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12-18-06 GSCS on Dept of Educ School Funding Cost Study

GARDEN STATE COALITION OF SCHOOLS/GSCS        12-18-06

                                   

INITIAL CONCERNS: Department of Education School Funding Formula Cost Study

 

OVERALL CONCERN:

Inadequate timelines have not been allowed for the full in-depth analyses, open discussion and understanding of the district-by-district impact that a new school funding formula requires.  In addition, any funding formula viable conversation needs to be rooted in reality –to do that, the entire package needs to be revealed at the same time. A conversation about theory, when not backed up by knowledge of practical application, will likely result in confused expectations, mixed messages, and ‘having to do whole thing’ over again to get it right.

 

CONCERN: Leveling down of quality education.

 

Does the per pupil *cost measure (an average of $8500) demonstrate the state’s goal/expectations for quality education in New Jersey in the future?

 

Does this per pupil benchmark for funding – that is generated based on the 305 school districts (culled based on their passing state AYP measures for NCLB purposes)  spending  imply a fiscal goal of the state which would mean hundreds of districts are currently spending more than that for their regular education programs today? That those districts will be driven down to lower per pupil budgeting and likely thus end up achieving less? And would driving down achievement be considered satisfactory by our state leadership? (see addenda for example re: IJ scoring on NJ ASK)

 

It is vital that the state be clear on its underlying thinking here in establishing this low number for future as the basis for future state aid calculations.

 

For this recommendation to be considered from the get-go, is not there a broad assumption that the PJP panels functioned according to an open process, and that the panels signed off of the study? Yet we know that the panels did not have an opportunity to review and input, even on a draft report.

 

Literal district data was not used to derive costs, thus the reality of variances such as teacher stability and enrollment growth which affect per pupil costs directly, are not a factor in the costing out process. However, these variables are a factor in local budgets and school costs. A couple of major factors that are omitted from the study and that would make the study more realistic are: indexing salary costs by such key elements as stable teaching force versus teacher/staff turnover ratios, and district ‘time-in-job’ by teachers that affects where teachers fall on the salary guides.

 

Concern: Wealth equalizing of special education aid, and LEP (Limited English Proficient)

state aid. Historically these mandated programs have been support by state

 ‘categorical’ aid. Categorical aid is distributed directly to individual students

based on their specific needs..

 

 Since special education programs are mandated for individual children no matter where they live, it is reasonable for the funding support & programs for those individual children to be the same no matter where they live. For example, if the state imposes a new school funding law that mandated precise special education aid per student, but also then devised a formula that wealth-equalized that support, then many districts would be under a new mandate where they would have to provide the requisite amounts either entirely out of their local levy or via combination of state aid and local levy. State Mandate-State Pay conflicts emerge, as well as comparability of programs for disabled students spanning various districts, among other things.

 

It is important to recognize that hard caps will come into play with mandated programs that become equalized under a new formula. Special education costs are rapidly outpacing inflation and not likely to be curbed in year 1, 2, or 3 of a new formula. Between that and the growth of health benefits, utilities and other items beyond a district's control, it is not difficult to foresee real budgetary problems and divisions incurred by the way this funding formula seems to be structuring out.

 

Supporting the GSCS position is this excerpt below, from a study document by national experts (Jay Chambers, for one) commissioned by the Department of Education itself. In fact, this study was referenced in Department of Education testimony before the Joint Committee on Public School Funding this fall. The study, that reviewed New Jersey special education programs and funding and related them to national picture, indicates that categorical funding for special education may indeed be the best way to fund students with disabilities. It is consistent across districts and assures comparable programs for special education students no matter where they live:

 

Final Report NJ SEEP study commissioned by DOE Re: funding structure for Special Education aid…  (Excerpt from) Exhibit 1-3 p. G-14 of Report).

 

"Criteria for Evaluating State Special Education Funding Formulas "

   

Equitable

·         Student equity: Dollars are distributed to ensure comparable program quality regardless of district assignment.

·         Wealth equity: Availability of overall funding is not correlated with local wealth.

·         District-to-district fairness: All districts receive comparable resources for comparable students.

 

Concern: Minimum Aid is proposed for all districts

 

GSCS supports the concept, but points out that this can be better achieve both in terms of equity and effectiveness, by increasing the state share of special education categorical aid to all districts.

 

No district is favored in this method, and special education student support is appropriately increased via state share.

