1 The CPRE Wisconsin School Finance Adequacy Initiative: K-12 Education Today Allan Odden Anabel Aportela, Sarah Archibald, and Michael Goetz Consortium

1

The CPRE Wisconsin School Finance Adequacy Initiative:

K-12 Education Today

Allan OddenAnabel Aportela, Sarah Archibald, and Michael Goetz

Consortium for Policy Research in EducationJuly 13, 2005

2

Introductions

3

Our Goal

• To conduct a school finance adequacy study, or what the Doyle Commission called, a “cost-out” study

• How much money per pupil is needed to educate students to Wisconsin’s proficiency standards?

• There are many more details, but the above is the core of our Initiative

4

What We Will Produce …

• We will produce a per pupil number, with adjustments for varying pupil needs, and school and district contexts

• We will show how this would work in a foundation school finance formula, that is funded with a combination of state and local dollars, and allows any district to spend above the foundation expenditure level if it wants to – no limits on spending

5

What We Will Produce …

• We intend to build to a foundation level by showing resources for each school in the state, and …

• We will have on our web site our proposed resources for every school in the state – or most schools

6

Comparisons to Current Resources

• You will probably want to know how what we will propose for each school compares with current resources

• Very hard to do because we do not have school level resource data, and very hard even if we did

• We would be willing to collect resources for a range of schools in a range of districts, if we had volunteers from the Task Force – would require about 1 day of work with us per school

7

Roles

8

Roles of the Task Force• Understand what we are doing and

communicate to/with their constituencies

• Contextualize our approach to Wisconsin

• Add important Wisconsin information, perspective

• Tailor the recommendations to Wisconsin and its school system

• Raise issues we may have overlooked

9

Roles of our Policy Analyst Advisors

• Be our “critical friends”

• Critique and help us improve our analyses

• Provide additional insight from their own research and experiences

• Keep us honest

• Help us maintain our credibility with the Wisconsin education policy analysis community

10

Roles of the Work Group

• Help us find our way through the thicket of Wisconsin SF data

• Insure that our analyses use the right data and are on target

• Help maintain good and clear communication between our UW-CPRE group and the key state agencies that conduct the official school finance analyses for the state

11

Task Force Members’ Concerns and Issues Related to Wisconsin

School Finance Adequacy

12

Agenda

1. Context of Wisconsin Education, Spending and Teacher Salaries

2. Wisconsin Student Achievement

3. Current School Finance System

4. Equity Analysis

5. Previous Wisconsin Adequacy Studies

6. Our Approach to Wisconsin Adequacy

13

1. Wisconsin Context

14

Wisconsin State Population Since 1995

4,800,000

4,900,000

5,000,000

5,100,000

5,200,000

5,300,000

5,400,000

5,500,000

5,600,000

1995 1997 1999 Census2000

2002 2004

Increase of 8.45% since 1995

Source: Department of Administration, State of Wisconsin

15

Population Growth Unevenly Distributed

• Most growth is in four areas:– The counties around Hudson, which are

becoming “commuting” communities for the Twin Cities

– Dane County and surrounding counties– SE Wisconsin, which is becoming more of a

“commuting” community for the greater Chicago area

– In and around Green Bay

16

Percent Population Growth Since 1995Top 20 Counties

17

800,000

825,000

850,000

875,000

900,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Increase of 2.26% since 1995

Source: Department of Public Instruction, State of Wisconsin

Wisconsin Student Population Since 1995

18

School Districts in Declining Enrollment

Fiscal Year

# of Declining Enrollment Districts (Using Revenue

Limit Definition)Percentage of All School Districts

1997-98 131 30.8%

1998-99 163 38.3%

1999-00 188 44.1%

2000-01 193 45.3%

2001-02 216 50.7%

2002-03 232 54.5%

2003-04 250 58.7%

2004-05 267 62.7%

19

Number of School Districts byTotal Enrollment, 2004

Total Enrollment Number of Districts

10,000+ 11

5,000 – 9,999 17

4,000 – 4,999 13

3,000 – 3,999 24

2,000 – 2,999 42

1,000 – 1,999 106

500 – 999 128

1 – 499 101

Total Districts 442426 districts, 16 Independent Charter

schools


30% of Enrollment

30% of Enrollment

20

Student Enrollment and Diversity

Ethnicity 2001-2002 2002-2003 2003-2004

Asian American

3.35% 3.35% 3.37%

African American

10.15% 10.36% 10.52%

Hispanic 4.96% 5.38% 5.83%

American Indian

1.42% 1.46% 1.45%

White 80.11% 79.45% 78.83%


21

WI v. National School Finance:Change in Real Exp. Per Pupil

Nation Wisconsin

1960-1970 69% 66%

1970-1980 22% 16%

1980-1990 48% 60%

1960-1990 206%

So tripled!

