1. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations Implications of 2776: New Basic Education Funding Formula For Business Managers Fall 2010

2. Slide 2Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Purpose To provide school business managers and others a walk through of the new funding structure that will be implemented in September 2011.

3. Slide 3Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Walk Away Questions As we go through this presentation, we encourage each of you to consider how this will affect your district’s: – Budgeting (commencing January 2011). – Communications with the community and legislators. – Negotiations with bargaining groups. – Decisions and conversations about resource equity.

4. Slide 4Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2261 – The Beginning SHB 2261 passed in 2009 Legislative Session. Established a major change in processes behind school district funding.

5. Slide 5Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Schedule of Groups Workgroups were established to address various issues and report back to the QEC and the Legislature. – Quality Education Council – Ongoing. – Funding Formula Technical – Reported 12/09. – Data Governance – Ongoing. – Levy – Ongoing. Yet to be started: – Compensation - Initial Report due 6/30/12.

6. Slide 6Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Legislature and Governor Quality Education Council (QEC) OSPI and/or OFM Work Groups Funding Formula Levy and Levy Equalization Early Learning (lead by DEL) Building Bridges Data Governance Compensation Highly Capable Learning Assistance Program Transitional Bilingual Program Teacher Standards Professional Educator Standards Board Accountability Implementation of Core 24 State Board of Education State Superintendent Governor Appointee SBE Member PESB Member AGOAC Member DEL Director Legislators (8)

7. Slide 7Financial Resources and Governmental Relations Office of Superintendent of Public Instruction SHB 2776 Passed this spring and implements the new funding structure for education as proposed by the QEC and the FFTWG.

8. Slide 8Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Key Provisions of 2776 Established the new funding structure commencing September 2011. Establishes crosswalk values from current funding levels (new structure no new dollars).

9. Slide 9Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Prototypical School Funding Model

10. Slide 10Financial Resources and Governmental Relations Office of Superintendent of Public Instruction What is Prototypical School? Prototypical school is a fixed theoretical school size that is used for modeling purposes. Replaces the per 1,000 ratio paradigm currently used. As adopted in 2776, it is a scalable model. – I.E. As enrollment increases or decreases from prototypical size, the staff units change proportionately.

11. Slide 11Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776 – Prototype as a basis Funding formula assumptions are based upon a prototypical school and an assumed prototypical class size. – Class size assumptions are different based upon grade and subject. – Planning time for teachers is acknowledged in determination of class size. Future legislation is expected to direct changes to the assumed class size.

12. Slide 12Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776 - Prototypical School Size CategoryElementary (K-6) Middle (7-8) High (9-12) Base Enrollment400432600 In reality, school configurations vary widely and are not always consistent with the Prototype model.

13. Slide 13Financial Resources and Governmental Relations Office of Superintendent of Public Instruction How Enrollment is Used Funding is generated based on the student grade level rather than a school’s classification. – When 6 th grade is part of the middle school, the 6 th grade students generate staff at the elementary funding level. – When 9 th grade is part of the middle school, the 9 th grade students continue to generate staff at the high school funding level. Prototype allocations will be calculated based on districtwide grade level enrollment.

14. Slide 14Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776 – Prototypical Assumption of Class Size Grade LevelClass Size (Basic Ed) Class Size (High Poverty School) Grades K-325.23Not Defined Grade 427.00Not Defined Grades 5-627.00Not Defined Grades 7-828.53Not Defined Grades 9-1228.74Not Defined CTE 7-826.57Same CTE 9-1226.57Same Skills Centers22.76Same Lab ScienceNot DefinedSame Advanced PlacementNot DefinedSame International BaccalaureateNot DefinedSame

15. Slide 15Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Class Size to Teacher Conversion Converting the assumed class size to actual teachers is complex and is based upon standard state assumptions about: – Student instructional hours per day. – Teacher planning time. – Instructional workload of each teacher.

16. Slide 16Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776: School Level Classroom Teachers Grade LevelClass Size (Basic Ed) Students Planning Time Assumption Funded Teachers Grades K-325.2340015.5%18.31 Grade 427.0040015.5%17.11 Grades 5-627.0040015.5%17.11 Grades 7-828.5343220%18.17 Grades 9-1228.7460020%25.05 CTE 7-826.5710020%4.52 CTE 9-1226.5710020%4.52 Skills Centers22.7610020%5.27 Lab ScienceNot Defined AP/IBNot Defined

17. Slide 17Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Resulting Planning Time Assumed Instructional Day: – Elementary School 5.6 Hours. – Middle and High School 6 Hours. Assumed Planning Time: – 13% for Elementary = 45 Minutes. – 17% for Secondary = 60 Minutes.

