car olina institute for public policy · 2015-11-09 · program (leaap). the pilot program...

Carolina Institute for Public Policy

District Expenditures of Disadvantaged Student Supplemental Funds

2004-05 through 2006-07

April 2009

District Expenditures of Disadvantaged

Student Supplemental Funds

2004-05 through 2006-07

April 2009

District Expenditures of Disadvantaged

Student Supplemental Funds

2004-05 through 2006-07

April 2009

IGNACIO NAVARRO

CALIFORNIA STATE UNIVERSITY

MONTERERY BAY

REBECCA A. ZULLI

UNIVERSITY OF NORTH CAROLINA AT

CHAPEL HILL

GARY T. HENRY

UNIVERSITY OF NORTH CAROLINA AT

CHAPEL HILL

CHARLES L. THOMPSON

EAST CAROLINA UNIVERSITY

Table of Contents

Introduction 1

Summary of Key Findings 2

Expenditures Classification Scheme 2

Chart of Expenditure Categories 3

Nature of DSSF Expenditures Across Time 4

Magnitude of DSSF Expenditures 4

Allocation of DSSF Dollars 4

Allocation of DSSF Funds by Expenditure Category for the 16 Pilot Districts 5

DSSF Funds and Teacher Pay 8

Fund Supplanting Analysis 11

Conclusions 11

Tables:

Table 1 Total DSSF Expenditures in Pilot Districts 4 Table 2 Allocation of DSSF Funds by Expenditure Category (Percentages and Total Amounts) 5 Table 3a Allocation of DSSF-Funded Expenditures by District (Percentages and Total Amount)

in 2004-05 6 Table 3b Allocation of DSSF-Funded Expenditures by District (Percentages and Total Amount)

in 2005-06 7 Table 3c Allocation of DSSF-Funded Expenditures by District (Percentages and Total Amount)

in 2006-07 8 Table 4 Percent of Total DSSF Funds Dedicated to Teacher Salaries and Supplements in the

16 Pilot Districts from 2005-2007 9 Table 5 Evolution of Teacher Bonuses and Supplementary Pay Differentials between DSSF

Districts and their nearest non DSSF Neighbors from 2003-2006 10 Table 6 Estimates of DSSF Funded Expenditures’ Impact on Locally Funded Expenditures 11

District Expenditures of Disadvantaged Student Supplemental Funds: 2004-05 through

2006-07

Introduction

In 2004, Governor Mike Easley and the North Carolina State Board of Education established

the Disadvantaged Student Supplemental Fund (DSSF) as a pilot program in 16 of the state’s

most educationally disadvantaged districts. The overarching goal of the program was to

improve student learning and academic performance in the pilot districts, especially for

academically disadvantaged students. During the 2004-05 school year, the program provided

$22.4 million in new funds to the target districts. The program allowed districts flexibility to

allocate funds among a dozen “proven strategies” designed primarily to attract and retain

qualified, competent teachers and to provide enhanced instructional opportunities to students

at risk of school failure. The NC Department of Public Instruction (DPI) was required to

provide assistance and monitor the program through the Local Education Agency Assistance

Program (LEAAP). The pilot program continued with slightly increased funding for the

2005-06 school year. In 2006-07, the Governor recommended expanding the program

statewide, and the General Assembly appropriated $49.5 million for this purpose. The

original 16 pilot districts continued to receive the same amount of funding per pupil as they

received in the first two years, approximately $840 per academically disadvantaged pupil, but

the remainder of the state’s districts received approximately $88 per academically

disadvantaged pupil.

