School District Cost & Size Study Proposed Final Report

1. School District Cost & Size StudyProposed Final Report Joint Legislative Audit & Review Committee June 16, 2010 Mark Fleming, JLARC Staff

2. 2009-11 Operating Budget Identifies Five Questions • What is the relationship between the cost of school districts and their enrollment size? • How do categories of costs vary related to enrollment size? • How do other factors affect costs? • What nonfinancial benefits and impacts are associated with school and school district size? • Do district expenditure patterns change as a result of district consolidation or state oversight conditions? School District Cost & Size Proposed Final Report Report Pages 31-32

3. Key Findings aboutCost and Size • Highest expenditures per pupil are in small school districts • But not all small districts are high expenditure districts • High expenditure districts represent a small portion of all school district expenditures • Differences in expenditures per pupil are largely due to the statutory formula for distributing state funding School District Cost & Size Proposed Final Report Report Pages 1-2

4. Part One Overview of School Funding and Enrollment School District Cost & Size Proposed Final Report June 16, 2010

5. State Funds Provide Most School District Revenue Other $0.1 B Federal $0.8 B 1% Local $1.8 B 9% 19% 17% State Special Purpose $1.6 B State General Purpose Apportionment $4.7 B 50% 71% 4% State – Other General Purpose $0.3B Total: $9.3 B Source: JLARC analysis of school district F-196 2007-08 financial report data provided by LEAP. School District Cost & Size Proposed Final Report Report Page 4

6. Most School Districts are Small but Large Districts Enroll Most Students Most School Districts are Small but Large Districts Enroll Most Students 151 small districts: Less than 1,000 students each 29 large districts: • More than 10,000 students each • 53.3% • 41.4% • 5.3% 9.8% Enrollment 51.2% 39.0% • 53.4% • 40.1% 115 medium districts: • 1,000 to 10,000 students each • 6.5% Expenditures Total: 295 districts Source: JLARC analysis of 2007-08 school district financial and enrollment data provided by LEAP. School District Cost & Size Proposed Final Report Report Pages 6-7

7. Part Two Analysis of Cost and Size School District Cost & Size Proposed Final Report June 16, 2010

8. Study Compares Expenditures per Pupil Among 295 School Districts • Based on school year 2007-08 LEAP financial and enrollment data • JLARC defined high per pupil expenditures as exceeding statewide average by more than 25 percent School District Cost & Size Proposed Final Report Report Page 9

9. 210 Districts’ per Pupil Expenditures Fell Within Range State average: $9,380 Seattle$11,264 • Consistent pattern: • Since 1998-99 • Across all major categories: • Teaching • Administration • Facilities • Transportation 0-25% above state average 0-25% below state average FTE Enrollment (in thousands) Benge $59,749 85 Districts Expenditures per FTE Pupil ($ in thousands) Source: JLARC analysis of 2007-08 school district financial and enrollment data provided by LEAP. Report Page 10 45 40 35 30 25 20 15 10 5 0 $0 $10 $20 $30 $40 $50 $60 $70

10. 85 High Cost Districts are a Small Portion of Total Expenditures State average: $9,380 Expenditures $232 million Districts with high expenditures per pupil FTE Enrollment (in thousands) $9.2 billion $9.0 billion Total: $9.2B Expenditures per FTE Pupil ($ in thousands) School District Cost & Size Proposed Final Report Report Page 13 45 40 35 30 25 20 15 10 5 0 $0 $10 $20 $30 $40 $50 $60 $70

11. What is the Difference if No District Exceeded the 25% Range? $ 17 M Teaching State average: $9,380 Expenditures $47 million $ 10 M Administration $ 9 M Facilities $232 million $ 6 M Transportation $ 5 M All Other $ 47 M Total FTE Enrollment (in thousands) $185 million $9.0 billion Total: $9.2B Expenditures per FTE Pupil ($ in thousands) School District Cost & Size Proposed Final Report Report Page 13 45 40 35 30 25 20 15 10 5 0 $0 $10 $20 $30 $40 $50 $60 $70

12. What Affects per Pupil Expenditures? • Statutory apportionment formula drives per pupil expenditures • Districts receiving high apportionment revenue per pupil are the districts that spend the most per pupil • Other factors have limited impact on per pupil expenditures School District Cost & Size Proposed Final Report Report Page 15

13. Apportionment Formula is Based on Several Factors • Student enrollment • Reported by districts • Staff ratios and salary scales • Established in state operating budget • Enhancements for small school districts guarantee minimum staffing levels • Fundamental reason for large variation in per pupil expenditures School District Cost & Size Proposed Final Report Report Page 4-5

14. Two Key Points about Cost & Size • Expenditures per pupil follow the funding provided by the statutory formula for distributing state funds • School districts with high expenditures per pupil offer limited potential for statewide savings School District Cost & Size Proposed Final Report

15. Part Three Other Information School District Cost & Size Proposed Final Report June 16, 2010

16. Study Mandate Identified Two Additional Areas of Inquiry Nonfinancial benefits and impacts associated with school and district size • Review of literature finds lively debate but no definitive answer OSPI supervises financially troubled districts when districts are unable to balance budgets • Districts address difficulties in various ways • Do not always reduce expenditures School District Cost & Size Proposed Final Report Report Pages 23-25

17. Agency Responses • Invited comment on report by: • Superintendent of Public Instruction • Washington State School Directors Association • Washington Association of School Administrators • Association of Educational Service Districts School District Cost & Size Proposed Final Report

18. Contact Information Mark Fleming 360-786-5181 fleming.mark@leg.wa.gov www.jlarc.leg.wa.gov School District Cost & Size Proposed Final Report