2/26/2009 1

Education Financing – An Overview

BCSTA Trustee AcademyFebruary 26, 2009

Joan Axford / Frank Regehr

2/26/2009 JA/FR 2

Agenda / Overview

Ministry of Education and Provincial Budget Process

History of Block Funding and Allocation System

Review of Allocation SystemFunding PredictabilityEffect of Enrolment DeclineThe Saanich Story

2/26/2009 JA 3

Predictability

Just about the time you think or believe you have mastered the funding and budgeting process, there will be an announcement and all will change

Always begin every statement about funding and budgets with a disclaimer:

“based on the most recent information”

2/26/2009 JA 4

Ministry of Education Budget

Ministry of Education Budget 2008/09

Support Services

1%

Management Services0.36%

Public Libraries0.28%

Debt Service10%

Education Programs88.26%

2/26/2009 JA 5

Ministry Budget in Provincial Context

In 2001/02 the Ministry of Education Budget was $4.861 billion or 19.3% of the total Provincial Budget

In 2008/09 the Ministry of Education Budget is $5.675 billion or 15.05% of the total Provincial Budget

2/26/2009 JA2/26/2009 6

Cabinet and Treasury Board establish the overall budget and Individual Ministry Amounts

Ministry of Education sets priorities within the set overall amount

Ministry of Education allocates dollars to school boards

School Boards establish budgets and sets spending priorities

School Boards allocate funding to schools and programs

Schools allocate funding to classrooms/programs

2/26/2009 JA 7

Provincial Government Establishes the total funding for Public Education; Allocates the funding to the 60 school districts; Issues budget instructions and common format for budget

documents; Issues accounting instructions for common allocation of costs.

School Boards Determine local revenues; Prioritize expenditures; Allocate budgets to programs/services; Prepare budget documents and approve

budget.

2/26/2009 JA

History of Block Funding

Block Funding was introduced in 1990 in response to the 1988 Royal Commission for Public Education

It was recommended as a way to determine the amount of provincial funding needed for educational services

It was recommended that the distribution of the funding be done by a stable, predictable, supportable allocation system

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2/26/2009 JA

History of Block Funding

The Royal Commission recommendation was that the block be increased annually by an education price index which recognized the unique costs of public education

The allocation system of the day, a resource cost model, was supported by the system and recommended for retention

The resource cost model was very detailed and provided a service level for each specific function such as class size, library and counseling services, etc.

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2/26/2009 JA

History of Block Funding

No government has been able to increase the block by a price index and in fact the block was frozen for 3 years (2001/02 to 2003/04) and was unable to fund year 2 and 3 of the previous teachers settlement in 2001-2003

The resource cost model lost favour in the 1990’s because the per pupil amounts allocated to districts differed and were not understandable

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2/26/2009 JA

History of the Allocation System

In 1995/06 the allocation system was re-stated in a simpler form to reflect common core grants and specific grants to recognize district differences

The core grants allocated a standard amount of money per student, per school, and per district and provided funding for basic classroom, libraries, supplies, equipment, school administration, etc

Specific grants allocated amounts for operations and maintenance, transportation, special education, ESL

2/26/2009 JA

History of Allocation System

The allocation system today was introduced in 2002/03. It was announced as a new, streamlined funding formula,

honouring government's commitment to give school boards more flexibility, autonomy and control over the delivery of education services.

The new, simplified funding formula now comprises a student base allocation plus supplementary grants. There are 5 broad categories for supplementary grants: Unique student needs, including special needs, English as a

Second Language, Aboriginal Education, and Adult Education programs;

Enrolment Decline, where enrolments decrease by more than one per cent in a year;

Salary Differentials, for districts with higher average teacher salaries;

Transportation and Housing; and Unique Geographic Factors.

