Funding Formulas and Formula Approaches to Recognize Student Need 1 September 19 2018 Presentation Overview Provide an overview of the mechanics of state K12 Direct Aid funding formulas including key inputs used in the formulas ID: 755544
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Slide1
Overview of Virginia K-12 Funding Formulas and Formula Approaches to Recognize Student Need
1
September 19, 2018Slide2
Presentation OverviewProvide an overview of the mechanics of state K-12 (Direct Aid) funding formulas, including key inputs used in the formulas
Present formula approaches to recognize student need
2Slide3
Presentation TopicsKey Input Variables Used in Direct Aid Funding Formulas
Direct Aid Funding CategoriesState and Local Shares of Funding
Formula Approaches to Recognize Student Need
Appendices
3Slide4
Key Input Variables Used in Direct Aid Funding Formulas
4Slide5
Free Lunch RatesDivision-wide and school-level free lunch rates (FL%) are provided annually through the National School Lunch Program.
Free lunch data are used in five Direct Aid formulas targeting at-risk students. Data is updated biennially in the formulas.
5Slide6
Direct Aid Programs using FL%
Program
FY19
Appropriation
SOQ PIR (Prevention,
Intervention, & Remediation
)*
$113.1 million
At-Risk
Add-on
$100.3 million
K-3 Class Size Reduction**
$130.6 million
SOL Algebra
Readiness
$13.0 millionVirginia Preschool Initiative$75.3 millionTotal$432.2 million
6
*SOQ Remedial Education uses a 3-year average of division-level free lunch data.
**K-3 Class Size Reduction uses a 3-year average of school-level free lunch data.Slide7
Test ScoresTest or assessment scores are used in several Direct Aid formula calculations. Tests include:
Standards of Learning (SOLs)
PALS Diagnostic (K-3)
7Slide8
Direct Aid Programs using Test Scores
Program
FY19
Appropriation
SOQ PIR (uses divisio
n
3-yr.
avg. failure rates for English and math SOL tests)
$113.1 million
Early Reading Specialists (uses 3
rd
Grade reading SOLs)
$1.8 million
Math/Reading
Specialists (uses math or reading SOLs, all grades)
$1.5 millionEarly Reading Intervention (uses K-3 PALS)$22.6 millionProject Graduation (uses HS math, reading/writing, science, and history SOLs)$1.4 million
Total
$140.4 million
8Slide9
EnrollmentDirect Aid funds are distributed based upon two different enrollment counts:
Sept. 30
th
Fall Membership (FM)
March 31 Average Daily Membership (ADM)
Most
state funding
distributed
using ADM; provided in division-level allocations.
9Slide10
Large Direct Aid Programs using FM
Program
FY19
Appropriation
English as a Second Language (SOQ)*
$62.2 million
Early Reading Intervention
$22.6 million
K-3 Class Size Reduction
$130.6 million
SOL Algebra
Readiness
$13.0 million
Virginia Preschool Initiative**
$75.3 million
Total$303.7 million
10
*
English language learner
counts from Fall SRC.
**VPI slots are computed based on a fall membership projection of kindergarten.Slide11
Large Direct Aid Programs using ADM
Program
FY19
Appropriation
Standards
of Quality (
all
accounts)*
$4.7 billion
At-Risk
Add-on
$100.3
million
Supplemental Lottery Per Pupil
Allocation Funding
$234.7 millionTotal$5.0 billion11*These Standards of Quality accounts include: Basic Aid; Textbooks; Career & Technical Education; Gifted Education; Special Education; Prevention, Intervention, and Remediation (PIR); VRS Retirement; Social Security; and Group Life. Slide12
Direct Aid Funding Categories12Slide13
Direct Aid BudgetState funding (GF & NGF) is appropriated in the Direct Aid budget in four major “service areas”:
Standards
of
Quality ($6.2 billion)
Incentive Programs ($158.1 million)
Categorical Programs ($58.9 million)
Lottery
Proceeds
Fund ($592.5 million)
13Slide14
Standards of QualityFY19 funding for the Standards of Quality is provided through the following accounts, mostly on a per pupil basis:
Basic Aid ($3.3 billion)
Special Education ($397.7 million)
Career and Technical Education ($58.4 million)
Prevention, Intervention, & Remediation (PIR) ($113.1 million)
Gifted Education ($35.4 million)
English as a Second Language ($62.2 million)
Fringe Benefits for funded instructional pos. ($657.4 million)
Sales Tax ($1.4 billion)
Remedial Summer School ($24.9 million)
Textbooks ($70.3 million)
Early Reading Intervention
and
Algebra
Readiness (are SOQ but Lottery-funded)
14Slide15
SOQ Funding Process – General Concept15
Base Year Enrollment
Staffing Standards – Required Positions
Specific Data Inputs (ex. funded salaries)
Per Pupil Cost of Required Positions Calculation
Total Program Cost
Actual Enrollment
LCI
State Share (55% on avg.)
