K 12 Funding (1 27 09)

Funding

K-12 Public

Schools

The “nuts & bolts” of school

finance in Washington State

Ben Rarick

Office of Program

Research

January 27, 2009

Overview of the Presentation

A presentation in 2 parts:

Part 1 - Build a basic foundation of knowledge about the

funding formulas.

Part 2 – Tracking the data on school funding

Provide an overview of school spending & funding statistics.

Identify emerging policy issues and areas of rapid change in the

finance of Washington public schools.

1/19/20092Prepared by the House Education Appropriations Committee Staff, OPR

Part 1 – The formulas


General Apportionment Basic Funding Concepts

Student Enrollment

Formula Staff Units (Cert. Instructional, Administrative, & Classified Staff)

Salaries & Benefits(LEAP 12E document)

Nonemployee Related Costs (NERC)(provided on a per cert staff basis)

State General Apportionment“The State funds a certain number of staff units based on how many students are enrolled. Staff units are

funded at different amounts in different districts”

=


http://leap.leg.wa.gov/leap/budget/leapdocs/k12docs.asp

Formula factors - enrollment

Factor #1 - Enrollment Reported by districts first school day of each month,

September – May.

Average of 9 monthly counts produces “annual average

enrollment” (AAFTE).

FTE defined in W.A.C. as minimum 4 hrs/day Grades 1-3;

5 hrs/day Grades 4-12.

FTE enrollment is different than headcount enrollment.

About 979,594 FTE enrollment for SY 2008-09.

About 1,031,311 October headcount enrollment.

The difference? Some students are part-time.

E.g. running start and skill centers


Formula factors – staff allocations

Factor #2 - Staff Units for 3 types of school staff

Certificated Instructional Staff

Up to 53.2 staff units per 1000 in grades K-4 (18.8 pupils/staff)

The minimum allocation in K-3 is 49.0/1000 and in grade 4-12, 46.0/1000.

The difference between the minimums and maximums K-4: “use it or lose it”

CIS includes Teachers and Educational Staff Associates (Nurses, Social

Workers, Speech/Language Pathologists, etc)

Vocational & Skill Centers get enhancement, as do small schools/school

districts.

Certificated Administrative Staff

4.0 staff units per 1000 AAFTE (250 pupils per staff)

Includes superintendents, principals, vice principals, etc

Classified Staff

17.02 staff units per 1000 AAFTE (58.75 pupils per staff)

Statutory minimum: 16.67 per 1000 students (RCW 28A.150.260)

Includes janitors, aides, bus drivers, clerks, etc


Formula factors –

Salaries & Benefits

Factor #3 - Salaries & Benefits

Certificated Instructional Staff - salary determined by multiplying base salary by “staff

mix” factor (a metric combining years of experience & education level).

Example: Everett School District (grandfathered school district)

SY 2008-09 base CIS salary: $36,135 (x) staff mix of 1.53947

Therefore, state-funded CIS salary allocation for SY 2008-09: $55,629

13 districts are “grandfathered” at higher base salaries for 2008-09.

Certificated Administrative Staff salary allocations are set in the Budget (LEAP doc

12E) and are subject to I-732 increases annually.

SY 2008-09 - Salary amounts range from a high of $84,362 (4 districts) to a low of

$57,986 (89 districts).

Classified staff salary allocations are similarly established in the Budget.

SY 2008-09 - Salary amounts range from a high of $36,777 (Seattle) to a low of

$31,865 (225 districts).

Fringe Benefit Rates & Insurance Benefit Rates

Fringe: Includes pensions, Medicare, other

Governor‟s budget for FY10: Certificated: 16% of salary & Classified: 17% of salary

Governor‟s budget for FY10: Insurance benefits (including health, life, disability): $774

per employee, per month ($9288/year).


Formula factors - NERC

Factor #4 - Non-employee related costs (NERC)

Includes such things as supplies, materials, texts, computer costs, etc

Estimated $10,179 per certificated staff unit for SY2009-10.

Translates to about $504 per student FTE.

