Funding Public Education in Virginia

Our Common Wealth

Dr. William Owings and Dr. Leslie Kaplan

Learning About Virginia Education

Funding:• How the Funding Formula works.• A disproportionate burden on

localities.• Actual funding for:

– Salaries– Professional Educator Positions– School Construction– Other School Priorities

Generally speaking…• All 50 states provide funding for public

schools in one manner or another.• The idea is to spread out the burden of

funding over a larger population to raise the “floor” level of services for all students in the Commonwealth.

Fiscal Capacity•Some localities have a

greater ability to fund education than others.

•This ability, or lack of ability, is called fiscal capacity.

Fiscal Effort

• Effort is how much of the capacity a locality wishes to expend for education

• Capacity does not equal effort

Composite Index:

• Virginia has a sound formula for determining a locality’s ability to fund education called the composite index.

Composite Index is a:

Measure of wealth based on a locality’s

revenues in:•Sales Tax•Income Tax•Property Tax

Composite Index

The composite index is computed to have a theoretical range of 0 to 1.0

0.0 1.0Extreme Poverty

ExtremeWealth

Composite Index

The CI (also known as required local effort) shows how much of the floor level of services the locality must pay.

Composite Index

A composite index of 0 would indicate that the locality has virtually no ability to pay and that the floor of education services would be carried almost entirely by the Commonwealth.

0 1.0.5

Composite Index

A composite index of 1.0 would indicate a locality has the ability to fund the “floor of education services” without any financial assistance from the Commonwealth.

0 1.0.5

Composite Index A composite index of .5 would

indicate a mixed level of fiscal capacity & the cost of delivering the “floor of education services” would be split approximately 50/50 between the Commonwealth and the locality.

.50 1.0

Norfolk’s Composite Index

• .3012

• The City of Norfolk must pay 30.12% of the SOQ costs

• The Commonwealth pays 69.88% of the SOQ costs

Capacity & Effort in Virginia

Traditionally, Virginia ranks in the top ten states in terms of wealth, but in the bottom 10 states in terms of effort.

How is “Floor of Services”

Established?• Virginia’s General Assembly examines

both capacity & effort in determining funding.

• The Standards of Quality (SOQ) provide the basis for funding educational programs and services in Virginia, but…

• There is a problem with with how the SOQs fund the “floor” of services.

Two Major SOQ Problems -

They Do Not Fund:•Salaries (correctly) ...or the•Number of positions in the

schools.

How Does the Formula Work?

• Each of the school divisions in Virginia is treated as a unit of measurement.

• Each school division has equal weight regardless of size, capacity, or effort.

Highland County has the same weight in determining

costs as does Fairfax County• Highland County • Fairfax County

JLARC (Joint Legislative Audit & Review Committee) recommended using the “linear estimator” to calculate costs.

What Does the Linear Estimator Do?

• Gives equal weight to each school division in terms of costs.

• This method underestimates the actual costs incurred by many school divisions.

Average Salaries Are Part of State Funding

• Fairfax County:– 10 teachers– @ $50,000/ year– Total: $500,000

• Highland County:– 1 teacher– @ $30,000/year– Total: $30,000

Average Salary

(using mean/average):

$500,000

+ 30,000

$530,000

$530,000 = $48,181.81

11 teachers

The Linear Estimator Treats Every School Division Equally:• Fairfax County:

– 10 teachers– @ $50,000/ year– Total: $500,000

• Highland County:– 1 teacher– @ $30,000/year– Total: $30,000

Average Salary (using EQUALIZER formula):

$50,000

+ 30,000

$80,000

$80,000 = $40,000

2 school divisions

A Low Estimate:

Fairfield & Highland Counties --Average Formula:

$48,181.81

Linear Estimator Formula:

$40,000.00

Does the linear

estimator give the General Assembly the real picture of average salary in Virginia?

Salaries

• The linear estimator model calculates a lower salary than the average.

• The figure used by this model in

1997-98 was more than $4,500, less than the actual average salary in Virginia.

Source: VEA Research, Superintendent’s Annual Report, VDOE

Salaries• With more than 80,000 teaching positions

for more than one million students in Virginia…

• If the formula underestimates salaries by approximately $4,000 for ¾ of them…

• Localities must come up with almost $1/4 billion in local funds to make up the

difference!

BUT, Salaries are funded on the “Composite Index”

• IF your Composite Index is .3

• The state pays 70% the cost of the estimated salaries.

• IF your Composite Index is .7

• The state pays 30% the cost of the estimated salaries.

Professional Positions in Schools

Virginia funds a basic number or ratio of professional positions for each 1,000 students in the school division.

63 positions funded

1000

students

Professional Positions in Schools

The state pays for a minimum foundation program in our schools, not the number of teachers we really need.

The Average Number of Professional Positions per 1000

Students in Virginia is 78. • The average locality

has an average of 15 professional positions that the state does NOT fund and that must be funded LOCALLY.

Funded Professional Positions in Virginia’s Schools:

• Virginia funds an average of 63 professional positions per 1,000 students

• Actually, the average number of positions is 78 –an average of 15 positions funded entirely with local funds!

40

45

50

55

60

65

70

75

80

VA Actual

Pro

fes s

i on

al

Pos i

t ion

s

Average

The Cost to Localities:

• 15 professional positions funded entirely with local dollars:

• $40,000 X 15 = $600,000 • ON AVERAGE, $600,000 for every

1,000 students in our schools is funded entirely with local dollars!

Other Funding Issues:

• ACA costs• Stimulus funds for

jobs ended 9/30/12• VRS payments• Non-SOQ funded

position raises

Per Pupil State Funding Trends

• 2008 - $5,003

• 2013 - $4,774

In Summary…• State funding for its public schools has

major problems.• Average salaries are not computed

accurately using the linear estimator model.

• The number of positions funded does not nearly approach a standard of quality.

• Other funding problems.

The State Pays Only a Portion of What it

REALLY Costs to Run Our Schools!

The “Bottom Line.”

We Must Ask…

“Do the Standards of Quality really fund high standards & quality in our schools?”

Three groups carry the heaviest burden...

•Local children•Local taxpayers•Local instructional staff

Funding Public Education in Virginia

William A. Owings, Ed.D.

&

Leslie S. Kaplan, Ed.D.