The Evidence-Based School Finance Adequacy Model for Wisconsin: Resources to “Double” Student Performance

1. The Evidence-Based School Finance Adequacy Model for Wisconsin: Resources to “Double” Student Performance Allan Odden Anabel Aportela, Michael Goetz, Sarah Archibald and Michelle Mangan Consortium for Policy Research in Education October 25, 2006

2. Our Task • To conduct a school finance adequacy study, or what the Doyle Commission called, a “cost-out” study • How much money per pupil is needed to educate Wisconsin’s students to a rigorous – world-class – proficiency standard and a foundation formula to distribute those dollars • A programmatic and fiscal approach • www.wcer.wisc.edu/cpre and follow the links to the Task Force

3. The Story in Brief • Wisconsin’s school finance system meets most equity benchmarks • Wisconsin’s student performance is above the national average • But equity is not sufficient today and beating the national average is not good enough • To compete in the global economy Wisconsin needs to “double” student performance and fund programs and strategies that can produce those learning gains

4. Wisconsin School Finance 2005

5. Table Results • Variation in property wealth per pupil, $409,766 in lowest spending decile to $798,840 in highest decile • Note: average wealth in highest spending decile is far below the secondary guarantee of $1,006,510 • Variation in school tax rates, from 7.07 mills in lowest spending decile to 10.62 in highest spending decile, with an average of 8.74 mills for shared costs • Variation in shared costs per pupil, from $7720 to $9973, with average of $8527 • Note: average shared costs per pupil in lowest decile of $7720 is higher than current operating expenditures per pupil for 19 states in 2004-05. • Also note: most shared costs above Tier 2 shared costs of $7782 • “New” school finance problem: high wealth, high tax rates and high dollars per pupil, rather than the “old” problem of low wealth, high tax rates and low dollars as well as high wealth, low tax rates and high dollars per pupil • Factor most strongly linked to higher spending: the local school tax rate

6. Wisconsin Equity

7. Wisconsin School Finance Equity 1. The two key equity statistics indicating degree of equal dollars per pupil are the coefficient of variation (CV) and McLoone Index • CV benchmark is less than or equal to 10% • CV in 2005 is 8.3%, better than the benchmark • McLoone benchmark is greater than or equal to 95% • McLoone in 2005 is 2005 is 95.2%, better than the benchmark 2. The key equity statistic for the linkage between dollars per pupil and property wealth per pupil is the wealth elasticity • Wealth elasticity benchmark is less than or equal to 10% • Wealth elasticity in 2005 is 5.1%, better than the benchmark 3. So generally, Wisconsin school finance beats all the standard equity benchmarks

8. Wisconsin School Finance Equity • When adjustments are made for pupil need, all equity statistics worsen • So WI school finance equity is pretty good but more robust recognition for pupil needs is required

9. 2. Student Achievement

10. Status of Student Achievement • There is a large discrepancy between student scores on Wisconsin’s tests and scores on the National Assessment of Educational Progress (NAEP) tests, which have a more rigorous, national performance standard • About 80% of students score at or above proficiency on state tests but only about 1/3 do so on NAEP tests • Even though we are slightly above the national achievement average, we are below average on international measures of achievement. • Further, according to the Education Trust, Wisconsin’s success with minority students is not good and the statewide achievement gap worsens from elementary to middle to high school

11. WKCE/WAA CombinedGrade 4 Mathematics2002-2004 Source: Wisconsin Department of Public Instruction

12. National Assessment of Educational ProgressGrade 4 Mathematics1992-2003 Source: NAEP

13. The Problem • Wisconsin needs to move a “good” education system to a “great” education system • We need a GREAT education system in order for our children to have high wage jobs in the emerging, knowledge-based global economy and to grow our state’s economy and tax revenues so we can fund the services our citizens want

14. Moving from Good to Great • What prevents us from moving from a “good” to a “great” education system? • Wisconsin citizens like their schools • Our kids do better than the national average • So we are pretty content with what we have • But on deeper analysis: • Our kids don’t do well on international benchmarks (where our future lies) • The funding system is archaic, too expensive for the state and a heavy burden for many

