School Finance

Updated: Ed Fund worries jangle Capitol nerves as session wanes

Updated May 3, Noon – Concerns about the amount of money in the State Education Fund sparked anxiety at the Capitol Friday about possible changes in the 2014-15 school finance deal that seemed settled earlier this week (see this story for background).

The development made it a frantic day for K-12 lobbyists, who convened in countless huddles to consult and drained their smartphone batteries with non-stop texting.

The issue also prompted a late-afternoon, voices-raised scrum in the House lobby between House Speaker Mark Ferrandino and several district lobbyists.

Key legislators said to expect movement on the issue Monday. And state budget director Henry Sobanet said, “We’ll figure this out early next week.”

The education fund is a dedicated account used to supplement various K-12 programs. Swollen to more than $1 billion this year because of infusions of state surplus funds, the SEF has been a tempting target for lawmakers anxious to increase education spending.

But Hickenlooper administration officials and some legislative budget experts want to be careful about a SEF spending spree so that there’s money available for use in future budget years.

Sobanet told Chalkbeat Colorado late Friday afternoon that he’d like to have a balance of about $660 million in the fund at the end of the 2014-15 budget year. (When the legislative session started, Sobanet was urging $700 million.) Talk around the Capitol Friday was that even achieving that lower number will require cutting about $50 million in SEF spending from education bills just passed or still pending in the legislature.

Sobanet said $50 million “is a moving target” and that a more exact figure has to be determined. “We’ll do that process before we start making recommendations or reductions.”

The biggest targets for cuts could seem to be the $110 million negative factor reduction and the $20 million of additional early literacy funding in House Bill 14-1292, the Student Success Act. The School Finance Act, House Bill 14-1298, includes $17 million for at-risk preschool and kindergarten funding, $30 million for English language learners and also additional funding for full-day kindergarten in general. Some of that money presumably could be vulnerable.

One influential lawmaker close to the discussions told Chalkbeat that the $110 million is safe, and that what unfolds next week might ease a lot of worries.

“There is a way forward,” he said, declining to elaborate. “There are lots of options.”

Several other pending bills also propose use of SEF money, but those total only about $8 million.

One of those, a proposal intended to improve performance of alternative education campuses (Senate Bill 14-167) was killed in a House committee Friday. And the Senate Appropriations Committee slashed the price tag of the gifted and talented bill (House Bill 14-1102).

Even Senate Bill 14-150, which proposes doubling the current $5 million budget of the Colorado Counselor Corps, “will get a haircut,” one lawmaker said. (The bill already has been sent to the governor, but there are procedural ways around that.)

The dilemma spotlighted splits in the education lobby, with mainline groups anxious to protect the $110 million for the negative factor while more reform-minded groups want to avoid cuts to early childhood, ELL and literacy programs. They often huddled in separate groups Friday.

House Speaker Mark Ferrandino was amused and a bit sarcastic about the sudden flurry of lobbyist anxiety over the supposed $50 million gap.

He reminded Chalkbeat that he’s been stressing for months that the levels of 2014-15 spending advocated by K-12 interests were “unsustainable.” The Denver Democrat originally was skeptical about making any reduction in the negative factor.

He repeated such arguments to K-12 lobbyists later during a spirited exchange in the noisy, stuffy House lobby as a water bill debate dragged on in the chamber.

A short time later, Ferrandino, Sobanet and Sen. Pat Steadman, D-Denver, huddled briefly in a second-floor alcove. Steadman is vice chair of the Joint Budget Committee and a prime sponsor of the School Finance Act. They broke up smiling.

The parliamentary ball was in the House’s court, as it had to decide what to do with Senate amendments to the success and finance acts.

The House voted Friday night to request that the School Finance Act be taken to conference committee, and it voted to accept Senate amendments to the Success Act. The scope of finance bill is broad enough that any changes to next year’s spending plan could be done there.

The question of the SEF’s balance isn’t an esoteric argument among budget writers

Although the fund has plenty of money at the moment, using it to increase basic school support – known as Total Program Funding – imposes costs in subsequent years on the state’s main General Fund, which provides the bulk of school funding every year. Total program has to increase by inflation and enrollment every year, hikes that have to be borne mostly by the General Fund.