209%

So tripled!

1990-2000 ~7% ~11%

22

WI v. Nation: ExpendituresNational Wisconsin WI Advantage

1981 $2436 $2670 + 9.6%

1986 3555 3973 + 11%

1991 5248 5946 +14%

1996 6103 7093 + 16%

2001 7436 9043 + 22%

2005 8554 9881 +16%

23

Wisconsin Per Pupil Expenditures1995-2005

0

2000

4000

6000

8000

10000

12000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

24

Wisconsin Personal Income1995-2005

0

5000

10000

15000

20000

25000

30000

35000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

25

Percent Changes in Personal Income and Per Pupil Expenditures

0%

1%

2%

3%

4%

5%

6%

7%

8%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Per Pupil Expenditures Personal Income

26

Increase in Expenditures Per pupil v. Increases in Personal Income Per Capita

• Annual increases in expenditures per pupil and Wisconsin personal income per capita tracked each other quite well from 1996 to 2001

• After that, expenditures grew at a faster pace than personal income, but that divergence began to change in 2005, though we have only estimated data for 2005

27

Wisconsin and Surrounding StatesPer Pupil Expenditures, 2004-2005

0

2000

4000

6000

8000

10000

12000

Wisconsin Minnesota Michigan Illinois Iowa

28

WI v. Nation: Teacher SalariesNational Wisconsin WI Advantage

1981 $17,602 $17,607 0 %

1986 25,206 26,347 + 4.5%

1991 33,015 33,100 0 %

1996 37,560 38,182 + 2 %

2001 42,988 41,646 - 3 %

2005 47,750 43,466 - 9 %

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National Average Teacher Salaries1997-2003

30000

35000

40000

45000

50000

55000

1997 1998 1999 2000 2001 2002 2003

30

30000

35000

40000

45000

50000

55000

1997 1998 1999 2000 2001 2002 2003

Wisconsin Average Teacher SalariesV. National Average 1997-2003

31

30000

35000

40000

45000

50000

55000

1997 1998 1999 2000 2001 2002 2003

Nation Wisconsin Michigan Illinois Minnesota Iowa

Wisconsin Average Teacher Salariesv. Surrounding States 1997-2003

32

2. Student Achievement

33

Major Trends in Achievement

1. Scores on Wisconsin’s state tests in terms of % at or above proficiency are twice as high as on the NAEP tests, which have a common national standard

2. Student test scores have not changed dramatically over the past 5-10 years

3. About 80% of students score at or above proficiency on state tests and about 1/3 on NAEP tests

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Major Trends in Achievement

4. Yes, Wisconsin is above the national average, but the nation on average is educating only about 30% of students to or above proficiency

5. Using a rigorous national standard, Wisconsin has a long way to go to educate 80%+ students to or above proficiency

6. According to the Education Trust, Wisconsin’s success with minority students is not good and the statewide achievement gap worsens from elementary, to middle to high school

