50-State Survey of School Finance Policies 2015: Key Findings and Trends

1. A 50-State Survey of Finance Policies and Programs:The 2015 Data Collection Results Deborah A. Verstegen, Professor University of Nevada, Reno dav3e@unr.edu Robert Knoeppel, Professor & Chair Clemson University RCK@clemson.edu February 11, 2016 National Education Finance Conference Draft-For Comment

2. Thanks to the American Federation of Teachers & the National Education Association for support for the survey and website Special thanks to State officials for their expertise and responses on the survey Website: http://www.schoolfinances.info

3. Purpose • Review and Highlight • Findings from 50-State survey of state school finance policies for 2015 • Responses for all 50 states • Background • Previous comprehensive state survey: • Verstegen, 1990 (ECS) • Salmon, 1987 (AEFA) • Whitney (NCES) 1997-98 • Verstegen and Jordan, UNR, 2007

4. Survey Methodology • Iterative process; electronic/paper survey methodology • Survey 50-Chief Education Officer/ Superintendent of Public Instruction • Follow-up: September - July • No response states: experts in the field completed the survey • Arizona—Oscar Jiménez-Castellanos and David Martinez • Connecticut—Dianne deVries • Virginia—Richard Salmon • Ohio—David Vesely Written description by state; and by categories across states—formula, special education, ELL, low income, transportation, capital outlay, other • Web posting and verification by State Department of education personnel/CFO, September 2015 • Finalize and post: http://www.schoolfinances.info

5. State Finance Policy Information • Description of Finance Formula • Student-Based Components • Special Education • Compensatory Education • English Language Learner • Gifted and Talented Education • Other-Career and Technical Education (2015) • Preschool (2015) • District-Based Components • Density/Sparsity of Small Schools • Instructional Unit Weights for Grade Level Differences • Declining Enrollment or Growth Capital Outlay or Debt Service • Transportation • Other—Charter Schools (2015)

6. State Finance Policy Information (con't) • Revenue and Expenditure Information • State Mandates Restricting Revenue or Expenditure Increases • Property Assessment Ratios Used/Legal Standards for Property Assessment* (Assessed Value/Market Value) (2015) • Measure of Local Ability to Support Schools • School District Budget and Tax Rate Procedures/Sources of Local Revenue • State Support of Nonpublic Schools

7. Findings: State Aid Systems • How do states pay for public elementary and secondary schools? • What are the key methods they use? • How are special needs supported? • What key issues / trends does the survey raise?

8. Key Methods for Funding Education Foundation Program District Power Equalizing Full State Funding Flat Grant Combination Approaches

9. State School Finance Formulae

10. New Finance Systems—CA, ND, RITrend is Toward Weighted Funding • California—Local Control Funding Formula

11. New Finance Systems—CA, ND, RITrend is Toward Weighted Funding • North Dakota • “Designed to provide each district an adequate education regardless of local [wealth] ability to pay…” • Base amount: $9,092 • Uniform local contribution • Weighting: sparsity, special education, low income, ELL • NOTE: limit fund balances, 45% of budget plus $20,000

12. New Finance Systems—CA, ND, RITrend is Toward Weighted Funding • Rhode Island • Basic Ed funding--$8,966 pp • Poverty + 40% weight • Special Education—high cost, 5x base, state pays • CTE • Transportation

13. State School Finance Formulae • Foundation Program (37 states) • Recent additions, CA, ND, RI (wgt foundation programs) • District Power Equalizing(2) • WI (3 Tiered GTB), VT (GY) • Two Tiered/ Combination (9) • GA (FP & GY), IL (FP, Alternate, Flat Grant), KY (FP, GTB I to 15% adj base, GTB II 30%); MT (FP & GTB); OK (FP & GY); TX (FP & GY) • Full State Funding (1) HA • Flat Grant (1) NC

14. State School Finance Formulae--Major Finding Total Foundation Programs, including Two Tiered Systems 46 states use as key method to pay for schools

15. Foundation Programs: Are They Adequate & Equitable? • Pupil Unit—foundation amount per pupil varies • Arizona $3,373, Arkansas $6,521, Connecticut $11,525, Kansas $3,852, Michigan $7,126, Nevada $5,192, Minnesota $5,831, New Jersey $11,009, South Carolina $2,120 • Instructional Unit- ID $22,401, Montana, $40K, 80K, 290K, El, Middle, HS • How is amount determined: rational or political basis • Foundation Amount: Adequacy target? • South Carolina—supports a “minimum education program…” • Maine-”adequacy based formula” cost analysis of $ needed to reach proficiency in state standards • Missouri-based on State and local funding in districts meeting all performance standards • New Hampshire-Adequate Education Aid Formula • Mississippi-Adequate Ed Program—based on efficient schools based on metrics

16. Foundation Programs—How they vary What is included in the base? New Attention to PreK as part of Foundation: • Nebraska-Counts 4 yr olds in formula • West Virginia-Pays for 4 yr olds (optional for student) 25 hrs/week • NJ-foundation funding for at risk 3 & 4 yr olds (not fully implemented due to recession) • Vermont-aged 3-5 entitled to attend PreK for 10 hrs / week (2016) • Oklahoma-Early childhood wgt-½ day 0.7; full day 1.3