 

There are indications that the administration is favoring this aid as a way to replace some of the special education categorical aid that will be lost to districts if the formula proceeds to equalize certain current categorical aids.  This could help set up a revenue neutral balance for those districts that would otherwise suffer reduced aid in year one of the new formula; in order not to incur a property tax increase for those districts, and meet 2007 election promises (such as the stated intent to “hold all districts harmless, at least for the first year”), the probability here is that the state would be able to use the minimum aid as a patch in the first year, and then either diminish that aid in subsequent years or let the Supreme Court pave the way for removing it altogether as unconstitutional.

 

Concern: Ability-to-Pay

 

A new calculation is being developed, but again, not made known even to legislators or legislative staff as of 11/30/06. While being based on a similar combination of property and income wealth as currently done, it is shifting its emphasis to a per capita basis. The per capita basis is being touted to bring relief to senior citizens and those who do not send children to public schools.

 

Questions need to be answered and discussed up front, and impact understood by all. For instance, will a community that supports its schools in sending the majority of its children to its public schools be deemed more wealthy?  Will a locality that is more population-dense be considered less wealthy?

 

This formula needs to be disclosed, and the data run and published as soon as possible so that it can be reviewed, with an eye on significant change possibilities, and the real probability of  unintended consequences.

 

Attendant Concern: “Hard Caps”

 

Reasonable caps differ from hard caps. In the proposed funding plan, hard caps apply cross the board with no exception allowed other than enrollment growth. The charts below demonstrate the impact on local taxes of two cost drivers that are beyond local control, special education mandated programs and health benefits. The data speaks loudly – these two factors alone made up 61.5% of local levy growth from FY02 to FY06- and makes clear that hard caps will have a negative impact on quality education. There is further stress on local districts now due to uncertainty concerning health benefits since the Governor’s recent removal of health benefits reform from the special session legislative proposal package.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADDENDA

 

FY02 to FY06 SPECIAL EDUCATION & HEALTH BENEFITS EXPENDITURES
IN REGULAR OPERATING DISTRICTS (RODs) v. GROWTH IN LOCAL LEVIES
ROD Levy Growth 0206	2,378,240,758
ROD Sp Ed Growth 0206	678,570,214	.2853% of ROD levy growth
ROD Health Bens Growth 0206	783,979,869	.3296% of ROD levy growth
ROD Sp Ed+ Health Ben Growth =	1,462,550,083	.61497% of ROD levy growth
GARDEN STATE COALITION OF SCHOOLS/GSCS 11-06

 

 

 

 

CHART (based on above data)

 

 

 

1

-

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

Dollars

Growth in ROD (Regular Operating District) Health Benefits & Special Ed Expenditures vs. Local Levy Growth:

'01-02 & '05-06

Growth in Sp Ed & Health Ben Costs

1,462,550,083

Growth In Local Levy

2,378,240,756

1

61.5% of the growth in local levy in regular operating districts from FY02 to FY06 (the same years that the state school aid formula, CEIFA, has not been implemented) has been due to increases in cost driver increases in special education and health benefits alone.

 

 

 

