher than that have to pay a penalty to TRS. But that penalty does nothing to help taxpayers – ultimately, they’ll be the ones paying for it through their property taxes.

And in many districts, teachers pay nothing towards their own pensions as yet another perk. Teachers are supposed to pay 9 percent of their salary into the state retirement system. But nearly two-thirds of all school districts pay for, or “pick up,” some or all of their teachers’ required pension contribution as an additional benefit. That costs local taxpayers approximately $380 million annually.

Fixing education finance

In going after the state with their $7.2 billion lawsuit, the suing superintendents are actually going after the ordinary people of Illinois. The only way the state could possibly pay for that new spending is through massive tax hikes.

The net result: Illinoisans will be poorer while the education bureaucracy gets richer.

Rather than squeeze another $7.2 billion more out of Illinoisans, lawmakers should cut back on the bloated system already in place: Consolidate school districtscut back on perks that nobody in the private sector gets, end the state’s dysfunctional payment of teacher pension costs, and move all new teachers to 401(k)-style retirement plans.

If lawmakers actually did all that, funding lawsuits and tax hikes would be entirely unnecessary. A bureaucratic rollback and pension reforms is what Illinois needs to return billions of dollars to the classrooms that need it.

Download a PDF of the report

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Other works by Ted Dabrowski and John Klingner on education finance:

From What Planet Is IL School Superintendent?

Illinois’ regressive pension funding scheme: wealthiest school districts benefit most

Illinois school district consolidation provides path to efficiency, lower tax burdens

Education finance solutions

Pensions vs. schools

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APPENDIX: Illinois already spends far more on education than its neighbors

Illinois spent more on education per student than any state in the Midwest in 2016, according to data from the U.S. Census Bureau.

That holds true when Illinois’ wealthiest districts – the Flat Grant (60) and Alternate districts (75) – are stripped out of the state’s average spending. Illinois 600 Foundation districts, on average, still spent more per student than both the national average and the average per-student spending in neighboring states in 2014.

When Illinois’ student population is broken down into quartiles based on the concentration of students in poverty, students in districts with the highest concentration of poverty received 13 percent more funding than those in the lowest poverty concentration.

Comments

Stuck on Zero SWRichmond Fri, 06/08/2018 - 18:55 Permalink

I saw one analysis of the California education system showing that less than 22% of the budget ever reached the school. Almost half was eaten up by Sacramento. The school board chief here in my county told me that the district had to hire over 1200 administrators to apply for and meet the demands of 22 funding sources. Tainter collapse here we come.

In reply to by SWRichmond

cdog TeamDepends Fri, 06/08/2018 - 18:00 Permalink

Illinois needs more anti-Establishment people, like Trump, running for office. The noise is deafening between the screams of the mentally ill FarLeft, the secret communists like Rahm Emmanuel, and the blatantly real racists who hide behind calling everyone else names.

The unions have run up the tab; its undeniable. Hopefully the Janus case, SCOTUS decision coming any day, will cut the blood supply to the union tumor.  It will be an event in the right direction. 

Currently, all published in the news, Chicago Public Schools (CPS) has a serious public health problem caused their cleaning contractor, unchecked pedophiles raping students and then being passed on to other districts, busted being delinquent with special ed kids, lead in many of the drinking fountains, and 100,000's kids significantly below grade level in every metric.

But hey, they're a sanctuary city and doing a mighty fine job of making it hard for feds to deport criminals. Bring in more non-english speakers and put more strain on your schools, right? Bring in more off the books cheap labor, right? How many of the 50,000 that were stopped at the border in May were headed to Chicago?

I'm an Illinois taxpayer and this malfeasance makes me sick.

In reply to by TeamDepends

DocBerg cdog Fri, 06/08/2018 - 21:29 Permalink

This article lauds unit school districts. We tried that in the 1960s, and while it was supposed to reduce administrative overhead, that never happened. The best thing for school administration in Illinois would be to refuse to grant principal and superintendent licenses to any people with degrees in physical education. These jocks refuse to cut back on the waste involved with interscholastic sports, and those are a real budget buster.

In reply to by cdog

alexcojones ted41776 Fri, 06/08/2018 - 17:51 Permalink

Remember when schools taught AND students learned? 

And NO lottery back then either. NO school shooters either, except that Texas Tower MK-Ultra guy.

And corporal punishment happened AT schools, administered by some big guy with a wooden paddle, and then more beatings at home for fucking up in school.