17. Foundation Programs—How they vary Trend towards weighted funding • CA, FL, GA, KY, OR, SC, ND, NV, RI, etc • Local effort, tax base variations NY, NJ-property and income NV, Property and sales Michigan, 18 mills, 50% AV Alabama, 10-15 mills, 20% AV • Pupil count varies--ADM, ADA, ENR, Wgt

18. Foundation Programs—How they vary • Is funding limited to the formula [inclusive]? • Local leeway/Recapture • Arizona, leeway • Arkansas, “recoup” • Texas, “Recapture” • Wisconsin “Negative Aid • Other: • Adjustments-Illustrative • Cost of education factor: Alaska-area cost differential; Florida-cost factor; Massachusetts-wage adjustment factor, up to +13%; Maryland-Geographic cost of education • Grade level adjustments • Security Aid, NJ • Teacher experience factor-Oregon, Arizona • Other-High cost students and districts

19. State Allocation Policies for Special Education

20. State Funding of Special Education • Weights per pupil (20 states) • Basis: Disability, Instructional Arrangement, Service Intensity; • Multiple (OK, AZ) or Single (MD, OR, UT, WV). • Unit (6 states): teacher support based on caseload (NV) • Cost reimbursement (8 states) • Wyoming reimburses 100% of approved special education costs. • Census: (8): Overall % of students in District • California “model based on assumption that, over a reasonably large geographic area, the incidence of disabilities is relatively, uniformly distributed.” New Jersey changed to census • *Other-new area provided in addition to other approaches: • Extraordinary Costs (CT 4.5 times previous year’s average; MA, circuit breaker funds costs above 4 times foundation budget, NH, 100% 10 times state average, etc.); Administrative Unit funding—CO, WI, NY; Block Grant Montana

21. Weights for Special Education: Adequate? • MD, OR, UT, WV use a single weight • Delaware and Kentucky have three broad categories based on exceptionality; • New Mexico has four categories based on service needs, Hawaii has four broad categories based on support levels. • Texas has nine weights based on instructional arrangements (e.g. resource room, self-contained) and one weight for “mainstreamed students” • Oklahoma has 12 categories based on a student’s disability; South Carolina, 10 categories, Arizona, 11 categories. Florida reports an Exceptional Student Education Matrix • Completed by checking all services provided under IEP • Students placed into 5 Support Levels (e.g. level 4=3.734; 5=5.201)

22. State Mechanisms for Low-Income/At-Rick Students

23. Low Income/Compensatory Ed Funding Low Income (proxy for “at-risk”) • State support, 38 states Eligibility: • Federal free lunch (KY, MS) and/or reduced lunch eligibility (ND, AL); • Students in need of remediation“test scores define students in need of academic assistance (SC). Weights: • Range--MD 97%; Mississippi 5% • Most states 20%-30% (CA 20%, GA 31%; IA 25%, MS 25%, SC, 25%) • Average weight is about 29% Trend to recognize concentration of LI students: NB progressive 5% to 30% based on % free lunch and local income; NJ <20% wgt; 47% to 60% wgt 57%

24. Funding for English Language Learners • Notable shift from past—increased recognition of costs by states (44 states provide support) • Allocation methods vary--Block grant-Delaware and Alaska, Census-Connecticut • Weights-prevalent method of allocation • Range: TX, 10% to 99% in Maryland • The average weight is about 38.7% Questions: Amount of funding (varies depending on major state grant); Is it sufficient; In or outside formula; relation to empirical studies of cost; other—are weighted student limited across multiple categories?

25. State ELL Funding Policies

26. State Funding for Gifted and Talented(can be in special education grant)

27. State Funding for Gifted and Talented • 33 states provide additional funding • Arkansas-weight 15% for 5% of ADM • Virginia-one instructional unit per 1,000 students • Hawaii—weight 2.65% for 3% of students • Louisiana-weight 60% • Other—Montana, lump sum appropriation; Ohio, combination, unit/pp

28. State Funding Mechanisms for Career and Technical Education

29. State Funding for Career & Technical Education • MA-budget 1.5 times senior high ($13,000) • NJ-weight of 1.31 for county voc ed • Georgia-weight of 1.18 for voc lab • Other: Ohio, 5 categories based on time in the program/ $pp

30. State Funding for Sparsity/Density of Small Schools

31. State Funding for Sparsity/Density of Small Schools • Adjustment based on: • Small size • Isolated districts • Multiple adjustments-”necessarily small” • No adjustment-18 states • Urban adjustments? Kansas

32. Funding for Transportation

33. Funding for Transportation • Most prevalent method— • Cost reimbursement-2 dozen states • Density formula-8 states • Equalized-4 states • No state aid-4 states

34. State Funding for Capital Outlay/Debt

35. State Funding for Capital Outlay/Debt • Debt service grants-8 states (2 states equalized) • Project grants-24 states (13 states equalized) • Loans-3 states • Aging facilities-6 states • No state funding-13 states

36. Thank you!