Dr. Kenneth Wong Mary-Stuart B. Kilner, UEP 2010Jason P. Becker, UEP 2010Urban Education Policy ProgramBrown UniversityJanuary 29, 2010

A Funding Formula for RI:CHILD CENTEREDEQUITABLEACCOUNTABLE

Providing what our children need to succeed!

Outline of presentation

1. The approach and method used to determine what an adequate education should cost.

2. Analysis of information to demonstrate that the method we are proposing is a better approach to targeting funding to children based on their needs.

3. Summary of why the goals of attaining horizontal and vertical spending parity between districts and schools requires redistribution over time.

4. Walk through some examples of the methodology.

Guiding principles for a Professional Judgment approach

1. To be financially responsible in the current economy, the formula assumes that the dollars the state has to contribute to education will not change in 2010.

2. Devise a single methodology for distributing state aid to all public schools in a child-centered manner, that is fiscally responsible and objective.

3. Uses New England & RI data and empirical best practice research.4. The formula will take into account the state’s forecasted revenue estimation

process annually.5. Estimates what the state needs to provide for a prototypical child. It then takes

into account student success factors unique to the child. After creating a cost per pupil it is adjusted for differences in revenue & expense capacity between districts.

6. Phases out as many state categorical programs as possible to create greater flexibility, efficiency and transparency.

Additional targeted opportunities to be supported by State Funds.7. Centralize certain purchasing functions and contracting functions to gain

efficiencies.8. Provide incentives to grow, hire and retain the highest quality teachers.9. Demonstrates through regression analysis that the model supports the particular

needs of more children better than the current funding model.

What costs at a minimum need to be included in the market basket for RI? Contrasted to evidence.

Teachers Teacher Aides Guidance Counselors Nurses Librarian/Media Specialist Technology Specialist Principal Assistant Principal Clerical Professional Development per

teacher Instructional Supplies/Materials

per pupil Equipment per pupil Assessment per pupil Student Activities per pupil Safety/security per pupil

Teachers Teacher Aides Teacher CoordinatorGuidance counselor Librarian Other Support StaffSchool Administration District AdministrationAdministrative Support Some portion of Benefits Instructional Supplies Instructional Supports

Augenblick & Myers Recommended RI Market Basket- NCES

DRAFT NE cost basket: Based on NCES 2005 Detailed Financial Survey. Adjusted NE Consumer Price Index.

STATE ABBREVIATED (SCHOOL) Total Foundation PP Cost Total Adjusted for NE CPI (10.5)     

RI PP less Retirement $ 7,609 $ 8,408MA PP Less Retirement $ 7,711  $ 8,521

CT PP Less Retirement $ 7,926 $ 8,758 NH PP Less Retirement $ 6,575 $ 7,265

 RI, MA, CT and NH AVERAGE FOUNDATION AMOUNT $ 8,238

 

One student support weight to provide more money for children who need more resources

• Poverty indicator status is independently verifiable & it has a strong correlation to the supports needed for ESL children.

• National studies/best practice comparable weights for poverty indicator (.35-.50) (Augenblick et al,). We propose .40

•Creates an objective, impartial mathematical mechanism to move money. 70% of children get funding targeted to their needs. This is a significantly higher percentage than under the proposed 2010 budget.

Strengths

• One success factor or weight may prove to be less efficient at providing resources for different types of needs. The success factor(s) should be reassessed every three years.

• This is a single index with certain information and mathematical limits.Weaknesses

• Use a formula that takes into account base need, a success support factor and a quadratic mean based equation to equalize the spending per pupil between districts over time.

•The equation takes into account the intensity of poverty in a district and the revenue and expense capacity of a district.

•Commit to a high quality Cost Out study: complete within 3 years of full implementation of the formula.

•Use poverty as a proxy for student success factors until a specific objective data provides better information.

Suggested Amendment

s

Proposed formula gets districts and students more targeted support.

Category Proposed Distribution

Current Distribution

% of Additional Students Reached

Free and Reduced Price Lunch Eligible Students

85.3% 67.2% 18.1%

English Language Learners

58.9% 38.0% 20.9%

Career and Technical Students

13.0% 7.7% 5.3%

Special Education

15.7% 6.2% 9.5%

Proposed funding formula for General Public Schools*

1. This proposed state share ratio accounts for two different state challenges when determining where funding should go. How to account for differences in revenue generation capacity of communities

How to allocate money to communities with high concentrations of children who need more supports

2. This calculation takes both of these considerations into account.  EWAV is used as a mechanism for estimating a local districts’ taxing capacity referred to as “revenue raising capacity”. Free and Reduced (FRPL) lunch status is used as a proxy for child need. The formula looks at each district and weighs these two challenges against each other. Whichever is more pronounced for that district gets more emphasis in the calculation. The two variables are added to determine what percent of the total cost of education the state needs to provide for that particular district.

2. Communities that have very low or very high local revenue capacity and /or who have very few or a lot of children who qualify for FRPL will experience the biggest changes. These are called “outliers.” Given the lack of a consistent method to distribute funds for the past twelve years, most communities will experience a change. The plan will be phased in over 5 years.

3. EWAV is a measured scale of revenue generation capacity from property values and community median income. It is one possible calculation to use. We acknowledge the need for reform of revenue assessment practices in Rhode Island and are open to other metrics.

4. This formula seeks to equalize the money and resources available for equivalent children and to reduce the operational spending capacity between districts over a phase in period.

