1. 1 Education Financing – An Overview BCSTA Trustee Academy February 26, 2009 Joan Axford / Frank Regehr

2. 2/26/2009JA/FR 2 Agenda / Overview Ministry of Education and Provincial Budget Process History of Block Funding and Allocation System Review of Allocation System Funding Predictability Effect of Enrolment Decline The Saanich Story

3. 2/26/2009JA 3 Predictability Just about the time you think or believe you have mastered the funding and budgeting process, there will be an announcement and all will change Always begin every statement about funding and budgets with a disclaimer: “based on the most recent information”

4. 2/26/2009JA 4 Ministry of Education Budget

5. 2/26/2009JA 5 Ministry Budget in Provincial Context In 2001/02 the Ministry of Education Budget was $4.861 billion or 19.3% of the total Provincial Budget In 2008/09 the Ministry of Education Budget is $5.675 billion or 15.05% of the total Provincial Budget

6. 2/26/2009JA2/26/2009 6 Cabinet and Treasury Board establish the overall budget and Individual Ministry Amounts Ministry of Education sets priorities within the set overall amount Ministry of Education allocates dollars to school boards School Boards establish budgets and sets spending priorities School Boards allocate funding to schools and programs Schools allocate funding to classrooms/programs

7. 2/26/2009JA 7 Provincial Government Establishes the total funding for Public Education; Allocates the funding to the 60 school districts; Issues budget instructions and common format for budget documents; Issues accounting instructions for common allocation of costs. School Boards Determine local revenues; Prioritize expenditures; Allocate budgets to programs/services; Prepare budget documents and approve budget.

8. 2/26/2009JA History of Block Funding Block Funding was introduced in 1990 in response to the 1988 Royal Commission for Public Education It was recommended as a way to determine the amount of provincial funding needed for educational services It was recommended that the distribution of the funding be done by a stable, predictable, supportable allocation system 8

9. 2/26/2009JA History of Block Funding The Royal Commission recommendation was that the block be increased annually by an education price index which recognized the unique costs of public education The allocation system of the day, a resource cost model, was supported by the system and recommended for retention The resource cost model was very detailed and provided a service level for each specific function such as class size, library and counseling services, etc. 9

10. 2/26/2009JA History of Block Funding No government has been able to increase the block by a price index and in fact the block was frozen for 3 years (2001/02 to 2003/04) and was unable to fund year 2 and 3 of the previous teachers settlement in 2001-2003 The resource cost model lost favour in the 1990’s because the per pupil amounts allocated to districts differed and were not understandable 10

11. 2/26/2009JA History of the Allocation System In 1995/06 the allocation system was re-stated in a simpler form to reflect common core grants and specific grants to recognize district differences The core grants allocated a standard amount of money per student, per school, and per district and provided funding for basic classroom, libraries, supplies, equipment, school administration, etc Specific grants allocated amounts for operations and maintenance, transportation, special education, ESL

12. 2/26/2009JA History of Allocation System The allocation system today was introduced in 2002/03. It was announced as a new, streamlined funding formula, honouring government's commitment to give school boards more flexibility, autonomy and control over the delivery of education services. The new, simplified funding formula now comprises a student base allocation plus supplementary grants. There are 5 broad categories for supplementary grants: Unique student needs, including special needs, English as a Second Language, Aboriginal Education, and Adult Education programs; Enrolment Decline, where enrolments decrease by more than one per cent in a year; Salary Differentials, for districts with higher average teacher salaries; Transportation and Housing; and Unique Geographic Factors.

