1. 1 Oregon Department of Education (ODE) State School Fund Ways & Means Education Sub-Committee March 24, 2003 Pat Burk, Deputy Superintendent Brian Reeder, Analyst, School Finance

2. 2 Agenda State School Fund  State Education Goals  How School Districts Spend their Money  How our Schools Perform  What Outcomes can be Expected

3. 3 To Meet Oregon’s Education Goals And ODE’s Prioritized Mission “…shall provide by law for the establishment of a uniform, and general system of Common schools…” Article VIII, Section 3, Oregon Constitution “…the best educated citizens in the nation and the world.” “Access to a Quality Education must be provided for all of Oregon’s youth…” ORS 329.035

4. 4  Teaching:540,000 Students  Employing: 35,000 Teachers & Assistants 18,600 Support Staff District Administrators and Support Staff2,600 Principals and Assistants1,600 School Support Staff (Clerical, etc)3,600 Counselors1,200 Librarians 600 Student Support Staff1,200 Other (Maintenance, custodial, etc.)8,400 TOTAL Support Staff 18,600  Operating:1,250 Schools 198 School Districts 21 Education Service Districts K-12 Dollars Pay For:

5. 5 Oregon’s K-12 System  High academic standards with clear expectations for student performance  A system of statewide assessments aligned with the standards  Use of data to drive school improvement and accountability  Assessments at grades 3, 5, 8, and 10

6. 6  State Standards and Assessments  Oregon Report Card  Database Initiative provides detailed information on how schools spend resources  Fiscal Audits  Federal ‘No Child Left Behind Act’ Oregon’s Accountability Tools

7. 7 State School Funding 1991 -- 2005 $5.0$5.1 $5.3 $5.9 $6.5 $6.8 $7.3 $1.9 $3.1 $2.6 $2.5 $3.5 $1.8 $4.2 $1.7 $4.5 $2.0 $4.7 $2.1 $5.0 $2.3 As of Special Session 6

8. 8 Revenue Trends Why? - Decrease in local revenues - Inflation (Personnel, Salaries, Benefits) - Increases in student enrollment State School Fund Revenues have increased but real Revenues Per Student have declined

9. 9 Funding Per Student 2002-03 amount includes $378 per ADMr for Accrual

10. 10 Funding Per Student 2002-03 amount includes $309 per ADMr for Accrual

11. 11 School District Cost Increases Major Cost Drivers:  PERS and Health Care Cost Increases  Declining Enrollment in Some Districts  Changes in Student Demographics Special Education Enrollment English Language Learners  Maintaining and operating aging school buildings

12. 12 School Districts by Change in Enrollment

13. 13 Demographic Changes

14. 14 Spending per Student*– 2000-01 “Instruction” (NCES Category) Direct Classroom Spending for: Teachers and Instructional Assistants 52.4% Classroom Supplies and Textbooks3.1% Professional and technical services3.0% (typically teachers or assistants hired to deliver specific instructional programs) Other – Fees and tuition.7% TOTAL (just below national average) 59.2% * Per Secretary of State K-12 Audit

15. 15 Spending per Student*– 2000-01 “Support Services” (NCES Category) Includes: Special Education Services, Counselors, Health6.0% Libraries, Curriculum & Instruction Improvement 4.6% School Level Administration (Principals & Support Staff)6.4% District Level Administration1.7% Business Services (Human Resources, Technology, etc) 5.7% Building Maintenance and Operations8.6% Transportation4.2% TOTAL 37.2% * Per Secretary of State K-12 Audit

16. 16 “Non-Instruction” (NCES Category) Includes: Food Services 3.3% School stores, enterprises.3% TOTAL 3.6% * Per Secretary of State K-12 Audit Spending per Student*– 2000-01

17. 17 A Decade of Progress 1992-2002 The focus on high standards is paying off -  Strong progress on state assessments  Declining dropout rates  High SAT and ACT scores  High percentage of college-bound students