35

Wisconsin 3rd Grade Reading Comprehension Test1999-2004

0%

20%

40%

60%

80%

100%

1999 2000 2001 2002 2003 2004

Advanced Proficient Basic Minimal

Source: Wisconsin Department of Public Instruction

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0%

20%

40%

60%

80%

100%

1992 1994 1998 2003

Advanced Proficient Basic Below Basic

Source: NAEP

National Assessment of Educational ProgressGrade 4 Reading

1992-2003

37

National Assessment of Educational ProgressGrade 4 Reading 2003

38

0%

20%

40%

60%

80%

100%

2002 2003 2004

Advanced Proficient Basic + Minimal No WSAS


WKCE/WAA CombinedGrade 4 Mathematics

2002-2004

39

0%

20%

40%

60%

80%

100%

1992 1996 2003


Source: NAEP

National Assessment of Educational ProgressGrade 4 Mathematics

1992-2003

40

NAEP Mathematics Percent at or Above Proficient

Grade 4

41

0%

20%

40%

60%

80%

100%

2002 2003 2004



WKCE/WAA CombinedGrade 8 Reading

2002-2004

42

0%

20%

40%

60%

80%

100%

1998 2003


Source: NAEP

National Assessment of Educational ProgressGrade 8 Reading

1998-2003

43

NAEP Reading Percent at or Above Proficient

Grade 8

44

0%

20%

40%

60%

80%

100%

2002 2003 2004




2002-2004

45

0%

20%

40%

60%

80%

100%

1992 1996 2003


Source: NAEP

National Assessment of Educational ProgressGrade 8 Mathematics

1990-2003

46

NAEP Mathematics Percent at or Above Proficient

Grade 8

47


2002-2004

0%

20%

40%

60%

80%

100%

2002 2003 2004



48

WKCE/WAA CombinedGrade 10 Reading

2002-2004

0%

20%

40%

60%

80%

100%

2002 2003 2004



49

3. Current Wisconsin Finance System

50

Wisconsin School Finance Structure

2004-05• Tier 1: Focus here is property tax relief for all districts

– Primary Guarantee: GTB of $1.93 million for first $1,000 of spending; this requires about a 0.52 mill tax rate

• Tier 2:– Secondary Guarantee: GTB of around 98th percentile, but varies with funding level –

estimated at $1,006,510 for 2004-05 – Secondary Cost Ceiling: For spending up to a set level, that increased by law about

$200-$400 each year; now set at 90% of statewide average shared cost per pupil– about $7,782 for 2004-05, or 6.74 mills

• Almost all districts have shared costs today above the secondary cost ceiling, a fact that was not true in the 1990s as a later slide will show

– So total mills for Tier 1 and Tier 2 is 7.26

• Tier 3:– Tertiary Guarantee: GTB at state average: about $407,300 for 2004-05– No spending ceiling, and no penalty for districts with assessed value at or below the

secondary guarantee– But for districts with wealth above that, negative aid that reduces Tier 2 aid at most

down to zero; Tier 1 aid stays the same and by law cannot be reduced by negative aid in Tier 3

51

Wisconsin School Finance Structure

2004-05• Revenue Limits– Each year each district can increase its revenues per pupil by

a fixed amount set by law, which ranged from $190 per pupil in 1993-94 to $241 for 2004-05; it can increase revenues above this only with a referendum with a simple majority approval; whatever is approved is rolled into the district’s shared cost for the next school year. Districts with shared costs below $7,800 in 2004-05 could increase spending to that level without a referendum.

• Qualified Economic Offer– If an increase in salary and benefits cannot be agreed to

during collective bargaining, the district can impose a QEO if it offers at least an increase of 3.8 percent in salary and benefits, excluding the extra costs of the education units and degrees. Recently health care costs have increased at a rate higher than 4 percent so can eat up all dollars in a QEO.

52

Categories of Districts ReceivingGeneral Equalization Aid in 2004-05

Category Number of Districts % of Total

Positive Primary & Secondary Aid 18 4.2%

Positive Primary, Secondary & Tertiary Aid 249 58.5%

Negative Tertiary Aid 117 27.5%

Primary Aid Only 37 8.7%

Special Adjustment Aid Only 5 1.2%

Total 426 100.0%

53

Additional WI School Funding Programs

State School Aid Appropriation 2004-05 Funding Level

1. General Equalization Aid* $ 4,218,691,0002. Special Education Aid $ 320,771,6003. SAGE Aid $ 95,029,6004. Milwaukee Parental Choice Program** $ 87,362,5005. Integration Aid (Chapter 220) $ 84,695,7006. Milwaukee/Racine Charter School Program*** $ 29,949,7007. Transportation Aid $ 17,742,5008. Special Adjustment Aid $ 13,222,8009. Tuition Payments Aid $ 9,741,00010. Bilingual-Bicultural Aid $ 8,291,400

* Includes $60 million from transportation fund (Segregated Fund) andMPCP (45%) and MRCSP (100%) funds

** 55% of funding is from state and 45% from Milwaukee Public Schools (MPS) general equalization aid reduction

*** 100% of funding is from general equalization aid reduction to all 426 school districts

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4. Wisconsin Equity Analysis

