Vocational and Skill Center Program Funding Priorities Fall Conference October 10, 2016

Questions to Answer How do vocational and skill center programs generate an allocation in the state formula? Why change the definition of a 1.0 annual average full-time equivalent student? What is the potential impact to vocational education and skill centers? What are Superintendent Dorn’s funding proposals for vocational education and skill centers?

Q. How do vocational and skill center programs generate an allocation in the state formula?

State Funding Formula — Vocational Vocational Education Middle High Staff Type Apportionment Report 1191MSCTE 1191CTE Class Size 26.57 CIS Per 1,000 AAFTE Student Ratios Other ESA Staff 3.07 Per 1.0 AAFTE Student Ratios School Level Administration 0.003132* 0.003133* CAS Central Office Administration 0.000862* 0.000894* School Level Classified 0.014484 0.014485 CLS Central Office Classified 0.002522 0.002615 Materials, Supplies, and Operating Costs $1,431.65 N/A *An enhancement percentage is added to the allocation for staff identified with an asterisk above.

State Funding Formula — Skill Center Skill Center Staffing High Staff Type Apportionment Report 1191SC Class Size 22.76 CIS Per 1,000 AAFTE Student Ratios Other ESA Staff 3.41 Per 1.0 AAFTE Student Ratios School Level Administration 0.003133* CAS Central Office Administration 0.000894* School Level Classified 0.014485 CLS Central Office Classified 0.002615 Per Student MSOC $1,272.99 N/A *An enhancement percentage is added to the allocation for staff identified with an asterisk above.

Q. Why change the definition of a 1 Q. Why change the definition of a 1.0 annual average full-time equivalent student?

RCW 28A.150.260 (13)(c) States in part: “The definition of a full-time equivalent student shall be determined by rules of the superintendent of public instruction,...The definition shall be based on the minimum instructional hour offerings required under RCW28A.150.220.”

RCW 28A.150.220(2)(a) As paraphrased: Beginning in the 2015-16 school year at least 1,080 instructional hours for grades 9-12, and at least 1,000 instructional hours in grades 1-8, all of which may be calculated using a district-wide annual average of instructional hours over grades 1-12.

SSB 6552 Instructional Hours Increase Starting with the 2014–15 school year, approximately $96 million was allocated in SSB 6552 targeted towards high school students only. This funding did not flow through to vocational and skill center programs.

Definition of a 1.0 Student AAFTE Instructional hours requirement can be met by averaging instructional hours across grades 1–12. (Average must be 1,027 hours.) OSPI’s proposed rules moves the definition of a 1.0 student AAFTE to 1,000 hours. These proposed rules must be approved by the legislature before implementation.

Q. What is the potential impact to vocational and skill center programs?

Example of Impact – Vocational Student enrolled in one hour of vocational instruction, and five hours of general education instruction all year. This results in a statewide average reduction of 10% of the claimable AAFTE. Hours in 1.0 AAFTE Hours per Day CTE FTE Gen. Ed. FTE AAFTE 900 hours 5h 0.2 0.8 1.0 1,000 hours 5h 33min 0.18 0.82

Example of Impact — Skill Center Student enrolled in three hours of skill center instruction, and three hours of general education instruction throughout the year. This results in a statewide average reduction of 10% of claimable AAFTE. Hours in 1.0 AAFTE Hours per Day Skill Center FTE Gen. Ed. FTE AAFTE 900 hours 5h 0.6 1.2 1,000 hours 5h 33min 0.54 1.08

What does this really mean? ($48,476,000) $0 If nothing is done to increase vocational and skill center allocations, then the programs will lose a combined $48.5 million as estimated for the 2017–18 school year. This calculation is based on caseload forecast council vocational and skill center enrollment and current law budget drivers for the 2017–18 school year.

Q. What are Superintendent Dorn’s funding proposals for vocational education and skill centers?

Dorn’s Funding Proposals Vocational and Skill Center Instructional Hours Hold Harmless and Vocational and Skill Center Funding

Instructional Hours Hold Harmless This request is specifically crafted to protect and hold harmless the vocational and skill center programs from losses in funding related solely to the change in the definition of a 1.0 student annual average FTE.