In 2005, before the statewide expansion, the General Assembly mandated an evaluation of

the effectiveness of the strategies funded by the DSSF program, as well as the effectiveness

and efficiency of DPI’s LEAAP teams. The team carrying out the evaluation is based

primarily at the University of North Carolina at Chapel Hill, with participation by researchers

at East Carolina University, Georgia State University, and California State University -

Monterey Bay. This is the fourth in a series of reports from the research team, but the first to

report findings on the DSSF expenditure patterns in the 16 pilot districts. The first report

compared the quality of teachers available to disadvantaged and other students in pilot

districts with the quality of teachers available to students statewide, traced patterns in the

performance of students progressing through NC schools, described how pilot districts spent

their funds and implemented the program, and explored the strengths and limitations of

assistance provided by DPI’s LEAAP teams. The second report provided an update on

teacher quality in pilot districts during the second year of the program and assessed the use of

DSSF to supplement teachers’ salaries. The third reported findings on the impact of the

DSSF on student performance in high school. In that report, based on a research design that

enabled us to separate out the effects of DSSF funds from a comprehensive array of other

influences on student achievement, we concluded that the DSSF definitely improved high

school student achievement during the two-year pilot.

An important next step was to assess the relative magnitude of DSSF resources in each of the

pilot districts and delve deeper into the manner in which they were spent in the pilot districts.

Consequently, the current report presents a thorough examination of the nature of DSSF

expenditures across the 2004-05, 2005-06, and 2006-07 years within the 16 pilot districts.

This report was designed to address the following five key questions:

(1) Overall, what is the magnitude of the DSSF resources as a percent of total

expenditures in the pilot districts?

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(2) Within the pilot districts, to which functional categories of expenditures were

DSSF funds ultimately allocated?

(3) To what extent were DSSF funds allocated to teacher salaries within the pilot

districts?

(4) How does the competiveness of teacher salaries in the 16 pilot districts compare

to those of their neighboring districts?

(5) To what extent were DSSF funds used to supplant monies from other sources?

Summary of Key Findings

In proportion to pilot districts’ total budgets, DSSF is a relatively small funding source.

Since the initiation of the DSSF program, DSSF-funded expenditures in the 16 pilot DSSF

districts represented less than 3% of their total expenditures. The majority of DSSF

expenditures in the 16 pilot districts were allocated to Regular and Special Instruction.

Across the 2004-05 and 2006-07 school years, the 16 pilot districts spent 66 cents per dollar

of their DSSF funds on Regular Instruction – on teachers and other costs of providing

classroom instruction in academic courses during the normal school day and week.

Cutting the pie in a different way, we see that the pilot districts spent about half of the DSSF

resources on teacher salaries and supplements. Furthermore, in the aggregate the proportion

of funds expended for salaries and supplements remained relatively constant over time. In

school year 2004-05 the pilot districts spent about 48% of the DSSF funds on teacher salaries

and supplements during the school year. This percentage increased slightly to 51% by school

year 2005-06 and decreased to 47% by school year 2006-07.

Another way of examining the impact of DSSF funds on salary spending in the districts is to

focus on salary competiveness. Salary competitiveness considers the salary changes in the

pilot districts relative to the salary changes in neighboring districts. After matching each

pilot district with its non-DSSF neighbors, we compared the teacher bonuses and

supplementary pay differentials between DSSF districts and their nearest non DSSF

neighboring districts for the year before the DSSF pilot program began (2003-04) through

school year 2005-06 (the last school year before the program was administered statewide).

Overall, eleven (11) out of 16 DSSF pilot districts gained salary competitiveness relative to

their closest non-DSSF neighbors. The remaining (5) of the16 DSSF decreased in

competitiveness over the three year period examined (2003-04 through 2005-06).

A final question is whether the pilot districts reduced local expenditures and supplanted those

expenditures with DSSF funds, thus defeating the purpose of creating a “supplemental fund.”

Importantly, our analysis did not find any evidence of fund supplanting.

Having provided this preliminary overview of our findings, we now step back to provide

more detail on the methods underlying our analyses as well as on the details of our findings.

Expenditures Classification Scheme

In our previous work examining the allocation of resources in high schools across the state,

we developed a coding scheme for classifying school and district expenditures by purpose

and object codes into 15 categories. We used this same coding scheme to conduct the current

analysis of expenditures in the DSSF pilot districts over the four year period from prior to

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inception through the first three years of implementation. The chart below describes each of

these categories.