Local Share (45% on avg.)Slide16
Example SOQ Program: PIR16
Base Year March 31 ADM
Staffing Standards:
Sliding scale pupil:teacher ratios from 10:1 to 18:1 based on SOL failure rates; 1.0 additional instruction hour per day
Inputs:
Free Lunch
SOL Scores
Fall Memb.
Salaries
Per Pupil Cost of Required Positions Calculation
Total Program Cost
Actual March 31 ADM
LCI
State Share (55% on avg.)
Local Share (45% on avg.)Slide17
SOQ Program – Basic Aid17
Basic Aid Details
Purpose
To support
the cost of basic school division operations
Requirements to Receive Funds
Mandatory – must meet staffing standards
Unique Inputs
staffing standards, support positions (salaries and benefits), sales tax, s
upport costs, inflation rates
Other
Inputs
funded salaries, base year
ADM, cost of competing adj. (COCA) for No. Va.
St./Local
MatchRequired – based on LCI
Historical State Funding
Year
Funding
FY20*
$3.3 billion*
FY19*
$3.3 billion*
FY18
$3.2 billion
FY17
$3.2 billion
FY16
$3.1 billion
*Based on Chapter 2 budget.Slide18
SOQ Program – Special Education18
Special
Education
Details
Purpose
To provide
the state share of the cost of required special education instructors
Requirements to Receive Funds
Mandatory – must meet staffing standards
Unique Inputs
December 1 spec. ed. child count, case load standards
Other
Inputs
Funded salaries, Base Year
ADM, COCA
St./Local MatchRequired – based on LCI
Historical State Funding
Year
Funding
FY20*
$398.5
million*
FY19*
$397.7
million*
FY18
$382.4 million
FY17
$382.3 million
FY16
$368.1 million
*Based on Chapter 2 budget.Slide19
Incentive ProgramsIncentive Programs are voluntary but require additional conditions to receive state funding; some local matches.
FY19 Incentive Programs and state funding:
Compensation Supplement ($0.0 million – funded in FY20)
Governor’s School ($17.8 million)
At-Risk Add-on ($100.3 million)
Math/Reading Instructional Specialists ($1.8 million)
Early Reading Specialists Initiative ($1.4 million)
Small School Division Enrollment Loss ($6.1 million – FY19 only)
Spec. Ed. Regional Tuition – GF portion ($28.0 million)
Other programs ($2.6 million)
19Slide20
Incentive Program – Compensation Supplement20
Compensation
Supplement
Details
Purpose
To provide the state share of a salary increase for funded SOQ instructional and support positions
Requirements
Certification that the
compensation supplement
is provided to required staff
Unique Inputs
Salary increase rate & eff.
date of raise
, funded positions
Other InputsADMMatchFormula match not required in Chapter 2 budget
Historical State Funding
Year
Funding
FY20*
$130.3
million*
FY19*
$0.0
million*
FY18
$31.7 million
FY17
$0.0 million
FY16
$51.8 million
*Based on Chapter 2 budget.Slide21
Incentive Program – At-Risk Add-on21
At-Risk
Add-on
Details
Purpose
An
additional state payment in support of educationally at-risk students
Requirements to Receive Funding
Certification
of available local match, permitted uses of funds
Unique Inputs
Min./Max. per pupil add-on percentages (on sliding
scale)
, free lunch
rates
Other InputsBasic Aid per pupil amounts for % add-onSt./Local MatchRequired – based on
LCI
Historical State Funding
Year
Funding
FY20*
$107.1
million*
FY19*
$100.3
million*
FY18
$100.0 million
FY17
$98.0 million
FY16
$89.1 million
*Based on Chapter 2 budget.