13. 2/26/2009JA Recent Changes to the Block Block 2001 to 2004$3.794 billion Salary Increases $432 million Literacy, arts, special ed $202 million Distributed Learning $7.7 million GAAP $35.0 million Reduction in 2001/02 ($3.5 million) Total Increase $673 million Block 2008/09$4.467 billion 13

14. 2/26/2009JA 14 Effect of Enrolment Decline on Per Pupil Block

15. 2/26/2009JA Provincial Funding Shortfall The Provincial Block has increased by $673 million since 2001/02 Government allocations within the block since 2001/02 result in the overall block amount being utilized for new expenditures and a shortfall in funding to provide for the maintenance of existing services:

16. 2/26/2009JA Provincial Funding Shortfall We know that in our district we can save about $2,828 per pupil in associated costs as enrolment declines, so for a provincial enrolment decline of 41,000 pupils this would reduce the shortfall by $118.2 million and leave an actual overall shortfall in funding to maintain services of $132 million. It is clear that boards are facing cost pressures which exceed the provincial ability to fund. We estimate that Saanich is short by $2.22 million caused by funding increases not keeping pace with cost pressures.

17. 2/26/2009FR 17 Provincial Education Funding - Operating 2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09 Coquitlam$ 7,471 Central Okanagan$ 7,493 Central Coast$20,476 Stikine$22,968 Tries to be equitable - definitely not equal

18. 2/26/2009FR 18 Equal Funding – 2008-09 – All Districts $5,851/school age student = $3,150 million $4,000/adult student (approx) = $ 32 million Home school and course challenges = $ 0.5 million

19. 2/26/2009FR 19 Equal Funding – 2008-09 – All Districts Unique students = $308 million Level 1$32,000 Level 2$16,000 Level 3$ 8,000 Unique students = $120 million ESL$1,174 Aboriginal$1,014

20. 2/26/2009FR 20 Equal Funding – 2008-09 – All Districts TOTAL unique student funding – addition to per pupil block (not including adult) Stikine$2,328 Vancouver Island West$1,783 Prince Rupert$1,692 Central Okanagan$ 568 Revelstoke$ 511 Arrow Lakes$ 491

21. 2/26/2009FR 21 2008-09 Supplements for Enrolment and Funding Decline School Age Decline >1% up to 4% $2,926 per student = $9 million School Age Decline >4% $4,388 per student = $1 million o Cumulative decline @$2,926 = $2million Funding protection - $$$ not less than previous year = $7 million

22. 2/26/2009FR 22 2008-09 Supplements for Enrolment and Funding Decline Addition to per pupil block 18 districts$ Nil Boundary$ 943 Fort Nelson$ 995 Gold Trail$1,321

23. 2/26/2009FR 23 2008-09 Supplement for Teacher Salary Differential Additional funding to districts with higher average salary Based on formula to calculate number of teachers funded Intended to fund actual cost difference between districts Does not fund teacher allowances, principal salaries, teachers of adult students

24. 2/26/2009FR 24 2008-09 Supplement for Teacher Salary Differential 2008-09 Total Funding $96 million Addition to per pupil block Vancouver Island West$ Nil Gold Trail$ 43 Kootenay-Columbia$362 Stikine$473

25. 2/26/2009FR 25 Supplement for Labour Settlement Costs Funding for teacher, support staff, and admin staff labour cost increases since 2006 Ministry formula started in 2006 recognizes TOC cost increases as estimated in 2006 Category 5+ teacher grid placements as estimated in 2006 Estimated teacher grid harmonization costs Remainder of $345 million allocated proportionately based on district salary expenditures

26. 2/26/2009FR 26 Supplement for Labour Settlement Costs 2008-09 Total Funding $458 million Addition to per pupil block Abbotsford$ 750 Burnaby$ 812 Campbell River$1,103 Stikine$2,328

27. 2/26/2009FR 27 Supplement for Unique Geographic Factors Small Communities – Elementary Up to $126,000 / > 5 km / < 250 FTE $29 million Small Communities – Secondary Up to $374,500 / > 25 km / < 635 FTE $19 million Small Communities – Grade 11 and 12 Up to $150,000 / < 215 FTE $ 8 million

28. 2/26/2009FR 28 Supplement for Unique Geographic Factors Low enrolment$47 million Up to $1.25 million / sch. dist. Maximum funding at 2,500 FTE Phased to $0 at 15,000 FTE Rural factor $21 million Distance to Vancouver/regional centre

