Basics of School Finance

WSSDA WebinarMarch 27, 2014

Barbara Posthumus, Director of Business ServicesLake Washington School Districtbposthumus@lwsd.org

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School Funding History Sources of Revenue Funding Model Budgeting

Agenda

Washington State Constitution Article IX

“It is the paramount duty of the state to make ample provisions for the education of all children residing within its borders,...”

School Funding History

• Doran Decisions 1977-1988• Tasks the Legislature with defining “basic education”

• ESHB 2261 • Establishes prototypical school model & establishes QEC

• SHB 2776• Creates new school funding allocation model

• McCleary Decision 2010• Confirms state funding is not ample, it is not stable, it is not

dependable

Doran Court Decisions Doran I - 1977

◦ the level of funding provided by the state.... was not fully sufficient..

◦ legislature had not defined basic ed or provided fully sufficient funding without reliance on special excess levies

◦ led to Basic Ed Act of 1977 which established revised funding formula, substantially increased state funding, and limited amount and purpose of special levies.

Doran Court Decisions Doran II - 1983

◦ duty to fully fund includes not only basic ed act also: special education; transitional bilingual; remediation; transportation for some pupils.

Doran III - 1988◦ required establishment of some form of “safety

net” in special education

ESHB 2261 ESHB 2261 passed in 2009

◦ Defines new programs of Basic Education, while mandating that no new requirements shall be implemented without associated funding.

◦ Adopts prototype schools funding model. ◦ Establishes that programs shall be fully funded by the

2018-19 school year. ◦ Establishes a new funding formula for Pupil Transportation,

to begin during or before 2013. ◦ Created the Quality Education Council (QEC) to develop

and implement workgroups on funding formulas, data governance, levy, compensation

◦ Creates a roadmap for work groups to define the details of the funding formulas.

SHB2776 Prototypical School Funding Model

SHB2776 passed in 2010◦ Implements the new funding structure for education

as proposed by the QEC and the Funding formula technical workgroup

◦ New funding structure to begin Sept 2011◦ New structure only - no new dollars◦ Creates timeline for funding phase-in and 2018

deadline for full funding◦ Funding shall be for allocation purposes only

SHB 2776 Goals (continued)

More funding must begin in 2012-13 Full Day Kindergarten fully funded statewide

by 2017-18 K-3 Class Size Reduction fully funded by

2017-18 Materials, Supplies and Operating Costs fully

funded by 2015-16 Transportation fully funded by 2014-15

McCleary v. State of Washington McCleary 2010o The Washington State Supreme Court issued a ruling that

the state is not complying with its constitutional duty to “make ample provision for the basic education of all children in Washington.”

o Court recognized the Legislature had enacted “a promising reform package” in its 2009 education reform bill and indicated that legislation, if funded, “will remedy deficiencies in the K-12 funding system.”

o Court deferred to the Legislature to determine how to meet its constitutional duty, but retained jurisdiction over the case to “facilitate progress in the state’s plan to fully implement the reforms by 2018.”

Sources of Revenue

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Retail Sales45%

B&O Tax21%

Property Tax13%

Use Tax3%

Real Estate Excise Tax

3%

Public Utility3%

Other12%

State PerspectiveWhere Does the money come from?

Source: Organization and Financing of Washington Public Schools May 2013

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Public Schools44%

Higher Ed8%

Government Oper.3%

Human Services37%

Natural Resources

1% Other8%

State PerspectiveWhere Does the money go to?

Source: Organization and Financing of Washington Public Schools May 2013

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State BEA66%

Local Property Tax/Levy

23%

Federal10%

Other Local1%

(apportionment)

District PerspectiveWhere Does the money come from?

Source: Organization and Financing of Washington Public Schools May 2013

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Largest Revenue source for school districts Basic Education Categorical

◦ Special Education◦ Highly Capable◦ Learning Assistance Program◦ Bilingual Instruction◦ Transportation

State Revenue or “Apportionment”

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Enrollment is the largest driver of revenue Key to positive or negative impacts to

budget Prototypical Model Enrollment Staffing Funding Staff Mix (levels of education and

experience of your teachers) drive funding

Basic Ed Apportionment

Prototypical School Funding Model

Fixed theoretical school size used for modeling purposes

Funding formula assumptions are based upon prototypical school

Class size assumptions are different based upon grade and subject

Planning time for teachers is factored in for determination of class size

Category Elem K-6 Middle 7-8

High 9-12

Base Enroll 400 432 600

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Certificated Instructional Staffing (CIS) Legislative class size allocations plus

planning time equals teachers

Prototypical Model

Students per staff

% Increase in Teachers to Cover Planning

Elem Gr K-3 25.23 15.5%

Elem Gr 4-6 27.00 15.5%

Middle Gr 7-8 28.53 20.0%

High Gr 9-12 28.74 20.0%

K-1 High Poverty

20.30 20.0%

Gr 2-3 High Poverty

24.10 20.00

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Other cert staff based on prototypical school model.