55

Wisconsin School Finance Equity

1. The two key equity statistics indicating degree of equal dollars per pupil are the coefficient of variation (CV) and McLoone Index– CV benchmark is less than or equal to 10%– McLoone benchmark is greater than or equal to 95%

2. The key equity statistic for the linkage between dollars per pupil and property wealth per pupil is the wealth elasticity– Wealth elasticity benchmark is less than or equal to

10%

56

Wisconsin Status on Equity Goal of Equal SpendingEquity Statistics

Aid Years: 1990-91 through 2002-03

Using shared Cost per Pupil 1990-91 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

Number of Districts 381 380 379 378 374 376 367

Number of Pupils 759,462 791,864 823,363 848,603 834,298 861,181 881,231

Secondary Cost Ceiling (Percentile)

4,660 (72%)

5,233 (66%)

5,617 (58%)

5,963 (50%)

6,285 (1%)

6,533 (0%)

7,230 (2%)

Coefficient of Variation 10.6% 10.5% 10.3% 10.0% 9.3% 8.9% 7.9%

McLoone Index 0.95 0.95 0.95 0.95 .94 0.97 0.95

Verstegen --- --- --- --- 1.002 1.027 1.008

All Statistics Weighted by Pupils.

Both CV and McLoone generally within equity benchmarks over the 1990s

57

Wisconsin’s Status on Equity Goal of Equal AccessFiscal Neutrality Statistics

Aid Years: 1990-91 through 2002-03

Using Shared Cost & Equalized Value per Pupil

1990-91

1992-93

1994-95

1996-97

1998-99

2000-01

2002-03

Number of Districts 381 380 379 378 374 376 367 Number of Pupils 759,462 791,864 823,363 848,603 834,298 861,181 836,207

Correlation Coefficient

0.62 0.63 0.63 0.62 0.34 0.41 0.40

Pro

per

ty

Val

ue

Elasticity 0.16 0.15 0.15 0.14 0.06 0.06 0.05

Wealth elasticity fell to below 10% over the 1990s

58

Summary Data for Wisconsin School Finance1990-91 through 1998-99 Aid Years

GTB Levels, Shared Cost Ceilings & Percentile Rankings

1990-91 1993-94 1994-95 1995-96 1996-97 1998-99

1st Tier GTB 298,195 310,776 357,856 406,592 2,000,000 2,000,000

Percentile Ranking for All Students

93% 93% 94% 95% 100% 100%

2nd Tier GTB 185,906 204,339 216,455 230,066 569,584 676,977


73% 72% 72% 71% 98% 97%

3rd Tier GTB N/A N/A N/A N/A 232,954 263,246


N/A N/A N/A N/A 62% 62%

Primary guarantee covered most students, as did the secondary guarantee,beginning in 1996-97, making it one of the highest GTB programs in the country.

59

Summary Data for Wisconsin School Finance1990-91 through 1997-98 Aid Years

GTB Levels, Shared Cost Ceilings, Minimum Aid Districts & Percentile Rankings

1990-91 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98

Shared Cost Ceiling Amount

4,660 5,233 5,453 5,617 5,786 5,936 6,285

Percentile Ranking

72% 66% 59% 58% 56% 50% 49%

Number of Minimum Aid Districts

48 53 57 51 47 none none

Top shared cost ceiling used to cover large percentage of students, butbegan to drop in the 1990s and now covers only about 2% of students

60

Do these equity trends hold today as well?

61

Wisconsin School Finance 2005

Average Average Average Average

Average property Local state total

number of value Average Revenue revenue revenue

pupils per property Per per per Number

per district pupil tax rate Pupil pupil pupil of districts

Decile (deciles) ($) (mills) ($) ($) ($) (deciles)

