Posts tagged with Economy
De Soto USD 232's proposed 2011-2012 budget has one very noticeable, positive note: the district's mill levy could be decreasing by 1.5 mills thanks to a five percent increase in state aid for bonded interest and a nearly three percent in aid increase for the supplemental, or local option, budget.
"The potential savings to our patrons may not be huge but [the district] always feels [a reduction] is a step in the right direction," said District Finance Director Ken Larsen.
To break the numbers down, the proposed mill decrease would mean that for each $100,000 of assessed valuation on a home, the property owner would see a $15.29 reduction in taxes.
"It's not a huge decrease but it does add up," Larsen said.
Overall, the proposed budget of $48,274,429 is a $900K increase from the 2010-2011 budget. According to Larsen, the primary reason for the increased budget is the expectation for increased enrollment. Already the preliminary numbers for enrollment show a slight increase.
Enrollment factors into the district budget through the base state aid per pupil (BSAPP), which is down more than $200 this year to $3,780. Last year the state cut the BSAPP mid-year, Larsen is hopeful that won't happen this year thanks to the state's recent increase in revenues.
"It's good news for us that Kansas has a higher revenue than projected but as always we'll just do the best we can with what we're given," Larsen said. "That's our goal year to year."
While the district isn't making any cuts this year, Larsen warns that continuing to meet that goal will require reductions next year and beyond.
"We're holding steady this year but we need to be ready to make cuts in the future," he said. "We already have a finance committee in place that will begin meeting this fall to prepare for whatever is thrown at us in the coming years."
The Board of Education will meet on Monday, Aug. 15 at 6 p.m. to have a public hearing regarding the proposed budget and to vote on its approval.
Board President Tammy Thomas sees the proposed budget as an example of the district's increasing efficiency.
"People in the district are becoming more unified, we're not being held back by boundaries of 'that's not my job' because we all have the same focus of being mindful of the tax payers' money," she said. "We're doing what we can to streamline things and are always aware we're spending someone else's money."
Kansas University will dramatically change the way it offers scholarships to incoming freshmen, putting more of a focus on four-year renewable scholarships and letting students know upfront what level of aid they can expect based on their high school GPA and standardized test scores.
The new scholarships, KU leaders say, are designed to attract new students to KU.
“It’s a good program. It’s where we want to go,” said KU Chancellor Bernadette Gray-Little. “We want to use our funding to pool more of it so that it not only helps the students, but also helps us in terms of who we want to recruit.”
The effort matches her goals to not just recruit high-quality students, but to retain them, too, because the scholarships are available for four years only, she said.
“Graduating in four years becomes more important,” she said.
To put more scholarship money in renewable scholarships available for freshmen, KU realigned some of its existing funds to front-load more scholarship money.
Lisa Pinamonti Kress, KU’s director of admissions, said a number of elements will help her recruit students. Recruits are frequently asking her how much scholarship money is available and how much of it is renewable.
“With the state of the economy, we’ve definitely heard that students and parents would like to know what it costs for the entire four years,” she said.
The new scholarships, paired with KU’s four-year guaranteed tuition compact, allow them to do that, she said.
Now, if students know their high school GPA and their standardized test scores, they’ll know how much money they’ll get, and they’ll get a letter within two weeks of being admitted, she said.
The deadline to be considered for scholarships has been moved up slightly, to Nov. 1 from Dec. 1, she said. And gone are those scholarship essays that students had to write in the past, Kress said, along with a resume-like form that listed all the extracurricular activities a student had participated in.
Before the change, KU had four-year renewable scholarships, but they were mostly reserved for the highest-achieving students, she said. Today, most of KU’s scholarships are one-time awards with an average of about $1,000 or $1,500, she said. Funds that supported those scholarships will be redirected to the new renewable scholarships, she said.
Those “signing bonuses” didn’t align with KU’s desire to link recruitment with retention of students, said Matt Melvin, KU’s associate vice provost for recruitment and enrollment.
To secure other funding for the new program, Melvin said KU made a number of other changes to its existing scholarships. A scholarship for perfect ACT scores was eliminated. The criteria to renew the scholarships were strengthened, with the KU GPA requirement moving from 3.25 to 3.4. And KU worked with schools and departments to use funds that had been reserved for awards for upperclassmen.