Historical Add-on
Ranges
Year
Min./Max.
FY20*
1.0%/14.0%*
FY19*
1.0%/13.0%*
FY18
1.0%/13.0%
FY17
1.0%/13.0%
FY16
1.0%/12.0%Slide22
Categorical ProgramsCategorical Programs target particular needs of specific students; typically no local match.
FY19 Categorical Programs and state funding:
State Operated Programs ($35.6 million)
School Lunch Program State Match ($5.8 million)
Virtual Virginia ($5.4 million)
Homebound ($5.0 million)
Adult Education ($1.1 million)
Adult Literacy ($2.5 million)
Other programs ($3.5 million)
22Slide23
Lottery ProgramsFor FY19, 20 programs are funded by the Lottery Proceeds Fund, including two SOQ programs (Early Reading Intervention & Algebra Readiness)
Several programs have a local match
FY19 Lottery Programs and state funding:
Supplemental Lottery Per Pupil Allocation ($234.7 million)
K-3 Class Size Reduction ($130.6 million)
Virginia Preschool Initiative ($75.3 million)
Spec. Ed. Regional Tuition – Lottery Portion ($67.6 million)
Other programs ($84.3 million)
23Slide24
Lottery Program – Supplemental Lottery Per Pupil Allocation24
Supplemental Lottery PPA
Details
Purpose
To
provide additional state funding support for both operational and capital expenditures
Requirements
None – flexible use
Unique Inputs
Funded Per
Pupil Amount (in Approp. Act)
Other
Inputs
ADM, LCI for state share of funding
Local Match
Not required
Historical State Funding
Year
Funding
FY20*
$239.4
million*
FY19*
$234.7
million*
FY18
$191.3 million
FY17
$36.6 million
FY16
$0.0 million
*Based on Chapter 2 budget.Slide25
Lottery Program – K-3 Class Size Reduction25
K-3 Class Size Reduction
Details
Purpose
To
provide state funding for the incremental cost of reducing ratios/indv. class caps in grades K-3 for schools with qualifying levels of educationally at-risk students
Requirements
Certification
of available local match, required K-3 ratios/indv. class caps met
Unique Inputs
School-level free lunch rates, 14:1
to 19:1
ratios/indv. class size caps
Other
Inputs
Fall membershipSt./Local Match
Required – based on LCI
Historical State Funding
Year
Funding
FY20*
$130.4
million*
FY19*
$130.6
million*
FY18
$121.7 million
FY17
$123.3 million
FY16
$112.2 million
*Based on Chapter 2 budget.Slide26
Lottery Program – Virginia Preschool Initiative26
Virginia Preschool Initiative
Details
Purpose
To provide the state share of funding for at-risk,
unserved four-year-olds in quality preschool programs
Requirements
Certification
of available local match & program stnds., VPI data collection
Unique Inputs
Free lunch rates, Head Start students, projected kindergarten enrollment
Other
Inputs
None
St./Local
MatchRequired – based on LCI (0.5000 max. local share)
Historical State Funding
Year
Funding
FY20*
$75.7
million*
FY19*
$75.3
million*
FY18
$69.2 million
FY17
$69.4 million
FY16
$68.7 million
*Based on Chapter 2 budget.
Historical VPI Per
Pupil Amt.
