Final
Integrating Universal Proficiency

SCHOOL FINANCE SYSTEM

Votes:
Action Taken:
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11:35 AM -- Integrating Universal Proficiency with a School Finance System: Stakeholder Discussion

Jane Urschel, Associate Executive Director, Colorado Association of School Boards (CASB), indicated that CASB has established a working committee to follow the progress of the school finance interim committee. Ms. Urschel provided background on CASB and said every school district except one is represented by CASB. Ms. Urschel said that school districts have been impacted by "a perfect storm" and that school finance is the "beachhead" where three of Colorado's constitutional provisions collide: the Gallagher Amendment, the Taxpayer's Bill of Rights (TABOR), and Amendment 23. In discussing the impact of these provisions, Ms. Urschel said that CASB does not believe that a new school finance system needs to be built from the ground up, but rather believes that the impacts of the constitutional amendments and the pressure points need to be addressed. Ms. Urschel said that in the 1970s and 1980s, the school finance factors centered largely on issues of equity. In 1994, the new school finance act created new pressure points.


11:40 AM

As she continued her remarks, Ms. Urschel discussed whether, in studying school finance, there are three revolutions that have taken place. The first revolution could be viewed as one of quantity, resulting in universal education. The second may be seen as one of equality, resulting in provisions for a thorough and uniform system. The third and current revolution, she noted, may be seen as one of quality. Ms. Urschel continued to discuss history and said that discussions in 1993 centered on the at-risk factor. The Legislative Council Staff studied proxies and decided that free lunch students would be the most appropriate proxy and that this at-risk factor could be supported by available data. She commented on the fact that so much more data is available, and noted that, with the increased data availability, CASB wonders whether a combination of proxies for at-risk measures could be considered. She said that enrollment growth exerts another pressure point. Some school districts do not have adequate bonding capacity. Declining enrollment districts have special needs in regard to funding. Ms. Urschel said that while prior school finance acts have not looked at a quality and standards-based education, the state has continued to raise expectations and standards. She said that CASB believes that Colorado should continue to fund a system of public schools and determine how much is enough to fund a quality, standards-based education for every student and from where the funding will come. Another factor is what price citizens are willing to pay. She asked Mr. Freeman to discuss perspectives from a small school district.



11:44 AM

Mike Freeman, representing the board of education for Ault-Highland School District RE-9, stated that one of the most troublesome issues in small school districts is special education costs. These districts may have just a few severely disadvantaged students whose costs can take a very high percent of the school district's budget.
Mr. Freeman noted that the assessed valuation in small school districts limits their bonding capacity. Reporting requirements under NCLB can be burdensome for very small school districts with very limited administrative staff. Another factor for these school districts concerns transportation costs, which school districts may cover large areas of the state. He said it is difficult for small districts to be efficient in regard to the cost per student in transportation, food services, and maintenance costs. Mr. Freeman said that the state inflation factor of .1 percent does not reflect true inflation he sees across the state. He said this factor makes it difficult to keep teachers and staff.


11:48 AM

Jim Weigel, representing the board of education for Adams County District #12, provided background on his growing school district and discussed the factors he sees as crucial. He said he has categorized concerns he has heard from constituents and from other school board members. In describing his school district, he indicated that his school district has a very high mill levy relative to other districts. He discussed his personal background and interest in school finance issues as a school board member. He commented on the sufficiency of funds for services that impact the students who are behind where they should be in regard to proficiency and state standards. He shared the impact of students, such as special education and at-risk students, who are more expensive to fund and to bring up to proficiency. He said that in dealing with taxpayers and communicating with them, he has heard concerns and interest in how a school district spends its funds. Taxpayers are expecting school districts to do more with less funding. Mr. Weigel said that people tend to respond more positively to discussions of the value of the educational product. He said that some constituents feel that the value of investment in education is very important, and that measures of CSAP results and student achievement also can assist in discussing the value of education. His constituents have expressed concern about limits on the ability to pay for education. He said that those closest to the education system appear to be the most willing to pay more to support K-12 education. The greatest persuasion comes through discussion of the value of education.