4. * for illustrative purposes only

•Example calculations before charter schools:•Newport, where there is a low EWAV but high concentration of children at-risk• Newport Total Estimated Cost = $8,238(2,170)+0.4($8,238)(1,198)=$21,824,110• Newport State Share = (√(.002+.602)/√2)($21,824,110)=(.43)($21,824,110)=

$9,259,186• Proposed State Share Ratio = 0.43

•Providence, where there is a high EWAV and high concentration of children at-risk• Providence Total Estimated Cost = $8,238(23,431)+0.4($8,238)(20,506)=

260,595,94925,956,365 • Providence State Share = (√(.8332+.902)/√2)($260,595,949) = 0.87($260,595,949)

= $225,956,365• Proposed State Share Ratio = 0.87

•New Shoreham, where there is a low EWAV and low concentration of children at-risk• New Shoreham Total Estimated Cost = $8,238(142)+0.4($8,238)(15)=$1,219,224• New Shoreham State Share = (√(.002+.102)/√2)($1,209,224) = (.07)($1,209,224) =

$86,212• Proposed State Share Ratio = 0.07

Getting the money to where children sit. Illustrative examples of high and low poverty districts using

proposed formula, at an estimated foundation cost of $8,238.

How does the formula accommodate charter school funding?

Charter schools would be funded similarly to traditional school districts using the weighted student funding formula, as well as the state share ratio for the sending district, to determine the state funds sent to each school.

Charters will continue to be reimbursed for the local contribution expected for each child by sending districts.

Highlights of good benchmark practices for funding formulas

WHY CHOOSE THESE STATES?Massachusetts: Funds the child and has seen significant improvement in Academic outcomes,Maryland: Funding Formula best practice State, with two good costing out studies and gains in academic achievement.. .

Source: State Financial Web sites Griffith. (2007) “Education Finance – A National Perspective.” Education Commission of the States. Presentation, Providence, RI. 2007. Taken 1/2/10.

Key Recommendations for RI•Initial foundation amount $8,238

•Costs are shared in a range from a low of % State/Local to a high of % State/Local.

•Adjust foundation balancing revenue gen. capacity and student needs.

•Adjust for additional child needs: “Student Success Factor (weight)” Adjusts using a single weight that is a proxy for poverty, LEP and SP.ED. Recommended weight (.40)

•District Rev./Exp. Generation capacity using EWAV as it is currently in Statute until we determine if there is something better.

•Phased in over 5 years or less.•5-7 Categorical state programs.•3-5 Categories of spending to be centralized.

MD-end state after 5 yr•Foundation amount $6,694 (2009)

•Cost shared 50%State/50% Local. State share increase paid for by .34 per pack tax on cigarettes.

•Adjusts for three different weights. poverty indicator (.97); LEP (.99) & SP. ED. (.74)

•Guaranteed tax base program for districts with very little wealth and high poverty.

•Geog. & Density of Poverty adjust.

•Dist. Revenue gen. capacity adjust. (based on wealth measured 4 ways)

•Min. district share is 15%. Max spend over state share = 10%

•Some transportation funding support for districts through a grant

•Phased in over 5 years•< 10 Categorical Grant programs

•St. share of benefits capped at 34.5%.

MA-updated 3x in 11 yrs.•St. avg = $9,659. State funding varies by type of school. $8,574 (rural)-14,501(technical). (2009)

• St. share varies by district based on an local avg. wage/St. avg Wage. The state determines the average wage for 8 high employment categories in the aggregate and for each district

•Adjusts for poverty indicator. They use a flat dollar amt. based on a cost study. $3,239 for Gr1-8 $2,619 for Gr9-12

•Adjusts for pupil specific information. 5 levels of Spec Ed; 3 ELL funding bins; Vocat. Ed

•Originally set in 1992. Adjusted ‘07 based on cost study

•14 categorical grant programs.

Categorical Funding Categories

This proposal will include funding outside the aid distribution for certain high-cost items. The following categorical funding is proposed: 

Extraordinary costs related to high cost special education students. The state will assume the costs of these students when they exceed five times the district’s combined core instructional foundation and student success factor amount.

Certain start-up and maintenance costs for high cost career and technical education programs. Funding will be provided through a state grant program.

Early Childhood pre-kindergarten programs currently have a categorical program to support pre-K initiatives. This proposal will expand this investment.

Key words for a common language Key word DefinitionEquitable 1. Provides the minimum funding, and high quality resources, necessary for

each child to reach a common proficiency standard.2. Provides incremental funds for some children with different characteristics,

special needs or skills that require more support.Money followsthe child

1. Majority of the state funds must be spent on the classroom and the child. 2. Calculation of funding is based on current student enrollment.3. If enrollment status or child’s location changes between districts, the

money moves.Transparent 1. Set cost for child proficiency; mapped to key spending categories; tied to

outcomes. 2. Grow extensive longitudinal data: on children, teachers and spending

practices. 3. Funding allocations that align with, support, and enhance learning

opportunities.Accountable 1. Utilize YE 2010 UCOA chart of accounts data to evaluate and inform

district/schools about targeted changes to spending that would enhance student outcomes.

2. Publish targeted spending goals and expected outcomes.3. Provide guidelines for key spending categories to districts & schools

Foundation Amount

The minimum dollars that must be spent to assist a child to help him/her reach “proficiency” in all subjects as defined by RI state standards . Research supported.

Student supportfactors

Key challenges or talents experienced by the child that require more financial support. Minimally includes a “support factor” that correlates to child’s poverty status, ESL, special learning needs and gifted & talented.

High-needschildren

Children whose incremental financial support exceed 5x the cost of the foundation amount.