18. 18 We Have Made Significant Progress

19. 19 Additional Quality Education Indicators 47.1% 46.6% 23.6% 22.5% 523 526 521 526 7.2% 4.9%

20. 20 But we have not yet met our goals  Many students are not reaching the high standards necessary for them to succeed in the 21 st century  Significant Achievement Gaps exist in performance of Hispanic and African American students and students in poverty  Student dropout rates are still too high  Paperwork takes time away from teaching

21. 21 2001-03 Budget State School Fund Reductions from Close of Session (Millions of Dollars) Cuts thru 5 th Special Session* $ 149.7 December Reductions 46.2 Measure 28 failure 95.0 MUPL Shortfall** 8.3 TOTAL State Reductions $ 299.2-5.7% *Includes Special Session 5 reduction of $132 Million plus common school fund adjustment of $17.7 Million. Does not include $211 Million accrual adjustment. **Medicare Upper Payment Limit (MUPL) Revenue Shortfall is an estimate from DAS

22. 22 2002-03 State School Fund Reductions in Funding per Student Close of Session Estimate$ 5,502 per ADMw Current Estimate$ 4,988 Reduction$ 514 -9.3%

23. 23 2003-05 Budget State School Fund – in millions Without Cuts* GBBCut State Funding 6,010 5,050960 Local Revenues 2,269 2,269 0 Total$8,279 $7,319 $ 960 * Based on expected level of spending in 2001-03 before cuts made necessary by revenue shortfalls.

24. 24 2003-05 Governor’s Balanced Budget Proposed 2004-05 SSF amt per ADMw is 17.4% below 1990-91, inflation adjusted 1990-91 $ 5,874 per ADMw 2004-05$ 4,854 per ADMw Based on 2003 dollars

25. 25 Quality Education Commission Student Performance Expectations Using Best Practices and Full Funding  90% of all students would reach reading and math benchmarks in this decade  Elementary by 2005  Middle School by 2008  High School by 2012

26. 26 Governor’s Assumptions  No cost of living or step increases for teachers—saves $257 million  No salary increases for school-level administrative staff—saves $15 million  No wage increases for school-level classified staff—saves $23 million  No increase for district-level administration and services—saves $34 million  No increase in health insurance or other benefits costs—saves $144 million  No increase in costs for supplies and services—saves $86 million Total Savings = $559 million Add-back to maintain school days = $100 million Net Savings = $459 million 2003-05 Governor’s Budget - $5.05 Billion

27. 27 2003-05 Governor’s Budget - $5.05 Billion Example of Program Impacts  Reduce central administration and business services by 15%  Reduce school-level administration by 15%  Eliminate: - 1.0 elementary specialists per school—total of 750 statewide - 2.0 middle school teachers per school—total of 520 statewide - 4.5 high school teachers per school—total of 770 statewide  Increase: - Average middle school class size from 23 to 25 students - Average high school class size from 24 to 27 students

28. 28 Cuts Beyond Governor’s Assumed Savings of $459 million  Reduce central administration and business services by 10%  Reduce school-level administration by 10% Eliminate: - 1.0 elementary specialists per school—total of 750 statewide - 2.0 middle school teachers per school—total of 520 statewide - 4.0 high school teachers per school—total of 685 statewide Increase: - Average middle school class size from 23 to 25 students - Average high school class size from 24 to 26 students 2003-05 Alternative Budget - $4.66 Billion

29. 29 Cuts Beyond Governor’s Assumed Savings of $459 million  Reduce central administration and business services by 10%  Reduce school-level administration by 10% Eliminate: - 1.0 elementary specialists per school—total of 750 statewide - 2.0 middle school teachers per school—total of 520 statewide - 5.0 high school teachers per school—total of 850 statewide Increase: - Average middle school class size from 23 to 25 students - Average high school class size from 24 to 27 students 2003-05 Alternative Budget - $4.64 Billion

30. 30 Questions and Discussion Visit our website at www.ode.state.or.us