A Funding Formula for RI: CHILD CENTERED EQUITABLE ACCOUNTABLE

1. Dr. Kenneth Wong Mary-Stuart B. Kilner, UEP 2010Jason P. Becker, UEP 2010Urban Education Policy ProgramBrown UniversityJanuary 29, 2010 • Providing what our children need to succeed! A Funding Formula for RI: CHILD CENTERED EQUITABLE ACCOUNTABLE

2. Outline of presentation 1. The approach and method used to determine what an adequate education should cost. 2. Analysis of information to demonstrate that the method we are proposing is a better approach to targeting funding to children based on their needs. 3. Summary of why the goals of attaining horizontal and vertical spending parity between districts and schools requires redistribution over time. 4. Walk through some examples of the methodology.

3. Guiding principles for a Professional Judgment approach 1. To be financially responsible in the current economy, the formula assumes that the dollars the state has to contribute to education will not change in 2010. 2. Devise a single methodology for distributing state aid to all public schools in a child-centered manner, that is fiscally responsible and objective. 3. Uses New England & RI data and empirical best practice research. 4. The formula will take into account the state’s forecasted revenue estimation process annually. 5. Estimates what the state needs to provide for a prototypical child. It then takes into account student success factors unique to the child. After creating a cost per pupil it is adjusted for differences in revenue & expense capacity between districts. 6. Phases out as many state categorical programs as possible to create greater flexibility, efficiency and transparency. Additional targeted opportunities to be supported by State Funds. 7. Centralize certain purchasing functions and contracting functions to gain efficiencies. 8. Provide incentives to grow, hire and retain the highest quality teachers. 9. Demonstrates through regression analysis that the model supports the particular needs of more children better than the current funding model.

4. What costs at a minimum need to be included in the market basket for RI? Contrasted to evidence. Augenblick & Myers Recommended RI Market Basket- NCES • Teachers • Teacher Aides • Guidance Counselors • Nurses • Librarian/Media Specialist • Technology Specialist • Principal • Assistant Principal • Clerical • Professional Development per teacher • Instructional Supplies/Materials per pupil • Equipment per pupil • Assessment per pupil • Student Activities per pupil • Safety/security per pupil • Teachers • Teacher Aides • Teacher Coordinator • Guidance counselor • Librarian • Other Support Staff • School Administration • District Administration • Administrative Support • Some portion of Benefits • Instructional Supplies • Instructional Supports

5. DRAFT NE cost basket: Based on NCES 2005 Detailed Financial Survey. Adjusted NE Consumer Price Index.

6. One student support weight to provide more money for children who need more resources

7. Proposed formula gets districts and students more targeted support.

8. Proposed funding formula for General Public Schools* 1. This proposed state share ratio accounts for two different state challenges when determining where funding should go. • How to account for differences in revenue generation capacity of communities How to allocate money to communities with high concentrations of children who need more supports • This calculation takes both of these considerations into account.  EWAV is used as a mechanism for estimating a local districts’ taxing capacity referred to as “revenue raising capacity”. Free and Reduced (FRPL) lunch status is used as a proxy for child need. The formula looks at each district and weighs these two challenges against each other. Whichever is more pronounced for that district gets more emphasis in the calculation. The two variables are added to determine what percent of the total cost of education the state needs to provide for that particular district. 2. Communities that have very low or very high local revenue capacity and /or who have very few or a lot of children who qualify for FRPL will experience the biggest changes. These are called “outliers.” Given the lack of a consistent method to distribute funds for the past twelve years, most communities will experience a change. The plan will be phased in over 5 years. 3. EWAV is a measured scale of revenue generation capacity from property values and community median income. It is one possible calculation to use. We acknowledge the need for reform of revenue assessment practices in Rhode Island and are open to other metrics. 4. This formula seeks to equalize the money and resources available for equivalent children and to reduce the operational spending capacity between districts over a phase in period. • * for illustrative purposes only

9. Getting the money to where children sit. Illustrative examples of high and low poverty districts using proposed formula, at an estimated foundation cost of $8,238. • Example calculations before charter schools: • Newport, where there is a low EWAV but high concentration of children at-risk • Newport Total Estimated Cost = $8,238(2,170)+0.4($8,238)(1,198)=$21,824,110 • Newport State Share = (√(.002+.602)/√2)($21,824,110)=(.43)($21,824,110)= $9,259,186 • Proposed State Share Ratio = 0.43 • Providence, where there is a high EWAV and high concentration of children at-risk • Providence Total Estimated Cost = $8,238(23,431)+0.4($8,238)(20,506)= 260,595,94925,956,365 • Providence State Share = (√(.8332+.902)/√2)($260,595,949) = 0.87($260,595,949) = $225,956,365 • Proposed State Share Ratio = 0.87 • New Shoreham, where there is a low EWAV and low concentration of children at-risk • New Shoreham Total Estimated Cost = $8,238(142)+0.4($8,238)(15)=$1,219,224 • New Shoreham State Share = (√(.002+.102)/√2)($1,209,224) = (.07)($1,209,224) = $86,212 • Proposed State Share Ratio = 0.07

10. How does the formula accommodate charter school funding? • Charter schools would be funded similarly to traditional school districts using the weighted student funding formula, as well as the state share ratio for the sending district, to determine the state funds sent to each school. • Charters will continue to be reimbursed for the local contribution expected for each child by sending districts.

11. Highlights of good benchmark practices for funding formulas WHY CHOOSE THESE STATES? Massachusetts: Funds the child and has seen significant improvement in Academic outcomes, Maryland: Funding Formula best practice State, with two good costing out studies and gains in academic achievement.. . Source: State Financial Web sites Griffith. (2007) “Education Finance – A National Perspective.” Education Commission of the States. Presentation, Providence, RI. 2007. Taken 1/2/10.

12. Categorical Funding Categories This proposal will include funding outside the aid distribution for certain high-cost items. The following categorical funding is proposed: Extraordinary costs related to high cost special education students. The state will assume the costs of these students when they exceed five times the district’s combined core instructional foundation and student success factor amount. Certain start-up and maintenance costs for high cost career and technical education programs. Funding will be provided through a state grant program. Early Childhood pre-kindergarten programs currently have a categorical program to support pre-K initiatives. This proposal will expand this investment.

13. Key words for a common language