15. Future Needs • The emerging, knowledge-based economy requires high levels of skills and cognitive expertise • It doesn’t matter that our kids now beat Mississippi or the national average; in the future, they must function as citizens of the global economy, so • They need to beat the kids in Singapore, China, Korea, India and they fall far short of that goal, especially low-income kids and kids of color • Even on national tests we don’t do all that well; though we educate 85 kids to a proficiency level on our state tests, we do so for only a third of our kids on the NAEP • FUTURE GOAL: “Double” Student Performance at a NAEP-caliber proficiency standard

16. Wisconsin Cannot Afford the Current Aid System • Designed in the 1970s as a route to reducing property taxes, it did not do so • The system actually was and still is an incentive to local school spending; over time both property taxes for schools and state aid have grown, even after the revenue limits and QEO of 1995 • The state cannot afford a system that supports 2/3rds of what local districts decide to spend

17. The Education and School Funding Challenge • Redesign an education system that can “double” student performance over the next decade • Redesign the state aid formula so that it supports that education system and can be afforded by the state over the long term

18. We Can “Double” Performance Some Examples: • Madison doubled the reading performance of its African American students in 3rd grade reading • Abbotsford in rural Wisconsin increased math performance from 55% to 87% • The Columbus school in Appleton doubled performance • Monroe doubled the percent at advanced levels in elementary school math • We are studying schools in Lacrosse and Milwaukee

19. Examples of “doubling” performance in other states ….. • Kennewick district in eastern Washington • Rosalia, a small rural district like Abbotsford • Long Beach and Garden Grove in California; Newport News, Virginia; Aldine, Texas • Reading First schools in Washington, with even greater gains for low income and ELL students

20. How Did Schools “Double” Performance?Focused on Instruction • Conducted a needs assessment • Set higher goals: double performance, 90% of kids at or above proficiency, or advanced. • Threw out the old curriculum and adopted a new, research-based curriculum • Engaged in a wide range of data-based decision making, including formative assessments, to tailor instruction to exactly what students did and did not know

21. How Did Schools “Double” Performance?Focused on Instruction • Invested in extensive, long-term professional development – days in summer institutes, placed reading and math coaches in schools, money for trainers • Used school time more efficiently – 90-120 minute reading blocks; protected math blocks; sometimes double reading or math periods, instead of electives, for struggling students

22. How Did Schools “Double” Performance?Focused on Instruction • Provided multiple extra-help strategies for struggling students: 1-1 tutoring, small group tutoring (both by licensed teachers), double periods during the regular day, extended day programs, summer school • In the process, created professional learning communities that worked together relentlessly to boost student performance

23. How to “Double” Performance … The Challenge: Scale up these strategies in all districts and schools to create a GREAT Wisconsin school system And Provide adequate funding so all districts and schools have the resources to deploy these programs and strategies – the evidence-based model

24. The Evidence-Based Model • The evidence-based model – the October 20 report -- identifies the resources schoolsneed to implement all the strategies required to “double” student performance in mathematics, science, reading/writing, and history • Schools and districts will need to engage in major restructuring to use those resources in ways that actually “double” student performance • This will require statewide leadership and perhaps some limits on resource use

25. Overview of Costs • The costs of the model, with substantial extra help strategies for struggling students, is another 6.8 percent over what is now spent on shared costs plus categorical programs – details below • The adequate resources can be delivered in a two-tiered foundation program, with resources built up from the school level, with no revenue limits (the foundation level is the ceiling for state support), no tier 3, no QEO and local add-ons above the adequate level

26. Costs of the Model ….. • For the resources recommended for prototypical schools, see Table 1 of EB Report, pp. 109-111 • For smaller schools and even smaller schools/districts, see Table 2, p. 112 and pp. 113-114

27. Costing the Recommendations • All recommendations are tailored to the pupil numbers and pupil demographics of (almost) every school in Wisconsin, including all independent Charter schools • School resources are aggregated to the district level and then district resources added: central office, operations and maintenance, and transportation

28. Salaries and Benefits • We used state average salaries to price out all staff recommendations and used the following benefit formula for our October 20 cost estimates: • FICA and Medicare: 7.65 % • State retirement: 10.6 percent • Workers comp and unemployment ins: 1.2% • Health benefits at the rate for UW employees or 18.09 % (controversial technically, legally and politically) • Total: 37.54%