11:51 AM

Mr. Weigel noted that he has heard suggestions for additional development fees. He also noted that tax rates and wealth differences in school districts have a great impact. High growth and declining enrollment school districts incur unique costs. Mr. Freeman responded to a question from Representative King about the impact of single special education student on a very small school district. He said that these costs may be as high as $40,000 or $50,000. Ms. Urschel mentioned the impact on Thompson School District of an autistic student who may cost $200,000 per year. Senator Bacon further discussed the implications of these costs for a single school district. Representative Pommer raised questions about the state inflation rate and how it is not keeping pace through Amendment 23 provisions. In responding, Mr. Freeman said he did not know what a more reasonable measure would be, but that school districts are having to provide 3 or 4 percent salary increases regardless. Representative Pommer said the difference between the CPI and an inflation index based on additional costs that are not recognized in this factor.


11:59 AM

Mr. David DuVall, Executive Director, Colorado Education Association (CEA), provided background on the organization and its representation. He said that school districts need a well-considered and consistent level of support to meet growing challenges. He said that public education remains a state responsibility and underscored that it should not matter where a student is born or lives in the state. Each child should be afforded the same opportunity for a thorough and uniform quality education. In addition, it should not matter where someone lives, they should be expected to contribute a certain level of support for public education. He said that the General Assembly must provide the resources to support its expectations for standards. Local control is a notion that may no longer exist, according to Mr. DuVall, falling victim to globalization, standards-based reform, and several state constitutional measures. He recommended a new partnership between the state and local school districts, taking a fresh look at their responsibilities and their relationship. He said that many of the problems the state is facing is not so much a problem of the school finance system, but rather of Colorado's tax system. He said that is appears that schools have historically been funded through slices of a total pie. During the standards movement, expectations are raised, but the slices of funding received by school district are not discussed in conjunction with the new programs required so that every student can be brought up to the standards. He said to run schools like a business, you must provide funding for the services required to bring students up to the standards.


12:06 PM

Mr. DuVall discussed the patchwork nature of Colorado's tax system and the fact that Colorado is a relatively wealthy state. He said Colorado's low-tax status comes at a cost when you look at funding for K-12 and higher education systems. Mr. DuVall provided some per pupil spending comparisons with the states that surround Colorado. He said that the current litigation facing Colorado should come as no surprise. He discussed teacher salaries and the impact on the ability of school districts to recruit quality teachers. He said that recent trends have a long-term detrimental effect on the state and the quality of education across the state. He said that CEA supports a comprehensive look at the state and local revenue structure and funding mechanisms to ensure a thorough and uniform system. He further stated that CEA supports a state-funded pre-kindergarten, full-day kindergarten programs for every school, and guaranteed teacher-pupil ratios, especially in the primary grades. Additionally, CEA supports a minimum state teacher salary of $40,000, as well as state health insurance for school employees.


12:12 PM

Representative King asked questions about funding students who are at-risk academically, rather than just on an socioeconomic basis and about the Denver proposal, ProComp. Mr. DuVall said that the Denver Classroom Teachers' Association supports current provisions in ProComp, which incentives for staffing hard-to-teach schools. In addition, Mr. DuVall said that the committee should look at populations in the schools and fund programs that address its unique, special populations He said that CEA encourages looking at the programs necessary in the school districts to meet the special needs of its students. Ms. Urschel said that the committee may look at a quality, standards-based education, relative to funding. Under this approach, learning should be fixed, and time should be variable. She raised the issue of whether a new academic measure of at-risk help would be beneficial.


12:15 PM

Karen Middleton, representing the State Board of Education, asked about looking at education as a P-16 system, the entire spectrum of education and not just the area for which each stakeholder has responsibility. Mr. DuVall commented further on CEA's push for a minimum teacher salary, and said that there will be a need of a new generation of quality teachers. The state must determine a strategy to allow the teaching profession to be a competitive profession and to allow Colorado, as a state, to be competitive in attracting teachers. The commented on a P-16 system in light of the Colorado Commission on Higher Education (CCHE) having entrance requirements for its four-year institutions and stressed that Colorado must ensure that all Colorado students have access to the coursework necessary to meet higher education requirements. Ms. Urschel reminded the members of the instructional authority of school districts, but said that does not mean that partnerships do not need formed. She said that a state-of-an-art school finance act might look at P-16, and at networking opportunities between K-12 teachers and higher education.