2/26/2009 JA

Recent Changes to the Block

Block 2001 to 2004 $3.794 billionSalary Increases $432 millionLiteracy, arts, special ed $202 millionDistributed Learning $7.7 millionGAAP $35.0 millionReduction in 2001/02 ($3.5 million)Total Increase $673 millionBlock 2008/09 $4.467 billion

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2/26/2009 JA 14

Effect of Enrolment Decline on Per Pupil Block

Comparison of Provincial Funding 2001/02 to 2008/09

10.23%

17.74%

26.82%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Change in Total Block Change in Per Pupil Block Change in Core Per Pupil

2/26/2009 JA

Provincial Funding Shortfall The Provincial Block has increased by $673 million since 2001/02 Government allocations within the block since 2001/02 result in the overall block

amount being utilized for new expenditures and a shortfall in funding to provide for the maintenance of existing services:

Formula Costs Pressures Distributed Learning $53,312,655 GAAP $35,002,907 Targeted Literacy, Arts and Special Needs $152,000,000 Summer School $3,658,080 Course Challenge $396,012 Special Needs increases $220,409,739 Labour Settlement $458,178,052 Total $922,957,445 Actual Increase to the Provincial Block $673,000,000 Shortfall $249,957,445

2/26/2009 JA

Provincial Funding Shortfall

We know that in our district we can save about $2,828 per pupil in associated costs as enrolment declines, so for a provincial enrolment decline of 41,000 pupils this would reduce the shortfall by $118.2 million and leave an actual overall shortfall in funding to maintain services of $132 million.

It is clear that boards are facing cost pressures which exceed the provincial ability to fund. We estimate that Saanich is short by $2.22 million caused by funding increases not keeping pace with cost pressures.

2/26/2009 FR 17

Provincial Education Funding - Operating

2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09

Coquitlam $ 7,471Central Okanagan $ 7,493Central Coast $20,476Stikine $22,968

Tries to be equitable - definitely not equal

2/26/2009 FR 18

Equal Funding – 2008-09 – All Districts

$5,851/school age student= $3,150 million

$4,000/adult student (approx) = $ 32 million

Home school and course challenges= $ 0.5 million

2/26/2009 FR 19

Equal Funding – 2008-09 – All Districts

Unique students = $308 millionLevel 1 $32,000Level 2 $16,000Level 3 $ 8,000

Unique students = $120 millionESL $1,174Aboriginal $1,014

2/26/2009 FR 20

Equal Funding – 2008-09 – All Districts

TOTAL unique student funding – addition to per pupil block (not including adult)Stikine $2,328Vancouver Island West $1,783Prince Rupert $1,692Central Okanagan $ 568 Revelstoke $ 511Arrow Lakes $ 491

2/26/2009 FR 21

2008-09 Supplements for Enrolment and Funding Decline

School Age Decline >1% up to 4%$2,926 per student = $9 million

School Age Decline >4% $4,388 per student = $1 million

o Cumulative decline @$2,926 = $2millionFunding protection - $$$ not

less than previous year = $7 million

2/26/2009 FR 22

2008-09 Supplements for Enrolment and Funding Decline

Addition to per pupil block18 districts $ NilBoundary $ 943Fort Nelson $ 995Gold Trail $1,321

2/26/2009 FR 23

2008-09 Supplement for Teacher Salary Differential

Additional funding to districts with higher average salary

Based on formula to calculate number of teachers funded

Intended to fund actual cost difference between districts

Does not fund teacher allowances, principal salaries, teachers of adult students

2/26/2009 FR 24

2008-09 Supplement for Teacher Salary Differential

2008-09 Total Funding $96 millionAddition to per pupil block

Vancouver Island West $ NilGold Trail $ 43Kootenay-Columbia $362Stikine $473

2/26/2009 FR 25

Supplement for Labour Settlement Costs

Funding for teacher, support staff, and admin staff labour cost increases since 2006

