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The Honolulu Advertiser
Posted on: Sunday, March 23, 2008

Spending on Hawaii schools outstrips results

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By Loren Moreno
Advertiser Staff Writer

Education spending has risen steeply over the past decade while enrollment has declined and test results are mixed, causing some to question whether more money would improve Hawai'i public schools.

The state Department of Education has seen its total operating budget grow from $972 million in 1999 to $2.34 billion this school year.

The DOE and its budget have been the target of criticism by some state lawmakers. State Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), has called the department a "bloated and inefficient bureaucracy."

That has forced DOE officials to defend a budget that has increased by more than 150 percent over the past 10 years.

James Brese, the DOE's chief financial officer, said that a number of factors have contributed to the increase in the DOE budget, including teacher salary raises, inflation and federally mandated spending.

Another factor is that services that used to be handled by other state agencies were transferred to the DOE's budget.

"Some of these different things were always being done, but they were on someone else's books," Brese said.

For instance, student transportation services, school health aides and minor repair and maintenance funding a total of about $77 million per year were all transferred to DOE's budget from another state agency, Brese said.

A more substantial transfer of services came back in 2001 when the DOE took on its employee benefit costs and debt servicing, which were originally handled by the state Department of Budget and Finance. Those costs account for $619 million per year or 31 percent of the DOE's general budget, Brese said.

Despite the explanations, Hemmings wants a comprehensive management audit of the DOE, saying the department receives an overwhelming portion of the state funds without "accountability or transparency."

"For years now, (the DOE's) mantra has been give us more money and we'll do a better job. And for years we've given an exorbitant amount of money and they've done a worse job," Hemmings said.

He cited recent College Board SAT scores, which have declined over the past several years.

In 2002, the math score on the SAT taken by public school students was 493, slightly below a national average of 512.

In 2007, math scores declined to 479.

National scores also decreased in 2007, to 509.

Reading scores on the SAT, previously known as the verbal score, have essentially remained flat.

"We keep throwing money at education and we're producing one of the worst products in the nation," Hemmings said.

The charge is not fair, said Daniel Hamada, DOE assistant superintendent of curriculum, instruction and student support.

Student achievement has been "steadily growing," Hamada said, citing improved Hawai'i State Assessment scores and recent National Assessment of Educational Progress scores.

Under a recent Hawai'i State Assessment, in 2007 a total of 184 of 282 schools or 65 percent met benchmarks set under the federal No Child Left Behind law.

That compares with only 100 schools that achieved their yearly goals in 2006, according to DOE data.

Hamada said that on the recent NAEP scores, which measure fourth- and eighth-grade math and reading compared to the nation, Hawai'i was the only state to have an increase in scores in both subject areas and both grade levels.

"If you look at NAEP scores, Hawai'i has been narrowing the gap. That in itself is the proof. In terms of student achievement, I would have to respectfully disagree with Sen. Hemmings," Hamada said.

Sen. Norman Sakamoto, D-15th (Waimalu, Airport, Salt Lake), chairman of the Senate's Committee on Education, said court mandated spending has contributed to what appears to be a substantial budget increase.

"It's not all a straight line over 10 years. But I don't want to be an apologist and say that everything is well spent. I think we need to continue to work on improving efficiency," Sakamoto said.

One portion of spending that has increased dramatically is programs for special needs students, Sakamoto said.

Under the Felix Consent Decree, spending on special education and other special needs programs have increased by more than $400 million since 1994 when the state settled a lawsuit by agreeing to the decree. Today, special education spending makes up $523 million 25 percent of DOE's budget.

Sakamoto likened the current budget situation to a leaky dam, where money is flowing but some slips through the cracks.

"Right now the dam is leaking and we need to do a better job spending the resources we have. But I personally believe we need more resources," he said.

Under the 2004 Reinventing Education Act principals were given control of 75 percent of their school's budget. Currently, the money that goes directly to schools is about $909 million per year, or about 43 percent of the DOE's budget.

Sakamoto said giving principals the flexibility to spend school-level money was a good idea. But he said he believes that principals are not given enough money and are often forced to cut positions.

"The flexibility part is working. But I believe they need more dollars, so they can decide 'What do we do with $43,000?' versus 'Where do we cut because we're $43,000 short?' " Sakamoto explained.

But Hemmings cited several audits, including a scathing review of Kailua High School in 2006, that questioned whether money is being spent responsibly.

Hemmings is calling for a comprehensive audit of the entire department something that hasn't been done since 1973.

Brese admits that the DOE is not perfect and said it is always trying to improve. For example, Brese said, assistant superintendents and program managers are asked to carefully examine their budgets before they ask for more money.

Brese also said the DOE has been regularly audited by the state Office of the Auditor.

"Certainly our audits haven't been squeaky clean. ... We're audited probably more than any other state agency," Brese said.

Board of Education Vice Chairwoman Karen Knudsen said big increases in teacher and staff salaries have also played a critical role in the Department of Education's rising budget.

The average teacher salary has increased by 42 percent over the past decade from $29,208 to $41,496.

"I know with No Child Left Behind that the department has been pouring a lot of money into staff development. ... My question is how are we measuring the effectiveness of this?" Knudsen said.

Kathryn Matayoshi, executive director of the Hawaii Business Roundtable, said there is a reasonable expectation that the budgets of state agencies or companies will increase with time, especially over a period of 10 years.

"Definitely for every business, the cost of doing business is rising," Matayoshi said.

Brese pointed out that Hawai'i's consumer price index has increased by 27 percent over the past decade, which he said means a $1 billion budget would have to grow by $260 million to still provide the same services.

"Inflation is always going to impact," Brese said. "That's the same with anybody's budget."

Reach Loren Moreno at lmoreno@honoluluadvertiser.com.

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