1 1,996 409,766 7.07 2,851 4,868 7,720 41

2 98,338 219,109 7.49 1,641 6,229 7,870 1

3 4,219 370,551 7.41 2,720 5,213 7,932 19

4 2,427 389,036 8.00 3,051 5,086 8,137 36

5 1,717 366,628 8.58 3,054 5,250 8,304 46

6 2,573 400,000 8.85 3,523 4,928 8,451 37

7 1,584 441,977 9.11 3,640 5,021 8,661 54

8 1,523 458,640 9.90 4,383 4,556 8,939 58

9 1,558 491,944 10.27 4,849 4,392 9,241 56

10 1,144 798,840 10.62 6,843 3,130 9,973 77

Weighted average 433,276 8.74 3,651 4,876 8,527

Weighted std. dev. 324,034 1.65 1,880 1,427 706

Median district 356,900 8.67 3,108 5,190 8,408

Totals

Amount Percent

Local revenue 3,180,487,047 42.8%

State revenue 4,247,967,027 57.2%

Total revenue 7,428,454,074

62

Table Results• Variation in property wealth per pupil, $409,766 in lowest spending decile to

$798,840 in highest decile– Note: average wealth in highest spending decile is far below the secondary

guarantee of $1,006,510 • Variation in school tax rates, from 7.07 mills in lowest spending decile to 10.62

in highest spending decile, with an average of 8.74 mills for shared costs• Variation in shared costs per pupil, from $7720 to $9973, with average of

$8527– Note: average shared costs per pupil in lowest decile of $7720 is higher than

current operating expenditures per pupil for 19 states in 2004-05.– Also note: most shared costs above Tier 2 shared costs of $7782

• “New” school finance problem: high wealth, high tax rates and high dollars per pupil, rather than the “old” problem of low wealth, high tax rates and low dollars as well as high wealth, low tax rates and high dollars per pupil

• Factor most strongly linked to higher spending: the local school tax rate

63

Wisconsin Equity

Indicator 1996-97 (Vincent)

1998-99 (Vincent)

2001-02 2002-03 2003-04 2004-05

Equal Revenues Per pupil Range --- --- $6735 $7533 $8471 $8563 Restricted Range (5th and 95th percentiles)

--- --- $1977 $2090 $1986 $1947

Federal Range Ratio --- --- 0.288 0.288 0.263 0.251 Coefficient of Variation 0.100 0.093 0.089 0.087 0.085 0.083 McLoone Index 0.950 0.940 0.961 0.953 0.960 0.952 Verstegen Index --- --- 1.095 1.084 1.087 1.017 Median --- --- $7413 $7900 $8176 $8409 Fiscal Neutrality Correlation Coefficient 0.565 0.574 0.552 0.563 0.565 0.532 Elasticity 0.081 0.083 0.091 0.047 0.048 0.051

64


1. The two key equity statistics indicating degree of equal dollars per pupil are the coefficient of variation (CV) and McLoone Index

• CV benchmark is less than or equal to 10%– CV in 2005 is 8.3%, better than the benchmark

• McLoone benchmark is greater than or equal to 95%– McLoone in 2005 is 2005 is 95.2%, better than the benchmark

2. The key equity statistic for the linkage between dollars per pupil and property wealth per pupil is the wealth elasticity

• Wealth elasticity benchmark is less than or equal to 10%– Wealth elasticity in 2005 is 5.1%, better than the benchmark

3. So generally, Wisconsin school finance beats all the standard equity benchmarks

65


• When adjustments are made for pupil need – disabled (0.9), poverty (0.25) and ELL (0.2), all equity statistics worsen

• When adjustments are made for the varying purchasing power of the education dollar using the NCES GCEI, all equity statistics worsen

• When adjustments are made for both, some equity statistics no longer meet the benchmarks – CV rises to 11.5%

• So WI school finance equity is pretty good but more robust recognition for pupil needs is required

66

5. Previous

Adequacy Studies in Wisconsin

67

Four Methods of Determining the Cost of an Adequate Education

• Successful District Approach

• Cost Function Approach

• Professional Judgment Approach (Called the Resource Cost Model in the 1980s)

• Evidence-Based Approach

68

Reschovsky and Imazeki’s Economic Cost Function for WI

• Per-pupil expenditures are specified as a function of– public school outputs– a set of input prices– student, family and neighborhood

characteristics, and – a set of unobserved characteristics of the

school district.

