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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
1/19/20093Prepared by the House Education Appropriations Committee Staff, OPR
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”
=
1/19/20094Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/20095Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/20096Prepared by the House Education Appropriations Committee Staff, OPR
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).
1/19/20097Prepared by the House Education Appropriations Committee Staff, OPR
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.
1/19/20098Prepared by the House Education Appropriations Committee Staff, OPR
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.
1/19/20099Prepared by the House Education Appropriations Committee Staff, OPR
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.
1/19/200910Prepared by the House Education Appropriations Committee Staff, OPR
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.
1/19/200911Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/200912Prepared by the House Education Appropriations Committee Staff, OPR
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).
1/19/200913Prepared by the House Education Appropriations Committee Staff, OPR
Part II –A) Selected Spending & Funding Statistics
B) Areas of Rapid Budget Growth
1/19/200914Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/200916Prepared by the House Education Appropriations Committee Staff, OPR
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%
1/19/200917Prepared by the House Education Appropriations Committee Staff, OPR
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%.
1/19/200918Prepared by the House Education Appropriations Committee Staff, OPR
Per Pupil Spending Over TimeAll Funding Sources
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
20
$4,342
$6,740
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Sta
te F
un
din
g P
er
Stu
de
nt
State Funding Per-Student Spending 1994 to 2008
Sources: Reflects school year amounts from OSPI F195/F196 School Financial Services and OSPI enrollment reports. From Citizen’s Guide for K-12 Finance.
Implicit
Price
Deflator
Adjusted
Seattle
Consumer
Price Index
Adjusted
Note: This chart shows the rate of funding changes
over time as compared to inflation. It is useful for
evaluating rates of change in funding, but not
necessarily the level of funding.
K-12 Share of Total Budget has declined
1/19/200921Prepared by the House Education Appropriations Committee Staff, OPR
44.0%42.3% 41.7% 41.3%
38.8%40.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1997-99 1999-01 2001-03 2003-05 2005-07 2007-09
Percent of Near General Fund-State Spent on K-12 Public Schools
Source: WinsumWhat percent K-12 comprises of the total budget reflects spending priorities, but also
caseload growth in K-12 relative to other budget areas (e.g. medical assistance).
Two different ways of looking at K-12 financeHow much is funded ($’s) vs. What is funded (programs/services)
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
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)
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
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.
41 school districts have fewer than 100 students.
21 school districts have fewer than 50 students.
8 school districts have fewer than 25 students.
3 school districts have fewer than 10 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
1/19/200924Prepared by the House Education Appropriations Committee Staff, OPR
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: $81.1 million.
1/19/200925Prepared by the House Education Appropriations Committee Staff, OPR
Emerging Issues in K-12 Finance in WA State
3 Lawsuits Pending Special Education Coalition (Appeal) – Special Ed Funding
Federal Way – Salary Equity
McCleary – General Adequacy
Basic Education Finance Task Force
School Construction Task Force
Pupil Transportation Funding Study
WASL Work Group
Comprehensive School Health Task Force
Federal Stimulus Package & NCLB Negotiations
State Board of Education – “Core 24” & Accountability System
1/19/200926Prepared by the House Education Appropriations Committee Staff, OPR
Appendix – Tracking Districts with Low
Fund Balances
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
27
Source: OSPI F196 Report for 2007-08
District Enrollment
Total
Revenues
Ending Fund
Balance
Fund
Balance as
% of
Revenues
Evaline 47 443,598$ (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
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
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
1/19/2009Prepared by the House Education Appropriations Committee Staff, OPR
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