Tulsa Tech superintendent explains large fund carry-overs

 In Oklahoma, education at all levels – common education, higher education and career technology education – amounts to the highest portion of the budget appropriated by the state Legislature.

The Oklahoma Department of Career and Technology Education (ODCTE)  is the umbrella agency for the Career Tech system, with a large degree of autonomy (and funding) afforded to local systems.

In interviews with CapitolBeatOK, one independent fiscal analyst made the case for reducing or ending state funding for Career Tech, while the head of the state’s largest system explained the larger-than-average annual fund carry-overs she manages.

ODCTE recently held its annual gathering of leaders at the various Career Tech systems. Career Techs in Oklahoma operate under the governance of locally-elected boards, and superintendents hired by those boards.

According to ODCTE, Career Tech derives funding from three sources: local taxes (73 percent of the total), state taxes (22 percent) and federal (5 percent). By way of comparison, in common education (K-12), the funding proportions are 23 percent local, 64 percent state and 13 percent federal.

Career Tech systems are able to carry balances from one fiscal year the next, in both the general fund and building fund. These funds are derived from property taxes paid by those who own property within a career tech district and/or county.

In addition to its importance in professional education, an examination of general fund balances and building fund balances for Oklahoma’s Career Techs, with a focus on Tulsa Tech — the local Career Tech system controlling the most resources in Oklahoma — illustrates the financial clout of vocational technical education in Oklahoma.

Over the last decade (actually, eleven years total), Career Tech general fund balances carried from one year into the next have increased from $51.1 million (Fiscal Year 2000-01) to $112 million as the system headed into FY 2011 (July 1, 2010 to June 30, 2011).

This represents an increase of about 119 percent in the decade. If the amount were adjusted for inflation, it would still amount to $66,241,596.24. In short, Career Tech inflation-adjusted growth in terms of general fund carryovers, in the past decade, has been $45.8 million, or 69.1 percent.

Over that same time, growth in the Tulsa Tech balances has been even more robust. The general fund balance carried forward was $9.28 million in Fiscal year 2000-01; moving into 2010-11 it was $21.7 million. The increase was 133.7 percent for the decade. Based solely on inflation, growth would have been $12,015,011.77. The inflation-adjusted growth was $9.69 million (80.67 percent).

As for the building fund balances across the state network of Career Techs, total building fund balances carried into the following year were $36.89 million in FY 2000-01. The total went to $106 million moving into FY 2010-11, an increase of 187.8 percent. If the sum had increased at the rate of inflation, it would be $47,734,071.81, so there was inflation-adjusted growth of $58.46 million, or 122.47 percent.

Turning to Tulsa Tech, building fund balances carried into the following year have increased from $6.7 million (FY 2000-01) to $33.4 million (moving into FY 2010-11) — an increase of some 397.5 percent.

If this amount had increased based solely on inflation, it would be $ 8,699,619.93, so there has been inflation-adjusted growth of $24.75 million, or 284.49 percent.

In an interview with CapitolBeatOK, the superintendent/CEO of Tulsa Tech explained her system’s much higher (as compared to other Career Tech sites in Oklahoma) carry-over rates.

Kara Gae Neal said, “Tulsa Tech’s Building Fund fluctuates primarily because we do not build a new facility until we can SAVE enough to construct, open and operate a facility debt-free and interest-free.”

“We have a Board-directed 10-year building plan that is annually reviewed and modified as needed. Our construction is on-going due to the training demands of the existing and emerging workforce population in metro Tulsa.  Start-to-finish construction is generally a three-year process.

“Tulsa Tech does not use our available bonding capacity because we don’t want to overburden taxpayers and compete with (and possibly risk the failure of) bond issues needed by our 14 sending school districts, Tulsa Community College, Tulsa City County Library, Tulsa Health Dept and Tulsa County in general.

As for the general fund, Neal commented, “When comparing funds between career techs, please remember we are the only one for a metropolitan service area of nearly 1000 square miles and our reserves reflect that budget need. Additionally we have 500 full time employees and another 500 adjuncts.

“Tulsa Tech’s full-time enrollment at five locations is 4000 high school students and adults.  Expansions and new facilities by Fall 2014 will allow 1000 more to be served. The variation in the General Fund carry over you mentioned is to staff and operate the newest facilities opening. That, like our reserve in the Building Fund, we save until we can open debt free and fully operational.”

Neal commented at length on other operational and policy issues. Many of those reflections will be posted in a future story.

CapitolBeatOK asked Jonathan Small, fiscal analyst for the Oklahoma Council of Public Affairs, to comment on the large balances carried forward in the Tulsa Tech system.

He replied, “Tulsa Career Tech is a local function and should be funded by local dollars. It is apparent that a reform needs to be that in some areas such as Tulsa, the building fund apportionment/millage is too large, and should be reduced, and those funds shifted to operations, and excess funds should be shifted to operations as well, so that state appropriations to career tech can be reduced.”