Chart of Expenditure Categories

The NCDPI provided us with detailed expenditure data for each of the 115 districts in the

state for the 2003-04, 2004-05, 2005-06, and 2006-07 school years. For the state as whole,

we calculated total expenditures and total DSSF expenditures for each of the 4 school years.

We focused only on expenditures in the 16 pilot districts during these years, again calculating

total district expenditures and total DSSF expenditures and then breaking each of these totals

down into our previously developed expenditure categories. We then used DPI supplied

enrollment data to compute total per-pupil expenditures and per-pupil expenditures in each

Expenditure Category Types of Expenses Included

Regular Instruction Annual teacher salary, benefits, local salary supplements, bonuses,

classroom materials for instruction of regular students

Special Instruction Annual teacher salary, benefits, local salary supplements, bonuses,

classroom materials for instruction of students with special needs

Professional Development

for Instruction

Expenditures related to staff development and new teacher

orientation. These include expenditures for workshops and mentor

salaries and benefits.

Student Services

Salaries, benefits, and materials for guidance services,

psychological services, speech, language pathology, media

services, and some health services related to instruction.

Supplementary Instruction Salaries, benefits, and materials related to instructional programs

outside the regular school day.

Technology Purchases of hardware and equipment, computer software,

materials for technology vocational ed, and IT expenditures.

Other Supporting Services

Salaries, benefits, and supplies for student health services (not

related to instruction) such as medical, dental, and nursing services

as well as other student services not related to instruction.

Transportation Salaries and benefits for transportation personnel and other

expenditures related to the daily transportation of pupils.

School Maintenance &

Utilities

Salaries, benefits, and supplies for activities related to cleaning,

repairing, and maintaining school premises and the utility charges.

Maintenance & Food

Services

Salaries, materials, and food supplies for student nutrition

activities.

School Leadership Salaries, benefits, and supplies related to the principal’s office.

Community Services

Activities that are not directly related to the provision of education

for pupils in a local school administrative unit. These include

services such as community recreation or civic programs and

salaries for personnel related to these activities.

Capital Outlay Acquisition of property, renovations, replacement of furnishings

and acquisition of buses, etc.

District Administration

Salaries, benefits, supplies and other expenditures that support

district level activities including the board of education,

superintendents, business services, personnel services, statistical

services, planning, research, evaluation services, etc.

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category for the DSSF pilot districts, as well as, the state as a whole for both total

expenditures and for DSSF expenditures exclusively.

Nature of DSSF Expenditures Across Time

Magnitude of DSSF Expenditures

Since the implementation of the DSSF program in 2004-05, DSSF-funded expenditures in the

16 pilot districts represented less than 3% of total expenditures. The absolute amount of

DSSF funded expenditures increased from school year to school year in these districts. But

when we consider DSSF expenditures as a percentage of total expenditures in the pilot

districts, the pattern is different. As Table 1 below depicts, in the first year of DSSF

implementation, the state spent a total of $21,127,229 on DSSF-funded expenditures in the 16

pilot districts. DSSF expenditures in pilot districts increased by 6.05 % in the 2005-06 school

year and by another 0.45% in the 2006-07 school year. In relative terms, however, the

DSSF’s share of total expenditures in the 16 pilot districts remained fairly constant between

2004-05 and 2005-06 school years and decreased between the 2005-06 and 2006-07 school

years. As column 7 in Table 1 shows, DSSF expenditures represented approximately 2.8% of

total expenditures in the 16 pilot districts in 2004-05 and 2005-06. By the 2006-07 school

year the relative share of DSSF expenditures from total expenditures in the 16 pilot districts

decreased slightly to 2.7%.

In the 2006-07 school year, statewide DSSF funded expenditures increased by 113% when

the program expanded its coverage to include all school districts in the state. As column 4 in

Table 1 reveals, this increment in DSSF funds increased the relative importance of DSSF

funds as a percentage of total state expenditures from .19% in school years 2004-05 and

2005-06 to .37% in 2006-07.