Sobanet wants to keep a certain balance in the education find to help cushion the General Fund in later years and reduce the odds of K-12 budget cuts in the next economic downturn.

School district lobbyists have been working hard this session to get as much money as possible now, and they say districts will worry about future budget cuts if and when they happen.

Lawmakers need to make up their minds fast – they have to adjourn next Wednesday.

Paying for school

Sweeping study proposes major changes to the way schools are funded in Michigan

Michigan needs to change the way it funds education so that schools get more money for students who need extra attention — such as those who live in poverty and those who don’t yet have a strong command of the English language.

That’s the top recommendation from a prominent group of educators, policymakers, and business leaders who have been studying Michigan’s school funding system for much of the past two years.

While many states use a complex formula that gives schools more money if they serve children facing extra challenges, Michigan has long used a system that distributes the same amount of money for virtually all students, regardless of their needs.

The state provides some extra funding for students with disabilities — but not nearly enough, according to a state study last year that found schools across Michigan are getting $700 million less a year than they need to serve those students.

The study released Wednesday recommends a major restructuring so that schools would be fully funded for special education programs and would get extra funds to provide resources to students who need extra help. With that money, schools could offer lower class sizes, add counselors and social workers, and give teachers more support, the report says.

The study was conducted by Augenblick, Palaich and Associates on behalf of the Michigan School Finance Research Collaborative.

The collaborative — including top business and education leaders across the state — came together in 2016 after an earlier “school adequacy study” was largely ignored by political leaders.

The earlier study, which was funded by the state legislature, recommended that the state significantly increase the amount of money it sends to schools per student.

The collaborative hopes this new more robust study, which clocks in at more than 300 data-packed pages, will have a greater impact.

Since this study used multiple methods to determine the right funding level for schools, it will be more difficult to ignore, the group hopes.

The study — paid for with $843,000 from major foundations and 18 county school districts — included interviews with hundreds of educators, including district and charters school teachers. Those interviews helped researchers determine how much money schools need to more effectively do their jobs.

The study examined geographic cost differences in different parts of the state, labor cost differences, and other factors and determined that schools need approximately $9,590 each for students who don’t have special needs, including funds that would come from the state and federal governments.

The study recommends that schools get 35 percent more for students living in poverty, between 50 and 70 percent more for students who are learning English, 70 percent more for students with mild disabilities and 115 percent more for students with moderate disabilities.

Among other recommendations in the  report is that charter schools receive the same per-student funding as districts. Currently, the state’s funding system pays some districts more per student than others based largely on historic funding levels as opposed to current needs. Some districts — including most charter schools — are currently getting around $7,600 per child from the state while others get thousands of dollars more

It’s difficult to compare how much funding schools are getting now with the proposed $9,590 per student because schools get a mix state and federal dollars and the $9,590 doesn’t include things like transportation dollars.

The report suggests that the state use a new approach to student transportation in which transportation dollars are distributed differently, taking into account differences between urban and rural school districts.

The report did not put a price tag on the cost of implementing the recommendations and did not spell out how Michigan could come up with the extra money. But members of the collaborative said they hope lawmakers will consider the report as they make policy changes. 

“The issue here is not about whether you live in Farmington or whether you live in Ingham County, it’s about every child ought to have the opportunity to be successful and that ought to be our goal in Michigan,” said Randy Liepa, the Superintendent of Wayne County’s intermediate school district. “I don’t think there will be significant pushback on that.”

The findings were released Wednesday morning, with press conferences planned in Lansing, Grand Rapids, and in the Detroit area.

Read the full report here:

spending squeeze

Facing a state budget crunch, Gov. Cuomo proposes modest 3 percent education boost

Governor Andrew Cuomo delivers his executive budget address.

Facing budget pressure at home and from Washington, Gov. Andrew Cuomo proposed increasing school aid by 3 percent this year —  far less than what advocates and the state’s education policymakers had sought.

Cuomo put forward a $769 million increase in school aid during his executive budget address on Tuesday, less than half of the $1.6 billion sought by the state’s Board of Regents. In response, the state’s top education officials said they were “concerned,” and suggested that they would press lawmakers to negotiate for more education spending.

The governor’s modest increase in school funding comes amid a projected $4.4 billion state budget deficit, a federal tax overhaul expected to squeeze New York’s tax revenue, and the threat of further federal cuts.

