National Trends in School Finance
STUDY OF THE FINANCING OF PUBLIC SCHOOLS
The committee come back to order. Representative Middleton told the audience that members of the committee met with the State Board of Education earlier in the month.
10:56 AM -- National Trends in School Finance
Michael Griffith, Education Commission of the States (ECS), and Daniel Thatcher, National Conference of State Legislatures (NCSL), introduced themselves and began their presentation. They provided a handout outlining their presentation (Attachment A).
Mr. Griffith began, talking about how states fund education, explaining that 38 states use a foundation program, 6 states use teacher allocation systems, and 6 states use other systems. He described teacher allocation systems and other systems used by states.
Mr. Thatcher spoke about funding for at-risk students, describing the wide range of students who are "at-risk" for various reasons. He explained that the most common tool for identifying at-risk students is free/reduced price lunch qualification. Mr. Thatcher talked about problems in using that tool as an identifier. He also discussed a number of other tools for identifying at-risk students.
Mr. Thatcher next spoke about use of categorical funds for at-risk students and about the move by some states toward putting at-risk funding into the funding base. He said the trend across states is to reduce categorical programs and move toward the use of the state's primary funding formula to simplify the funding system and provide greater predictability. Mr. Thatcher talked about attaching weights to at-risk students based on the students' particular circumstances.
Mr. Thatcher highlighted several at-risk programs that have shown positive educational results including providing: additional education experts such as tutors; targeted additional instruction time such as after school or summer school programs; additional general instruction time by lengthening the school day or year; early learning programs; and small class and school sizes. Mr. Griffith provided information to this topic as well, talking about the higher cost of successful programs.
Mr. Griffith moved on to a discussion of declining enrollment, talking about short- and long-term hold-harmless provisions provided in some states. Mr. Griffith also discussed other ways of addressing declining enrollment, including use of a rolling student average, best year count of the past two or three years, or a combination of the two. He discussed the North Dakota system that provides more funding for districts with fewer students and for districts with more students than the state average.
Mr. Griffith continued, talking about issues related to small and isolated schools, discussing how states deal with these issues.
Next, Mr. Griffith talked about count days, saying the most common system is multiple count days, describing the arguments for and against this count system. He also talked about use of an extended count period and average daily attendance systems. He also mentioned a monthly-count system used for a short time in Arizona.
Mr. Thatcher spoke next about shared costs and how districts can realize efficiencies by working together. He said a study by the Leadership for Education Achievement in Delaware found that if school districts pooled their purchasing power, they could reduce their costs by between 8 and 14 percent. Mr. Thatcher also talked about the money spent on administrative costs, and touched on the subject of local control in Colorado.
Mr. Griffith next spoke about stable funding sources for education, talking about the difficulty in finding a stable funding source. He said Michigan and Washington have moved to a statewide property tax system, but noted that these systems tend to be unpopular with tax payers and are often adopted as a package that reduces other state or local taxes.
Senator King asked for further information about the use of weights. Mr. Griffith responded, noting that the amount of the weight varies greatly from state to state. He responded to further questions from Senator King around whether any states fund academically at-risk students in addition to economically at-risk students. He provided examples of what states are doing to identify at-risk students, talking specifically about a system attempted in Ohio.
Representative Massey asked the presenters to talk more about "Robin Hood" systems, such as the one used in Texas, whereby wealthier districts share resources with poorer districts. Mr. Griffith responded to Representative Massey's question, as well as a question about incentivizing students to attend school on count dates.
Senator Spence asked for more information on weighted student funding, asking about a number of specific systems. Mr. Griffith talked about a system in Alberta, Canada, where most money was moved to the school level, rather than the school district level, noting that the system has now been pulled back so that more is going back to the school district. He said Houston has also tried this tactic and described some of the issues faced in states that attempted this. Mr. Thatcher added that Hawaii is the only state that has implemented statewide weighted student funding, but reminded committee members that Hawaii is unique in that it has only one school district. He said most other programs like this have been district-level rather than state-level programs.
Senator Johnston asked for additional information about the use of weights in New York. Mr. Griffith responded, explaining that New York's base is low and that it has many categoricals. Senator Johnston asked a follow-up question about how states are gathering free and reduced lunch eligibility data. Mr. Griffith said some states use averaging, looking at average income data rather than free/reduced lunch eligibility data, but that free/reduced lunch eligibility data must still be collected.
Senator Hudak clarified Colorado's method in calculating at-risk for high school students. Representative Middleton provided further clarification, saying Colorado only funds as at-risk students who are free lunch eligible, not those who are reduced-cost lunch eligible.
Senator Steadman asked the presenters to talk about the strengths and weaknesses of distributing money for at-risk students through the formula as opposed to distributing it through a categorical program. Mr. Griffith responded, talking about the proscriptiveness of the systems.
Senator Romer asked about which states are using an outcome based model and which states are working on time on task. Mr. Griffith said not many states or districts are looking at using outcome-based funding, though it has been a topic of discussion. He talked about theoretical models, but said no one can seem to make that work as a predictable funding model. He also spoke to the question about time on task. Conversation between Senator Romer and Mr. Griffith on this topic ensued.
Mr. Griffith responded to a question from Senator Romer about whether any states have discussed pay-for-performance bonus systems based on student learning growth.
Representative Middleton asked for context around the at-risk programs identified in the presentation as programs that work, which Mr. Griffith provided. Conversation on this issue between Representative Middleton and Mr. Griffith ensued.
Senator Johnston asked about states that use average daily membership rather than average daily attendance. Mr. Griffith provided clarification to that issue.
The committee recessed for lunch.