29. Costs of the Model …. • Model includes a recommended declining enrollment adjustment, plus half-day K for 4 year-olds now in kindergarten, and full-day kindergarten for 5 year olds, so the ADM in the model is: 884,965 • Official ADM is 869,002 minus K3ADM of 4026, so 864,976; Model ADM is 19,989 kids higher

30. Costs of the Model …. • We have replaced the following categorical programs totaling ~$500 million: • Special education • SAGE • Transportation • School Library • Bilingual • Preschool to Grade 5 • Children at Risk • Peer Review Mentoring • Supplemental Large Area • English for SE Asian Students • Charter Schools • Special adjustment aid (hold harmless)

31. Costs of the Model …. • We have retained the following categorical programs: • Chapter 220 integration, about $84 million • State tuition, driver education, county handicapped children, head start, school lunch, nutrition, milk and school breakfast, alcohol and drug abuse, alcohol driver safety, Sage debt, CESA admin, minority scholarships, youth tobacco, alternative ed, Wisconsin moving, International education, green healthy, advanced placement, Wallace fellows, about $44 million

32. Costs of the Model …. • We also “carry forward”: • Operations and maintenance at $938 per pupil • Transportation at $411 per pupil on average, but used the actual transportation expenses for each district in Tier 2 (see next slide)

33. Running the Model Through a Foundation Formula • We ran a modified, Foundation version of current formula, with: • Tier 1 at $1000 per pupil, with a tax rate of 0.52, so primary guarantee of $1,930,000 • Tier 2 set at the adequacy level from the model PLUS a district’s actual transportation expenditures per pupil in 04-05 • Tier 2 tax rate of 7 mills (to keep state/local costs at current proportion for shared costs) • Seven mills is a required tax rate (this tax rate could be higher or lower and would then shift the state local share of funding) • For very wealthy districts, if the 7 mills raises more than the adequacy amount, it is ratcheted back to a level that just produces the adequacy level • Special Education, the three poverty programs (Tutors, extended day, Summer School) and ELL categorical programs are then added • Then debt service is added via a % equalizing formula: 20 percent for district of average property wealth per pupil, higher % for lower wealth district and lower % for higher wealth district • Then a Hold Harmless so no districts receive less aid per pupil • Then a local add-on is provided for districts with actual tax rates above Tier 1 + Tier 2 + Debt Service tax rates

34. Running the Model Through a Foundation Formula • No revenue limits as the adequate level in Tier 2 functions as a ceiling support level • No Tier 3 • No QEO • And, again, extra local dollars if actual tax rate is greater than sum of Tier 1 + Tier 2 tax rate + debt service tax rate, no constraint on local control except a referendum vote, though no state support for the local add on

35. Impacts of this Foundation … • Total increased costs of $584 million, $503 million of state dollars, and $81 million of local dollars • This equals a 6.8% total increase – MODEST • No state tax increase required to fund adequacy – phase new model in over 2-3 years • 389 state aid winners (compared to just ~263 winners for actual 07 aid runs), including Markesan and Florence, and districts with high percentages of poor students – Milwaukee, Racine, Beloit, etc. • 49 districts get hold harmless at a cost of $23 million (v. $13.3 million HH for 2007)

36. Impacts of this Foundation … • 137 districts required to raise local tax rate to the 7 mill level for Tier 2 • A requirement in context of adequacy • Could exempt those already producing acceptable student performance • Average rate increase is 0.6 mills • Altogether, more than 75% of money is at the school level when pro rate M & O, most of which is school

37. Impacts of this Foundation … • All equity statistics show system is still fair • Coefficient of variation drops a tad • McLoone Index rises • Wealth elasticity drops dramatically to essentially zero • This formula would provide adequate funding so all schools could deploy educational strategies that could “double” student performance

38. Comparison of Actual to Model

39. Costs of the Model …. • Note that the EB model puts much more into extra help categorical programs, which the equity analysis above showed was a shortcoming of the current system • And within shared costs, the EB model provides more professional development

40. Related Issues • Management and accountability systems to help direct the system to restructure in order to “double” student performance • Should the state restrict use of any resource in the funding model? • Structure to provide leadership and leadership training to refocus schools on strategies that boost student learning – role of DPI, CESAs, educational organizations, political and business communities, university