Overview of School FundingESSA Negotiated Rulemaking

Dr. Karen Hawley Miles March 2016President & Executive Director • Education Resource Strategies

How are districts funded?

3

Spending varies widely across districts...

Source: 2013 ERS database analysis; refers to operating expenditures. For comparison purposes only, the dollars are adjusted for geographic differences in the cost of living, so they will not match district reported numbers exactly.

Aldine,TX Charlotte, NC

Knox County, TN

Fulton County, GA

Denver, CO Prince George's

County, MD

Baltimore, MD

Cleveland, OH

Washington, DC

Newark, NJ

$7,800 $8,300$9,200

$10,200 $10,800

$13,000$14,100 $14,400

$16,800

$21,100

K-12 Dollars Per Pupil

~3x

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All levels of government fund education – Title I is the federal government’s largest contribution

Source: U.S. Dept. of Education, National Center for Education Statistics, Survey F-33, 2012-13

National Average Typical Urban District10% 16%

45%49%

45%36%

Sources of Education Funding

LocalStateFederal

How do districts allocate resources to schools?

6

Most districts allocate staff positions to schools but use of weighted student funding is growing

Source: ERS

Typical Weighted Student Funding

How resources are allocated

Most staff positions and non-personnel budgets are allocated based on enrollment

Some positions are allocated based on school size

Staffing ratios vary by: Grade level Student need Programs offered

Schools get a set dollar amount per pupil with additional amounts (weights) linked to student needs such as: Poverty Special Education English Language Learner Grade level

Example 1 Principal 1 Assistant Principal if less than 450 students,

2 if greater 1 teacher for each 18 students in grades K-3 1 teacher for each 22 students in grades 4-5 1 Special Education teacher for 24 students on

an IEP receiving supplemental support

$5,000 per general education pupil Plus $600 for each low income student Plus $1,000 for each ELL student (0.2

weight)

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But not all positions or spending in schools goes through these formulasExample positions that might be allocated using different rules:

Instructional Coaches Additional staff or resources for magnet programs Staff positions that serve more than one school such as a:

Nurse Art teacher

Utilities

Districts vary in how much they keep out of the formula

8

Most districts experience significant per pupil funding variation across schools

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Source: ERS analysis; Midwest partner district financial file 2016

Secondary schools tend to be higher funded than elementary schools

Median $5.8KHi-Lo Spread 1.6X

Median $7.0KHi-Lo Spread 1.9X

Median $6.5KHi-Lo

Spread 1.6X

Actual District ExampleSchool Level Gen Ed. Dollar per Gen Ed. Student by School

Excludes Federal Funds

Elementary Schools Middle High

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80 to 90% of a school’s budget is spent on people

65%5%

2%

5%

8%

1%2%

9%

Typical School Budget

Teachers

Instructional Aides

Student support

Administration

Clerks & Other Staff

Substitutes

Supplies

Utilities & Maintenance

Source: ERS analysis

10

Most districts use average (as opposed to actual) teacher salary for budgeting which disguises inequity

Using average salary School A School B

District average salary $60,000 $60,000

Number of teachers 10 10

Budgeted for salary $600,000 $600,000

Though the district would appear to be

making an equal investment in these

schools on an average salary basis…

…School B actually invests $300k more

than School A

Using actual salary School A School B

Novice teachers earning $30,000 each 5 0

Mid-level teachers earning $60,000 each 5 5

Experienced teachers earning $90,000 each 0 5

Actual salary $450,000 $750,000

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Novice teachers tend to be placed disproportionately into high-need schools

Source: ERS analysis; Midwest partner district financial file 2016

Lowest-need quartile of schools Highest-need quartile of schools

16%

30%

Actual District ExampleNovice Teachers by School Need Quartile