69


• Outputs used for this study include:– value-added achievement scores from Wisconsin 8th

and 10th graders– number of advanced courses offered in high schools– but no measures of elementary achievement

• Teacher salaries comprise the largest share of input prices used, but they used a figure for a teacher with a given set of characteristics so the salary differed by school district, but quality was held constant

70


• This model includes a count of students with characteristics associated with higher costs to educate:– Number of students qualifying for free or reduced

price lunch or other public assistance programs – Number of students identified as limited English

proficient– The percentage of students classified as having any

disability– The percentage of students who are autistic, deaf, or

deaf/blind

71


• Finally, the model also includes two district characteristics associated with varying costs:– the proportion of each district’s students in high

school as opposed to elementary school, to help account for the possibility that more resources are needed for high school than at the elementary level.

– district enrollment and the square of district enrollment, to account for the economies and diseconomies of scale associated with large and small districts, respectively.

72


• The cost function is then set to a target level of performance, which was set equal to the performance of the average district

• An amount is estimated to educate an average student in an average spending district: – $6370 in 1994-95 dollars ($8125)

• Cost indices are calculated for each district, which, when multiplied by the average cost, yield the estimated cost for educating students to an adequate level in that district

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• Cost indices for WI range from 0.5 to 4.24• Milwaukee is the district with the highest index,

so the cost to educate its pupils is equal to $6370 x 4.24 = $27,008 ($34,486 in 2005)

• Authors note that this is without a measure of efficiency; when one is added to account for all factors that lead spending to be higher, including the number of low-income students served, it reduces Milwaukee’s index to 1.81, lowering the per-pupil to $11,530 ($14,723 in 2005 dollars)

74

IWF/Norman’s Professional Judgment Model

• Began with review of research to identify core resource issues

• Convened a panel of educational experts in December of 1998 to make recommendations about those issues

• Surveyed WI principals and a sample of teachers to get their input on what is necessary to teach students to standards

• The panel of experts convened in May 1999 used research, survey data, and their own expertise to make resource recommendations

75

Resource Recommendations of IWF Expert Panel in May of 1999

Elementary Middle High

Class size 15 K-3; 20 4-5 20 20

School Size 350 500 600-1000

Classroom Materials and Technology

1 computer/4 students; tech training

& support


& support


& support

Curriculum Mandatory full day K-5; arts

Broad curriculum with FL & Arts

Advanced FL and core options; arts

Support Services Remedial/ESL teachers; guidance,

social work*

*Plus special ed specialists and school

psychologist

*Plus .5 specialist for gifted and .5 for at-risk

students

Staff Development Staff Development coordinator in school

Release time needed 1 hr/day

0.5 Staff development specialist

76

IWF/Norman’s Professional Judgment Model

• The result was a basic per-pupil foundation amount of $8500 in 2000-01 ($9345 in 2005), plus:– $3200 ($3518) for low-income students– $700 ($770) for rural districts– $120 ($132) for all districts for help with the

implementation of new programs– Full-state funding of special education and

limited English proficiency programs

77

Comparing the Numbers (2005)Reschovsky & Imazeki’s

Cost FunctionNorman/IWFProfessionalJudgment

Average student in average district $8,125 $9,330

Additional per low-income student $12,932(extra weight of 1.59)

$3,518

Low-income student in average district

$21,066 $12,848

Student in Milwaukee $34,486 $14,719

Student in White Lake $27,167 $12,719

78

6. CPRE Wisconsin

School Finance Adequacy Initiative

79

School Finance Shifted with State Standards Based Reform (and NCLB)• Message of Standards-Based Education Reform

– Teach students to high standards• Requires a doubling or tripling of results!

– To accomplish this goal, need to focus on instructional, staffing, management and other strategies that combined will boost student performance

– Begin to do this with extant money, so ….• Imperative first to use current money better

– Adequacy provides the option of asking for more money but from the position of first restructuring and reallocating

80

School Finance Shift• Provide adequacy and improve equity• Reposition school finance from technical arena of

formulas to supportive center of the education system -- NRC panel report

• What “works” and “how much does it cost?”• How much money is needed to teach all students

to performance levels, including both extant and any new resources, which likely will be required except in New Jersey and Connecticut

81

Vincent v. Voight Case Virtually Created a WI Adequacy Standard

• School finance system must provide resources adequate to educate students to or above proficiency standards in mathematics, science, social studies and reading/language arts, and to provide instruction in art, music, and physical education.