AND Nobody knew anything about ADD. Guess it hadn't been invented then.

Yeah- I'm really really old

In reply to by ted41776

Byrond Fri, 06/08/2018 - 17:55 Permalink

The amount per student is reasonable, but only if it's actually spent to enhance the learning and health of the students. Of course this is not happening, but that's the case with everything in this country. Let them eat cake! 

Pumpkin Fri, 06/08/2018 - 17:56 Permalink

Lock them up for conspiracy to commit malfeasance.  Take their homes, assets and retirement.  Send a damn message for crying out loud!  They are either encouraging this behavior or discouraging it, no middle ground!

dchang0 venturen Fri, 06/08/2018 - 18:45 Permalink

Republicans are just as corrupt. They just favor other types of industries for cronyism, especially the military industrial complex.

It's all large-scale graft no matter who we vote into office. The only way out is to cut the size of gov't down to practically nothing, where it can't take taxpayer money and transfer it to favored cronies.

In reply to by venturen

geo wells Fri, 06/08/2018 - 18:34 Permalink

In school distracts dominated by Black students....they are there for a life of chaos...creating it and enjoying it....far cheaper just to put all in work camps.....save the state money...condition them for a life behind bars and maybe figure out how to train them minimally to at least support themselves behind bars and keep them from reproducing and creating more of same...

dchang0 Fri, 06/08/2018 - 18:43 Permalink

HAHAHAHAHAHA

All you stupid voters who pushed off your own responsibilities to raise and educate your own kids onto the state and taxpayers deserve all the fraud you got.

What did you expect, pushing so many billions of tax dollars through a giant union-led gov't bureaucracy? They were bound to siphon off the tax dollars for themselves at the expense of the kids.

It's like all those non-profit charities where only 2% of your donations make it to the actual cause, and the other 98% goes to the charity's staff and expense accounts.

peippe Fri, 06/08/2018 - 18:55 Permalink

back in the day, they could've paid me just 5k/year to stay home & read library books.

would have turned out okay. but then my teachers wouldn't have bought first generation mini vans 

& the economy would've suffered.

not dead yet Fri, 06/08/2018 - 18:57 Permalink

The Education industry wants to be the center of you and your families universe and the power it brings. We can blame the teachers or whatever but just like BLM or the pussy hat brigade it's all about power and influence. It's naive to think schools are pushing agendas and politicizing their classrooms as some kind of fad. It's all about control and power with all these different groups believing they, and only them, have the answers to all the problems besetting we the people and only they can lead us to the promised land. Just as with the Hitler Youth the Education industry is attempting to capture the hearts and minds of the young on their drive for power and control above all others.

whatisthat Fri, 06/08/2018 - 19:18 Permalink

I would observe the politicians (federal and state and local) and  the unions and unqualified teachers have ruined and bankrupt public schools  across America both financially and continual education shortfall, scams and disasters over the past 40-50 years...

Happy Days Fri, 06/08/2018 - 19:49 Permalink

I know a lot of the people don't want to hear about this, but this is it:

All this pissin' and moaning about the way gooferments screw you is because you haven't the gonads to stand up against it. They know they can screw you because of the cowardice of the collective. You let it happen and then complain. Complaining won't do squat nor will protests. Maybe you should read the Declaration of Independence and take a stand? They did that back then and won. Now you've trashed what they fought for and gave you. You would be a disgrace to the founding fathers. 

So you ask me, what can we do? First, wake the hell up. You "think" that by voting will fix any of this? Well here's something to chew on. If your voting actually meant something representative of the collective, I don't think you would be willing to fork over 30-50% of your earnings in taxes willingly? Am I right? You bet your shorts I am. Instead, you just roll over and take it up the sphincter. They take your property without your permission. Did they ever ask the collective to vote on an income tax? No, they just did it. As George Carlin said, "they service the account" or something like that. When he said that, you see him pretending to stick it up your sphincter. 

Here's what you can do. Everyone stop going to work. But I know none will have the guts to unify in such a manner. Yeah, you say you have a huge mortgage, car payment(s), college loans, blah blah blah. Well you did that to yourself, now didn't you? So now that they have you by the gonads (they don't, you just cowardly thing they do, a cop-out). Well, if everyone stopped going to work, this would all end very quickly. By the way, I have already done this at the age of 49. I walk the talk...how many of you will do it? Nada....doing nothing means nothing gets done. You, collectively are cowards, but you can change that. You do have a choice. 

