Implications of 2776: New Basic Education Funding Formula For Business Managers

1. Implications of 2776: New Basic Education Funding Formula For Business Managers Fall 2010

2. Purpose • To provide school business managers and others a walk through of the new funding structure that will be implemented in September 2011.

3. Walk Away Questions • As we go through this presentation, we encourage each of you to consider how this will affect your district’s: • Budgeting (commencing January 2011). • Communications with the community and legislators. • Negotiations with bargaining groups. • Decisions and conversations about resource equity.

4. 2261 – The Beginning • SHB 2261 passed in 2009 Legislative Session. • Established a major change in processes behind school district funding.

5. Schedule of Groups • Workgroups were established to address various issues and report back to the QEC and the Legislature. • Quality Education Council – Ongoing. • Funding Formula Technical – Reported 12/09. • Data Governance – Ongoing. • Levy – Ongoing . • Yet to be started: • Compensation - Initial Report due 6/30/12.

6. Legislature and Governor OSPI and/or OFM Work Groups Quality Education Council (QEC) • State Superintendent • Governor Appointee • SBE Member • PESB Member • AGOAC Member • DEL Director • Legislators (8) Professional Educator Standards Board State Board of Education

7. SHB 2776 • Passed this spring and implements the new funding structure for education as proposed by the QEC and the FFTWG.

8. Key Provisions of 2776 • Established the new funding structure commencing September 2011. • Establishes crosswalk values from current funding levels (new structure no new dollars).

9. Prototypical School Funding Model

10. What is Prototypical School? • Prototypical school is a fixed theoretical school size that is used for modeling purposes. • Replaces the per 1,000 ratio paradigm currently used. • As adopted in 2776, it is a scalable model. • I.E. As enrollment increases or decreases from prototypical size, the staff units change proportionately.

11. 2776 – Prototype as a basis • Funding formula assumptions are based upon a prototypical school and an assumed prototypical class size. • Class size assumptions are different based upon grade and subject. • Planning time for teachers is acknowledged in determination of class size. • Future legislation is expected to direct changes to the assumed class size.

12. 2776 - Prototypical School Size • In reality, school configurations vary widely and are not always consistent with the Prototype model.

13. How Enrollment is Used • Funding is generated based on the student grade level rather than a school’s classification. • When 6th grade is part of the middle school, the 6th grade students generate staff at the elementary funding level. • When 9th grade is part of the middle school, the 9th grade students continue to generate staff at the high school funding level. • Prototype allocations will be calculated based on districtwidegrade level enrollment.

14. 2776 – Prototypical Assumption of Class Size

15. Class Size to Teacher Conversion • Converting the assumed class size to actual teachers is complex and is based upon standard state assumptions about: • Student instructional hours per day. • Teacher planning time. • Instructional workload of each teacher.

16. 2776: School Level Classroom Teachers

17. Resulting Planning Time • Assumed Instructional Day: • Elementary School 5.6 Hours. • Middle and High School 6 Hours. • Assumed Planning Time: • 13% for Elementary = 45 Minutes. • 17% for Secondary = 60 Minutes.

18. 2776: Other Staffing in a School

19. District Level Funding

20. 2776: Districtwide Support

21. 2776: Central Administration • Central Administration is 5.3% of staffing units generated as K-12 teachers, School Level Staffing, and Districtwide Support. • The Central Administration percentage is NOT applied to enhancements. Examples include: Poverty, Lab Science, AP/IB, CTE, Skills Centers, or Categorical Program Staffing.

22. 2776: MSOC – Formerly Known as NERC • MSOC values for Lab Science, CTE exploratory, CTE preparatory, and Skills Centers will be defined in the omnibus appropriations act.

23. MSOC • Maintenance, Supplies, and Operating Costs. • Transition is not cost neutral because districts have different proportions of K-3/4 to all other grades. • MSOC values will be adjusted for inflation from the 2008-09 school year.

24. OtherFunding

25. The new formulas are based upon a staffing assumption for a program. The current funding structure provides $$ per student without conveying any staffing assumptions. Other Instructional Funding

26. Categorical Program Current Funding • Current funding is based on dollars only. • No detail about staffing or service delivery is provided. • Difficult to determine what the legislature is actually funding.

27. 2776: Categorical Programs • Calculated hours above are converted to staffing units for funding purposes. • Assumes staff are allocated as teachers. • Initially to be funded using statewide staff mix factor, but could convert to district specific staff mix in the future. • Designed to be cost neutral.

28. Categorical Programs • The Funding Remains Categorical Allocations: • Funds must be used for those programs. • Allocations only; districts can design program structure to meet student needs within governing rules and statutes.