Table 1: Total DSSF Expenditures in Pilot Districts

Allocation of DSSF Dollars

The majority of DSSF-funded expenditures in the 16 pilot districts were allocated to Regular

and Special Instruction. As Table 2 shows, between the 2004-05 and 2006-07 school years,

the 16 pilot districts spent 66 cents per dollar of DSSF-funded expenditures in Regular

Instruction. About 9 cents per dollar went to Special Instruction. Taken together, 75 cents

per dollar of DSSF- funded expenditures were allocated to Regular and Special Instruction.

Year All School Districts 16 Pilot Districts

Total

Expenditures

Total DSSF

Expenditures

DSSF

Expenditures

as % of

Total

Expenditures

Total

Expenditures

Total DSSF

Expenditures

DSSF

Expenditures

as % of

Total

Expenditures

2003-04 $10,345,330,573 $0 0.00% $698,455,645 $0 -

2004-05 $10,869,915,860 $21,127,229 0.19% $751,639,702 $21,127,229 2.81%

2005-06 $11,802,766,450 $22,405,838 0.19% $794,293,447 $22,405,838 2.82%

2006-07 $12,826,356,602 $47,820,309 0.37% $826,400,284 $22,505,639 2.72%

Total

04-05 - 06-07 $35,499,038,912 $91,353,376 0.26% $2,372,333,433 $66,038,706 2.78%

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In the aggregate, DSSF pilot funds in the last 3 school years were spent (in decreasing order)

on Regular Instruction (66%), Special Instruction (9%), Technology (9%), Professional

Development (6%), Student Services (4%), Supporting Services (3%), Transportation (1%),

School Leadership (1%) and District Administration (less than 1%). It is worth noting,

however, that the allocation of DSSF funded expenditures across different expenditure

categories was not constant over time. The most significant example of this change in the

spending mix over time can be observed in the Technology category. As Table 2 shows, in

the first year of DSSF implementation (2004-05), the 16 pilot districts allocated 14% of their

DSSF funded expenditures to technology-related activities. In the following years, however,

there was a substantial shift in allocation of resources from Technology to other expenditure

categories.

Table 2: Allocation of DSSF Funds by Expenditure Category (Percentages and Total

Amount)

Allocation of DSSF Funds by Expenditure Category for the 16 Pilot Districts

The last section revealed that, in the aggregate, there were slight variations on how the 16

pilot districts allocated their DSSF funded expenditures across different expenditures

categories over time. This section shows that there was significant variation in the DSSF

expenditure allocations across the 16 pilot districts. Tables 3a, 3b, and 3c show how each

district allocated its DSSF funded expenditures across different expenditure categories in

percentage terms for school years 2004-05, 2005-06, and 2006-07 respectively.

As Table 3a reveals, in 2004-05 the DSSF districts allocated from 30% to almost 90% of

their DSSF funded expenditures to Regular Instruction. Half of the pilot districts spent 70%

or more of their DSSF funds in Regular Instruction, while the other half allocated the DSSF

funds in a lesser degree to Regular Instruction and instead utilized more funds for the

Technology and Special Instruction categories. A couple of districts stand out for their

higher than average spending in Technology: Thomasville City Schools and Edgecombe

County Schools, which allocated less than 50% of their DSSF funded expenditures to Regular

Instruction and invested about 40% and 30% respectively to Technology.

By school year 2005-06, the majority of the pilot districts concentrated a higher proportion of

their DSSF funded expenditures to the Regular and Special Instruction categories than in the

previous school year. This trend was accompanied by a reduction in the proportion of funds

allocated to Technology. Interestingly, however, the Montgomery County School System

adopted an opposite strategy by increasing the proportion of DSSF funds going to

Technology related expenditures from 17% to 41% and reducing the proportion of funds

going to Regular or Special Instruction from 56% to 30% and 12% to 5 % respectively.