Some of the out-of-state awards will be financed using tuition waivers.
He said KU would also be offering assistance to low-income families that qualify for federal Pell Grants. If Kansas students meet minimum academic standards, KU would use a combination of grants and scholarships to provide payment for full tuition and fees for four years for those students, he said. They would also have to meet academic standards each year to keep the scholarship.
“It’s going to ensure not only that the best and brightest are going to come to KU; it’s going to ensure that that best and brightest are going to come to KU regardless of their ability to pay,” Melvin said.
KU officials plan to launch an affordability website for prospective students soon.
Dale Seuferling, president and CEO of the KU Endowment Association, said mostly existing funds were being used to support the new scholarships. For example, two of KU’s existing renewable scholarships, the Summerfield and Watkins-Berger scholarships, would no longer exist moving forward.
But the funds that support them would still be used to provide money for the highest-level renewable award given to Kansas residents, he said. And students will still receive a letter that informs them which donor was responsible for their scholarship.
And as KU continues with its comprehensive fundraising campaign, now in the silent stage, acquiring new funds for scholarships will remain a priority, he said. The new scholarships will allow them to show donors the emphasis KU is placing on renewable scholarships.
“It really provides, I think, a much more efficient and marketable program that will be better understood by parents and the students,” he said.
New scholarships for incoming freshman: Kansas University is offering several new renewable scholarships for freshmen entering in the fall of 2012. The freshmen will be able to look at a grid and tell what level of scholarship they qualify for.
Kansas Resident Renewable Scholarships
National Merit Finalist, National Achievement Finalist, National Hispanic: Scholar Must select KU as No. 1 college choice with National Merit
Scholarship Corp.; $40,000 ($10,000 per year); 30 KU hours + 3.4 GPA
Chancellor 32 ACT/1400 SAT, 3.85 GPA; $20,000 ($5,000 per year); 30 KU hours + 3.4 GPA
Traditions 31 ACT/1360 SAT, 3.75 GPA; $16,000 ($4,000 per year); 30 KU hours + 3.4 GPA
Crimson & Blue 28 ACT/1250 SAT, 3.5 GPA; $8,000 ($2,000 per year); 30 KU hours + 3.4 GPA
Rock Chalk 25 ACT/1130 SAT, 3.5 GPA; $4,000 ($1,000 per year); 30 KU hours + 3.4 GPA
Jayhawk 24 ACT/1090 SAT, 3.75 GPA; $4,000 ($1,000 per year); 30 KU hours + 3.4 GPA
KU Pell Advantage (for students who qualify to receive a Pell Grant) 22 ACT/1020 SAT, 3.25 GPA; Combination of scholarships and grants will fund all tuition and fees; 24 KU hours + 2.5 GPA
Nonresident Renewable Scholarships
National Merit Finalist, National Achievement Finalist, National Hispanic Scholar: Must select KU as No. 1 college choice with National Merit Scholarship Corp.; $40,000 ($10,000 per year); 30 KU hours + 3.4 GPA
Midwest Student Exchange Program* 24 ACT/1090 SAT, 3.25 GPA; $37,200 ($9,300 per year); 30 KU hours + 3.4 GPA
KU Excellence 28 ACT/1250 SAT, 3.5 GPA; $37,200 ($9,300 per year); 30 KU hours + 3.4 GPA
KU Distinction 25 ACT/1130 SAT, 3.5 GPA; $12,000 ($3,000 per year); 30 KU hours + 3.4 GPA
KU Achievement 24 ACT/1090 SAT, 3.75 GPA; $8,000 ($2,000 per year); 30 KU hours + 3.4 GPA
*Available for students living in Illinois, Indiana, Michigan, Minnesota, Missouri, Nebraska, North Dakota or Wisconsin.
Jayhawk Generations Scholarships Available for students who have a parent, step-parent, grandparent, step-grandparent or legal guardian who graduated from KU.