29. Categorical Programs • LAP: Poverty and Bilingual concentration factors are not continued. • hold harmless provided to those districts in lieu of continuation of that formula component. • Current groups headed by OSPI are developing new funding formula proposals for programs such as LAP and TBIP.

30. 2776: Special Education • Special Education funding did not change.

31. Small Schools and Districts • All districts should be funded using the same prototypical school models. A small school and small district allocation will be articulated with the same ratios for staff units and non-employee cost allocations as currently exists. Districts will receive the greater of the two allocations. • Formula Blending – As the new funding formulas are phased in, there should be a constant check to assess the points at which regular prototype school funding provides equal or greater funding. • Formula Integration – Small schools must continue to be considered in ongoing implementation discussions, such as Core 24 and local levy work group. • Consider incentives or policy for small high schools to increase student participation in internet or distant learning programs.

32. What comes next? Looking Forward

33. SHB 2776 – A Work in Process • 2776 provides a basis for a new funding structure. It does not present an immediate and complete package of change. • Several areas are stubbed out for future decisions and implementations.

34. How Are New Resources Phased-in Under SHB 2776?

35. Salary Assumptions • Have Not Changed - Assumed that staff in prototypical school categories would be grouped as certificated instructional staff, certificated administrative staff, and classified staff for salary purposes. • Future changes are dependent upon future legislation. The compensation workgroup is addressing the structure of compensation. Initial report due June 30, 2012.

36. Enrollment Exception • Prototype allocations will be calculated based on district-wide enrollment except for high poverty schools. • Enrollment and free and reduced price lunch percentages shall be calculated at the school level. • SHB 2776: The omnibus appropriations act will define an average class size for schools where more than 50% of students are eligible for free or reduced priced meals. • Class size reductions in high poverty schools have not yet been established.

37. 2776 Build Out • Legislation targets ending value for K-3 class size and MSOC. • Establishes a poverty enhancement for schools with FRPL > 50%; however, it does not implement.

38. 2776: CTE and Skills Centers • CTE and Skills Center pupil FTE are included in classified staffing calculations under school level staffing and districtwide support.

39. Transition of Formula: Hold Harmless • SHB 2776 states that the Legislature intends that funding shall not be decreased below current levels. • Per-pupil basic education funding. • Funding streams are discretely held harmless. • At the school district level.

40. For Allocation Purposes Only • SHB 2776 states the distribution formula shall be for allocation purposes only. Nothing requires school districts to maintain a particular classroom teacher to student ratio or other staff to student ratio. • Exception: Funds allocated to categorical programs (Learning Assistance, Special Education, etc.), continue to be restricted for use in programs. Districts/Schools determine their own structure for delivery of those services.

41. Accountability • Once implemented, the new funding model will require of OSPI/Districts the following comparisons: • Actual district staffing practices to the funded staff units by school and district level. • Actual district expenditures to funded levels (MSOC)? • These comparisons can be used to inform future policy and legislative decisions for funding level changes. • These comparisons shall be available on a public website.

42. Open Technical Issues

43. OSPI - Implementation Timeline Tools & Training • A projection model is now available on OSPI’s website for districts and others to project the new funding model at the school and district level. • OSPI will continue training throughout the state on the structure and implications of the new funding model. • Specific system training to be delivered as systems are brought on line.

44. OSPI - Implementation Timeline Systems • Three key systems affected: Apportionment, School District Revenues Projection (F-203), and Staff Reporting. • The initial F-203 system must be available to districts early spring 2011. • The apportionment system must be fully revised, tested, and operational by September 2011.

45. Questions and Answers .

46. Web-Based Information: Models, Tools, & Reports

47. Prototypical Model Walk Through • A live walk through of beta models to: • Gain a working understanding of the new funding model. • Perform funding projections for their districts/schools using the new funding algorithm. • Meet the requirements under ESHB 2261 to post school building expenditure information. • These models will be available on the School Apportionment website under a SHB 2776 link on left margin.

48. Staffing Unit Comparison • Required under SHB 2776 section 12. • OSPI must provide comparison such that, “…citizens are able to compare the state assumptions to district allocation decisions for each local school building.” • Actual hiring patterns from S-275 to the prototypical model.

49. New 1191 Report Prototype • The changes imposed by 2776 require a thoroughly restructured 1191 report for BEA. • The 1191 report prototype contains the following: • 1191. • 1191 ED. • 1191 EE, 1191 EM, 1191 EH. • 1191 MSOC. • 1191 SC. • 1191 CTE.

50. 1191 Report • Summarizes account 3100 revenues for BEA, while focusing on four main areas: • Guaranteed School-Generated Entitlement. • Guaranteed District-Generated Entitlement. • Summary and Benefits. • Guaranteed Entitlement .