12:23 PM

The committee recessed.


12:52 PM

The meeting was called back to order.


12:53 PM

Scott Murphy, representing the Colorado Association of School Executives (CASE), discussed the historical goals of equity in Colorado's school finance act, and the inherent demographic differences in school districts. He distributed a hand-out (Attachment D). Mr. Murphy noted that adequacy came into play with the at-risk factor but has not come to full realization. Mr. Murphy presented certain facts in his presentation:

Mr. Murphy said that Amendment 23 cannot meet the needs facing Colorado school districts, and that CASE would like to see fundamental change in the school finance system. He said that higher expectations have brought higher cost pressures. The costs associated with lower teacher-student ratios, early childhood education, and literacy materials, among others, must be taken into account, according to Mr. Murphy. He reiterated that the full costs of providing educational services to special education students can be very high. He said that CASE would also like a school finance system to recognize the costs incurred by school districts that support charter schools by off-setting the fixed cost obligations that the school districts and its taxpayers must absorb when these systems are put in place.


01:04 PM

Mr. Murphy said that CASE endorses a school finance system that provides sufficient resources, provides equity, allows for flexibility, creates predictability, and results in clarity. He said that any changes must be fact-supported and discussed in accordance with goals established for the committee's work.


01:06 PM

Vicki Newell, representing the Colorado Parent-Teacher-Association, gave a presentation from the perspective of parents. She provided information on her background and the constituencies she represents. Ms. Newell discussed the concerns of parents whose children are entering schools that lack sufficient resources and lack access to up-to-date technology. She discussed parental involvement in the schools, and specifically parent-supported fund-raising efforts for local schools. She showed specific examples of the types of products used in parent fund-raising efforts. She said that some fund-raising efforts have gone to buy books. She discussed the fact that budget shortfalls in one of Douglas County's newest schools required fund-raising efforts to buy books. Laptops and computer software, teacher aides, field trips, and school supplies are other resources that may be funded by parent fund-raising efforts.



01:17 PM

Ms. Newell discussed the status of the Public School Fund, as well as the impact of TABOR,Amendment 23, and the Colorado Student Assessment Program (CSAP). Ms. Newell continued her presentation by discussing the socio-economic circumstances from which some students enter school. She said that she does not want merely what is adequate for schools. Ms. Newell advocates protecting Amendment 23 and looking at a P-16 educational system. In addition, she said that special education promises must be kept, and that universal preschool and kindergarten should be available. Ms. Newell said that the state must take a look at the state constitution and the premises contained in it.


01:23 PM

Senator Windels asked further questions about local fund-raising efforts, and Ms. Newell responded that much of the money raised is now going toward necessities, not extras for school districts. Ms. Newell responded to questions about whether traditionally, the PTA only supported extras and was not expected to do fund-raising for basic needs for schools.


01:31 PM

Paula Stephenson, representing the Colorado Rural Schools Caucus and Dr. Dan Patterson, Superintendent of Fort Morgan School District, provided the next presentations. Ms. Stephenson said that she would like to discuss the plight of Colorado's rural school districts while noting that there is not a standard definition of "rural." She said that different subsets of rural school districts have similar concerns. She indicated that rural school districts feel that the school finance formula is difficult to understand, and that the cost-of-living factor does not take into account the travel and mobility necessitated in rural areas. She said that offering competitive salaries and attracting quality teachers are critical issues for their school districts. She said rural school districts still refer to the size factor as a "J" curve, with mid-sized districts penalized. Ms. Stephenson said that the school districts do not really feel a full impact of increased funding under Amendment 23, and that many rural school districts are losing federal Title I funding. She said that Gilpin School District has basically lost its Title I funding and discussed the tremendous impact of this loss. In addition, she said funding is not keeping pace with increasing state standards and federal mandates.