If, as extra credit, you want to know how things really work, a good starting point is a little reading of the following:

1. "The Prince" by Nicolo Machiavelli 

2. "Secrets of the Federal Reserve" by Eustace Mullins

3. "The Creature from Jekyll Island" by G. Edward Griffin

Now go back to WORK because your masters need to service you some more! Don't forget to give me a down vote as that, to me, will show me just how cowardly the collective is. 

boodles Fri, 06/08/2018 - 20:43 Permalink

Fabulous article. 

Your four recommendations to fix the problem:

1. Consolidate school districts

2. Cut back on perks that nobody in the private sector gets,

3. End the state’s dysfunctional payment of teacher pension costs, and

4. Move all new teachers to 401(k)-style retirement plans

 

Let me add a couple more radical ideas ...

5. Get rid of ALL school districts and make each school stand alone with one principal.

6. Voucherize every student

7. Encourage home schooling and private schooling

 

newdoobie boodles Sat, 06/09/2018 - 09:12 Permalink

No can do, the money does not come from the local economy. Regulations put in place to receive money that has been cycled thru the US dept of Ed + State dept of Ed + County dept of Ed = administrators capable of filling out the paperwork. Many time the strings attached to the money are specifically tied to positions that can not be done by someone who is already there. A whole new dept has to be created to funnel the funds.

In reply to by boodles

jmarshally Fri, 06/08/2018 - 22:26 Permalink

Many a great and productive man, was educated in a one-room school house, dedicated to Readin', 'Rightin' and 'Rithmetic. With those three skills, a man can do anything he is so disposed to do. All else, is time burning, make-work B.S.

 

snblitz Sat, 06/09/2018 - 00:43 Permalink

I am totally lost.

The article keeps using the word "pension" but no one knows what the word means.

pensions are annuities.

You or someone contributes money to a fund and then later draws money from the fund.

Annuities are a really well understood financial tool.

When you create an annuity (or pension) you can calculate before even the first dollar is contributed how the annuity is going to perform now and in the future.

If you create an annuity with utterly unrealistic terms this historically has been considered fraud and also unenforceable.

These pensions that the teachers are getting are just annuities with some sort of terms.

Has anyone considered calculating whether or not the annuities are sound?

For example.  Say a teacher contributes 3% of their $24,000 salary for 20 years and the money is invested in t-bills (3%)

At the end of 20 years they would have about $20,000 which they could then draw against.

I would say that would be enough money for about 1 year in retirement.

I keep reading that these teachers are getting 2 to 3 million dollar payouts.

How can that be?  I read numbers like 3% or 9% salary contributions.  Neither is even remotely enough to fund a 2 million annuity.

Let us assume the goal is 2 million dollars in the fund at retirement.

Assuming the fund managed 7% return on investment the teacher would need to contribute about $4000 per month or $48,000 per year.  That does not leave much left over after subtracting $48,000 from their $24,000 or $40,000 annual salary.

But what if the fund managed a more realistic 3%?  The contribution would have to be $6000 per month or $72,000 per year.

How then can you say the teachers salary is $40,000 when it is clearly at least $88,000?

I wonder is someone, even if the district, is actually contributing the money to the pension?

I mean for the teacher making $40,000 per year is someone actually putting $4000 per month into the fund?

If someone was putting the money into the annuity I would not be reading articles about underfunded pension programs.

The only way I can read such articles is if the money is not being put into the annuity or the annuity's investments are not achieving the expected return.

When you drill down to individual pensions it quickly becomes clear that the whole thing is a fraud.  No one contributed the needed money.  The return on investment was set at an entirely unrealistic value.  The pensions are unsound from the start.

 

 

 

 

hooligan2009 Sat, 06/09/2018 - 06:38 Permalink

this is no an education system, it is organized crime that defrauds and embezzles public funds.

the answer is competition. offer the chance to others at half the cost of that already paid from any and all state, local, city and federal taxes and watch a private company deliver twice the quality of outcomes for half this cost, in tax dollars.

Flash44 Sat, 06/09/2018 - 07:22 Permalink

After sucking us dry with property taxes here in Illinois we still have a very poor education system. Yes I agree with hooligan2009 junk the whole system and open it up to real competition or just have us pay for it personally to reduce the never ending fraud in the most corrupt state in the union.