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 Extreme Poverty Extreme Wealth

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

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

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

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 CountyFairfax 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 $530,000 $530,000 = $48, 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 $80,000 $80,000 = $40,000 2 school divisions

A Low Estimate: Fairfield & Highland Counties -- Average Formula: $48, Linear Estimator Formula: $40, 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 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 funded1000 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.

Professional Positions Average

Per Pupil State Funding Trends $5, $4,774

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?”

Funding Public Education in Virginia William A. Owings, Ed.D. & Leslie S. Kaplan, Ed.D.