28 ACT/1250 SAT, 3.5 GPA; $37,200 ($9,300 per year); 30 KU hours + 3.4 GPA
26-27 ACT/1170-1240 SAT, 3.5 GPA; $17,200 ($4,300 per year); 30 KU hours + 3.4 GPA
24-25 ACT/1090-1160 SAT, 3.5 GPA; $10,320 ($2,580 per year); 30 KU hours + 3.4 GPA
By Andy Hyland
"Our government's job is to make it easier for people to do business and stay in business. We're sending the message that Kansas is open for business."
That was Kansas Secretary of Commerce Pat George's message to the De Soto Economic Development Council. George spoke at the council's quarterly meeting on Tuesday, July 26.
George mentioned some of the tactics Kansas and the new administration are using to encourage business growth in the state, among those being potential changes to tax policy and ensuring the state has the proper infrastructure in place to support businesses.
"We want [Kansas] to be competitive in attracting business, big and small," he said. "It's a balancing act though because we can't base everything on incentives, we must have good assets too."
And what is Kansas' most important asset? According to George it's the people.
"Kansans know how to work and are known for our good work ethic and that's going help us put Kansas in the front of the pack as a place to be in business."
State officials on Thursday said there was some positive news in Kansas’ June unemployment report.
The June jobless rate of 6.7 percent was up from 6.3 percent in May and down from 6.9 percent in June 2010. The June seasonally adjusted unemployment rate of 6.6 percent was unchanged from May and down from 7 percent in June of last year.
Private sector jobs increased by 5,600 from May, while government jobs decreased by 9,600.
“The positive news in this month’s report is the growth in private sector jobs in Kansas. The job losses in the government sector were primarily seasonal employment losses, which are to be expected,” said Kansas Department of Labor Secretary Karin Brownlee.
Yuan Gao, a Kansas labor department economist, said: “The Kansas labor market saw little change in June this year. Future monthly data will show whether this is a temporary pause in employment growth or an actual shift to anemic growth. However, with the employment gains in manufacturing and in health care and social assistance, we think this is more likely to be a temporary pause in a slow recovery.”
The national unemployment rate for June was 9.2 percent.
Statewide, there were 18,884 initial claims for unemployment benefits in June, slightly more than the 18,708 initial claims in May, and up from 15,551 in June 2010.
There were 195,006 continued claims in June, down from 235,488 in May 2011 and a decrease from 263,123 in June 2010.
By Scott Rothschild
Gov. Sam Brownback says he wants to change the state’s tax system, and he has tasked Kansas Department of Revenue Secretary Nick Jordan to come up with some recommendations.
“The bottom line is, how do we grow the economy?” Jordan said.
Asked what he is looking at, Jordan said, “It’s all on the table.”
So far, Jordan has formed a group that has met a couple of times. The group includes Richard Cram, head of policy and research at the Revenue Department; Steve Stotts, director of taxation; the leaders of the House and Senate tax committees; and various state agency heads, according to revenue public information officer Jeannine Koranda.
More people will be pulled into the discussion as talks continue, Jordan said.
Jordan said he hopes to present several tax-change options to Brownback this fall, which would give the governor time to have a plan ready for the 2012 legislative session that starts in January.
Brownback, a Republican, is champing at the bit, mentioning several times the need for changing the state structure, specifically to reduce the state income tax.
Brownback also has noted in speeches that Kansas is losing population to states such as Texas, which has no state income tax. But several tax studies note that Kansas’ income tax is the most progressive portion of its tax structure.
During the last legislative session, House Republicans passed a plan to make permanent reductions in income taxes when state revenues grow. But critics of the plan in the Senate said it would have crippled needed services that have already been hurt by recent budget cuts.
Meanwhile, Democrats, who are in the minority in the House and Senate, have argued for fairer taxes by closing sales tax exemptions. But attempts to shut down these exemptions have failed to gain any traction.
By Scott Rothschild
Sean Fox, a professor of agricultural economics at Kansas State University, answers questions about rising food prices around the globe.
Q: Why are food prices on the rise?
A: The increased prices can be attributed to several factors based on supply and demand.
Q: I’ve read that corn, which is used in so many products, should be blamed because so much of it is now going for ethanol. Is that true?
A: Biofuel production has facilitated higher prices through greater demand for corn. Higher oil prices contribute to increased demand for ethanol, which drives up the price of corn.
