Who Is In Charge

Downside of A23 about to kick in

Colorado state budget
Colorado state budget

The possibility that the Amendment 23 formula itself might drive cuts in state K-12 spending for 2010-11 was raised Monday during a legislative briefing on state revenues and budget prospects.

Members of the legislative Joint Budget Committee and other lawmakers convened to hear the September revenue forecasts from staff of the Legislative Council and the executive branch Office of State Planning and Budgeting.

The news is not good, but, as is often the case, the two forecasts varied significantly.

Natalie Mullis, chief economist for Legislative Council, said the council staff estimates a $560.7 million shortfall in the current, 2009-10 general fund budget. That’s $240.7 million higher than the $320 million in cuts already planned by Gov. Bill Ritter’s administration.

But Todd Saliman, director of the OSPB, said his agency estimates that state revenues will be sufficient to cover the 2009-10 general fund budget with the cuts already planned.

If the 2009-10 budget is balanced with permanent cuts and/or revenue increases, the 2010-11 budget still will need to be cut $188.7 million from the prior year levels, Mullis said.

But if 2009-10 cuts are only one-time, the cumulative amount that will need to be cut from 2010-11 spending is $1.3 billion, Mullis said. It’s likely the legislature will look on Ritter’s cuts as one-time only.

Saliman projects a shortfall, albeit smaller, for 2010-11.

Regardless of the numbers, Saliman said budgeting will be tough. “We’re going to have to cut deeply in ’10-11. … The choices are going to be harder.”

Todd Saliman of the Office of State Planning and Budgeting (left) and Legislative Council economist Natalie Mullis (File photo)
Todd Saliman of the Office of State Planning and Budgeting (left) and Legislative Council economist Natalie Mullis (File photo)

Some of the differences between the two estimates have to do with accounting interpretations about how revenue should be recorded by fiscal year.

Both forecasts also lack estimates for costs that won’t be known until later, like Medicaid caseloads, an issue that worries state policymakers. Saliman said his staff would meet with that of Legislature Council to reconcile their figures and that they would agree on the most conservative (i.e., worst case) estimate. That is expected to be done before Ritter submits his formal 2010-11 budget proposal to the JBC on Nov. 2.

Of most interest to the education community was the discussion about A23, the constitutional provision that governs the annual amount of state aid to school districts. The amendment requires support to increase each year by inflation and enrollment plus an additional 1 percent. For the 2010-11 budget, the regional inflation rate for calendar year 2009 will be used.

Both Legislative Council and OSPB are forecasting deflation for 2009, .4 percent to 1.6 percent, respectively.

Sen. Chris Romer, D-Denver, raised the question of how deflation would work in the A23 formula, asking if the 1 percent bonus would remain in effect, even if there were a negative inflation rate greater than 1 percent.

Mullis said that was a legal question for other officials to decide, but Saliman said his interpretation is that the two would be added together, possibly yielding a negative number. “We’re assuming that you end up with a negative .6 percent” for the A23 multiplier, he said.

“For the first time since Amendment 23 was passed we’ll have negative inflation,” Romer said. “There’s a new ball game in town as it relates to school funding.”

Romer supports the idea of increasing state revenues by ending some business tax exemptions but hasn’t yet proposed a detailed plan for doing that.

Another part of the 2010 legislative debate over K-12 spending will be whether A23 covers all state aid to schools. In addition to base per-pupil funding, districts also receive additional (and varying) amounts of money based on such factors as the cost of living for staff, district size and numbers of at-risk students – the so-called factors.

In the past, that money has been part of the overall annual A23 calculation. But now Ritter and many legislators believe the factors aren’t included in the formula. So, it’s possible the factors will be cut as lawmakers search for cash for other programs, further reducing the amount of aid districts receive in 2010-11.

(Another complication to school finance is the practice of the state backfilling projected declines in local property tax values. Department of Education officials say local tax valuations may be holding up better than expected. But, even if backfilling is needed, lawmakers may be tempted to cut back on those amounts as well. The state does not compensate districts for declines in property tax collections, as can happen with taxpayers are delinquent. That may be an increasing concern because of foreclosures.)

The K-12 funding formula for 2009-10 is firm, meaning overall budget cutting done by the 2010 legislature probably won’t affect aid to school districts. The exception to that is $110 million in school aid that the legislature set aside until January. Given the revenue situation, it seems unlikely that lawmakers will release that money for local school use. What’s not yet decided is if the $110 million will be taken off the top, or deducted from the factors. That decision could have an impact on school aid for 2010-11.

Higher education funding didn’t come up at Monday’s briefing. College budgets are basically being held at 2008-09 levels with the help of federal stimulus funds. Ritter has proposed reducing direct state aid to colleges and universities in the current year and making up the shortfall with additional stimulus money. (That plan requires federal approval.) The trouble with that plan is that federal rules require the state to restore in 2010-11 the direct aid it cut in 2009-10, about $80 million. That will put additional pressure on the 2010-11 budget process.

The forecasts focused just on the general fund, which is supported by state taxes. Total state spending, including federal, cash and other revenue, is about $18 billion a year.

Do your homework

Turnaround 2.0

McQueen outlines state intervention plans for 21 Memphis schools

PHOTO: TN.gov
Candice McQueen has been Tennessee's education commissioner since 2015 and oversaw the restructure of its school improvement model in 2017.