Year
Per Pupil Funding
FY20*
$6,326
*
FY19*
$6,326
*
FY18
$6,125
FY17
$6,125
FY16
$6,000Slide27
State and Local Shares of Funding27Slide28
Local Composite Index of Ability-To-Pay (LCI)
The LCI is a relative measure of local financial resources relative to the state avg. Its calculation is based upon:
True Value of Real Property (weighted 50%)
Adjusted Gross Income (40%)
Taxable Retail Sales (10%)
Calculation weighted by:
Average Daily Membership (67%)
General Population (33%)
Final value
i
s percentage of formula costs that must be funded from
local
funds (ex. LCI of 0.6000 = 60% local share; 40% state share)
28Slide29
Average State Distributions Per Pupil in FY17(by LCI and ADM)
29
$4,870
$4,991
$6,867
$6,353
Bottom Half
Top Half
Top Half
Bottom Half
ADM
LCI
Source: FY17 Superintendent’s Annual Report, Table 15
(.3491 and above)
(.3481 and below)
(3,814 and below)
(3,851 and above)Slide30
Average Local Expenditures Per Pupil in FY17(by LCI and ADM)
30
$7,458
$6,077
$3,315
$3,287
Bottom Half
Top Half
ADM
LCI
Source: FY17 Superintendent’s Annual Report, Table 15
(3,814 and below)
(3,851 and above)
(.3491 and above)
(.3481 and below)
Top Half
Bottom HalfSlide31
Per Pupil Expend. – by LCI Tier & Source31
Top Third
.3855-.8000 (
highest local ability
)
Middle Third
.3043-.3848
Bottom Third
.1701-.3026 (
lowest local ability
)Slide32
Formula Approaches to Recognize Student Need
32Slide33
Formula Approaches to Recognize Student NeedSOQ Programs
:Increase/establish new Basic standards (& funding) that increase student/ instructional supports and school climate (e.g., counselors).
Increase the staffing standard in the Prevention, Intervention, & Remediation formula (lower the 10:1 to 18:1 ratios; increase the one
hour
of additional instruction per day).
Increase the 17 per 1,000 staffing standard for ESL instructors.
Provide 100% state share of Remedial Summer School funding (or a higher per pupil amount that
funds additional
costs)
for
divisions
with high poverty or low student achievement.
Compensation
Supplement
:
Provide salary increase funding at a higher percentage increase (or higher state share) for divisions with high student poverty, low student achievement, and/or high staff shortages.33Slide34
At-risk Add-on:Increase the maximum % per pupil add-on (e.g., from 14% to 15% in FY20) to increase funding to higher poverty divisions. Incorporate additional inputs in the formula
(e.g., achievement gap, absenteeism data, etc.).
Math/Reading Specialists Accounts
:
Provide
funding
based on 100% state share for highest poverty/lowest performing schools as incentive to hire specialists.
Lottery
Per Pupil Funding Allocation Account
:
Currently uses ADM and LCI to distribute the funds. Incorporate the number of free lunch students with ADM, with each weighted, to distribute the funds.
K-3 Class Size Reduction
:
Lower the
school staffing
ratios below the current 14:1 to 19:1 levels to increase funding. 34Formula Approaches to Recognize Student NeedSlide35
LCI:Apply LCI to additional Direct Aid formulas where it is currently not applied to differentiate levels of funding. Locality
resources per the LCI often correlate to student needs in the division. (Decisions whether to distribute
the same amount of state funding
or increase it to mitigate LCI impact and whether to require
a local
match).
School Lunch State Match/School Breakfast Incentive Programs
:
Funds
are currently provided based
on
a single amount for the number of meals served in each
division.
Provide
a higher amount per meal for high poverty divisions as an incentive to increase meal participation in such divisions.Mentor Teacher Program:Divisions receive an equal amount of mentor support per beginning teacher. Provide a higher amount per teacher for high poverty divisions or apply LCI. 35Formula Approaches to Recognize Student NeedSlide36
VPI:Provide a higher per pupil amount or eliminate the Head Start
deduct in the formula for high poverty divisions.
Early Reading Intervention/SOL Algebra Readiness
:
Lower the
pupil:teacher
ratios
and/or
increase the additional
instructional hours per week factors in
the
formulas to increase funding to
high
poverty divisions.
VPSA Educational Technology Grants
:Funds are currently provided at $50,000 per division/$26,000 per school. Increase these amounts for high poverty divisions/schools or apply the LCI to the funding.Note: With such approaches listed above, consider the local impacts of increased staffing and required local match. Also consider distributional impacts across divisions.36Formula Approaches to Recognize Student NeedSlide37
Appendices
37Slide38
Composite Index Formula38Slide39
State Funded Salary Increases39