ASK 4Scores I & J District Level Scores: 2004-05
District	DFG00	Total Language Arts Scores	Total Math Scores
ALLAMUCHY TOWNSHIP	I	72.5%	72.5%
ALLENDALE	I	96.3%	95.4%
ALPINE	I
AVON BOROUGH	I	72.7%	81.9%
BAY HEAD	I	90.9%	100.0%
BEDMINSTER TOWNSHIP	I	91.8%	92.0%
BERKELEY HEIGHTS	I	93.0%	93.0%
BETHLEHEM TOWNSHIP	I	94.5%	93.2%
BOONTON TOWNSHIP	I	93.0%	94.8%
BRANCHBURG TOWNSHIP	I	94.6%	90.7%
BRIDGEWATER-RARITAN REG	I	90.8%	91.2%
BYRAM TOWNSHIP	I	94.6%	95.4%
CALDWELL-WEST CALDWELL	I	91.1%	89.5%
CALIFON	I	94.7%	94.7%
CEDAR GROVE TOWNSHIP	I	88.8%	90.8%
CLINTON TOWN	I	84.8%	85.1%
CLINTON TOWNSHIP SCHOOL	I	89.7%	88.0%
CLOSTER	I	96.8%	95.6%
COLTS NECK TOWNSHIP	I	91.4%	88.9%
CRANFORD TOWNSHIP	I	93.8%	89.9%
CRESSKILL	I	89.4%	84.0%
DEMAREST	I	97.6%	96.4%
DENVILLE TOWNSHIP	I	91.9%	91.9%
EAST AMWELL TOWNSHIP	I	93.6%	97.9%
EAST BRUNSWICK TOWNSHIP	I	92.4%	91.3%
ENGLEWOOD CLIFFS	I	92.0%	98.0%
EVESHAM TOWNSHIP	I	90.2%	86.2%
FAIR HAVEN BOROUGH	I	97.2%	95.2%
FLEMINGTON-RARITAN REGION	I	91.9%	90.1%
FLORHAM PARK	I	96.9%	93.9%
FRANKLIN LAKES	I	93.5%	90.3%
FRANKLIN TOWNSHIP	I	90.0%	95.0%
GLEN RIDGE	I	91.6%	85.3%
GREEN TOWNSHIP	I	94.4%	83.4%
GREENWICH TOWNSHIP	I	87.1%	84.4%
HANOVER TOWNSHIP	I	97.6%	91.0%
HARRINGTON PARK	I	89.0%	93.2%
HAWORTH	I	88.4%	94.3%
HILLSBOROUGH TOWNSHIP	I	91.3%	88.3%
HOLMDEL TOWNSHIP	I	91.5%	95.2%
HOPEWELL VALLEY REGIONAL	I	93.1%	89.9%
KINNELON	I	93.6%	91.4%
LEBANON BOROUGH	I	78.6%	100.0%
LEBANON TOWNSHIP	I	91.2%	85.3%
LIVINGSTON TOWNSHIP	I	92.4%	93.4%
MADISON	I	94.8%	91.7%
MAHWAH TOWNSHIP	I	91.5%	89.7%
MARLBORO TOWNSHIP	I	91.8%	89.0%
MEDFORD LAKES BOROUGH	I	87.1%	82.5%
MEDFORD TOWNSHIP	I	97.2%	94.1%
METUCHEN	I	89.9%	86.0%
MILLSTONE TOWNSHIP	I	92.6%	90.7%
MONMOUTH BEACH	I	89.2%	94.5%
MONTCLAIR	I	85.6%	80.8%
MONTVALE	I	89.1%	90.0%
MONTVILLE TOWNSHIP	I	91.6%	90.4%
MOORESTOWN TOWNSHIP	I	93.6%	93.1%
MORRIS PLAINS	I	90.9%	89.5%
MOUNT LAUREL TOWNSHIP	I	94.4%	91.2%
MOUNTAINSIDE	I	94.8%	90.8%
NEW PROVIDENCE	I	94.4%	88.7%
NORWOOD	I	89.9%	89.9%
OAKLAND	I	94.4%	91.4%
OLD TAPPAN	I	96.3%	98.8%
ORADELL	I	89.2%	88.3%
PARK RIDGE	I	95.8%	92.5%
LONG HILL TOWNSHIP	I	92.9%	91.4%
PRINCETON REGIONAL	I	94.5%	90.5%
RAMSEY	I	95.9%	93.2%
RANDOLPH TOWNSHIP	I	92.4%	90.8%
READINGTON TOWNSHIP	I	94.0%	92.2%
RIVER EDGE	I	91.9%	87.8%
RIVER VALE	I	96.3%	95.6%
ROCKAWAY TOWNSHIP	I	88.9%	94.4%
ROSELAND (ESSEX CO.)	I	96.4%	91.2%
SCOTCH PLAINS-FANWOOD	I	92.0%	92.0%
SEA GIRT BOROUGH	I	100.1%	100.0%
SHREWSBURY BOROUGH	I	89.1%	92.7%
SOMERSET HILLS	I	94.3%	95.7%
SOUTH BRUNSWICK TOWNSHIP	I	88.7%	89.0%
SOUTH ORANGE-MAPLEWOOD	I	81.3%	78.8%
SPARTA TOWNSHIP	I	90.7%	91.3%
SPRING LAKE	I	100.0%	100.0%
SUMMIT	I	91.2%	90.0%
TENAFLY	I	95.4%	97.0%
VERONA	I	93.7%	90.7%
VOORHEES TOWNSHIP	I	94.5%	94.5%
WARREN TOWNSHIP	I	96.2%	97.9%
WASHINGTON TOWNSHIP	I	91.3%	90.9%
WASHINGTON TOWNSHIP	I	94.3%	93.0%
WATCHUNG BOROUGH	I	91.8%	95.4%
WENONAH	I	97.5%	95.1%
WESTFIELD	I	94.6%	94.0%
WYCKOFF TOWNSHIP	I	96.2%	91.7%
BERNARDS TOWNSHIP	J	96.2%	96.7%
CHATHAMS, SCH DIST OF	J	96.1%	93.8%
CHESTER TOWNSHIP	J	92.9%	92.9%
CRANBURY TOWNSHIP	J	91.6%	93.1%
ESSEX FELLS	J	95.5%	93.2%
GLEN ROCK	J	91.7%	91.2%
HADDONFIELD BOROUGH	J	96.8%	93.5%
HARDING TOWNSHIP	J	88.5%	92.3%
HO-HO-KUS	J	96.8%	93.7%
LITTLE SILVER BOROUGH	J	87.6%	87.6%
MENDHAM BOROUGH	J	93.3%	97.3%
MENDHAM TOWNSHIP	J	93.1%	93.0%
MILLBURN TOWNSHIP	J	96.6%	95.6%
MONTGOMERY TOWNSHIP	J	90.5%	89.4%
MOUNTAIN LAKES	J	92.6%	90.4%
NORTH CALDWELL	J	91.9%	84.9%
RIDGEWOOD VILLAGE	J	94.9%	95.8%
RUMSON BOROUGH	J	95.0%	86.8%
SADDLE RIVER	J	95.3%	97.6%
TEWKSBURY TOWNSHIP	J	94.4%	93.1%
UPPER SADDLE RIVER	J	94.8%	92.9%
WEST WINDSOR-PLAINSBORO R	J	93.3%	91.2%
WOODCLIFF LAKE	J	94.2%	82.5%
I & J Average		92.4%	90.6%
State Average		81.2%	80.2%