This $504/student is spent by districts, on average, in following

distribution (approximate):

Central Purchases - $141

Technology - $117

Utilities - $97

Instructional Materials (books, etc) - $70

Professional Development - $48

Insurance - $23

Maintenance & Custodial Costs - $17

Security - $5

Vocational ($24,999) and skill centers ($19,395) receive more.


Additional amounts for

higher cost students

Special Education

.9309 x‟s the Basic Education allocation, 12.7% cap per enrollment

Basic Education Allocation Rate (“BEA Rate”) estimated at about $5,225 for

SY2008-09.

Birth - to - Pre-K: BEA x‟s 1.15.

Opportunity for safety net funding.

Bilingual Education

$904 rate per bilingual student for SY2008-09.

Free/Reduced Lunch Eligible (Learning Assistance Program)

$285 rate per student unit in SY2008-09.

Additional LAP units provided for districts with:

Concentrations of poverty above 40%; and

Concentrations of English Language Learners above 20%.

Highly capable

Maximum 2.3% of district enrollment.

$406 rate per eligible student in SY2008-09.


Local Effort Assistance (LEA)

Districts cannot levy more than 24% of their levy base (comprised

of eligible state & federal funds)

91 districts are grandfathered at higher levy rates (e.g. Kahlotus @ 33.9%)

The issue: property poor districts must tax at higher rates to raise

the same dollar amount.


Property Poor Districts

Highest 12% Levy Rates

Property Wealthy Districts

Lowest 12% Levy Rates

Wellpinit $ 36.76 Shaw Island $ 0.16

Nespelem $ 20.91 San Juan $ 0.20

Taholah $ 12.29 Orcas Island $ 0.21

Keller $ 9.45 Lopez Island $ 0.22

Mount Adams $ 6.86 Grapeview $ 0.28

State LEA formula equalizes to 12% - “meeting half way”

A few notable levy facts…

16 districts with no voter approved levy 9 more districts have levies too small to maximize LEA eligibility.

These 25 districts represent $2.7 million in unrealized LEA payments.

244 districts raise less than their levy lid allows 196 districts raise less than 95% of their levy lid (66% of districts).

132 districts raise less than 80% of their levy lid (45% of districts).

Represents approximately $158 million in unrealized levy capacity.

51 districts in “roll back status” – voter approved levy exceeds lid.


Pupil Transportation formula

The formula multiplies the number of children transported for each radius mile

route category, x‟s a distance weighting factor, x‟s a funding rate per mile.

The distance weighting factor is designed to adjust for the use of “as the crow flies”

linear miles, rather than actual miles driven.

The minimum load factor is designed to adjust for diseconomies of scale associated

with low ridership & the special load factor is designed to adjust for transporting

specialized populations.

Formula does not pay for routes within a mile of school; however, K-5 students within

a mile generate additional funds which may pay for roadway improvements, crossing

guards, bus routes, etc.

Example for one basic student on a two-mile bus route*:

Distance weighting

Factor for 2mi route

3.2

# of students

Transported

1

Funding Rate

per Unit (FY06)

$42.52

# of Trips to/from

school

2X‟s X‟s X‟s

Total (for example student)

$272.13Source: OSPI *if district qualified for minimum load factor, the amount for this child would be more


Formula overviewWhy do some districts get more money than others?

Grandfathered Salary Status for certificated instructional staff.

Differences in # of high cost students (special education, bilingual,

free/reduced lunch eligible, etc).

Differences in staff mix (less experienced staff generate fewer state

dollars).

Differences in administrator and classified salary rates (LEAP

Schedules).

Small school/district enhancement (remote & necessary).

Levy Equalization Assistance (State Assistance for Property Poor

Districts).

Local deductible revenues (e.g. timber sales).

Transportation formula (radius miles, # of riders, etc).


Part II –A) Selected Spending & Funding Statistics

B) Areas of Rapid Budget Growth


Projected K-12 Enrollment Growth

936,434.76 975,278.50

979,594.18

984,825.18

988,847.91

993,996.40

1,106,837.24

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

1,150,000

School Year

K-12 FTE Enrollment Projections – 1997 to 2021Source: Caseload Forecast Council, November 2008 forecast

K-12 FTE Enrollment

Prepared by the House Education Appropriations Committee Staff, OPR15 1/19/2009

Overview of K-12 State Funding

GENERAL APPORTIONMENT (RCW 28A.150.260) $10,048 66.7%

SPECIAL EDUCATION (RCW 28A.150.370) $1,325 8.8%

TRANSPORTATION (RCW 28A.160.150) $610 4.0%

LEARNING ASSIST. PROGRAM (RCW 28A.165) $260 1.7%

BILINGUAL (RCW 28A.180) $164 1.1%

INSTITUTIONS (RCW 28A.190) $41 0.3%

SUBTOTAL: BASIC EDUCATION PROGRAMS $12,448.1 82.6%

STUDENT ACHIEVEMENT FUND (I-728) $911 6.0%

INITIATIVE 732 COLA & OTHER COMP INCREASES $355 2.4%

LEVY EQUALIZATION (LEA) $486 3.2%

EDUCATION REFORM $377 2.5%

ENHANCED STAFFING RATIOS (K-3 CIS & Classified) $296 2.0%

TWO LEARNING IMPROVEMENT DAYS $71 0.5%

STATEWIDE PROGRAMS/ALLOCATIONS $40 0.3%

STATE OFFICE & ED AGENCIES $35 0.2%

HIGHLY CAPABLE $19 0.1%

EDUCATIONAL SERVICE DISTRICTS $18 0.1%

FOOD SERVICES $6.3 0.0%

SUMMER, OTHER SKILLS CENTERS, & VOC. EQUIPMENT $5.7 0.0%

PUPIL TRANSPORTATION COORDINATORS $1.8 0.0%

Subtotal: Non-Basic Education Programs $2,623.0 17.4%

TOTAL - STATE FUNDS $15,071.1 100.0%

2009-11 BASIC EDUCATION PROGRAMS

(Dollars in Millions)

2009-11 NON-BASIC EDUCATION PROGRAMS

(Dollars in Millions)

Maintenance-level Estimates


This is not a complete list of every non-basic education programs

Highlights:

•About $15 billion per biennium in

K-12 (at Maintenance-level).

•Basic Education usually about

80% of total.

•Largest Recent % Growth is in

Education Reform Budget (2003-

05: $75.6 million).

Where does the Money Come From?Total K-12 Revenues by Source

State71.6%

Local Taxes16.0%

Federal8.9%

Other Revenues & Reserves

3.6%


Washington is

heavily state

funded. National

average is

around 50%.

What is the Money Spent On?K-12 expenditures by function

Teaching60.7%

Other Support Services11.0%

Teaching Support8.5%

Central Administration

6.2%

Building Administration

5.9%

Pupil Transportation4.1%

Food Services3.5%

Teaching & Teaching Support

is over 70% of budget.

Administration is about 12%.


Per Pupil Spending Over TimeAll Funding Sources


19

$5,608

$9,418

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

To

tal P

er

Stu

de

nt S

pe

nd

ing

Total Per-Student Spending 1994 to 2008

Sources: Reflects school year amounts from OSPI F195/F196 School Financial Services and OSPI enrollment reports. From Citizen’s Guide for K-12 Finance

Implicit

Price

Deflator

Adjusted

Seattle

Consumer

Price Index

Adjusted

Sources: Reflects school year amounts from OSPI F195/F196 School Financial Services and OSPI enrollment reports. From Citizen’s Guide for K-12 Finance

Implicit

Price

Deflator

Adjusted

Seattle

Consumer

Price Index

Adjusted

Note: This chart shows the rate of funding changes

over time as compared to inflation. It is useful for

evaluating rates of change in funding, but not

necessarily the level of funding.

Per Pupil Spending Over TimeJust State Funding Sources


20

$4,342

$6,740

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sta

te F

un

din

g P

er

Stu

de

nt

State Funding Per-Student Spending 1994 to 2008

Sources: Reflects school year amounts from OSPI F195/F196 School Financial Services and OSPI enrollment reports. From Citizen’s Guide for K-12 Finance.

Implicit

Price

Deflator

Adjusted

Seattle

Consumer

Price Index

Adjusted

Note: This chart shows the rate of funding changes

over time as compared to inflation. It is useful for

evaluating rates of change in funding, but not

necessarily the level of funding.

