Budget Transparency: Overview of the Operating Budget James M. Brese Assistant Superintendent and CFO September, 2010 Department of Education

Total Biennium Operating Budget Reductions

Total Operating Budget Reductions – FY08 vs. FY11 Data reflects General Funds only The greatest portion of the DOEs budgeted dollars is allocated to the schools The greatest percentage reductions to the DOEs budget has come from the State and Complex Area

Total Operating Budget Reductions – FY08 vs. FY11 Data reflects General Funds only The greatest portion of the DOEs budgeted positions is allocated to the schools The greatest percentage reductions in the DOEs budget has come from the State and Complex Area

Total FY Operating Budget After Reductions The State and Complex Area took reductions to preserve instructional services at the school level!

Total FY Operating Budget After Reductions The State and Complex Area took reductions to preserve instructional services at the school level!

What are DOE Centralized Services? Why is this budget not allocated to the schools? The principal can focus on being the educational leader of the school! The DOE as a system can take advantage of standardization and economies of scale!

DOE Centralized Services Electricity bills and other utilities Network infrastructure support/development School food services Student transportation Diagnostic services for SPED services qualification Personnel hiring, recruitment, and recordkeeping Workers compensation Unemployment benefits administration Financial accounting and reporting IT development, implementation, operations Litigation support Autism, school based behavioral health Special education provision and recordkeeping

DOE Statewide Responsibilities Strategic Planning Student Achievement Standards Development Budget Preparation and Execution Teacher Certification Hawaii State Assessments Policy Development Internal Audit Compliance with US DOE and State Regulations Federal Reporting Requirements Inter-governmental relationship management

General Funds $1.3 Billion, 76% Federal Funds Ceilings $305.7 Million, 18% Special Funds, Trust Funds, Interdepartmental Transfers, and Revolving Funds $92.8 Million, 6% DOE Budget $1.7 Billion (Does not include $57 Million from the Hurricane Relief Fund) Budget Summary by All Means of Financing

Salaries $996.7 Million, 60% Non-Salaries $655.2 Million, 40% DOE Budget $1.7 Billion (Does not include $57 Million from the Hurricane Relief Fund) Budget Summary by Salaries/Non-Salaries No Fringe Benefits are Included. Removed from DOE Budget since FY Total Amount = $456.3 Million, or $2,641 per student for FY10-11

Weighted Student Formula (WSF) 42% Federal Funds 11% Other Programs 6% Special Education (SPED) 11% Other SPED & Student Support Programs 10% Other Centrally Expended 5% Facilities (Repairs & Maintenance) 3% Utilities 3% Student Transportation 3% Food Services 6% DOE Budget $1.7 Billion (Does not include $57 Million from the Hurricane Relief Fund)

Weighted Student Formula (WSF) $702.3 Million Federal Funds $175.8 Million Other Programs $97.1 Million Special Education (SPED) $186.0 Million Other SPED & Student Support Programs $159.5 Million Other Centrally Expended $86.7 Million Facilities (Repairs & Maintenance) $42.8 Million Utilities $56.1 Million Student Transportation $51.3 Million Food Services $94.5 Million DOE Budget $1.7 Billion (Does not include $57 Million from the Hurricane Relief Fund)

Weighted Student Formula (WSF) The Weighted Student Formula (WSF) promotes equity by allocating funds to schools based on individual students educational needs. Weighted Characteristics: Economically Disadvantaged English Language Learners Geographic Isolation School Size/Sliding Scale Multi-track K-2 Class Ratios Transient Students Neighbor Island Students $702.3 Million of DOE Budget = 42% With 172,806 students enrolled, approximately $4,064 is average budget per student. Budget per student is based on SY Projected Official Enrollment Count

Other Programs (Categorical) At Risk Programs Summer School Driver Education Lost Textbooks School Health Aides After School A Plus Athletics (except Directorsnow in WSF) JROTC Hawaiian Language Immersion Program Hawaiian Studies Other Instructional Services Learning Centers Student Activities (Student Conference, Student Council, Awards, Student Exchange) