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Washington State PTA School Finance Study

Washington State School Finances: Does Every Child Count?

A Report by the Washington State PTA


Study Focus

• Analyzed the local, state and federal revenues used to maintain and operate public school districts in 2001-02 school year

• Used only General Fund revenues

• Included about 96 percent of 969,838 student FTEs

• 174 of 296 school districts, excluded small and remote districts


Adjustments for Different Costs

Adjusting for Student Needs • Special education students given a weight of 1.9• English language learners given a weight of 1.2• Poor students given a weight of 1.2

Adjusting for District Differences in Education Costs• Used a district-level Geographic Cost of Education Index (GCEI)

developed for the nation by researchers for the U.S. Department of Education.

• GCEI is based on costs of teachers, administrators, other school staff, and educational resources.


Funding-per-Pupil Averages for 174 Public School Districts in School Year 2001-02

Average

Standard deviation

Median

Combined state & local funding per pupil*

$6,317 $462 $6,319

Total federal, state & local funding per pupil*

$6,906 $577 $6,827

*All figures have been adjusted for differences in local costs and weighted for student needs.


Q1. How fairly is school funding distributed?

Based on national benchmarks for two equity measures, the distribution is generally fair and equitable.

• Coefficient of Variation

• McCloone Index


Q1. How fairly is school funding distributed?

Even with favorable assessment, 17 districts are more than 1 standard deviation below average.

See Table 5.

• Funding levels of these lowest-funded districts ranged from $615 to $1,055 below the study’s average funding per pupil, adjusted for student needs and local costs.


Q2. Why are the 17 districts relatively under- funded?

No single reason explains under-funding.

• 16 of 17 districts have below-average shares from more than one revenue source.

• All 17 districts are located in areas with high education costs; no state adjustment for costs

• 16 of 17 districts have below-average staff mix factors;state salary allocation is relatively low

• 12 of the 17 districts make an above-average tax effort;yet 9 of the 12 generate below-average local revenues

Washington State PTA School Finance StudyQ3. To what extent is school funding dependent

on district wealth?

District wealth does not appreciably drive school funding in Washington state.

Fiscal Neutrality scores meet national benchmarks.

• elasticity of school funding-per-pupil to tax base-per-pupil

• correlation between school funding-per-pupil and tax base-per-pupil

Washington State PTA School Finance StudyQ4. What is additional cost of funding schools to

a level adequate to meet state standards?

Lower estimate of $179 million

• Based on “successful district approach”

• Brings bottom half of districts up to median

Upper estimate of $2.1 billion

• Based on “professional judgment approach” used by The Rainier Institute

• No district currently at recommended funding level

Washington State PTA School Finance StudyQ5. Which districts are at risk for ensuring high-needs

students attain state standards?

Based on notion that the distribution of resources should be proportional to need.

17 districts with above-average need, yet below average resources

See Table 8

Figure 3. Identifying Most At-RiskDistricts in Study

0

40

80

120

160

65 of 174 districtshad below-average

funding

22 of the 65districts also hadlarge shares of

high-needstudents

17 of the 22districts had highrates of studentsnot meeting 4th

grade WASLstandards

Number of Districts

Washington State PTA School Finance StudyQ5. Which districts are at risk for ensuring high-needs

students attain state standards?

17 at-risk districts shared other traits in common

• 15 have higher than average rates of minority students

• 15 have higher than average rates of poor students

• 13 have average staff mix factors below the state average


Highline’s Story

Average total funding $6,254 $652 below averageGeo. Cost index - 1.14, High-needs index - 1.023, Poor students - 46 percent

Slightly above-average local share

Taxes itself at above-average rate; Below-average tax base

High enough rate to receive full levy authority; in fact had a roll back.

Below average State Share

Below average staff-mix factor

No compensation for high cost of education

Relatively low compensation for poor students

Not eligible to receive Local Effort Assistance

Below average Federal Share


Grandview’s Story

Average total funding $6,291 $615 below averageGeo. Cost index - 1.01, High-needs index - 1.084, Poor students - 76 percent

Below-average local share Taxes itself at below-average rate; Far below-average tax base per pupilTax would have to be about 2.5 times average rate to earn the full levy authority.

Average State ShareBelow average staff-mix factorRelatively low compensation for poor studentsEligible to receive Local Effort Assistance

Above average Federal ShareLarge portion of federal funds meant to target poor students


Conclusions

Judged against national benchmarks, equity is good.

Compared to equity, adequacy of school funding is much bigger problem.

State needs to do a better job of matching funds to districts’ needs and costs.


Recommendations

The state should conduct a study of the state school finance system to

• Develop a base spending per pupil level aligned with achieving state standards.

• Determine additional funds needed for students with extraordinary needs.

• Determine feasibility of a price adjustment to ensure comparable purchasing power across districts.

Where Does the Money Come From?