18. Slide 18Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776: Other Staffing in a School School Level StaffingElementary (K-6) Middle (7-8) High (9-12) Staff Type Base Enrollment400432600Student Principals1.2531.3531.880CAS Teacher Librarians0.6630.5190.523CIS Guidance Counselors0.4931.1161.909CIS Health & Social Services: School Nurses0.0760.0600.096CIS Social Workers0.0420.0060.015CIS Psychologists0.0170.0020.007CIS Teaching Assistance0.9360.7000.652CLS Office Support2.0122.3253.269CLS Custodians1.6571.9422.965CLS Student & Staff Safety0.0790.0920.141CLS Family Involvement Coordinators0.0 CLS

19. Slide 19Financial Resources and Governmental Relations Office of Superintendent of Public Instruction District Level Funding

20. Slide 20Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Districtwide SupportAll GradesStaff Type Base Enrollment1000Student Technology0.628CLS Facilities, Maintenance, and Grounds1.813CLS Warehouse, Laborers, and Mechanics0.332CLS 2776: Districtwide Support

21. Slide 21Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Central AdministrationPercentStaff Type Total Central Admin Staff5.3% Percent Certificated Administrators25%CAS Percent Classified75%CLS 2776: Central Administration Central Administration is 5.3% of staffing units generated as K-12 teachers, School Level Staffing, and Districtwide Support. The Central Administration percentage is NOT applied to enhancements. Examples include: Poverty, Lab Science, AP/IB, CTE, Skills Centers, or Categorical Program Staffing.

22. Slide 22Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Maintenance, Supplies, and Operating CostsPer Student Starting $$ Target Values 2015-16 SY Total MSOC per Student FTE$517.91$1,082.76 Technology$54.43$113.80 Utilities and Insurance$147.90$309.21 Curriculum and Textbooks$58.44$122.17 Other Supplies and Library Materials$124.07$259.39 Instructional Professional Development for Certificated and Classified Staff $9.04$18.89 Facilities Maintenance$73.27$153.18 Security and Central Office$50.76$106.12 2776: MSOC – Formerly Known as NERC MSOC values for Lab Science, CTE exploratory, CTE preparatory, and Skills Centers will be defined in the omnibus appropriations act.

23. Slide 23Financial Resources and Governmental Relations Office of Superintendent of Public Instruction MSOC Maintenance, Supplies, and Operating Costs. Transition is not cost neutral because districts have different proportions of K-3/4 to all other grades. MSOC values will be adjusted for inflation from the 2008-09 school year.

24. Slide 24Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Other Funding

25. Slide 25Financial Resources and Governmental Relations Office of Superintendent of Public Instruction OTHER INSTRUCTIONAL FUNDING The new formulas are based upon a staffing assumption for a program. The current funding structure provides $$ per student without conveying any staffing assumptions.

26. Slide 26Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Categorical Program Current Funding Current funding is based on dollars only. No detail about staffing or service delivery is provided. Difficult to determine what the legislature is actually funding.

27. Slide 27Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Categorical ProgramsHours Per Week Staff Type Class Size15Student Learning Assistance Program1.5156CIS Transitional Bilingual Instruction4.7780CIS Highly Capable2.1590CIS 2776: Categorical Programs Calculated hours above are converted to staffing units for funding purposes. Assumes staff are allocated as teachers. Initially to be funded using statewide staff mix factor, but could convert to district specific staff mix in the future. Designed to be cost neutral.

28. Slide 28Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Categorical Programs The Funding Remains Categorical Allocations: – Funds must be used for those programs. – Allocations only; districts can design program structure to meet student needs within governing rules and statutes.