• A rigorous standard because, according to NAEP standards, Wisconsin educates only about 35% of students to proficiency in mathematics and reading in grades 4 and 8, and probably less in high school grades

82

Change in School Finance• State funds an adequate amount – staff for effective

strategies and salary levels and structures to recruit and retain high quality staff – probably through a foundation type of formula

• Districts provide schools an adequate amount via needs-based funding formula

• Schools reallocate dollars to more effective, school-wide educational strategies

• System reinforces these school finance shifts with incentives and strategies to improve instructional quality so teachers can successfully teach students to standards – including new forms of compensation

83

Determining an Adequate Fiscal Base

• Difficult, could argue this is THE school finance research issue today

• And currently, there are many approaches– Successful district approach – expenditures where

students meet performance targets (IL, OH, KS)– Economic cost function – research NY, WI, TX, IL, NB – Professional judgment on quality inputs – WY, WI, MD,

KY, SC, NY, MS, NB, KS, MT – 2nd generation approaches needed

– Evidence-based approach – NJ, KY, AR, AZ, WY – and in the future, Wisconsin

84

Determining an Adequate Fiscal Base

• Successful district and cost function approaches produce an expenditure number but no information on how the dollars would be used

• Professional judgment and evidence-based approaches provide both an expenditure number and information on how the dollars could be used, or at least how the expenditure number was determined

85

Successful District• Use expenditure and achievement data to identify “successful”

districts -- districts that produce desired results– Eliminate “unusual” districts from analysis – very high wealth, very

large, very small, very high spending, etc.– From the reduced universe, find districts that actually produce the

performance desired, e.g., have >70% of children scoring at or above proficiency on the state test

– Calculate a “weighted average” of the expenditures per pupil for these districts, as well as their average SES characteristics -- % minority, % poverty (usually free and reduced price lunch), % ELL, etc.

– Assume that if these districts can meet a state performance benchmark, other districts could too

– Use the calculated expenditure as the expenditure in a foundation school finance formula

– Adjust the calculated expenditure per pupil for the special needs of other districts – small rural, sparse, large urban, etc.

86

Successful District• Advantages:

– Provides a clear link between a $/PUPIL level and a result level– Relatively simple and straightforward – policymakers can

understand the method– Draws from actual state districts

• Disadvantages: – Too many “atypical” districts excluded from analysis– The successful districts are usually relatively homogeneous,

“urban”/ rural districts– Results are difficult to “adjust” for larger (>2500 students) urban

and poorer rural areas, and thus often are hotly debated– Results can be manipulated– Also does not identify the educational delivery system– Is not now being used by any state – disadvantages have led to too

much controversy

87

Cost Function• Economic approach using regression analysis to identify

the cost ($/pupil) to produce an outcome• Dependent variable: expenditures per pupil, which can be

used as the foundation expenditure• Independent variables: characteristics of students and

districts (% disabled, % ELL, % poverty, size, sparsity, geographic price indices, performance level desired, etc.)

• Average expenditure varies with performance level• Calculate an overall “cost” adjustment to account for

district and student needs• Results are simple: an average expenditure and an

overall cost adjustment

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Cost Function• Advantages:

– Clearly links a cost level to a result level– Sophisticated– Accounts for most key factors that impact costs

• Disadvantages: – Complicated: few policymakers understand or trust the

methodology and not used in any state– Some scholars question the methodology– Provides a dollar amount but no indication of a delivery

strategy– Also assumes no resource reallocation of existing resources– Huge increments for low income/ELL students – 4 + times the average for Milwaukee

89

Next two approaches get inside the “Black Box” of schools

• Identify the educational delivery strategies that can produce the desired results

• This means creating detailed specifications of resources needed to support the delivery strategies

– At the school level • Need prototypic designs for each of elementary, middle and high

schools

– To the degree possible, the designs must be supported by research and evidence-based best practices that produce improvements in student learning

• Much more detailed specifications and costing than are included in most general education reform recommendations

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Professional Judgment• Education professionals make judgments on what is

needed at the school level to teach students to proficiency standards

• Panels of teachers and administrators identify the resource needs for prototypical elementary, middle and high schools

• State panels review and revise the proposals of various local/regional panels

• State panels also create prototypical district design

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Professional Judgment• Advantages:

– Draws from the expertise of the best educators in the state, and perhaps from around the country

