K12 Finance 101

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K-12 Finance 101

• What is the current situation?
• How does the state fund K-12 education?
• How did we get here?
• Where are we headed?

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• Whats Happening
• Locally?

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• Out of a 48 million budget.
• Student enrollment is projected to be down
  331 students 1,600,000
• Lost Revenues 49,000 in state SpEd.
  70,000 in PASS
• Increase in fuel 100,000 fuel
• Salaries increased 283,ooo certificated
  115,000 classified 654,000 benefits

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• WHAT do we do?
• 2.6 M out of a 48M budget5.4
• HOW?
• Dip 460,000 into reserves.
• Estimated end reserves 3, necessitates a TAN of
  100,000
• Cuts, cuts and cuts and fees.
• Staffing, building budgets, transportation,
  SpEd., travel, technology, maintenance,
  athletics, curriculum student fees

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Decline of District Reserves
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State, Local, and Federal Funds Total 9.3 Billion
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5 High Priority Basic Education Funding Needs
Many More Remain
1. District Enrollment
2. Staff Ratios(Certificated Instructional,
Administrative Classified)
3. Salaries Benefits
4. Operating Costs (NERC) State
GeneralApportionment
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Certificated Instructional Staff Ratios
Certificated Instructional StaffK-4
118.8 5-12 121.7 IncludesAll
Teachers,Instructional Coaches, Nurses,
Counselors, Librarians, all other Pupil Support
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Current Funding Re-Stated to Reflect Class Size
Students per 1 FTE Staff
5 hoursinstruction
120.7
124.2
CertificatedInstruction StaffK-4 118.8 5-12
121.7
124.2
11,250
1786
1498
12,659
Pupil Support
16,500
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• For Kelso this equates to 46 extra Basic Ed.
  certificated positions
• This does not include categorical programs

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Districts Must Subsidize State Salary Allocations
Significantly
2007-08 Building Blocks ofK-12 Staff Average
Salaries

• Average total salary
• State average allocation

96,445
57,065
56,856
50,318
36,593
30,688
Instructional
Classified
Administrative
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Districts Spend Over 500 Million More on NERC
Than the State Funds
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5 High Priority Basic Education Funding Needs
Many More Remain
I-728
1. District Enrollment
Learning Assistance
2. Staff Ratios(Certificated Instructional,
Administrative Classified)
Busing
Special Education
3. Salaries Benefits
Bilingual
4. Operating Costs (NERC) State
GeneralApportionment
Gifted
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Current LAP Funding is Inadequate

• Learning Assistance Program (LAP) allocates 3.46
  staff per 1,000 poverty students, 1289
• This equates to a teacher spending 30 minutes per
  day with groups of 28 struggling students
• No for materials, program support or
  professional development

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Current Transportation is Inadequate

• State funding is calculated as the ash blows
• Districts with hills, valleys and rivers do not
  benefit from this method of funding
  apportionment.
• Special Ed. transportation is not fully
  reimbursed.
• Run 32 regular routes, 10 SpEd. routes
• Kelsos single largest budget overdraft is
  transportation at 653,000.

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Transportation Funding Gap
JLARC estimate for basic ed underfunding in
2004-05 92.6 - 114 Million
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Diesel per Gallon up 48 Over Sept 2007 Price
West Coast Monthly Average Retail Price per
Gallon of Diesel
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Current SpEd. is Inadequate

• The state funds up to 12.7 of student population
  for Special Ed.
• Kelso has a Special Ed. population of 13.8
• Flat fee of 10,782 for each SpEd student
• This is BEA, federal, and state money
• Safety Net not eligible until student cost
  17,000
• Kelso is 254,00 over in the SpEd. category.
• Excess covered by levy. Safety net was 170,000

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I-728 is inadequate

• I-728 monies are largely used for staff
• Staff expense increase roughly 8 a year
• I-728 monies are now capped at a 1.8 increase.
• This is not conducive to supporting staff based
  programs such as all day Kindergarten or reducing
  class size.

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• How did we manage in the past?

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How Have Districts Balanced Their Budgets in the
Last Few Years?

• 2000-2008

• 2009 and Beyond

• Reduction in pension rates saved 364 million
• 2003-05 COLA suspension (3.1) saved 187 million
  
• Increases in I-728 revenue and federal funding
  totaled 614 million

• Pension rates increase
• I-728 and federal revenues flatten
• Local funds continue to support COLAs
• Other cost continue to increase faster than
  inflation
• Health benefits
• Fuel

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2000-2008 Employer Pension Contributions
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From 1999-2008, I-728 and Federal Funds Increased
by 614 Million Beginning 2008-09 Only Small
Increases
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Health Benefit Costs Increase Rapidly
Annual Health Benefit Cost Per Certificated
Instructional Staff
8.73
8.11
19.17
6.46
3.00
School Year
preliminary
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• What can we expect?

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Local Funds are Maxed Out

• State under-funding pushes costs onto local
  districts
• Local districts must utilize local funds (levy,
  LEA, I-728)
• Local funds are capping out
• 2007-08 year had 7 districts in binding
  conditions. This number will dramatically
  increase in 08-09.

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State Wide Predictions

• Analyst predict a state wide revenue increase of
  199 million in local funds by 2011
• Expenditure increases of 631 million are
  predicted by 2011.

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Local Districts Options

• Close Schools
• Programmatic cuts (e.g., libraries)
• Delay curriculum adoption
• Reduce staff (e.g., increase class size)
• Add additional students (e.g. Internet Academies)
• Cut administration
• Create additional fees for students and families

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Local Districts Options

• Eliminate sports and extracurricular activities
  or Pay to Play
• Cut arts, music, social studies, physical
  education
• Eliminate 6th and/or zero period in high school
• Reduce elective course offerings
• Reduce bussing options (e.g., longer routes, less
  transportation w/in 1 mile for young, earlier
  starts for fewer buses)

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One more thing

• New SBE mandate 3 credits of math to graduate
• Will require additional teachers and curriculum
• CORE 24, 24 credits to graduate, was passed
  (dependent upon funding)
• Local schools now in AYP
• Will require set aside money for professional
  development and busing of option students
• Following year will mandate supplemental services
  providers for low income students

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