Q: How much corn is going toward biofuel production?
A: It’s estimated 40 percent of the United States’ corn output will likely be used for ethanol in 2011.
Q: So is that, in turn, causing food prices to go up worldwide?
A: What has happened is that incomes have increased very dramatically in places like India and China, contributing to a very dramatic overall increase in demand for food commodities. That is a major driver on the demand side. The world’s population also has increased by 10 to 12 percent during the last 10 years, increasing the demand for food.
Q: Bottom line: What are the effects from higher food prices worldwide?
A: The effects of higher-priced food commodities are far from universal. In Europe and the U.S., people spend a relatively small proportion of their incomes on food — around 10 percent. People in lower-income countries, such as in the Middle East and sub-Saharan Africa, spend a greater proportion of their income on food. If they are spending 70-plus percent of their income on food, a 15 percent increase in wheat prices or corn prices is a major issue for them.
Gov. Sam Brownback announced Tuesday that he has donated $150,000 in unspent inauguration funds to nonprofit groups, including $30,000 to the Kansas Arts Foundation, which Brownback set up to replace the state-funded Kansas Arts Commission, which he killed.
“These organizations reflect Kansas’ commitment to helping their neighbors in times of need and making our communities a great place to raise a family and work,” Brownback said.
Brownback vetoed funding of the Kansas Arts Commission, making Kansas the only state to not have a state-funded arts commission.
Brownback replaced the commission with a nonprofit fundraising arm called the Kansas Arts Foundation. The Brownback for Governor Inaugural Committee donated $30,152.99 to the foundation.
The Legislature had to change the law during the past session to allow the inaugural committee to donate.
Here are the other donations made by the committee:
• Kansas Association for the Medically Underserved, $50,000.
• Friends of Cedar Crest Association, $10,000.
• Kansas Dental Charitable Foundation, $10,000.
• Rescue missions in Emporia, Salina, Topeka and Wichita, $35,000.
• Girl Scouts of Kansas Heartland, $5,000
• Jayhawk Area Council Boy Scouts of America, $5,000.
• Power Community Development Corp. (Dunbar Theatre), $5,000.
By Scott Rothschild
Lawrence teachers seek higher wages, in part to boost their pension prospects for retirement.
State officials, meanwhile, search for ways to make financial sense out of the pension plan, Kansas Public Employees Retirement System, that is a key retirement component for thousands of people in the Lawrence area, whether it’s at Kansas University, through local governments or elsewhere.
And taxpayers? Many — both inside or outside the system — are wondering what will come of KPERS in the years ahead, as it struggles with underfunding while the market remains sluggish, unable to keep pace with the system’s pledged future commitments.
As talk swirls of giving state and other public employees more control over their requirement plan investments — perhaps through a swing to defined-contribution plans, in the form of 401(k)s or others — financial planners can find themselves answering questions about how the systems work, or where they might be going.
But comparing the benefits and disadvantages of each option often depends on where the person doing the comparing is sitting.
• Employees appreciate KPERS because it provides a defined benefit — essentially a guaranteed rate of return — that is backed by the system’s provider, the state of Kansas.
• While the state reaps the benefits of offering a strong retirement plan, it also is forced to replenish funds when investments can’t keep up with payouts.
“It’s a no-lose proposition for the employee,” says Rusty Thomas, who retired last month after 10 years as owner of Rusty Thomas Financial and Insurance, having advised clients on their retirement plans. “But it costs the state some bucks to fund it, to make sure the money’s there.”
Here’s a look at some of the pluses and minuses of the two types of plans from a financial planner’s point of view, both for employees and for the government.
A “defined-benefit” plan, KPERS is financed by the state of Kansas and using contributions from qualifying employees’ wages. The system guarantees the amount of money an employee will receive upon retirement, based upon the average of the employee’s highest wages over a three-year period. An employee can take payments as an ongoing annuity, or as a lump-sum payment.
• Pros (for an employee): Employees automatically contribute a percentage of their wages into the KPERS fund, then watch their nest eggs grow at a defined rate until it’s time to retire. No thinking. No shifting investments. Just put money in, and reap a guaranteed rate of return. “It’s a no-brainer,” Thomas says. “You know it’s going to be there when you retire.”