29. 2/26/2009FR 29 Supplement for Unique Geographic Factors Climate$ 9 million Heating and cooling using district’s degree day temperatures Sparseness factor$12 million Dispersion within district

30. 2/26/2009FR 30 Supplement for Unique Geographic Factors Addition to per pupil block Vancouver$ Nil Surrey$ 4 Conseil Scolaire$ 2,554 Central Coast$10,220 Stikine$11,161

31. 2/26/2009FR 31 Supplement for Transportation and Housing Formula based on bus routes mileage and costs approved for 2001-02 2008-09 funding for each district remains at 2001-02 level Subsequent issues affecting transportation costs include: enrolment decline school closures changes to costs or bus routes

32. 2/26/2009FR 32 Supplement for Transportation and Housing Addition to per pupil block New Westminster$ 3 Prince George$ 290 Cariboo-Chilcotin$ 932 Stikine$1,376 2008-09 Funding $86 million

33. 2/26/2009FR 33 Supplement for Summer Learning Addition to per pupil block 23 school districts$ Nil Richmond$ 66 Vancouver$ 70 Nisga’a$ 73

34. 2/26/2009FR 34 Supplement for Summer Learning Funding first established in 2007 In 2008, funded $400 per full credit courses and $200 for any other course$ 13 million

35. 2/26/2009FR 35 Holdback Supplement – 2008-09 Funding is calculated 4 times per year: 1) March – estimate for next school year 2) November – funding recalculated using September enrolments 3) February – Distributed Learning and special education students funding using February enrolment 4) May – DL students funded using May enrolment

36. 2/26/2009FR 36 Holdback Supplement – 2008-09 Ministry funding holdback for Nov/Feb/May count $84.5 million November 2008 allocation $47.5 million Funds available for Feb/May $37.0 million Ministry commits to allocation of all funds

37. 2/26/2009FR 37 2008-09 Fall Recalc = $4,467 Million

38. 2/26/2009JA Ministry Education – Autumn 2008-09

39. 2/26/2009FR 39 Per Pupil Block Amount

40. 2/26/2009FR 40

41. 2/26/2009FR 41 Provincial Education Funding - Operating 2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09 Coquitlam$ 7,471 Central Okanagan $ 7,493 Central Coast$20,476 Stikine$22,968 Tries to be equitable - definitely not equal

42. 2/26/2009FR 42 Diverse Province District differences include: Compact or dispersed Large or small Metro or remote Student diversity – incidence of unique students Understandable formula?

43. 2/26/2009FR Provincial Funding/Student 2005-062006-072007-082008-09 At Nov. 2008 Block funding – operating 4,027,603,7174,243,496,0384,345,211,4694,426,685,547 School age and adult enrol 567,523559,499556,310545,269 Total block funding per student $ 7,097$ 7,584$ 7,811$ 8,118

44. 2/26/2009FR Provincial Education Funding $ per student w/o labour settlement & unique student increases 2005-062006-072007-082008-09 At Nov. 2008 Block funding – operating 4,027,603,7174,243,496,0384,345,211,4694,426,685,547 Unique student funds (not including adult) 390,289,475399,204,975414,879,981428,173,434 Labour settlement funding 196,372,946320,913,967457,568,050 New program – summer learning 12,776,550 Remaining block funding 3,637,314,2423,647,918,1173,609,417,5213,528,167,513 School age and adult enrol 567,523559,499556,310545,269 Adj. block funding per student $6,409$6,520$6,488$6,470

45. 2/26/2009FR SD’s – Additional Revenue Reported 2008-09 Budgets Provincial Total$219 million Provincial avg/student$ 402 Port Alberni$ 68 Vernon$ 812 West Vancouver$1,829 Nisga’a$2,438 E.g. international prog., rentals, interest

46. 2/26/2009FR 46 Predictability of Funding - Enrolment Enrolment2005-062006-072007-082008-09 Actual567,837559,499556,310545,269 Forecast567,523562,682547,840542,509 Increase (decrease) 314(3,183)8,4712,761