– Proposals tailored to the state context

• Disadvantages: – Reflects just professional judgments, no clear link to

student learning gains– Being somewhat “co-opted” as the word gets out, meaning

many proposals are too generous– And too many professional judgment panels unable to

identify “evidence” or “research” that supports their proposals, which often reflect personal belief or personal philosophy

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Evidence-Based Model• Draws from research and evidence-based best practices to identify

those educational delivery strategies and their resource needs that are linked to student learning gains

• Attempts to “back” each resource recommendation with reference to research and/or best practices

• Given the development of several comprehensive school reforms, can draw from those designs, which themselves often are based on compilations of research-supported practices

• Can also draw from a synthesis of the best professional judgment panels

• Can “speed up” and therefore reduce the cost of conducting an adequacy study

• “Squares” with the evidence-based practice required by No Child Left Behind

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Evidence-Based Model• Advantages:

– Produces a detailed staffing for prototypic schools to address all key educational issues, with all proposals having a research and/or best practices base

– Draws from previous research and adequacy studies already conducted around the country – each element has an “evidence” rationale

– Avoids educator predilection to make proposals on individual philosophy rather than engage in “evidence-based” practice

– Parsimonious but robust – a “Ford” -- not a “Cadillac” – not a “Yugo”– Generally, additional costs are less than other approaches

• Disadvantages: – Not all school elements have a research base, or a strong research base– Should not “stand alone”: needs a state panel of leading educators and

policymakers to review and tailor to any particular state context– Hard to link all recommendations combined to a specific performance target

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Outcome of Latter Two Approaches

• Prototypical school designs & staffing needs – Elementary– Middle or Intermediate – High School

• Estimated cost per pupil of each prototype • Estimate of the student, district and price

adjustments needed• Provides resources adequate to enable

schools/districts to determine most powerful educational strategy

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Components of Prototypical Elementary, Middle & High Schools

• School size• Administration• Regular instruction – class size• Specialist instruction/planning & prep• Instructional materials, textbooks, library books• Strategy for struggling students – disabled, low

income, ESL, GATE – such resources will vary by incidence of such students in each school – tutoring, ELL, extended day, summer school

• Professional development • Pupil support

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Key School Components …• Technology – school computers & software including upgrading

and maintenance costs• Student activities• Secretarial• Operations and maintenance• Food servicesPLUS:• District design• Preschool• New Performance Pay Structure and salary levels• Adjustments for all prototypic designs for schools with more and

fewer students, and with greater and lesser poverty, so each design is tailored to size and demographics of each school

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Arkansas Prototypic School Resources

(School unit of 500 students)• 1 Principal• Longer teacher year: 10 days more for summer training institutes• 2.5 Instructional Facilitators• 20-25 Teachers (class size of 15 K-3, 25 4-12)• 4-6 Specialist Teachers – art, music, pe, library & prep time; more for HS• Strategy for struggling students: base of 1 Reading Tutor + one position for each

20% poverty ; 40% more for low income ELL• Census funding for most disabilities + full state funding for severe disabilities • Parent outreach/student support -- 1 for each 20% poverty + 1counselor in

middle school and 2 counselors in secondary schools• $250/pupil for technology -- hardware and software• $250/pupil for texts and other equipment and materials• $50/pupil for professional development trainers• Supervisory aides for lunch, playground and bus duty

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Wisconsin Prototypical School Resources

• A draft report will be prepared with preliminary recommendations for all program elements for prototypical schools for the next meeting

• This report and modifications will be discussed at the October and January meetings

• Costs and possible school finance structures of final recommendations will be presented at an April meeting

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Adjustments for the Second Year

• Labor market study focusing at least on Milwaukee – adequate levels of teacher salary

• Probably propose a new type of knowledge and skills-based salary schedule as a better vehicle for providing pay increases

• Assess benefits, largely health benefits, and propose a more efficient approach

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Adjustments for the Second Year

• Possible additional topics:– Geographic price indices– Income factor to the property wealth per pupil

figure– Central office design to complement the

various school prototype designs– Maybe designs for operations and

maintenance

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The Adequacy Initiative

GOAL:From Equity To Adequacy

Equal Access to Tax Base Sufficient Spending for High-Standards Education

Documents

1 The CPRE Wisconsin School Finance Adequacy Initiative: K-12 Education Today Allan Odden Anabel Aportela, Sarah Archibald, and Michael Goetz Consortium