Ministry formula started in 2006 recognizes TOC cost increases as estimated in 2006 Category 5+ teacher grid placements as

estimated in 2006 Estimated teacher grid harmonization costs Remainder of $345 million allocated

proportionately based on district salary expenditures

2/26/2009 FR 26

Supplement for Labour Settlement Costs

2008-09 Total Funding $458 millionAddition to per pupil block

Abbotsford $ 750Burnaby $ 812Campbell River $1,103Stikine $2,328

2/26/2009 FR 27

Supplement for Unique Geographic Factors

Small Communities – ElementaryUp to $126,000 / > 5 km / < 250 FTE $29 million

Small Communities – Secondary Up to $374,500 / > 25 km / < 635 FTE $19 million

Small Communities – Grade 11 and 12 Up to $150,000 / < 215 FTE $ 8 million

2/26/2009 FR 28

Supplement for Unique Geographic Factors

Low enrolment $47 millionUp to $1.25 million / sch. dist.Maximum funding at 2,500 FTEPhased to $0 at 15,000 FTE

Rural factor $21 millionDistance to Vancouver/regional centre

2/26/2009 FR 29

Supplement for Unique Geographic Factors

Climate $ 9 millionHeating and cooling using district’s degree day temperatures

Sparseness factor $12 millionDispersion within district

2/26/2009 FR 30

Supplement for Unique Geographic Factors

Addition to per pupil blockVancouver $ NilSurrey $ 4Conseil Scolaire $ 2,554Central Coast $10,220Stikine $11,161

2/26/2009 FR 31

Supplement for Transportation and Housing

Formula based on bus routes mileage and costs approved for 2001-02

2008-09 funding for each district remains at 2001-02 level

Subsequent issues affecting transportation costs include: enrolment decline school closures changes to costs or bus routes

2/26/2009 FR 32

Supplement for Transportation and Housing

Addition to per pupil blockNew Westminster $ 3Prince George $ 290Cariboo-Chilcotin $ 932Stikine $1,376

2008-09 Funding $86 million

2/26/2009 FR 33

Supplement for Summer Learning

Addition to per pupil block23 school districts $ NilRichmond $ 66Vancouver $ 70Nisga’a $ 73

2/26/2009 FR 34

Supplement for Summer Learning

Funding first established in 2007

In 2008, funded $400 per full credit courses and $200 for any other course $ 13 million

2/26/2009 FR 35

Holdback Supplement – 2008-09

Funding is calculated 4 times per year: 1) March – estimate for next school year 2) November – funding recalculated using September enrolments 3) February – Distributed Learning and special education students funding using February enrolment 4) May – DL students funded using May enrolment

2/26/2009 FR 36

Holdback Supplement – 2008-09

Ministry funding holdback for Nov/Feb/May count $84.5

million November 2008 allocation $47.5

million Funds available for Feb/May $37.0

million Ministry commits to allocation

of all funds

2/26/2009 FR 37

2008-09 Fall Recalc = $4,467 Million

Summer Learning

Transportation

Unique GeographicFactorsLabour Settlements

Teacher SalaryDifferentialUnique Student Needs

Enrolmentdecline/protectionHoldback

Basic EnrolmentFunding

2/26/2009 JA

Ministry Education – Autumn 2008-09

2/26/2009 FR 39

Per Pupil Block Amount

0

5,000

10,000

15,000

20,000

25,000

99 Province 87 Stikine 59 PeaceRiver South

70 Alberni 43 Coquitlam

Summer Learning

Transportation & Housing

Unique Geographic

Labour Settlements

Teacher Salary Differential

Unique Student Needs NotIncluding AdultEnrolment Decline & FundingProtectionBasic Enrolment Funding