Prototypical Model

Elem K-6

Middle 7-8

High 9-12

Per Prototypical School 400 432 600

Librarian .663 .519 .523

Counselor .493 1.216 2.539

Nurse .076 .060 .096

Social Workers .042 .006 .015

Psychologists .017 .002 .007

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Classified Staff (CIS)

Prototypical Model

Elem K-6

Middle 7-8

High 9-12

District Wide

Per Prototypical School 400 432 600 Per 1,000 students

Teaching Assistance .936 .700 .652

Office Support 2.012 2.325 3.269

Custodians 1.657 1.942 2.965

Student & Staff Safety .079 .092 .141

Family Involvement Coord.

.0825

Technology .628

Facilities/Maint./Grounds 1.813

Warehouse/Mechanics .332

Central classified administration

5.3% of staff units x 74.5%

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Certified Administration Staff (CAS)

Prototypical Model

Elem K-6

Middle 7-8

High 9-12

Per Prototypical School 400 432 600

Principal 1.253 1.353 1.880

District Wide

Central Administration 5.3% of staff units

x 25.5%

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LAKE WASHINGTON SCHOOL DISTRICTBASIC ED STAFFING 2013-14 Actual

Elem Middle High Planning Elem Middle HighGrades K-6 Grades 7-8 Grades 9-12 Time Grades K-6 Grades 7-8 Grades 9-12 Total

Ratios Staff FTE

Certificated Certificated

Grade K-3 25.23 15.5% Grade K-3 352.360 352.360

Grad K-1 High Poverty 20.85 15.5% Grad K-1 High Poverty 0.000 0.000

Grad 2-3 High Poverty 24.10 15.5% Grade 2-3 High Poverty 0.000 0.000

Grade 4 27.00 15.5% Grade 4 94.637 94.637

Grade 5-6 27.00 15.5% Grade 5-6 174.988 174.988

Grade 7-8 28.53 20.0% Grade 7-8 156.475 156.475

Grades 9-12 28.74 20.0% Grades 9-12 243.120 243.120

Subtotal 1,021.580

Per Prototypical School 400 432 600 1,000

Librarian 0.663 0.519 0.523 Librarian 23.205 4.469 5.075 32.749

Counselor 0.493 1.216 2.009 Counselor 17.255 10.472 19.496 47.223

School Nurses 0.076 0.060 0.096 School Nurses 2.660 0.517 0.932 4.109

Social Workers 0.042 0.006 0.015 Social Workers 1.470 0.052 0.146 1.668

Psychologists 0.017 0.002 0.007 Psychologists 0.595 0.017 0.068 0.680

Subtotal 86.429

Total Cert Staff 1,108.009

Principals 1.253 1.353 1.880 Principals 43.855 11.651 18.245 73.751

Classified Classified

Teaching Assistance 0.936 0.700 0.652 Teaching Assistance 32.760 6.028 6.327 45.115

Office Support 2.012 2.325 3.269 Office Support 70.420 20.022 31.724 122.166

Custodians 1.657 1.942 2.965 Custodians 57.995 16.724 28.774 103.493

Student & Staff Safety 0.079 0.092 0.141 Student & Staff Safety 2.765 0.792 1.368 4.925

Family Involvement 0.0825 Family Involvement 2.887 2.887

278.586

Total School Staff 1,460.346

Districtwide Districtwide

Technology 0.628 Technology 14.785

Facilities/Maint/Grounds 1.813 Facilities/Maint/Grounds 42.683

Warehouse/Mechanics 0.332 Warehouse/Mechanics 7.816

Cert Admin 5.3% 25.47%

Classified Admin 5.3% 74.53% Cert Admin 20.595

Classified Admin 60.264All staff calc 0.065699 0.063788CLS staff calc 0.014484 0.014485 Total Cert Instructional Staff 1,108.009

Total Cert Administrative Staff 94.346Total Classified Staff 404.134

Certified staffing FTE and Staff Mix (levels of education and experience of your teachers) drive funding. Cert FTE multiplied by state salary allocation equals funding

Classified and Administration FTE multiplied by average state salary allocation equals funding

Some districts are grandfathered at higher amounts

Salaries drive mandatory benefits and medical benefits

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How Model Drives Funding

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Materials, Supplies and Operating Costs (MSOC)