Year Reg

ula

r

Inst

ruct

ion

Sp

ecia

l

Inst

ruct

ion

Pro

fess

ion

al

Dev

elo

pm

ent

for

Inst

ruct

ion

Stu

den

t

Ser

vic

es

Tec

hn

olo

gy

Oth

er

Su

pp

ort

ing

Ser

vic

es

Tra

nsp

ort

ati

on

Sch

oo

l

Lea

der

ship

Dis

tric

t

Ad

min

istr

ati

on

Total $

2004-05 66 7 6 2 14 1 1 1 0 $21,127,542

2005-06 68 10 6 5 6 3 1 0 0 $22,405,838

2006-07 65 10 6 5 9 5 0 0 0 $22,505,639

All Years 66 9 6 4 9 3 1 1 0 $66,039,019

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Other interesting cases are that of Edgecombe County and Northampton County Districts,

which reduced substantially the proportion of funds, dedicated to Technology and shifted

them primarily to the Professional Development category, becoming the two districts that

allocated the highest proportion of funds to this category.

Table 3a: Allocation of DSSF Funded Expenditures by District (Percentages and Total Amount)

in 2004-05

School Year 2004-05

District Reg

ula

r

Inst

ruct

ion

Sp

ecia

l

Inst

ruct

ion

Pro

fess

ion

al

Dev

elo

pm

ent

for

Inst

ruct

ion

Stu

den

t

Ser

vic

es

Tec

hn

olo

gy

Oth

er

Su

pp

ort

ing

Ser

vic

es

Tra

nsp

ort

ati

on

Sch

oo

l

Lea

der

ship

Dis

tric

t

Ad

min

istr

ati

on

Total $

Lexington City 88 0 0 2 9 0 0 0 0 791,028

Thomasville City 43 2 11 2 40 1 0 2 0 666,500

Edgecombe County 30 13 7 10 29 8 0 4 0 1,897,435

Franklin County 72 4 7 2 16 0 0 0 0 1,940,026

Halifax County 89 0 3 0 0 1 0 7 0 1,355,053

Weldon City 68 0 14 0 17 0 1 0 0 269,387

Hertford County 55 22 3 2 17 0 2 0 0 901,500

Hoke County 72 7 8 2 9 0 1 1 0 1,648,250

Hyde County 50 13 0 0 37 0 0 0 0 182,083

Montgomery County 56 12 1 7 17 5 1 2 0 1,119,499

North Hampton County 31 26 10 0 24 2 7 0 0 813,500

Pasquotank County 57 13 4 3 17 5 0 0 0 1,371,591

Robeson County 79 6 11 0 2 0 2 0 0 4,815,883

Vance County 75 3 0 1 18 0 3 0 0 2,039,250

Warren County 72 3 6 1 14 1 3 0 0 777,494

Washington County 70 3 1 0 26 0 0 0 0 538,750

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Table 3b: Allocation of DSSF Funded Expenditures by District (Percentages and Total Amount)

in 2005-06

School Year 2005-06

District Reg

ula

r

Inst

ruct

ion

Sp

ecia

l

Inst

ruct

ion

Pro

fess

ion

al

Dev

elo

pm

ent

for

Inst

ruct

ion

Stu

den

t

Ser

vic

es

Tec

hn

olo

gy

Oth

er

Su

pp

ort

ing

Ser

vic

es

Tra

nsp

ort

ati

on

Sch

oo

l

Lea

der

ship

Dis

tric

t

Ad

min

istr

ati

on

Total $

Lexington City 86 0 0 6 9 0 0 0 0 766,750



Franklin County 83 4 3 8 1 0 0 0 0 1,997,250

Halifax County 99 0 1 0 0 0 0 0 0 1,283,295

Weldon City 79 0 0 2 15 0 1 0 4 264,500

Hertford County 53 19 4 9 11 2 2 0 0 883,500

Hoke County 77 6 7 5 0 3 0 2 0 1,744,250

Hyde County 99 0 1 0 0 0 0 0 0 162,788




Robeson County 74 18 5 0 0 0 3 0 0 5,958,789

Vance County 88 0 1 6 2 0 3 0 0 2,130,654

Warren County 56 18 11 1 3 7 4 0 0 771,000


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Table 3c: Allocation of DSSF Funded Expenditures by District (Percentages and Total Amount)