K-12 Share of Total Budget has declined


44.0%42.3% 41.7% 41.3%

38.8%40.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

1997-99 1999-01 2001-03 2003-05 2005-07 2007-09

Percent of Near General Fund-State Spent on K-12 Public Schools

Source: WinsumWhat percent K-12 comprises of the total budget reflects spending priorities, but also

caseload growth in K-12 relative to other budget areas (e.g. medical assistance).

Two different ways of looking at K-12 financeHow much is funded ($’s) vs. What is funded (programs/services)


22

Important note: Most state allocations are for allocation purposes only. How districts choose to utilize resources will

vary considerably across the state, and will also vary considerably from what is depicted here.

Estimate of Educational Programs & Service Levels Supported by the Budget, based on Statewide Averages

2009-10

General Apportionment to Public Schools

Estimated state-funded student-teacher ratio: Estimated state-funded class size:

21.0 grades K-4 26.2 grades K-4

24.3 grades 5-12 29.2 grades 5-8

29.2 grades 9-12

$55,094 Average state-funded teacher salary $62,382 Average state-funded administrator salary

$74,126 Average state-funded total teacher compensation $33,616 Average state-funded classified salary

Estimated number of state-funded staff in a school of 500 students:

1.4 Administrators 0.2 Student Health Services (Nurses/Social Workers)

0.5 Librarians/Media Specialists 6.8 Classified Staff (Aides, Secr, Custodians, Food Service)

0.8 Guidance Counselors

Non-employee Related Costs (NERC)

$10,179 Amount allocated per certificated instructional staff person

$504 Amount allocated per student

Of the amounts provided on a per pupil basis, districts on average spend the allocation in the following proportions:

$95 Utilities $17 Maintenance & Custodial Costs

$22 Insurance $137 Central Purchases

$46 Professional Development supplies $114 Technology

$68 Instructional Materials (books, etc) $5 Security

Two different ways…(continued)


23

1.5 Estimated hours of additional instruction per week supported by LAP budget

Instruction assumed to be provided in groups of 15 LAP "students" by a fully certified teacher

4.9 Estimated hours of additional instruction per week supported by bilingual budget

Instruction assumed to be provided in groups of 15 bilingual students by a fully certified teacher

2.1 Estimated hours of additional instruction per week supported by highly capable program budget

Instruction assumed to be provided in groups of 15 students by a fully certified teacher

$4,862 Estimated excess cost allocation per eligible student for the 2008-09 school year

Based on 93.09% of basic education allocation rate, including compensation increases.

$460

$110 K-4 Class Size Reduction 0.9 Teacher FTEs in a elementary school

$148 Grade 5-12 Class Size Reduction 0.9 Teacher FTEs in a secondary school

$48 Extended Learning 0.9 Hours/week of extended day for 1/3 of the study body

$84 Professional Development 0.5 FTE coach or instructional facilitator

$6 Early Education Interventions

$3 Facility Improvements

$16 Indirect Costs

$44 Other (including savings)

$460 total

Learning Assistance Program

Transitional Bilingual Education Program

Highly Capable Student Program

Special Education Excess Cost Allocation

The Student Achievement Fund (I-728)

Amount per pupil allocated from the Student Achievement Fund to support various reform initiatives.

Districts on average spend the allocation in

the following proportions (per pupil): Estimates of what these amounts fund in a school of 500:

Small school districts are prominent in

Washington State

Out of the 295 school districts in Washington: 106 school districts have fewer than 500 students.

77 school districts have fewer than 250 students.





Benge – 5.5 students (southeast of Ritzville)

Evergreen (Stevens) – 5.5 students (northwest of Spokane)

Star – 9.5 students (Pasco)

Small school/district subsidy in K-12 budget: $46 million/year.

26 districts had more than $20,000/pupil in total revenues for 2007-08;

however, none of them had more than 200 students.Enrollment as of December, 2008


Rapid change in Washington K-12 financeareas of budget growth

Increase in English Language Learners (ELL) Since 1987, K-12 enrollment is up 35%, while ELL enrollment is up 520%.

Safety Net for High Cost Special Education Students 2005-07 safety net: $16 million state funds.

2009-11 Governor Proposed: $74 million state funds.