29. Slide 29Financial Resources and Governmental Relations Office of Superintendent of Public Instruction LAP: Poverty and Bilingual concentration factors are not continued. – hold harmless provided to those districts in lieu of continuation of that formula component. Current groups headed by OSPI are developing new funding formula proposals for programs such as LAP and TBIP. Categorical Programs

30. Slide 30Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776: Special Education Special Education funding did not change. Special EducationPercent of Basic Ed and MSOC Birth to Pre-Kindergarten1.15 Kindergarten to age 21.9309

31. Slide 31Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Small Schools and Districts All districts should be funded using the same prototypical school models. A small school and small district allocation will be articulated with the same ratios for staff units and non-employee cost allocations as currently exists. Districts will receive the greater of the two allocations. Formula Blending – As the new funding formulas are phased in, there should be a constant check to assess the points at which regular prototype school funding provides equal or greater funding. Formula Integration – Small schools must continue to be considered in ongoing implementation discussions, such as Core 24 and local levy work group. Consider incentives or policy for small high schools to increase student participation in internet or distant learning programs.

32. Slide 32Financial Resources and Governmental Relations Office of Superintendent of Public Instruction LOOKING FORWARD What comes next?

33. Slide 33Financial Resources and Governmental Relations Office of Superintendent of Public Instruction SHB 2776 – A Work in Process 2776 provides a basis for a new funding structure. It does not present an immediate and complete package of change. Several areas are stubbed out for future decisions and implementations.

34. Slide 34Financial Resources and Governmental Relations Office of Superintendent of Public Instruction How Are New Resources Phased-in Under SHB 2776? School Year2010-112011-122012-132013-142014-152015-162016-172017-18 1 Full-Day Kindergarten Must be fully funded statewide by 2017-18 Phase-in based on FRPL 219 Schools More funding can begin More funding must begin Continues to ramp up Fully Funded 2 K-3 Class Size Reduction Must be fully funded statewide by 2017-18 Phase-in based on FRPL $0 More funding can begin More funding must begin Continues to ramp up Fully Funded 3 Maintenance, Supplies, Operation Costs (MSOC) Must be fully funded by 2015-16 $ per student basis More funding can begin More funding must begin Continues to ramp up Funded at new level 4 Basic Transportation Must be fully funded by 2014-15 % of formula funded basis More funding can begin More funding must begin Continues to ramp up Fully Funded

35. Slide 35Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Salary Assumptions Have Not Changed - Assumed that staff in prototypical school categories would be grouped as certificated instructional staff, certificated administrative staff, and classified staff for salary purposes. Future changes are dependent upon future legislation. The compensation workgroup is addressing the structure of compensation. Initial report due June 30, 2012.

36. Slide 36Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Enrollment Exception Prototype allocations will be calculated based on district- wide enrollment except for high poverty schools. – Enrollment and free and reduced price lunch percentages shall be calculated at the school level. – SHB 2776: The omnibus appropriations act will define an average class size for schools where more than 50% of students are eligible for free or reduced priced meals. – Class size reductions in high poverty schools have not yet been established.

37. Slide 37Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 2776 Build Out Legislation targets ending value for K-3 class size and MSOC. Establishes a poverty enhancement for schools with FRPL > 50%; however, it does not implement.

38. Slide 38Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Career and Technical EducationMiddleHighStaff Type Base Enrollment100 Student Certificated AdministrationNot Defined CAS Teachers4.516 CIS Other Certificated SupportNot Defined CIS 2776: CTE and Skills Centers Skills Center StaffingHighStaff Type Base Enrollment100Student Certificated AdministrationNot DefinedCAS Teachers5.272CIS Other Certificated SupportNot DefinedCIS CTE and Skills Center pupil FTE are included in classified staffing calculations under school level staffing and districtwide support.

39. Slide 39Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Transition of Formula: Hold Harmless SHB 2776 states that the Legislature intends that funding shall not be decreased below current levels. – Per-pupil basic education funding. – Funding streams are discretely held harmless. – At the school district level.

40. Slide 40Financial Resources and Governmental Relations Office of Superintendent of Public Instruction For Allocation Purposes Only SHB 2776 states the distribution formula shall be for allocation purposes only. Nothing requires school districts to maintain a particular classroom teacher to student ratio or other staff to student ratio. Exception: Funds allocated to categorical programs (Learning Assistance, Special Education, etc.), continue to be restricted for use in programs. Districts/Schools determine their own structure for delivery of those services.

41. Slide 41Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Accountability Once implemented, the new funding model will require of OSPI/Districts the following comparisons: –Actual district staffing practices to the funded staff units by school and district level. –Actual district expenditures to funded levels (MSOC)? These comparisons can be used to inform future policy and legislative decisions for funding level changes. These comparisons shall be available on a public website.