01:39 PM

Mr. Patterson, representing the Fort Morgan School District, the largest school district in the Rural School Caucus, relayed his experience in New Mexico as that state was undergoing changes in its school finance system. He believes that funding should go where the need is and that there needs to be consistency from year to year. He said that local school boards should make the funding decisions for the districts. Categorical funding should become part of the school finance formula and not subject to annual change. He said that you cannot educate all students with the same amount of funding, and that one severely disabled student can break a small school district. Transportation equity must be addressed, according to Mr. Patterson. He said that there are many models to consider, and that any formula should fund districts objectively, while providing for school district autonomy, without earmarking. He also feels that school districts should have latitude to spend funds according to local priorities.


01:43 PM

Representative King asked Ms. Stephenson about the impact of Title I funding on rural schools. She said that new definitions of poverty during the last census has changed the allocation of fund and adversely impacted some districts. Vody Herrmann, School Finance Unit, Colorado Department of Education (CDE), confirmed that there is a national redistribution of funding under Title I based on census data. Ms. Newell asked Ms. Stephenson to address the grant-writing capacity of rural schools. Ms. Stephenson said that it varies, and that sometimes grant applications are simply written by someone who has taken an interest in the grant, and that sometimes several districts go together to hire a grant writer. Representative King asked how many rural school districts are declining school districts. Ms. Stephenson said that not every rural school district has a declining enrollment, but that northwest Colorado and the eastern plains have declining enrollment school districts.


01:49 PM

Representative Pommer asked about the potential impact of proposals for requirements to spend 65 percent of its revenues on classroom expenditures. Mr. Patterson said that local school districts often spend a higher percentage than 65 percentage on classroom expenditures.


01:51 PM

Ray Kilmer, representing the Boards of Cooperative Educational Services (BOCES) Association as its executive director, began his presentation by introducing Don Strathman who will be assuming the position this summer. Mr. Kilmer said that for the last four years, BOCES have received only 1 percent of Read-to-Achieve funds distributed in the state. However, he noted that state grant-writing support has resulted in increased grant funding. He said that the 17 BOCES were originally recognized in 1965 and that they used to receive a standard amount for purposes of organizing. In 1996, the emphasis changed to the implementation of standards and assessments. Since 2003, direct state funding for BOCES has ceased. He said that many of the points made earlier by CASB and CASE are supported by the BOCES. He described BOCES as either single-purpose or more broad-based. They are funded from sources available to school districts, not sources directly available to the BOCES. Mr. Kilmer said that he would like the committee to consider multiple levels of support, depending on the purpose and scope of the BOCES. He said that the association supports reinstating and updating the provisions for BOCES. He said that special education, professional development, and data management are three major areas that BOCES can support and that could be funded directly. BOCES could move into support for English language learners and implementation of NCLB if supported appropriately.

02:02 PM

Mr. Kilmer said that the BOCES support a review of special education funding under the Exceptional Children's Education Act and the equity and adequacy of those dollars. He said that BOCES also support multi-year enrollment averaging and other considerations for school districts experiencing mobility, school choice, and other enrollment fluctuations.


02:05 PM

Senator Windels asked Mr. Kilmer about supplemental on-line education, who said that supplemental on-line education provisions are very important to BOCES school districts. He indicated that excess costs and oversight of instruction are factors in providing supplemental on-line services. Mr. Kilmer also indicated that BOCES are providing alternative certification avenues and professional development for teacher aides. The minimum requirements to be a special education unit should be changed and raised, according to Mr. Kilmer in response to a question from Representative King. Mr. Kilmer said that this potential provision would provide more money for instruction and less for administration.


02:08 PM

Nina Lopez, representing the Colorado League of Charter Schools, discussed the organization she represents. Approximately 36,000 students attend charter schools, according to Ms. Lopez. Ms. Lopez said that while charter schools all have site-based governance, no two charter schools are alike. She discussed the variance in charter schools. She said that the issues that have been raised throughout the day impact charter schools. She said that some of factors impacting charter schools can enhance the discussion, but do not need to drive the discussion of school finance. Ms. Lopez said that she does not have a current set of objectives and goals from the League. She said that the challenges in the current system include facilities funding for charter schools and the percentage of their budgets that charter schools must spend on facilities. The other issue is access to state and federal categorical funds that flow to school districts but that do not follow a student. Transportation issues are major issues for many charter schools, according to Ms. Lopez. Finally, proper accounting for the administrative expenses withheld by school districts can be an issue. She said at times, a charter school almost has to operate as a school district. She recommended reviewing the concept of money following a student and stated that another pressure point for choice in school districts is how resources should be allocated in a school district. Ms. Lopez noted that in regard to universal proficiency, she hopes that the committee can at least agree on what the goals and objectives should be.