• Cons (for an employee): None, really. “If the state goes bankrupt, that’s the downside,” Thomas says. “But what do you think the chances of that are? That’s pretty remote.”
• Pros (for the state): “It’s a great incentive to get somebody to come to work for you: ‘By the way, you get KPERS when you retire,’ ” Thomas says.
• Cons (for the state): Because the state defines the benefit, it is responsible for seeing that the fund has enough money to pay out the promised benefits. And when the market’s down, or the state has used KPERS funds to finance other needs with the intention of replenishing the funds later, the bills ultimately come due. “If the amount is not there that you promised your beneficiaries, you have a problem,” Thomas says. “You’ve got to come up with the money, and it comes from the taxpayers.”
A “defined contribution” plan, a 401(k) allows employees and employers to contribute money toward an employee’s retirement, with the money put into mutual funds — with the employee’s contributions going into funds often chosen by the employee, from a collection of funds offered through the plan. As such, returns are not guaranteed. Employees draw money from their 401(k) upon retirement. By law, annual contributions are limited.
• Pros (for an employee): “You get matching dollars (from your employer) up to a certain point, and after that you can put in your own money,” Thomas says. “As long as you continue, you have a nice nest egg at the end of that time, provided you’ve invested wisely.”
• Cons (for an employee): The plan’s benefits can turn negative in a hurry if an employee doesn’t put money into the account or the investments end up being somewhat less than wise. Returns are not guaranteed. “It’s the discipline factor,” Thomas says. “When a person doesn’t have enough discipline to contribute consistently, every paycheck, the plan never grows. Then they don’t have any money when they retire.” If investments in the fund decline, the 401(k) account balance drops.
• Pros (for the state): Under such a plan, the state would know exactly what it would need to pay, upfront, depending on how much it would be willing to pay to match each employee’s own contributions. And that contribution could be changed every year, with proper notification. And the state contributions would match contributions, or a share of contributions, not require them. “It’s all provided employees put money in there,” Thomas says. “If they don’t, the state doesn’t have to put any money in, and that saves them even more money.”
• Cons (for the state): “You still have expenses,” Thomas says. And the state could be subject to additional regulation if it got into 401(k)s or similar defined-contribution plans. It’s also possible that employee morale could suffer with changes to retirement benefits.
By Mark Fagan
As Kansas University continues to strain in the face of the realities of state budget cuts, indications of the effects are all over campus.
The school will absorb another 1.193 percent reduction in its state funding for the 2012 fiscal year that begins this month.
Sure, there are the big things. Rodolfo Torres, a KU math professor who will serve as the faculty senate president this year, is quick to mention that faculty and staff have gone three years without salary increases.
“It’s really affecting the morale of the faculty,” he said, and he has heard of some who have left the university for higher-paying jobs.
KU recently approved limited raises as part of a tuition increase.
But KU is seeing all kinds of other signs of scrimping, saving and increased efficiencies all over campus. Here’s a quick look at just some:
• Mark Reiske, associate director of design and construction management, said that the university’s utility budget has been strained at times.
The university designates a set amount of money for utilities each year, he said. Thermostats in classrooms are controlled centrally.
“Those have crept up in cooling seasons and crept down in heating seasons,” he said.
Also, some classrooms that are inefficient to keep cool haven’t been used this summer, he said, including some rooms in the military science building and in Summerfield Hall.
• KU Libraries is one area where budgets have been held stable, said Lorraine Haricombe, the dean of libraries. But that doesn’t mean they haven’t had to make cutbacks. As journal subscription prices have continued to go up, the libraries consulted faculty members to see which journals — both print and electronic — are in the highest demand.
And the libraries just began offering donors an opportunity to sponsor a journal subscription.
“It’s a fairly new idea,” Haricombe said, adding that “a couple” of donors have signed up so far. It’s not a model the libraries can rely on into the future, she said, to ensure that the most relevant journals are produced.
• In KU’s College of Liberal Arts and Sciences, the overall number of faculty members has shrunk by 20 since the budget cuts began in 2009, said Danny Anderson, the college’s dean.
