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Sunday, October 29, 2006

Half-Day Math---Short and Long Term; Cutting Back on pasta--Loading up on Ice Cream

As a young man, I had the pleasure of working in an accounting firm. It was a firm that specialized in start up companies, and also firms that were struggling. Sometimes stock rather than cash was the method of payment for services.

In start up firms, costs were always a very important matter for attention. One of the accountants always used to smile and say, "Did I ever tell you about the guy that lost a little on each sale, but made it up on volume? Then the pause. Then the laughter all around.

It is basic in start up firms that are in financial trouble that when managers discuss where they are financially, after quickly talking about the numbers, they quickly spin to ideas of larger revenue down the road. It is a deadly sign that there are cost problems in their analysis.

Thus, in the discussion of the Half-Day Kindergarten, we see in the paper that it is supposedly all about transportation. Yes. Transportation is part of it. That will be discussed further in depth. And Revenue is part of it. But before all the spin. Let's meditate a bit on COSTS.

12 Students, Half Time teacher costs of $21,000. Cost per student for salary and benefits is $1750 per student.

Full Time Kindergarten, Most recent Hire in district, compensation package $70,295---Comparing apples to apples. Cost per student in class of 12---Cost per Student in salary and benefits is $5859.

Now---compare apples to apples---- move to ideal class size of 16: Half Day Cost per student is $1313. Full Day teacher cost with 16 students is $4388.

So---just like in a troubled company---the jugler is always trying to distract the public, or the accounting firm as to where the problem is.

That is the short term cost view; Now the long term view:



Recently I discussed the long term view of half day kindergarten with one of the many newspapers that is covering the issue here in Evansville.

The reporter had lived in a small town with one sibling and both had gone to the same school system all their school career. Both had attended---half day kindergarten. I mentioned the obvious----families come to school systems. One must look at this from the family perspective.

Over their 13 years each in the school system, assuming that "x" is a standard and constant reimbursement amount from the state, over the 13 years, the two children earned 25/26 of what was possible. So---what was the "loss" or what what was the less that top amount--less that 4%. Now consider that reimbursement amounts always go up, and Kindergarten is the first grade, so over 13 years what is the "lost" amount-----I would guess 1% or less.

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In summary---whether it is dieting or accounting, one cannot cut back on pasta and load up on ice cream.

There are cost problems---but it has nothing to do with our half-day kindergarten teacher salary----this is one of our most bargain basement cost elements.

At the School board meeting in November, expect the families to present the spreadsheets. After all-----when we do budgets.....we do numbers....Numbers are not letters and words.......Numbers are not rants.

Stay tuned.

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