Still, Cuomo, a Democrat who plans to run for reelection this fall and is considering a 2020 presidential bid, defended his spending plan as a boost for schools at a time of fiscal uncertainty.

“We have increased education more than any area in state government,” he said during his speech in Albany. “Period.”

He also floated a plan to have the state approve local districts’ budgets to ensure they are spending enough on high-poverty schools. And he set aside more money for prekindergarten, after-school programs, and “community schools” that provide social services to students and their families.

Now that Cuomo’s proposal is out he must negotiate a final budget for the 2019 fiscal year with lawmakers by April 1. While the Democratic-controlled assembly is likely to push for more school spending, the senate’s Republican leaders are calling for fiscal restraint and tax cuts.

What was the response?

Advocates and policymakers were alarmed by Cuomo’s proposed $769 million education bump — a 3 percent spending increase compared to last year’s 4.4 percent boost.

Last month, a coalition of statewide education organizations estimated that the state would need to increase spending by $1.5 billion just to maintain current education services. The group, which includes state teachers union and groups representing school boards and superintendents, called for a $2 billion increase.

In a statement Tuesday, Board of Regents Chancellor Betty Rosa and State Education Commissioner MaryEllen Elia noted that Cuomo’s proposal was less than half the amount they sought. They promised to work with lawmakers to ensure the final budget amount “will meet the needs of every student throughout our State.”

Anticipating such criticism, Cuomo noted in his speech that he has expanded education spending by nearly 35 percent since taking office. His proposal would bring total school aid to $26.4 billion — the largest portion of the state budget.

Still, that didn’t prevent pushback. A state assemblyman heckled Cuomo as the unveiled his education spending plan, suggesting it was not enough money.

“It’s never enough,” Cuomo shot back.

Will poorer schools get more funding?

Cuomo said he wants to fight “trickle-down education funding” and ensure that poor schools receive their fair share of cash.

To that end, Cuomo wants the state education department and his budget office to review local school district budget plans. The plan is aimed at larger school districts, including New York City, which Cuomo singled out in his speech.

“Right now we have no idea where the money is going,” Cuomo said on Tuesday. “We have a formula. We direct it to the poorer districts. But what did Buffalo do with it? What does New York City do with it?”

It’s unclear how the proposal would impact New York City, which already uses a funding formula designed to send more money to schools with needier students. But some education advocates were intrigued by Cuomo’s idea, which they said could be a way to expose and fight inequities in school funding across the state.

“Right now, school-level expenditure with consistent definitions is really a mystery,” said Ian Rosenblum, executive director of The Education Trust – New York. “It means that a lot of inequity can be swept under the rug.”

Cuomo officials also said that 73.1 percent of funding will be directed to high-needs districts in this year’s budget, which the state said was the highest share ever. Last year, they received 72 percent.

But advocates are more concerned with the state’s “foundation aid” formula, which funnels a greater share of funds to high-needs districts. The formula was created in response to a school funding lawsuit settled more than a decade ago; advocates say schools are still owed billions from the settlement.

Cuomo proposed boosting foundation aid this year by $338 million, a far cry from the $1.25 billion requested by the Board of Regents. Without more foundation aid, some advocates say Cuomo’s promise of greater funding equity rings hollow.

“Equity is you’re actually helping to lift up poor districts so that they can provide an equitable education,” said Billy Easton, executive director of the union-backed Alliance for Quality Education. “Not just that they’re receiving a larger share of a too-small pot.”

What does all of this mean for New York City schools?

New York City is not immune from Albany’s budget crunch.

The total increase proposed for the city — $247 million — falls about $150 million short of the mayor’s projections in November, according to the city’s Independent Budget Office.

It may also be difficult for the city to wrangle funding for big-ticket items. Mayor Bill de Blasio wants to expand his prekindergarten program to 3-year-old students, but he estimates that he will need $700 million from state and federal sources by 2021. (The governor proposed $15 million to expand pre-K seats across the state.)

How about charter schools?

Cuomo would boost spending for charter schools by 3 percent the same rate as for district schools. He also wants to provide more support for schools that rent private space, which is a major financial burden for some schools.

“Once again, Gov. Cuomo demonstrated his unwavering commitment to ensuring every student in our state has access to a great public education,” said James Merriman, CEO of the New York City Charter School Center.