The college has tried to avoid using adjunct faculty and graduate students to replace the teaching loads, Anderson said. Some faculty have voluntarily taught overloads, but, in many cases, class sizes are growing and courses are being offered less frequently.
• Matt Cook, an information specialist working in the biology department, said he didn’t know how cuts were affecting the IT department on a grand scale.
But he is seeing signs of decreased staffing levels in his area — the two-man team that works on IT issues for the biology department would soon be shrinking to one-and-a-half, he said, as his co-worker would be splitting time between biology and chemistry.
• In KU’s School of Pharmacy, the school is cutting its continuing education for licensed pharmacists as a cost-saving move, said Ken Audus, KU’s dean of pharmacy.
Many members of the industry offer the training for free, which is not something the school could do, Audus said.
Though he said he has heard complaints, he said the decision helped preserve other things the school was doing.
“That’s not something you want to put on the backs of students,” Audus said.
• Even in places at the university that aren’t seeing budget cuts, that doesn’t mean they’re not looking for ways to save.
At Watkins Community Health Center, student fees and fees for service pay the bills, and they’re holding relatively steady, said Joe Gillespie, Watkins associate director of student health services.
But they’re still moving away from most paper forms to cut back on costs. Student forms such as personal and family health histories must be filled out online now, he said, through the student’s personal online portal. Appointments may also be made online, he said.
l In the office of research and graduate studies, some staff members have left for higher-paying jobs, said Kevin Boatright, communications director for the office.
Some of those have even taken other jobs at KU to obtain a salary raise, he said.
As the move to replace those staff members has been slower, more and more of the administrative work associated with research grants is being passed on to faculty members, he said.
The office is managing well overall, in spite of those challenges, he said.
By Andy Hyland
Before Kansas University presented its tuition proposal to the Kansas Board of Regents, much of the discussion on it took place among a 19-member advisory committee that helped set the new rates.
The eight students, five faculty, four administrators and two staff members took time to examine proposals, and offered feedback on how they wanted tuition funds used.
Lisa Wolf-Wendel, a professor in the School of Education, served on the committee, and said a lot of the discussion focused on how to best allocate money for raises for faculty and staff.
The group was divided into two camps, she said. One of who wanted to see the targeted raises for the most excellent faculty, and another who was concerned about the effects that might have on the morale of overall faculty.
If faculty were rated on a scale from one to five, no one in the group wanted to reward faculty who got a two, she said. Some were concerned about where the line would be drawn to determine who would get raises, she said.
“There’s probably more than 10 percent (of KU faculty) who are great,” she said.
The group eventually settled on targeted raises to top faculty and staff — with no raises given until January.
For the Lawrence campus, only one student on the committee — a student seeking a master’s degree — would actually be paying a higher tuition rate next fall.
The other students on the committee were either graduating seniors or were among the nearly two-thirds of KU students whose tuition would not increase because their rates are guaranteed not to increase for four years. The rate for incoming freshmen went up by more than 6 percent.
Jack Martin, a KU spokesman, said the group played an important role, as it set the recommendations forwarded to the chancellor. He said the students on the committee were chosen by student government representatives.
Regardless of where they were in their careers, he said the students were mindful of keeping tuition low, and weren’t focused on the benefits they would get for themselves without paying any extra money.
“I just don’t think they think like that,” he said.
Brandon Kuzara, a sophomore from Colorado Springs, Colo., said he was asked by a friend in student governance to serve on the committee, though he wasn’t involved in governance himself. They were looking for a male, out-of-state student, he said.
He said he felt like students’ voices were heard, and they held the line on raises for faculty and staff.
“We didn’t like what we initially heard,” Kuzara said, and the group agreed to change it. He also said the discussions remained collegial.
In addition to raises, students also pushed for more financial aid, and the return of learning communities, groups of students who take courses based on a central theme. Those had been eliminated in prior budget cuts.
Kuzara said even though he wasn’t personally facing a tuition increase, he was compelled to keep out-of-state tuition low, because that’s one of the main reasons he was attracted to KU.
“Being from out of state, the tuition at the University of Kansas was very competitive,” he said, and he wanted to ensure it stayed that way. “I didn’t want to see a 10- to 15-percent increase.”
By Andy Hyland