Tennessee Education Commissioner Candice McQueen has identified 21 Memphis schools in need of state intervention after months of school visits and talks with top leaders in Shelby County Schools.

In its first intervention plan under the state’s new school improvement model, the Department of Education has placed American Way Middle School on track either for state takeover by the Achievement School District or conversion to a charter school by Shelby County Schools.

The state also is recommending closure of Hawkins Mill Elementary School.

And 19 other low-performing schools would stay under local control, with the state actively monitoring their progress or collaborating with the district to design improvement plans. Fourteen are already part of the Innovation Zone, the Memphis district’s highly regarded turnaround program now in its sixth year.

McQueen outlined the “intervention tracks” for all 21 Memphis schools in a Feb. 5 letter to Superintendent Dorsey Hopson that was obtained by Chalkbeat.

Almost all of the schools are expected to make this fall’s “priority list” of Tennessee’s 5 percent of lowest-performing schools. McQueen said the intervention tracks will be reassessed at that time.

McQueen’s letter offers the first look at how the state is pursuing turnaround plans under its new tiered model of school improvement, which is launching this year in response to a new federal education law.

The commissioner also sent letters outlining intervention tracks to superintendents in Nashville, Chattanooga, Knoxville, and Jackson, all of which are home to priority schools.

Under its new model, Tennessee is seeking to collaborate more with local districts to develop improvement plans, instead of just taking over struggling schools and assigning them to charter operators under the oversight of the state-run Achievement School District. However, the ASD, which now oversees 29 Memphis schools, remains an intervention of last resort.

McQueen identified the following eight schools to undergo a “rigorous school improvement planning process,” in collaboration between the state and Shelby County Schools. Any resulting interventions will be led by the local district.

  • A.B. Hill Elementary
  • A. Maceo Walker Middle
  • Douglass High
  • Georgian Hills Middle
  • Grandview Heights Middle
  • Holmes Road Elementary
  • LaRose Elementary
  • Sheffield Elementary
  • Wooddale High

These next six iZone schools must work with the state “to ensure that (their) plan for intervention is appropriate based on identified need and level of evidence.”

  • Sheffield Elementary
  • Raleigh-Egypt High
  • Lucie E. Campbell Elementary
  • Melrose High
  • Sherwood Middle
  • Westwood High

The five schools below will continue their current intervention plan within the iZone and must provide progress reports to the state:

  • Hamilton High
  • Riverview Middle
  • Geeter Middle
  • Magnolia Elementary
  • Trezevant High

The school board is expected to discuss the state’s plan during its work session next Tuesday. And if early reaction from board member Stephanie Love is any indication, the discussion will be robust.

“We have what it takes to improve our schools,” Love told Chalkbeat on Friday. “I think what they need to do is let our educators do the work and not put them in the situation where they don’t know what will happen from year to year.”

Among questions expected to be raised is whether McQueen’s recommendation to close Hawkins Mill can be carried out without school board approval, since her letter says that schools on the most rigorous intervention track “will implement a specific intervention as determined by the Commissioner.”

Another question is why the state’s plan includes three schools — Douglass High, Sherwood Middle, and Lucie E. Campbell Elementary — that improved enough last year to move off of the state’s warning list of the 10 percent of lowest-performing schools.

You can read McQueen’s letter to Hopson below:

Mergers and acquisitions

In a city where many charter schools operate alone, one charter network expands

Kindergarteners at Detroit's University Prep Academy charter school on the first day of school in 2017.

One of Detroit’s largest charter school networks is about to get even bigger.

The nonprofit organization that runs the seven-school University Prep network plans to take control of another two charter schools this summer — the Henry Ford Academy: School for Creative Studies elementary and the Henry Ford Academy: School for Creative Studies middle/high school.

The move would bring the organization’s student enrollment from 3,250 to nearly 4,500. It would also make the group, Detroit 90/90, the largest non-profit charter network in the city next year — a distinction that stands out in a city when most charter schools are either freestanding schools or part of two- or three-school networks.

Combined with the fact that the city’s 90 charter schools are overseen by a dozen different charter school authorizers, Detroit’s relative dearth of larger networks means that many different people run a school sector that makes up roughly half of Detroit’s schools. That makes it difficult for schools to collaborate on things like student transportation and special education.

Some charter advocates have suggested that if the city’s charter schools were more coordinated, they could better offer those services and others that large traditional school districts are more equipped to offer — and that many students need.

The decision to add the Henry Ford schools to the Detroit 90/90 network is intended to “create financial and operational efficiencies,” said Mark Ornstein, CEO of UPrep Schools, and Deborah Parizek, executive director of the Henry Ford Learning Institute.

Those efficiencies could come in the areas of data management, human resources, or accounting — all of which Detroit 90/90 says on its website that it can help charter schools manage.

Ornstein and Parizek emphasized that students and their families are unlikely to experience changes when the merger takes effect on July 1. For example, the Henry Ford schools would remain in their current home at the A. Alfred Taubman Center in New Center and maintain their arts focus.  

“Any changes made to staff, schedule, courses, activities and the like will be the same type a family might experience year-to-year with any school,” they said in a statement.