Education Funding Formula (State Education Finance Study Commission)

1. Education Funding Formula(State Education Finance Study Commission) GASBO November, 2012

2. Items to be Covered • HB 192 (2011) • Legislation From this Past Year • Prioritized Recommendations with Fiscal Impact • Non-Fiscal Recommendations • Items for Further Study

3. HB 192 (2011) • State Education Finance Study Commission • Evaluate the cost and resources needed to educate a child • Basically everything was on the table to be reviewed

4. HB 192 (2011) • Timeline • September 30, 2011. Interim recommendations • December 31, 2011. Proposed legislation for interim recommendations • September 30, 2012. Final recommendations completed • December 31, 2012. Proposed legislation for final recommendations completed

5. HB 192 (2011) • Extended decision making time of the flexibility contracts for IE2, etc. to June 30, 2015 • Extended class size waiver through FY 2015 • Extended expenditure controls for QBE and Twenty additional days waiver through FY 2015. • Extended Teacher contracts being offered by May 15 through FY 2015

6. State Education Finance Study Commission • Legislation From this Past Year • Eliminate the 65% Direct Instruction Rule • Did NOT Pass • Equalization Formula Change (HB 824) • Capital Outlay change shifting Growth Funds to Regular Capital Outlay Funds (HB 760) • Funding for School Nurse Program (SB 403) • Funding for Professional Development (SB 404)

7. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 1 • Extend PeachNet or other system to school systems and create capital outlay grant for technology infrastructure • Fiscal Impact • $20 million phased in over three years

8. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 2 • Fund School Counselors at a ratio of 1:450 for all Programs

9. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 3 • Fund approximately 50% of transportation earnings and bond bus replacement at $45 million per year • Fiscal Impact • FY2014 $0 • FY2015 $10,000,000 • FY2016 $12,500,000 • Recommendation to exempt LEAs from motor fuel tax • Local Systems should consider using Stop Arm cameras • DOE examine how to meet Start Up Charters Transportation needs

10. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 4 • Continue the implementation of the school nurse funding by funding 45% of the program in FY 2014 and 50% of the program in FY 2015. • Fiscal Impact • FY2014 $3,246,795 • FY2015 $3,132,448 • FY2016 $0

11. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 5 • Professional Learning Part 1 - $400,000 in FY2014 • Provide 0.01% of QBE Salary Earnings to the PSC in FY2014 to utilize these one-time funds to determine new category level expenditure controls for professional learning • Professional Learning Part 2 - $1,206,304 in FY2014 • Reduce funding from 1.5% of certified salaries used in the development of each respective program weight to 1.0% but add the salaries of school level administrators

12. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 5 (continued) • Professional Learning Part 3 - $6,185,860 in FY2014 • Create a fund stream for the Professional Learning initiatives by appropriating 0.15% of salary earnings to the Department of Education in FY2014. • The amount would increase to 0.25% in FY2015 with the School System’s funds decreasing from 1.0% to 0.9% to keep expenditures level. • Total Fiscal Impact - $7,792,164 in FY2014

13. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 6 • Continue to fund the new capital outlay program recommended by the commission and enacted in HB760, 2012 Session. Bill shifted Exceptional Growth entitlement earnings to the Regular program.

14. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 7 • Funds appropriated to the Department of Education for the SIRS Discovery Researcher database for elementary and middle school students be restored and that the SIRS Issues Researcher in high school be maintained. • Fiscal Impact - $106,790 for FY2014

15. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 8 • Redirect funds earned for Central Administration Operations to technology over a three-year period. • Hold Harmless the smallest 10% of systems from redirect. • Provide Classroom Technology through redirected funds AND new funds in FY 2015 and FY 2016. • Fiscal Impact • FY2014 $ 66,318 • FY2015 $13,590,102 • FY2016 $13,615,361 • Combine Funding for textbooks and technology into one category called Instructional Materials.