2/26/2009 FR 40

FINAL 2008/09 PER PUPIL BLOCK RATES ADJUSTED FOR PROVINCIAL LEARNING NETWORK AND ANNUAL FACILITY GRANT

2008-09 FTE Pupil + Adult FTE

Ministry Block $$$ per FTE

Final District Funding Allocation for operating

43 29,687 7,471$ 221,786,892 23 21,037 7,493$ 157,637,305 40 6,618 7,494$ 49,590,297 45 6,160 7,498$ 46,185,216 34 18,602 7,518$ 139,860,522 41 23,829 7,543$ 179,749,552 36 65,085 7,582$ 493,482,234 35 18,284 7,598$ 138,918,416 61 19,052 7,608$ 144,952,182 38 21,903 7,617$ 166,829,010 37 15,827 7,618$ 120,578,428 44 15,631 7,639$ 119,405,530 42 14,151 7,698$ 108,927,608 33 12,488 7,707$ 96,240,938 39 55,477 7,837$ 434,757,271 63 7,667 7,984$ 61,209,740 68 13,973 8,042$ 112,373,427 22 8,577 8,043$ 68,978,423 62 8,226 8,181$ 67,289,871 79 8,538 8,187$ 69,900,158 75 6,311 8,190$ 51,689,157 67 6,581 8,240$ 54,226,034 73 14,320 8,247$ 118,100,420 71 8,293 8,401$ 69,676,383 48 4,042 8,442$ 34,116,451 57 14,092 8,457$ 119,185,252 69 4,659 8,551$ 39,841,084 20 4,142 8,713$ 36,086,890 83 7,018 8,742$ 61,356,128

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

43 23 40 45 34 41 36 35 61 38 37 44 42 33 39 63 68 22 62 79 75 67 73 71 48 57 69 20 83 72 70 5 28 53 60 19 47 54 91 27 82 6 58 78 46 8 64 59 52 81 51 85 10 93 74 50 92 84 49 87

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2008-09 FTE Pupil + Adult FTE

Ministry Block $$$ per FTE

2/26/2009 FR 41

Provincial Education Funding - Operating

2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09

Coquitlam $ 7,471Central Okanagan $ 7,493Central Coast $20,476Stikine $22,968

Tries to be equitable - definitely not equal

2/26/2009 FR 42

Diverse Province

District differences include:Compact or dispersedLarge or smallMetro or remoteStudent diversity – incidence of unique

studentsUnderstandable formula?

2/26/2009 FR

Provincial Funding/Student

2005-06 2006-07 2007-08 2008-09At Nov. 2008

Block funding – operating

4,027,603,717 4,243,496,038 4,345,211,469 4,426,685,547

School age and adult enrol

567,523 559,499 556,310 545,269

Total block funding per student

$ 7,097 $ 7,584 $ 7,811 $ 8,118

2/26/2009 FR

Provincial Education Funding$ per student w/o labour settlement & unique student increases

2005-06 2006-07 2007-08 2008-09At Nov. 2008

Block funding – operating

4,027,603,717 4,243,496,038 4,345,211,469 4,426,685,547

Unique student funds (not including adult)

390,289,475 399,204,975 414,879,981 428,173,434

Labour settlement funding

196,372,946 320,913,967 457,568,050

New program – summer learning

12,776,550

Remaining block funding

3,637,314,242 3,647,918,117 3,609,417,521 3,528,167,513

School age and adult enrol

567,523 559,499 556,310 545,269

Adj. block funding per student

$6,409 $6,520 $6,488 $6,470

2/26/2009 FR

SD’s – Additional Revenue Reported 2008-09 BudgetsProvincial Total $219 million

Provincial avg/student $ 402Port Alberni $ 68Vernon $ 812West Vancouver $1,829Nisga’a $2,438

E.g. international prog., rentals, interest

2/26/2009 FR 46

Predictability of Funding - Enrolment

Enrolment 2005-06 2006-07 2007-08 2008-09

Actual 567,837 559,499 556,310 545,269

Forecast 567,523 562,682 547,840 542,509

Increase (decrease) 314 (3,183) 8,471 2,761

2/26/2009 FR 47

Predictability of Funding - Enrolment

For two years – 2006-07 to 2008-09Enrolment up in 8 districts down in 52 districts down > 5% in 27 districts

Each student decline – ($5,851)Funding protection may delay impact> 200 in SD67

2/26/2009 FR 48

Predictability of Funding - Formula

Since 2006-07, new funding count February and May – Distance Learning

Since 2006-07, Labour Settlement $$$ now fund employees serving adult students and employees funded from SD businesses and other revenues

October 2007, Grades 10 to 12 FTE count In 2008-09, Summer Learning - $13 million

2/26/2009 FR05/03/23 49

Predictability of Funding

Ministry announced funding – March 2008 2007-08 $4.345 billion = + $116 million 2008-09 $4.467 billion = + $122 million 2009-10 $4.543 billion = + $ 76 million

Labour settlements costs 2007-08 $125 million 2008-09 $137 million 2009-10 ???

