1. Determining the Cost of Education in New Jersey NJ Department of Education Presentation before the Joint Legislative Committee on Public School Funding Reform October 24, 2006

2. 1 Background DOE decided that there was a need to explore new school funding formula Entered contract with Augenblick, Palaich and Associates (formerly Augenblick & Myers) in 2002 Chose to use two methods to estimate the cost of education

3. 2 Successful School Districts (SSD) Establish measurable criteria by which districts are deemed successful Identify districts that meet that criteria Calculate general education expenditures for districts meeting that criteria Method should not be used to determine costs of students with special needs

4. 3 Professional Judgment Panels (PJP) Develop educational goals Construct prototype school districts Have education professionals identify resources needed to meet educational goals Determine the cost of specified resources Apply costs to all school districts and calculate weights for special needs students

5. 4 Outline of Discussion Discussion of Dr. Augenblick’s work with DOE Summary of final PJP resources Explanation of how cost of PJP resources were determined Summary of Successful School Districts analysis Questions

6. 5 Role of Augenblick, Palaich and Associates Assist DOE in the implementation of two methods for determining cost of education Provide advice on implementing SSD method Facilitate PJP meetings Advise DOE personnel in calculating the cost of PJP resources Create formulas to calculate foundation amount for all districts and weights for special needs students

7. 6 Five Steps of PJP Implementation Determine student outcome goals Define prototype districts Convene panel meetings Provide DOE with resources for costing purposes Translate resource costs into base cost formulas and special needs weights

8. 7 Step 1 – Determine Outcome Goals NJ educational goals defined by DOE based on three factors Core Curriculum Content Standards No Child Left Behind AYP requirements State specified graduation requirements

9. 8 Step 2 – Define Prototype Districts Review data of school district demographics Size Student Characteristics Based on review, created six prototype districts Two K through 8 Four K through 12 Allowed for varying rates of low-income and limited English proficiency students Special education rates consistent across districts

10. 9 Step 3 – Hold Panel Meetings First meeting included seven DOE staff members Second meeting included approximately 40 school district representatives divided across five panels Third meeting included eight school district representatives

11. 10 Brief Summary of PJP Resources General Education Special Education Limited English Proficiency At-Risk Resources are not intended to be prescriptive

12. 11 Step 4 – Costing Out Panel results given to NJ DOE DOE responsible for determining the cost of PJP resources Provided advice on analytic decisions as needed

13. 12 Step 5 – Creating Base Cost Formulas and Student Weights Six base per pupil costs translated into a series of equations used to determine base cost for each school district Student weights calculated as the ratio of additional cost for special populations relative to base cost

14. 13 Determining the Cost of PJP Resources Personnel resources specified as FTEs Certificated staff salaries determined by median salary in certificated staff data Non-certificated staff salaries determined by median salaries in the State Occupational Employment and Wage Estimates (Bureau of Labor Statistics) Benefit rate equals 20 percent of salaries Non-personnel resources recorded in different terms

15. 14 Additional Cost Adjustments School level PJP costs used to identify costs associated with grade spans not included in PJP process Separate cost analysis conducted to identify additional cost of county vocational districts

16. 15 Basic Education Costs in Prototype Districts Very Small K - 8 Small K - 8 Small K – 12 Mod. K - 12 Large K - 12 Very Large K – 12 Base Cost $10,057$7,863$8,775$8,215$8,136$8,016 Adj. Base Cost $8,460$7,223

17. 16 Special Needs Weights K - 8K – 12 Special Education Speech Only0.460.41 Mod. Impairment1.951.45 Severe Impairment7.394.28 Ext. School Year0.480.43 Prek Disabled3.182.80 At-Risk Education0.630.44 LEP0.810.37

18. 17 Other District Adjustments District TypeAdditional Weight Grade K – 6No additional weight Grade 7 - 120.08 Grade 9 - 120.13 County Vocational0.20

19. 18 Geographic Cost of Education Index Developed by Dr. Jay Chambers for NCES Accounts for multiple factors that affect the cost of hiring comparably skilled professionals including: Housing costs Work environment

20. 19 Successful School Districts Analysis Success criteria defined by student performance on Statewide assessments Analysis limited to K – 8 and K – 12 districts to allow for comparison to PJP results Alternative criteria that incorporated broader range of factors (e.g., attendance and dropout rates) did not substantially alter results

21. 20 SSD Results 305 school districts identified as successful 75 percent of K – 8 districts 64 percent of K – 12 districts Per-pupil costs were consistent with PJP results $8,004 for K – 8 districts, 9 percent higher than the median PJP for K – 8 districts $8,493, almost identical to the median PJP for K – 12 districts