17. State Education Finance Study CommissionHold Harmless SMALLEST 10%

18. Combine Funding for Textbooks and Technology into one Category called Instructional Materials

20. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 9 • Continue to fund the Equalization formula as recommended by the commission and enacted in HB824, 2012 Session. • Commission did recommend that beginning in FY2014, the state work towards fully funding Equalization as revenues improve.

21. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 10 • Beginning in FY 2016, lower the funding ratio for School Psychologists from 1 : 2475 FTEs down to 1 : 2420 FTEs. • Fiscal Impact • FY2014 $ 0 • FY2015 $ 0 • FY2016 $ 673,316

22. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 11 • Change Funding of Media Specialist to 1 : 675 FTEs for all Programs. • Create Media Clerk Position and fund at a ratio of 1 : 950 FTEs for all Programs. • Fiscal Impact • FY2014 $ 487,911 • FY2015 $ 0 • FY2016 $ 0

23. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 12 (Simplify Formula by Combining Programs) • FY 2014 Recommended Changes • Kindergarten remain as separate Program • Elementary Program created by combining • Primary Grades and Upper Elementary • Early Intervention Program created by combining • Kindergarten EIP, Primary Grades EIP and Upper Elementary EIP • Middle School Program • Combine Middle Grades and Middle School Programs into single program

24. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 12 (Simplify Formula by Combining Programs) • FY 2015 Recommended Changes • Special Education Low Needs Program • Created by combining Categories I, II and V into single program • Special Education Medium Needs Program • Currently Special Education Category III Program • Special Education High Needs Program • Currently Special Education Category IV Program

25. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 12 (Simplify Formula by Combining Programs) • FY 2016 Recommended Changes • Create Special Instruction Program by combining • Gifted • Alternative Education • Remedial • Commission also recommended renaming Vocational Program to Careers Program

26. State Education Finance Study Commission • Recommendations with Fiscal Impact • Priority # 12 (Simplify Formula by Combining Programs) • Even though combining programs will be financially neutral to the state due to using weighted averages to determine funding weights, it will create winners and losers at the district level. • To offset the losses, the Commission recommended that the losing systems be held harmless as these programs are phased in. • Fiscal Impact • FY2014 $3,245,466 • FY2015 $3,610,024 • FY2016 $6,704,797

27. State Education Finance Study Commission • Other Items Studied with No Recommendations • Funding ratios for Social Workers • Funding ratios for Speech-Language Pathologists • School Nutrition • However, the commission did recommend simplifying the current funding formula for school nutrition

28. State Education Finance Study Commission • Recommendations with No Fiscal Impact • Create a Student Services Funding Category under Indirect Instruction including the following categories • School Psychologists • School Social Workers • Special Education Leadership • Central Administration will only include the following • Superintendents • Assistant Superintendents • Accountants • District Secretaries • Operations (until phased out)

29. State Education Finance Study Commission • Recommendations with No Fiscal Impact • “Smoothing” non-classroom costs identical across all programs on a per FTE basis • Counselor Tech Specialists • Media Specialists Media Materials • Operations Instructional Materials • School Admin Central Admin Operations • Social Worker Psychologists • Facilities M&O Additional Instruction

30. State Education Finance Study Commission • Recommendations with No Fiscal Impact • “Smoothing” • Costs would be calculated so that each FTE generates identical amount of funding for each category by adjusting class staff ratio (student : teacher ratio) to keep program weight same.

31. State Education Finance Study Commission • Items for Further Study • Alternative Funding Models such as Student-Based budgeting • Look at an accountability/flexibility model that combines concepts of IE2, Charter Systems and Strategic School Systems (SSS) • Further study to repeal the 65% Rule and replace it with a penalty for excessive central office spending • Miscellaneous Others

32. State Education Finance Study Commission

33. Contact Information Lou Byars lbyars@doe.k12.ga.us Georgia Department of Education 1652 Twin Towers East 205 Jesse Hill Jr. Drive, SE Atlanta, GA 30334 404-656-2447