‘FISCALLY DISTRESSED’ DESIGNATION COULD LEAD TO MORE
ADMINISTRATIVE RESTRUCTURING

(March 15, 2005) Nine Arkansas K-12 school districts that the Policy Foundation (APF) recommended for administrative restructuring in 1998 have been designated as “fiscally distressed” by the state Department of Education. The nine districts are Altheimer Unified, Dierks, Dollarway, Eudora, Flippin, Lead Hill, Midland, Waldo and Western Yell County.

The “fiscally distressed” designation could lead to more administrative restructuring, defined by APF (1998) as “reducing the number of school districts into not more than 134 administrative units, i.e., one superintendent and staff.” The 1998 APF report explained:

“The General Assembly, the state Board of Education and the Department of Education must work hard and smart to utilize every dollar as cost-effectively as possible. By re-structuring existing superintendent positions into “administrative units” with multi-district responsibilities in most cases, we can reallocate millions of dollars back to the classrooms for instructional programs, teacher salary increases, more qualified certified personnel and technology.”1

The 1998 APF study found the potential savings to taxpayers from the K-12 administrative restructuring proposal could exceed $170 million over a 10-year period. The districts designated as “fiscally distressed”

APF Presented Administrative Restructuring to Supreme Court

Apologists for Arkansas’ K-12 status quo dismissed administrative restructuring when APF issued its 1998 report. But in recent years restructuring has emerged as a significant education policy reform. PA 60 of 2004 required restructuring in districts with fewer than 350 students in two consecutive years. Fifty-nine K-12 districts that APF (1998) recommended for restructuring were effected by the measure.2

APF presented restructuring to the state Supreme Court in an amicus brief that it filed in Lake View v. Huckabee, a school finance case. APF asked if school finance should be about the preservation of several hundred K-12 administrative jobs or about the future of 449,171 Arkansas K-12 students. What are Arkansas’ priorities? Children or administrative jobs?

Two Special Masters appointed by the Supreme Court addressed the issue in their final report:

“We also cannot ignore administrative consolidation, which has the potential for making more efficient use of the revenues already available.” (p. 89)

There would be approximately 230 Arkansas K-12 districts if those designated this week as “fiscally distressed” were all restructured pursuant to APF’s 1998 recommendation. Nearly 100 other K-12 districts would have to be restructured to meet the goal of 134 administrative units. Critics still dismiss administrative restructuring but it is conceivable this goal could be achieved within a decade.

---Greg Kaza

1 “Streamlining And Cost-Saving Opportunities In Arkansas’ K-12 Public Education System.” The Murphy Commission (Arkansas Policy Foundation) September 1998.
2 “The Dawn Of Administrative Restructuring.” APF research memo. 2004