 

 

 

Garden State Coalition of Schools/GSCS   School Funding Principles 9-06

 

All districts must have a reasonable financial stake in their children’s education.

 

• Promotes community and parental involvement via budget planning process

 

15%-85%solution:No district should fund its schools less than 15% nor more than 85%

(It is understood that there could likely be a few anomalies to this rule.)

 

• Ability-to-Pay considerations can apply within this framework.

 

• State funding of categorical aids outside an adequacy foundation can achieve 85%.

 

• State & federal funding of adequacy foundation amounts, plus categorical aids,

can fund the highest concentrations of special-needs children.

 

 

Wealth Formula

 

• Adjustment of the current 50% property + 50% income/aggregates per community over enrollment should not occur unless they results in a significant benefit to a significant supermajority of districts across the state; nor should it occur if there is significant negative impact to one type/segment of communities within the state.

 

• For example, removing income or lessening income part of the wealth formula by a certain factor, e.g., will benefit cities more where citizens have lower income on average.

 

• There is a need to compare overall impacts: i.e., evaluate how the local fair share determinations are balanced against state and federal aid that localities are currently receiving to support their education and municipal needs.

 

 

Ability toPay:  sensitive not only to community local fair share, but also to individual residents’ income capacity as well

 

• Circuit Breakers: offset property taxes/individuals who meet certain criteria/wealth ranges

 

Defining ‘regular education’ is critical; determine first what is not to be considered as regular education.

 

• Regular education is first organized and delivered to all students attending public schools (i.e., applying today’s core curriculum standards).

 

 

Categorical/Special Needs program for certain students only

 

 

• Individual students with special needs will determine these ‘categorical’ aids: special-needs services for these students will be determined by the individual student’s needs within a district.  These services will not be available for the entire student body compared to regular education programs that would be provided for all the students in a given district.

 

• Special Education programs and related services: specifically, child study teams and related service/special education staff must realistically be included under the special education aid umbrella. The functional time that child study teams must devote to special education students is approximated to be well over 90%.

 

• Transportation

 

• Bi-Lingual

 

• At-Risk students

 

• Adult Education

 

• Debt Service

 

• Per-Pupil aids must be kept current by enrollment fluctuations.
• Supplemental programs can be justified via special grant programs, with annual review and justification.
• Constitutionality can be checked formulaically by built-in ‘floor’ or ‘benchmarking.’