02:18 PM

Ms. Lopez said that when she thinks of universal proficiency, there may be many different ideas around the table. She said that positive points to build upon may be unique student identifiers and the concept of value-added assessments. She said that the use of data to identify need can be a tool.


02:21 PM

Senator Anderson brought two major questions before the stakeholders: 1) what is would be your reaction if the state were to say it was no longer going to participate in the No Child Left Behind Act? and 2) if special education were fully funded, would the current school finance system be as onerous? Mr. Weigel said that he would support withdrawing from NCLB and that full funding of special education would relieve a lot of pressure on school districts. He said that there are advantages to complying with NCLB and that having accountability measures in place is positive. However, he said that biggest problem is that the sanctions are ineffective, and that turning failing schools into charter schools is simply a governance change. Ms. Urschel said that CASB does not have an official position on NCLB compliance, but that CASB does feel that it is a federal intrusion. She also noted, however, that it has forced the state and school districts to confront certain issues. She said that fully funding special education would change the character of school finance.


02:26 PM

Ms. Urschel continued by stating that the origination of NCLB took place without advocacy, but that advocacy may be used now to bring changes. Mr. Van Sant said that NCLB is an important issue in his district. He said that special education funding is also critical. Mr. Murphy said that he feels walking away from NCLB would be difficult. He also said that full special education support would be very helpful. In response to the same questions, Mr. DuVall said that as attractive as it sounds to walk away from NCLB, the CEA supports fixing and funding it, rather than withdrawing entirely. Mr. DuVall said that the total impact of opting out would not be worth the message that it would send. He said that fully funding special education would be a huge step forward. He said that if the federal government appropriately funded special education, the question regarding NCLB compliance and its impact would be different.


02:31 PM

Ms. Newell said that withdrawing from any unfunded mandated would be a good idea, and that she feels insurance companies need to step forward in the realm of special education. Mr. Kilmer said that he likes the option that Colorado school districts now have to opt out, but forgoing funding would be difficult, unless the state took a new role in funding hard-to-educate students. Mr. Freeman said that NCLB is resulting in school districts neglecting their high achieving students. Ms. Stephenson said the Rural Schools Caucus would support opting out of the No Child Left Behind. She said that fully funding special education would have a huge impact on rural school districts.
Mr. Patterson said that parts of NCLB are beneficial, but that he would support opting out if it did not impact their current levels of federal funding.
He said fully funding special education would have a big impact, as long as funding was not merely shifted from other areas.


02:35 PM

Ms. Middleton said that the State Board of Education has been discussing increased advocacy and requests for waivers under NCLB. She said that 75 percent of the CDE is federally funded, and that she feels the state should try advocacy and waiver requests before considering opting out of the federal law. Representative Merrifield indicated that he would support more efforts to opt out of NCLB. Representative Pommer asked questions regarding where school districts would target additional funding. Mr. Weigel said that in his district, the focus for increased funding may be different for different schools, such as early education or English language learners. Other major needs are math support at the secondary school level. Ms. Rainey, Colorado School Finance Project, said that the work that her organization has done has indicates that school districts have special categories of students and underfunded programs they would like to address. Ms. Newell said that she said a study on best practices would be useful, as would a survey of what has been cut from school budgets in the last decade . Mr. Patterson mentioned smaller class size, full day kindergarten, extending the school year, and increasing school teacher salaries and benefits as key issues. Mr. Murphy discussed different needs in school districts, such as salary and benefits in rural school districts.


02:42 PM

Mr. Gustafson, Colorado Springs School District 11, said that intervention programs for at-risk students are crucial for urban school districts. Representative Pommer said that if the committee does end up seeking increased funding, politically, requests for more funding for schools must be specific and include expected measurable outcomes.


02:50 PM

The committee recessed.