What is the objective? Pull the levers in the funding model to create a cost neutral impact to vocational and skill center programs due to the instructional hours shift. Focus on additional staff allocations. Staff allocations will increase by policy decisions around compensation, while MSOC growth is limited to inflation.

Proposed Solution — Step #1 Allocate the other CIS staff factor for vocational and skill center programs at the same rate as the prototypical high school (600 Student FTE). Prototypical HS Per 1,000 FTE (3.18/600)*1,000 = 5.3 Other CIS Staff Current Law Vocational 3.07 per 1,000 Skill Center 3.41 per 1,000 Librarian Counselor Nurse Social Worker Psychologist Total 0.523 2.539 0.096 0.015 0.007 3.18

Proposed Solution — Step #2 Provide an allocation for teachers based on an assumed class size of 22.76 for vocational programs and 19.63 for skill center programs. Class Size Vocational Skill Center Current Law 26.57 22.76 Proposed 22.96 19.63

Fiscal Impact of Hold Harmless ($48,500,000) Total Investment $48,583,000 $83,000* $0 *Bold numbers represent net new dollars. Estimated fiscal impact for 2017–18 school year is $83,000. While the total investment is $48,583,000 the net impact from baseline is an increase of only $83,000.

Dorn’s Funding Proposals Vocational and Skill Center Instructional Hours Hold Harmless and Vocational and Skill Center Funding

SSB 6552 Instructional Hours Increase Starting with the 2014–15 school year, approximately $96 million was allocated in SSB 6552 targeted towards high school students only. This funding did not flow through to vocational and skill center programs. General education funding increased at a faster rate than vocational and skill center funding.

Vocational and Skill Center Funding This request helps to restore the vocational and skill center funding enhancement to more historical values. Proposes funding increases in both staffing and materials, supplies, and operating costs (MSOC). Is presented to be solely considered, and is not in any way dependent on the hold harmless proposal.

Vocational MSOC Expenditures State Resource to Allocation Model is a required element of SHB 2776. The State Resource to Allocation Model can be found here: http://www.k12.wa.us/SAFS/INS/2776/Portal.asp. School Year CTE MSOC Allocation CTE MSOC Expenditures Per Student Expenditures 2011–12 $78,843,127 $44,734,709 $757 2012–13 $83,140,906 $48,002,046 $782 2013–14 $85,463,510 $47,293,507 $774 2014–15 $88,371,246 $54,555,032 $875

Proposed Vocational MSOC (Part 1) Step 1: Actual costs adjusted for inflation. Step 2: Compare adjusted 2017–18 value to general education MSOC in the areas of direct expense (technology, curriculum, other supplies, and professional development). School Year 2014–15 2015–16 2016–17 2017–18 Actual Costs $875.07 $885.60 $895.31 $911.43 Inflation 1.2% 1.1% 1.8% General Ed Allocation Voc. Adjusted Costs Multiplier $591.49 $911.43 1.54

Proposed Vocational MSOC (Part 2) Step 3: Apply the multiplier to the total per pupil general education MSOC allocation in current law for the 2017–18 school year. Proposed Vocational MSOC allocation is $1,917.89 per 1.0 AAFTE. Note: This does not shift portions of MSOC out of vocational education over to general education, thus indirects stay at 15%. MSOC Total General Ed Allocation Vocational Multiplier Vocational Allocation Per Pupil $1,245.38 1.54 $1,917.89

What about Skill Center MSOC? Skill Center MSOC should be 2014–15 school year actual expenditures adjusted for inflation. Proposed Skill Center MSOC allocation is $2,257.27 per 1.0 AAFTE. School Year 2014–15 2015–16 2016–17 2017–18 Actual Costs $2,167.17 $2,193.18 $2,217.30 $2,257.27 Inflation 1.2% 1.1% 1.8%

Other ESA Staff Factor Allocate the other CIS staff factor for vocational and skill center programs at the same rate as the prototypical high school (600 Student FTE). Prototypical HS Per 1,000 FTE (3.18/600)*1,000 = 5.3 Other CIS Staff Current Law Vocational 3.07 per 1,000 Skill Center 3.41 per 1,000 Librarian Counselor Nurse Social Worker Psychologist Total 0.523 2.539 0.096 0.015 0.007 3.18

Principals/Vocational Directors Move the allocation for principals out of vocational programs back to general education (Activity 23 – Principals Office not open for vocational programs). Provide an allocation (CIS) at a rate of 2.32 per 1,000 student FTE for a vocational program director.