2/26/2009 FR05/03/23 50

Predictability - Holdback

Predictable for MinistryLess predicable for districts

2003-04millions

2004-05millions

2005-06millions

2006-07millions

2007-08millions

2008-09millions

Estimatee.g. Enrol.

$45.6 $46.0 $45.1 $45.4 $45.3 $84.5

Final $24.6 $25.4 $29.8 $ 0 $3.6 ?

% to SD’s 54% 55% 66% 0% 8% ?

2/26/2009 FR 51

Need for Predictability

Ability to forecast funding March/April is critical In my district

if too cautious = layoffs/programs reductions if too optimistic = potential for deficit

2/26/2009 FR 52

Budget Decision Making – SD67

Funding allocation 70% funding allocation = 5,851 per student If enrolment declines 200 students = $1,170,200

Teachers for 200 FTE @ 20:1 @ $86,000 = $860,000Clerical support + supplies, est. @ 30,000

_______Funding reduction (after year 1) $280,200

2/26/2009 JA

The Saanich Story

7,167.6250 FTE as of September, 2008 22 School Sites:

3 Secondary schools, grades 9 – 12 3 Middle schools, grades 6 – 8 9 Elementary schools, grades K – 5

The district also has a Distance Education School, the Children’s Development Centre and two Learning Centre Schools

The school district has closed six elementary schools and opened one new elementary school in September 2008

Operating Budget of $70.4 million

2/26/2009 JA

Saanich-Reductions Since 1995/96

The district has reduced $13.34 million (or 18.9% of our budget) in services since 1995/96 from all functional areas of our system. Only 3% of the budget is spent on district administration with the balance supporting students and schools.

Instructional Services $3,580,469 26.83% School Budgets $2,754,167 20.63% Plant Maintenance, Transportation and Custodial Budgets $2,329,466 17.45% Board Office and Curriculum Staff Budgets $2,108,394 15.80%

SIDES, Reduce Admin. Costs of Benefits, One-Time Costs & Funding $1,602,367 12.00% Increase Revenues $972,772 7.29% Total Reductions $13,347,635 100.00%

2/26/2009 JA

Saanich-2008/09 Final Budget

Preliminary Budget Shortfall ($2,844,705) Reduced Revenues ( 69,905) Increased Expenditures ( 160,002)

Shortfall Funded by Reserves ($3,074,612)

Today’s Expenditures exceed today’s revenues

2/26/2009 JA

Saanich-Reserve Balances

The District creates reserves after consultation with community to sustain educational services for as long as possible

Savings from School Closures: $462,000 for 2005/06 and 2006/07 $ 924,000 Unspent 2005/06 funding: $871,043 for 2005/06 and 2006/07 $1,742,086 Investment and Building Lease Revenue $ 386,863 International Program Expansion $ 332,837 Total Reserve $3,385,788 Surplus 2007/08 $ 103,391 Spent on Services in 2008/09 (3,074,612) Net Balance Available for 2009/10 $ 414,567

2/26/2009 JA

Saanich-2009/10 Structural Shortfall

For 2009/10 structural shortfall is caused by: Cost Pressures ($2.935 million) $2.223 million Savings from School Closure $0.712 million Shortfall from Enrolment Decline ($2.705 million) Unspent 2005/06 Funding $0.871 million Structural Shortfall ($4.058 million) Fully Utilize Savings Reserves $0.414 million Net 2009/10 Shortfall ($3.644 million)

Shortfall caused by overall size of the block

Shortfall caused by allocation of the block

2/26/2009 JA/FR 58

Discussion/Questions

2/26/2009 JA/FR

Joan AxfordSecretary-TreasurerSchool District No. 63 (Saanich)250-652-7326joan_axford@sd63.bc.ca

Frank RegehrSecretary-TreasurerSchool District No. 67 (Okanagan Skaha)250-770-7706fregehr@summer.com