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Determining the Cost of Education In Minnesota April 2006 John L. Myers Justin Silverstein
© Augenblick, Palaich and Associates, Inc.2 APA Introduction School finance equity & adequacy studies Linking school finance to student results Bi-partisan work for policymakers Teacher quality & teacher compensation
© Augenblick, Palaich and Associates, Inc.3 School Finance Equity and Adequacy From the1970’s to the early 1990’s: Equity Since 1990: Adequacy more important Historically adequacy was determined politically using input measures and available resources Now adequacy is technically determined and output orientated. Relies on standards-based reform NCLB legislation has increased the need for states to understand the cost of an adequate education
© Augenblick, Palaich and Associates, Inc.4 Standards Based Reform What is the State’s Role? State sets expectations/requirements State assesses performance State holds districts/schools/teachers/students accountable Implies that the State must assure that education providers have adequate resources.
© Augenblick, Palaich and Associates, Inc.5 Alternative Methods Used to Set the Base Cost Professional Judgment (PJ) assumes educators can specify the resources needed to meet state standards. Successful School District (SSD) assumes a cost can be inferred from past successful practices. “Evidence-Based” (EB) assumes research exists to estimate a base cost, i.e., cost estimates for comprehensive school reform designs. Statistical Modeling (STAT) uses multiple regression techniques to predict the cost.
© Augenblick, Palaich and Associates, Inc.6 APA studies have been sponsored by different entities Legislature, governor, or state agency Legislature (required by court) A single education interest group Multiple interest groups (education & civic)
© Augenblick, Palaich and Associates, Inc.7 Developments in 2005-2006 Montana Committee, Special Session Kansas Legislative Auditor’s Report Washington State Study California Study Nevada Legislative Study
© Augenblick, Palaich and Associates, Inc.8 Minnesota Governor's Task Force Recommendations Rationally determined, learning-linked, student- oriented and cost-based Link education funding to school and student performance Local discretion in spending Equalized local option referendums Promote innovation to maximize resources Five-tier system
© Augenblick, Palaich and Associates, Inc.9 Task Force - Five Tier Structure Instructional services Local district revenue Innovative programs Categorical programs Facilities and debt service
© Augenblick, Palaich and Associates, Inc.10 Highlights of Task Force Report Agreed upon by 17 of the 19 task force members Spending decided by school districts Substantial data on demographics Doing a costing-out study Recognizes the full range of activities Dissenting letter
© Augenblick, Palaich and Associates, Inc.11 Task Force MAP Costing-out Study In the Appendix Professional Judgment study Three teams Five results Modification concerns
© Augenblick, Palaich and Associates, Inc.12 Phase I - Results Including Difference Total Operating Expenditures 2003-04 Cost Using MAP (Task Force) Base +APA Adjustments 2003-04 Actual Expenditures Comparable Difference Without Transportation and Capital $7.2557 billion$6.3027 billion$952.89 million With Transportation and Capital $7.9984 billion$7.0455 billion$952.89 million
© Augenblick, Palaich and Associates, Inc.13 Phase II Focus Base Cost SSD PJ Adjustments for Special needs students Comes from PJ work Special Education, At-Risk, and ELL
© Augenblick, Palaich and Associates, Inc.14 Economies of scale Rural/small schools Size adjustments Sparsely populated areas Cost differential cost-of-living adjustment labor market differential Phase II Focus
© Augenblick, Palaich and Associates, Inc.15 EB Approach Relies on work done by Odden and Picus in Arizona, Arkansas, and Kentucky Not related to a specific state standard Based on what a “good” school should look like Resources the same for any school of 500 Waited for some information from our Nevada work Using it do to the lack of transparency in the MAP work
© Augenblick, Palaich and Associates, Inc.16 Results of EB Approach Base cost figure Adjustments for Special Needs students EB Approach
© Augenblick, Palaich and Associates, Inc.17 SSD Identify Districts using Minnesota tests and standards Can look at spending in two ways Total base cost spending Base cost spending broken down by type of spending using efficiency screens
© Augenblick, Palaich and Associates, Inc.18 Selection of districts used two criteria First, a district has to be showing progress toward meeting a future standard Use a number of years of data and regression analysis to see if districts were on the way to meeting the standard Second, a district has to have high performing sub-groups SSD
© Augenblick, Palaich and Associates, Inc.19 45 districts met both standards Look at base cost spending for the districts in a number of areas using efficiency filters Instruction Maintenance and Operations Other Support SSD
© Augenblick, Palaich and Associates, Inc.20 Results Base cost figure for at least three separate spending areas based on the efficiency screens SSD
© Augenblick, Palaich and Associates, Inc.21 STAT Work being done by Doug Rose with APA Economies of scale Rural/small schools Size adjustments Sparsely populated areas Cost differential cost-of-living adjustment labor market differential
© Augenblick, Palaich and Associates, Inc.22 Final Costing Use the EB and SSD work to create two levels of adequacy SSD represents what is needed today EB represents what is needed as standards grow Create adjustments for special needs students At-risk Special Education ELL Other adjustments from the Stat Approach
© Augenblick, Palaich and Associates, Inc.23 Final Costing Create adequacy figures for each district in Minnesota for the 2004-05 schools year using both base costs Compare to current spending for each district
© Augenblick, Palaich and Associates, Inc.24 Questions and Comments
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