Lower Class Sizes Provide an allocation for teachers based on an assumed class size of 19.72 for vocational programs, and 16.00 for skill center programs starting with the 2019–20 school year. Class Size Vocational Skill Center Current Law 26.57 22.76 Proposed 19.72 16.00

Itemized Fiscal Impact The total fiscal impact of this proposal for the 2017–18 school year by proposal element is shown below. Proposal Element Impact in Millions Other ESA to 5.3 per 1,000 $13.0 Vocational Director/ BEA Principal $12.0 MSOC $37.0 Class Size $0.0 Total $62.0

Preferred Option $62,000,000* $0 *Bold numbers represent net new dollars. If definition of 1.0 student FTE does not change, the funding proposal generates $62 million for 2017–18 school year.

Fiscal Impact of FTE Definition $62,000,000* ($48,500,000) $0 *Bold numbers represent net new dollars. Estimated fiscal impact for 2017–18 school year is a loss of approximately $48.5 million.

Full Funding (Reduced FTE) If the full funding package was implemented after the instructional hours shift, then it would be based on 10% less FTE and would generate 10% less funding. Scenario Funding Generated (in millions) Student FTE equals 900 hours $62.0 Less 10% -$6.2 Student FTE equals 1,000 hours $55.8

Secondary Option $62,000,000* ($48,500,000) $83,000* $44,583,000* Total Investment $48,583,000 $0 Total Investment $44,500,000 *Bold numbers represent net new dollars. Increasing the Other ESA allocation to 5.3 per 1,000 generates about $11.3 million in school year 2017–18 in both proposals, assuming the definition of a 1.0 student FTE changes. Funding proposal of $55.8 million less $11.3 million equals $44.5 million of net new funding on top of the hold harmless. The combined total of the two, if the definition of a 1.0 student FTE changes, is approximately $44.6 million.

Option of Last Resort ($48,500,000) Total Investment $48,583,000 $83,000* $0 *Bold numbers represent net new dollars. Estimated fiscal impact for 2017–18 school year is $83,000. While the total investment is $48,583,000 the net impact from baseline is an increase of only $83,000.

Per Pupil Funding Impacts Proposal Per Student Funding Rate Full Funding Proposal – Vocational $7,328.89 Current Law – Vocational $6,540.55 Estimated Per Pupil Increase $788.34 Proposal Per Student Funding Rate Full Funding Proposal – Skill Center $8,007.52 Current Law – Skill Center $6,927.34 Estimated Per Pupil Increase $1,080.18

Hold Harmless Per Pupil – Vocational Proposal Per Student Funding Rate Hold Harmless Proposal – Vocational $7,268.51 Current Law – Vocational $6,540.55 Estimated Per Pupil Increase $727.96 Percent Increase Over Current Law 11.13 Scenario Student FTE Per Student Total Funding Current Law 1,000 $6,540.55 $6,540,550 Hold Harmless 900 $7,268.51 $6,541,659

Hold Harmless Per Pupil – Skill Center Proposal Per Student Funding Rate Hold Harmless Proposal – Skill Center $7,869.63 Current Law – Skill Center $6,927.34 Estimated Per Pupil Increase $942.29 Percent Increase Over Current Law 13.06% Scenario Student FTE Per Student Total Funding Current Law 1,000 $6,927.34 $6,927,340 Hold Harmless 900 $7,869.63 $7,082,667

Legislative Session 2017 It is important to not come out of session farther behind than you go into session. Restoration of the vocational and the skill center funding enhancements are critical to delivering programs for generating career ready graduates. Properly executed increases in compensation allocations should be an important focus for all in the education community.

T.J. Kelly Director- SAFS 360-725-6301 thomas.kelly@k12.wa.us Questions? T.J. Kelly Director- SAFS 360-725-6301 thomas.kelly@k12.wa.us