in 2006-07

DSSF Funds and Teacher Pay

This section of the report examines the proportion of DSSF funded expenditures that were

allocated to salaries across the 16 pilot districts over expenditure categories and time. In

addition, the final portion of this section examines whether over the time the DSSF pilot

districts’ teacher salaries became more competitive compared to those paid by their closest

non-DSSF neighbors1.

1 Salaries were calculated using accounting codes that correspond to salaries, supplements, and bonuses for

teachers in Regular, Special and Remedial Instruction.

School Year 2006-07

District Reg

ula

r

Inst

ruct

ion

Sp

ecia

l

Inst

ruct

ion

Pro

fess

ion

al

Dev

elo

pm

ent

for

Inst

ruct

ion

Stu

den

t

Ser

vic

es

Tec

hn

olo

gy

Oth

er

Su

pp

ort

ing

Ser

vic

es

Tra

nsp

ort

ati

on

Sch

oo

l

Lea

der

ship

D

istr

ict

A

dm

inis

tra

tio

n

Total $

Lexington City 94 0 0 6 0 0 0 0 0 766,750



Franklin County 73 11 5 10 0 0 1 0 0 1,997,250

Halifax County 91 0 2 0 0 7 0 0 0 1,283,561

Weldon City 52 0 0 7 29 2 1 0 9 264,500

Hertford County 51 2 14 6 11 16 0 0 0 890,741

Hoke County 72 2 10 3 9 4 0 0 0 1,744,250

Hyde County 71 23 1 1 4 1 0 0 0 162,750




Robeson County 58 20 7 0 14 0 1 0 0 6,136,246

Vance County 92 0 0 7 1 0 0 0 0 2,023,750

Warren County 78 1 11 2 0 7 1 0 0 770,980


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Table 4 shows the percentage of DSSF funded expenditures used toward teacher salaries and

supplements in each of the corresponding years by District. The table reveals that, in the

aggregate, the 16 Pilot Districts spent about half of the DSSF funds on teacher salaries and

supplements and the proportion of funds expended for salaries and supplements remained

relatively constant over time. Pilot districts spent about 48% of their DSSF funds on teacher

salaries and supplements in school year 2004-05. This percentage increased slightly to 51%

by school year 2005-06 and decreased to 47% by school year 2006-07. Table 4 also reveals

that even though in the aggregate the proportion of DSSF funds allocated to teacher salaries

remained relatively constant over time, individual districts used different expenditure

strategies, and these strategies changed over time. Franklin County schools, for example,

allocated 45% of their DSSF funds to teacher salaries in 2005-06 but increased that share to

about 70% by 2006-07. On the other hand, Halifax County schools spent about 73% and

54% of their DSSF funds on teacher salaries in 2004-05 and 2006-07 respectively.

Table 4: Percent of Total DSSF Funds Dedicated to Teacher Salaries and Supplements

in the 16 Pilot Districts from 2005-2007

Teacher retention and recruiting was one of the main concerns for school principals in the 16

pilot DSSF districts at the time the DSSF program was enacted2. Next we examine the

impact of DSSF funds on average teacher salaries in order to assess whether salaries in DSSF

pilot districts became more competitive in relation to their non-DSSF neighbors. To make

this comparison we defined neighbors for DSSF pilot districts as all districts that shared a

border with a DSSF pilot district and were not classified as a DSSF pilot district. After

matching each pilot district with its non DSSF neighbors, we compared the differences in

average bonus and supplementary teacher pay for school years 2003-04 (before districts

received DSSF funding), 2004-05, and 2005-06.