2014-15 Level

Technology $89.13

Utilities and Insurance $242.17

Curriculum and Textbooks $95.69

Other Supplies and Library Materials $203.16

Instructional Professional Development

$14.80

Facilities Maintenance $119.97

Security and Central Office $83.12

Total $848.04

Substitutes Career and Technical Education (Vocational

Education) Small Schools Districts – special allocations

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Basic Apportionment

Special Education◦ Funded based on a % of basic ed◦ Birth to Pre-Kindergarten=115%◦ Kindergarten to age 21 =93.09%

Learning Assistance Program (LAP), Transitional Bilingual (ELL) and Highly Capable◦ Provides funding for additional hours of

instruction◦ Formula drives cert teachers

Transportation

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State Categorical Funding

Local Levy◦ Must be voted on by community at least every

four years◦ Amount that can be collected is capped by state

formula◦ Increased from 24% to 28% in 2011◦ Set to sunset after 2017◦ Some districts are grandfathered at higher

percentage Levy Equalization

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Levy Funds

Special Education IDEA Vocational Education Title I (Remediation) Title II (Professional Development) Title III (Limited English Proficiency) Free and Reduced Lunch Funding Head Start Other Grants

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Federal Funding

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Investment earnings Fee programs – all day kindergarten, sports

participation, food services, summer school Grants and donations Rentals and leases – facilities use Revenue from other school districts Fines and fees from students (workbooks, supply

fees)

Local Nontax/Other

Budgeting

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Enrollment Mid-Year Projections (Fund Balance) Legislative Impact Budget Preparation Multi-year Budget Projection Monitoring and Reporting

Year in the Life of School District Budgeting

Enrollment

Mid-Year Projections

Budget Preparatio

n

Multi-Year Projections

Reporting

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Staffing drives 85% of budget State defines format of budget

◦ Program – Activity - Object

Budget Factors

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Basic Educa-tion54%

Special Education13%

Vocational4%

Compens. Educa-tion6%

Other Instruction1%

Community Services

1%

Transportation/Food Srvs

8%

Other Support Svcs.14%

District PerspectiveWhere Does the money go?

Source: Organization and Financing of Washington Public Schools May 2013

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Certificated Salaries

45%

Classified Salaries17%

Employee Benefits/Taxes

21%

Supplies and Ma-terials

6%

Purchased Services

11%

Capital Outlay0%

District PerspectiveWhere Does the money go?

Source: OSPI Financial Summary 2011-12

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Date Action

January Next year Enrollment Projections Complete

Feb/Mar Prepare Current Staffing Data

Mar/April Departmental Budget Preparation

April Staffing Allocations for next year developed

April/May District Budget Advisory Process

April Legislative Session Ends

May- early June Balance Budget

May Board Work Session Presentation

June Prepare Budget Document an send draft to Board

Sample Timeline

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Date Action

June 25 Board Meeting – Draft Budget Presentation

July 10 Final date to prepare budget and available to public

July 10 Final date to forward draft budget to ESD

July 20 Publish First Notice of Public Hearing

July 20 Final date to have copies of Budget available to public (1st class districts) and due to ESD for review

July 27 Publish Second Notice of Public Hearing

August 6 Board Meeting – Public Hearing and Final Adoption

August 31 Final date to Adopt Budget (1st class districts)

Sept 3 Final date to forward budget to ESD (1st class districts)

Sample Timeline

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Feedback◦ What kind of public process will you have?◦ Goals for next year◦ Goals for long-term

Questions◦ How are contingencies built into budget?◦ Does your district regularly do budget extensions?

Board input/Questions

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Multi-year Budget Projection

How do decisions today effect long-term budget outlook?

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“A monthly budget status report for each fund shall be prepared by the administration of each school district; and a copy of the most current budget status reports shall be provided to each member of the board of directors of the district at the board's regular monthly meeting. The report shall contain the most current approved budget amounts by summary level accounts and the fund balance at the beginning and end of the period being analyzed….Also, as a part of the budget status report, the administration shall provide each member of the board of directors with a brief written explanation of any significant deviations in revenue and/or expenditure projections that may affect the financial status of the district… “

Monitoring and ReportingWAC 392-123-115

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Meet with Business Manager Ask about funding issues Ask about budget preparation process Ask about long-range financial picture Ask about monthly board financial reports

Next steps

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Additional Resources Organization and Financing of Washington Public

Schoolshttp://

www.k12.wa.us/safs/PUB/ORG/13/Final%20Edition%202013.pdf

A Citizen’s Guide to WA State K-12 Financehttp://

www.leg.wa.gov/Senate/Committees/WM/Documents/2014%20K12%20Citizens%20Guide.pdf

“A Brief History of Education Funding in WA State” This is a one-page pictorial timeline of fundinghttp://

www.k12.wa.us/Communications/PressReleases2014/EducationFundingChart.pdf

Quality Education Council (QEC) reportshttp://www.k12.wa.us/QEC/default.aspx

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Final Questions