State71%

Local19%

Federal9%

Other1%


General Fund Revenues for School Year 2001-02

Total General Fund Revenues = $6,749,561,138

Washington State PTA School Finance StudyExcluded Districts Have High Per-Pupil-Funding

Funding (State & Local) Per PupilNot Adjusted for Cost & Needs

Average Minimum Maximum

Included Districts

$6,598 $5,044 $8,181

Excluded Districts

$8,283 $5,506 $35,994


Each District has a Need Index and a Cost Index

• Need indexes ranged from 0.91 to 1.18

average need index = 1.0

• Cost indexes ranged from 0.89 to 1.14

average cost index = 1.0


Funding Variables Adjusted for Cost and Need

For Each District Calculated

• (State and local) funding-per-pupil adjusted for differences in student needs and geographic costs

• (Federal, state and local) funding-per-pupil adjusted for differences in student needs and geographic costs


Adjustments Changed Relative Ranking

District, County Rank

Before

Rank

After

Seattle, King Co. 1 26

Tacoma, Pierce Co. 10 91

Southside, Mason Co. 79 13


Equity Scores (Dispersion Measures) for 174 Districts

Range

Combined state & local funding per pupil* $3,055

Total federal, state & local funding per pupil*

$3,836

* All figures have been adjusted for differences in regional costs and weighted for student needs.

• Range is difference between top and bottom value. • Addition of federal funds increases range by about $800.• National benchmarks for range don’t exist.


Equity Scores (Dispersion Measures) for 174 Districts Compare Favorably With National Benchmarks

Coefficient of Variation

Combined state & local funding-per-pupil* 0.073

Total federal, state & local funding-per-pupil* 0.084

* All figures have been adjusted for differences in local costs and weighted for student needs.

• COV is the standard deviation for funding-per-pupil expressed as a percent of the average funding-per-pupil. • Two-thirds of the students are within 7.3 percent of $6,317 state and local funding-per-pupil.• Both COVs are in the good or desirable range.


Equity Scores (Dispersion Measures) for 174 Districts Compare Favorably With National Benchmarks

McCloone Index

Combined state & local funding-per-pupil* 0.94

Total federal, state & local funding-per-pupil* 0.94


• McCloone Index compares funds to districts below median to the funds needed to ensure all students received median.• In both cases, districts receive 94 percent of the funds needed to ensure all students received the median funding-per-pupil.• Odden & Picus: desirable to be 0.9 or more


Washington State Meets Standard for Fiscal Neutrality

Fiscal Neutrality Score

Elasticity of tax base per pupil to funding (state and local) per pupil

0.035

Elasticity of tax base per pupil to funding (federal, state and local) per pupil

0.019


• Fiscal neutrality is when district funding is not dependent on district wealth.• A 1-percent increase in tax base per pupil is associated with a 0.035 percent increase in funding (state and local) per pupil.• Addition of federal funds lessens the elasticity to 0.019.• Odden & Picus: anything less than 0.1 means state met wealth neutrality standard.


Equity Results

Wealth Neutrality

• Overtime, wealth neutrality scores from various studies have indicated a stable relationship between district wealth and district funding.

• 1997 GAO Report (1993 data) .055

• 2003 Ed Week (2000 data) .066• 2004 PTA Report (2002 data) .035


Cost Estimates for Achieving State Education Goals

are Expensive and Range Widely

Additional funds needed to bring all students to an adequate level beyond the state and local funding of $6,174,101,704

• Assuming median level is adequate level of funding, the cost estimate is $178,670,188

• Assuming Rainier Institute level is adequate level of funding, the cost estimate is $2,067,477,832


Cost Estimates Depend on Approach

Approach 1: Link a funding per pupil to a level of student outcomes

Studies in Ohio and Illinois identified districts that achieved a desired level of performance using state tests. From this group of districts, identify those with characteristics comparable to state average. Then calculate the average spending-per-pupil of these districts. Results show that the calculated spending level is close to state’s median spending-per-pupil.



Approach 1: Link a funding per pupil to a level of student outcomes

• No such study done in Washington state. But, similar to other studies, we assume median funding-per-pupil ($6,319) is adequate funding level.

• The total amount of funding (state and local) for students below the median is $2,930,531,899; the revenue needed to fund the median for this group is $3,109,202,088.

• Difference is $178,670,188.



Approach 2: Identifying a set of inputs and pricing them. (Rainier Institute)

RI identified and priced a set of staffing levels and resources for effective regular, special education, ESL and remedial programs. A panel of experts reviewed inputs for fit with state.



Elementary K-5 Allotment for Special Need Students in WEQM ModelCore Certif. Additional Core Instruct. Professional Centralized Total Allotment/ WEQM

FTEs Instruct. Instruct. support training & services Allotment spec FTEs WEIGHTSStaff Time staff development

Spec ed 66 $158,865 $149,890 $15,383 $32,381 $356,519 $5,398 0.76ESL 44 59,422 2,950 62,372 $1,406 0.20Compensatory 100 241,844 0 241,844 $2,418 0.34

Total allotment on special needs population = $660,736

499 $8,393 $4,185,169Total FTEs * Expenditures per Student = Total Spent

$3,524,434 Total allotment on all FTEs for basic ed = $4,185,169.45 - $663,685.55$7,068 Basic allotment per FTE


Relatively Low Funded Districts

Districts at the lower end of the funding spectrum are substantially below the average funding per pupil, adjusted for cost and need.


Key to Map

Districts with an average (state & local) funding per pupil, adjusted for student needs and regional costs, that is

$924 or more below the state average

(twice the standard deviation)

Between $462 and $924 below the state average (one to two times the standard deviation).

Between $462 and $924 above the state average (one to two times the standard deviation).

$924 or more above the state average (twice the standard deviation)


Key to Map

Districts with an average (federal, state & local) funding per pupil, adjusted for student needs and regional costs, that is

Between $577 and $1,154 below the state average (one to two times the standard deviation).

Between $577 and $1,154 above the state average (one to two times the standard deviation).

$1,154 or more above the state average (twice the standard deviation)

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