2 See Henry et al (2008) , “Improving Teacher Quality in the DSSF Pilot Districts: A Comparison of Progress

from 2004-05 to 2005-06”

District

School Year

2004-05

School Year

2005-06

School Year

2006-07

Lexington City 42 65 54

Thomasville City 34 65 47

Edgecombe County 28 23 29

Franklin County 42 58 69

Halifax County 73 51 54

Weldon City 51 61 43

Hertford County 48 55 37

Hoke County 47 45 53

Hyde County 48 71 69

Montgomery County 46 8 15

North Hampton County 36 22 38

Pasquotank County 33 48 57

Robeson County 59 61 42

Vance County 61 71 72

Warren County 24 42 33

Washington County 59 42 38

Total 48 51 47

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We concentrate on bonus and supplementary pay because the certified portion of a teacher

salary is largely determined by education, experience, and NBCT status and varies little

across different districts once these teacher characteristics are accounted for. The results are

presented in the second and third columns in Table 5. The second column illustrates the

average supplementary pay differential between teachers in a particular DSSF district and

teachers with similar characteristics in their neighboring district before they received DSSF

funds (school year 2003-04). Thus, the second column reflects the DSSF and non-DSSF

salary differential for teachers with the same years of experience, National Board

Certification status, and education level for the 2003-04 school year. The third column in

Table 5 illustrates the supplementary pay differential for school year 2005-06, and the last

column in Table 5 shows whether there was a change in the supplementary pay differential

two years after the DSSF program was implemented.

The last column in Table 5 shows that, by the 2005-06 school year, 11 of the 16 pilot districts

gained salary competitiveness relative to their closest non-DSSF neighbors, either by

increasing the positive salary differential or by decreasing the negative differential they had

before DSSF implementation. On the other hand, 5 pilot districts lost relative

competitiveness by decreasing the positive differential or increasing the negative differential

they had before DSSF was implemented. Hertford County schools showed the largest

increase in salary competitiveness relative to its neighbors in the observation period. In

contrast, Halifax County School’s average supplementary pay became less competitive than

their neighbors’ during the observation period.

Table 5: Evolution of Teacher Bonuses and Supplementary Pay Differentials between

DSSF Districts and their nearest non DSSF Neighbors from 2003-2006

District

DSSF-Neighbor Difference $* Change in

Bonus/Supplementary

Pay Gap ** School Year

2003-04

School Year

2005-06

Lexington City -1658* -1608* 51

Thomasville City -1132* -1558* -425**

Edgecombe County 53 553* 500**

Franklin County -1813* -1260* 554**

Halifax County -1236* -2050* -813**

Weldon City -1265* -712* 553**

Hertford County 379* 1847* 1468**

Hoke County -682* -262* 421**

Hyde County -509* -358* 151

Montgomery County -142* -612* -469**

North Hampton -314* 233* 547**

Pasquotank -537* -921* -384**

Robeson County -2271* -1865* 405**

Vance County -249* 141 389**

Warren County -180* -674* -494**

Washington County 122 985* 863** *Represents statistically significant difference between DSSF district and neighbors at the .05 level.

** Represents a statistically significant salary differential in 05-06 to that of 03-04 at the .05 level

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Fund Supplanting Analysis

The last section of this report addresses the question of whether pilot districts used DSSF

dollars to supplant the expenditure of local funds. In other words, did pilot school districts

reduce expenditures funded locally and supplant them with DSSF funds, thus defeating the

purpose of creating a “supplemental fund”? We would deduce there was evidence of fund

supplanting if increases in DSSF funded expenditures were accompanied by decreases in

expenditures made from other funding sources.

Districts get funds from multiple sources at the local, state, and federal levels. Furthermore,

school districts’ strategies for allocating funds into expenditures change over time due to

changes in funding sources and changes in the composition of the student populations they

serve. As a result, in order to study the effect of a particular funding source on another, it is

necessary to isolate the correlation between expenditures made with a particular fund source

on expenditures made with another funding source by holding other factors constant,

including other funding sources, districts characteristics, and events that may change

statewide funding strategies in a particular year. Multiple regression analysis is a way to do

this statistically.