National Board Certification (NBPTS) By the end of the next biennium, National Board certificates in WA are projected to be 4

times larger in number than in 2006.

Budgeting for 4,550 NBPTS teachers for the 09-11 biennium.

Supplemental pay/TRI pay for teachers Since 2001, base pay is up 18%, while „total supplemental pay‟ is up 80%.

Online learning/ALE Number of students taking courses for credit online has more than tripled since „06.

In ‟08, about 6500 students enrolled online; in „06, there were about 1800 enrolled.

Running Start Participation (headcount) has increased five-fold since 1993.

Currently about 13,500 FTE.

WASL Budget 2003-05 WASL budget: $35.9 million.

2009-11 Governor Proposed: $81.1 million.


Emerging Issues in K-12 Finance in WA State

3 Lawsuits Pending Special Education Coalition (Appeal) – Special Ed Funding

Federal Way – Salary Equity

McCleary – General Adequacy

Basic Education Finance Task Force

School Construction Task Force

Pupil Transportation Funding Study

WASL Work Group

Comprehensive School Health Task Force

Federal Stimulus Package & NCLB Negotiations

State Board of Education – “Core 24” & Accountability System


Appendix – Tracking Districts with Low

Fund Balances


27

Source: OSPI F196 Report for 2007-08

District Enrollment

Total

Revenues

Ending Fund

Balance

Fund

Balance as

% of

Revenues

Evaline 47 443,598$ (46,560)$ -10.5%

Montesano 1,271 10,878,262$ (49,597)$ -0.5%

Onalaska 870 7,658,838$ 27,508$ 0.4%

Arlington 5,289 45,579,812$ 184,713$ 0.4%

Colville 2,183 18,251,355$ 218,470$ 1.2%

White River 4,297 39,140,008$ 651,617$ 1.7%

Cashmere 1,426 12,126,970$ 223,390$ 1.8%

Bridgeport 696 7,265,137$ 140,215$ 1.9%

North Thurston 13,158 114,173,567$ 2,222,393$ 1.9%

Statewide Average 7.5%

Districts with Ending Fund Balances Below 2% (2007-08)

Appendix

National Comparisons of K-12 Spending


28

ArizonaUtah

NevadaMississippi

Idaho, $7,785 TennesseeOklahoma

South DakotaTexas

FloridaNorth CarolinaMissouriNorth DakotaAlabamaIowaSouth Carolina

NebraskaCalifornia, $9,870 New MexicoWashington, $9,980 KentuckyLouisianaColoradoIndianaOhioGeorgia

U.S. Average, $10,615 MontanaKansasOregon, $10,773

West VirginiaMinnesota

ArkansasWisconsinVirginiaMichigan

IllinoisHawaiiAlaska

PennsylvaniaRhode Island

New HampshireMaryland

ConnecticutMaineDelaware

MassachusettsWyoming

New JerseyNew York

VermontD.C.

$0 $3,000 $6,000 $9,000 $12,000 $15,000 $18,000 $21,000

Public School Current Expenditures Per StudentSchool Year 2007-08

Source: Rankings & Estimates, National Education Association, Dec. 2008 From Citizen’s Guide for K-12 Finance

Appendix

National Comparisons of Student/Teacher Ratios


29

D.C.Vermont

Rhode IslandMaineVirginia

New JerseyNorth DakotaWyoming

New HampshireNew YorkArkansasConnecticutNebraskaMassachusettsMissouriMontanaIowa

KansasGeorgiaLouisianaMarylandWest VirginiaSouth CarolinaSouth DakotaNorth CarolinaTennesseeTexasPennsylvaniaMississippiWisconsin

New MexicoDelawareOklahoma

U.S. Average, 15.4 AlabamaFlorida

HawaiiIllinoisKentuckyMinnesotaOhio

AlaskaIndianaColorado

MichiganIdaho, 18.1

Washington, 19.0 Oregon, 19.1

NevadaCalifornia, 20.9

ArizonaUtah

0 5 10 15 20 25

Students Enrolled Per Teacher in K-12 Public Schools, Fall 2007

Source: Rankings & Estimates, National Education Association, Dec. 2008 - From Citizen’s Guide for K-12 Finance