42. Slide 42Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Open Technical Issues ItemGroup Funding algorithm for high poverty schoolsFFTWG MSOC enhancements for CTE, Skills Centers, Laboratory Science, and small school district students. FFTWG Does Lab Science class size reduction apply to grades 7-8?FFTWG SHB 2776 does not incorporate QEC’s recommendation that CTE class size enhancement is only for preparatory CTE courses. QEC Need to develop a new funding formula for the Learning Assistance Program? Sub-Group of FFTWG Need to develop a new funding formula for the Transitional Bilingual Program? Sub-Group of FFTWG What amount does the QEC recommend for MSOC for categorical programs? QEC

43. Slide 43Financial Resources and Governmental Relations Office of Superintendent of Public Instruction OSPI - Implementation Timeline Tools & Training A projection model is now available on OSPI’s website for districts and others to project the new funding model at the school and district level. OSPI will continue training throughout the state on the structure and implications of the new funding model. Specific system training to be delivered as systems are brought on line.

44. Slide 44Financial Resources and Governmental Relations Office of Superintendent of Public Instruction OSPI - Implementation Timeline Systems Three key systems affected: Apportionment, School District Revenues Projection (F-203), and Staff Reporting. The initial F-203 system must be available to districts early spring 2011. The apportionment system must be fully revised, tested, and operational by September 2011.

45. Slide 45Financial Resources and Governmental Relations Office of Superintendent of Public Instruction. Questions and Answers

46. Slide 46Financial Resources and Governmental Relations Office of Superintendent of Public Instruction MODELS, TOOLS, & REPORTS Web-Based Information:

47. Slide 47Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Prototypical Model Walk Through A live walk through of beta models to: – Gain a working understanding of the new funding model. – Perform funding projections for their districts/schools using the new funding algorithm. – Meet the requirements under ESHB 2261 to post school building expenditure information. – These models will be available on the School Apportionment website under a SHB 2776 link on left margin.

48. Slide 48Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Staffing Unit Comparison Required under SHB 2776 section 12. OSPI must provide comparison such that, “…citizens are able to compare the state assumptions to district allocation decisions for each local school building.” Actual hiring patterns from S-275 to the prototypical model.

49. Slide 49Financial Resources and Governmental Relations Office of Superintendent of Public Instruction New 1191 Report Prototype The changes imposed by 2776 require a thoroughly restructured 1191 report for BEA. The 1191 report prototype contains the following: – 1191. – 1191 ED. – 1191 EE, 1191 EM, 1191 EH. – 1191 MSOC. – 1191 SC. – 1191 CTE.

50. Slide 50Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 Report Summarizes account 3100 revenues for BEA, while focusing on four main areas: 1.Guaranteed School-Generated Entitlement. 2.Guaranteed District-Generated Entitlement. 3.Summary and Benefits. 4.Guaranteed Entitlement.

51. Slide 51Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 ED Reflects student enrollment and calculated staff units at the district level, while focusing on three main areas: 1.Student enrollment details. 2.District staffing data. 3.Formulated staffing units.

52. Slide 52Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 EE, 1191 EM, 1191 EH Calculates the staff units for each of the prototypical schools elementary (K-6), middle (7-8), and high (9-12). Elementary focuses on school-generated staff units. Middle and High focus on both school- generated and CTE staff units.

53. Slide 53Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 MSOC MSOC entitlement in account 3100 is based on the seven new categories at the district level in two different areas: 1.Basic education entitlement based on the MSOC basic education rate. 2.Categorical entitlement based on the potentially different MSOC rates for each program.

54. Slide 54Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 SC Focuses on Skills Center school level revenues broken down into the following categories: – Certificated Instructional Staff. – Certificated Administrative Staff. – Staff Units Insurance, Payroll Taxes, and Benefits. – Skills Center MSOC.

55. Slide 55Financial Resources and Governmental Relations Office of Superintendent of Public Instruction 1191 CTE Focuses on school-generated entitlement for Grades 7-8 CTE and 9-12 CTE. Both levels break down revenue from the following categories: – Certificated Instructional Staff. – Certificated Administrative Staff. – Staff Units Insurance, Payroll Taxes, and Benefits. – CTE MSOC.

56. Slide 56Financial Resources and Governmental Relations Office of Superintendent of Public Instruction. Remaining Questions and Answers