Table 6 presents the results of a regression analysis that estimated the impact of an extra

dollar of per pupil DSSF funded expenditures on locally funded per pupil expenditures. One

can imagine that a district might use DSSF funds to supplant local funds during a given year.

In addition, districts that spent DSSF funds in one year might find it possible to decrease

local expenditures in the following year (for example, the purchase of technology or

materials). Table 6 indicates that DSSF expenditures did not exert any statistically significant

effects on local expenditures, either in the year in which the DSSF expenditures were made or

in the following year.

Table 6: Estimates of DSSF Funded Expenditures’ Impact on Locally Funded

Expenditures¹

% Change in locally funded per pupil

expenditures associated with a 1$ increase

in per pupil DSSF funded expenditures

(same year)

% Change in locally funded per pupil

expenditures associated with a 1$ increase

in per pupil DSSF funded expenditures

(same year and the past year)

Current Year 0. 007 0. 006

Past Year - -0.008

¹Numbers correspond to coefficients of an econometric model estimated using the First Difference

Estimator. Coefficients on other variables omitted from this table for simplicity.

In conclusion, none of the coefficients on the DSSF funded expenditure variables (current or

lagged) in our regression analyses were statistically significant by themselves or jointly.

Thus, our analysis did not find evidence of local fund supplanting caused by DSSF funded

expenditures.

Conclusions

While the DSSF was a relatively small funding source for the 16 pilot districts, the program

allowed them substantial flexibility in using the funds. Key purposes of the program were to

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attract and retain qualified, competent teachers and to provide enhanced instructional

opportunities to students at risk of school failure, and it seems from their patterns of

expenditures, that expenditures for these purposes were a priority in the pilot districts.

Overall, across the three years of funding, the pilot districts allocated a majority of the DSSF

resources, 66 cents per dollar, to expenditures in the category of Regular Instruction.

Increasing expenditures for teacher salaries, supplements and bonuses was a particular focus

of the DSSF expenditures in the pilot districts, with over 50% of the DSSF funds allocated to

salaries and supplements. Eleven of the 16 pilot districts increased the amount they spent on

salaries, with the greatest increase being nearly 20%. Increasing the expenditures on salaries

is clearly consistent with a focus on attracting and retaining quality personnel. Changes in

the expenditure patterns over time could reflect (1) more time to plan for the use of these

funds on the part of the districts, (2) better advice about how the funds could be used to

improve student achievement, (3) greater confidence that the DSSF would continue and

therefore, (4) they could make greater allocations to recurring costs such as teachers salaries,

or (5) changing local needs.

Increasing the ability of educationally disadvantaged districts to attract and retain teachers by

offering more competitive salaries may have contributed to the positive effects of the DSSF

funds on high school student achievement that we found in earlier reports. However, simply

increasing the amount spent on salaries does not necessarily make a district’s salary more

competitive. Competitiveness is also based on what other districts are able to offer to

prospective teachers. Over two thirds of the 16 DSSF pilot districts gained salary

competitiveness relative to their closest non-DSSF neighbors, either by increasing the

positive bonus and supplementary pay differential or by decreasing the negative differential

prevailing before DSSF implementation. Although small relative to pilot districts’ total

budgets, the DSSF funds enabled eleven of the pilot districts to offer more competitive

salaries to attract and retain quality teachers.

A crucial final finding is that the pilot districts did not simply reduce local expenditures and

replace those expenditures with DSSF funds, thus defeating the purpose of creating a

“supplemental fund.” Overall, the findings of this examination suggest that DSSF funds were

used as intented and were associated with increases in salary competiveness in the majority of

pilot districts. In combination with the other reports it appears that by targeting funding to

districts rather than to specific schools or students and allowing flexibility within guidelines

for how the districts spent the funds within the framework of the ABC Accountability System

has resulted in appropriate use of funds and improved student performance.

car olina institute for public policy · 2015-11-09 · program (leaap). the pilot program...

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