47. 2/26/2009FR 47 Predictability of Funding - Enrolment For two years – 2006-07 to 2008-09 Enrolment up in 8 districts down in 52 districts down > 5% in 27 districts Each student decline – ($5,851) Funding protection may delay impact > 200 in SD67

48. 2/26/2009FR 48 Predictability of Funding - Formula Since 2006-07, new funding count February and May – Distance Learning Since 2006-07, Labour Settlement $$$ now fund employees serving adult students and employees funded from SD businesses and other revenues October 2007, Grades 10 to 12 FTE count In 2008-09, Summer Learning - $13 million

49. 2/26/2009FR2/5/2016 49 Predictability of Funding Ministry announced funding – March 2008 2007-08 $4.345 billion = + $116 million 2008-09$4.467 billion = + $122 million 2009-10$4.543 billion = + $ 76 million Labour settlements costs 2007-08$125 million 2008-09$137 million 2009-10 ???

50. 2/26/2009FR2/5/2016 50 Predictability - Holdback Predictable for Ministry Less predicable for districts 2003-04 millions 2004-05 millions 2005-06 millions 2006-07 millions 2007-08 millions 2008-09 millions Estimate e.g. Enrol. $45.6$46.0$45.1$45.4$45.3$84.5 Final$24.6$25.4$29.8$ 0$3.6 ? % to SD’s54%55%66%0%8% ?

51. 2/26/2009FR 51 Need for Predictability Ability to forecast funding March/April is critical In my district if too cautious = layoffs/programs reductions if too optimistic = potential for deficit

52. 2/26/2009FR 52 Budget Decision Making – SD67 Funding allocation 70% funding allocation = 5,851 per student If enrolment declines 200 students = $1,170,200 Teachers for 200 FTE @ 20:1 @ $86,000 = $860,000 Clerical support + supplies, est. @ 30,000 _______ Funding reduction (after year 1)$280,200

53. 2/26/2009JA The Saanich Story 7,167.6250 FTE as of September, 2008 22 School Sites: 3 Secondary schools, grades 9 – 12 3 Middle schools, grades 6 – 8 9 Elementary schools, grades K – 5 The district also has a Distance Education School, the Children’s Development Centre and two Learning Centre Schools The school district has closed six elementary schools and opened one new elementary school in September 2008 Operating Budget of $70.4 million

54. 2/26/2009JA Saanich-Reductions Since 1995/96 The district has reduced $13.34 million (or 18.9% of our budget) in services since 1995/96 from all functional areas of our system. Only 3% of the budget is spent on district administration with the balance supporting students and schools.

55. 2/26/2009JA Saanich-2008/09 Final Budget Preliminary Budget Shortfall($2,844,705) Reduced Revenues( 69,905) Increased Expenditures( 160,002) Shortfall Funded by Reserves($3,074,612) Today’s Expenditures exceed today’s revenues

56. 2/26/2009JA Saanich-Reserve Balances The District creates reserves after consultation with community to sustain educational services for as long as possible Savings from School Closures: $462,000 for 2005/06 and 2006/07$ 924,000 Unspent 2005/06 funding: $871,043 for 2005/06 and 2006/07$1,742,086 Investment and Building Lease Revenue$ 386,863 International Program Expansion$ 332,837 Total Reserve$3,385,788 Surplus 2007/08$ 103,391 Spent on Services in 2008/09(3,074,612) Net Balance Available for 2009/10$ 414,567

57. 2/26/2009JA Saanich-2009/10 Structural Shortfall

58. 2/26/2009JA/FR 58 Discussion/Questions

59. 2/26/2009JA/FR Joan Axford Secretary-Treasurer School District No. 63 (Saanich) 250-652-7326 joan_axford@sd63.bc.ca Frank Regehr Secretary-Treasurer School District No. 67 (Okanagan Skaha) 250-770-7706 fregehr@summer.com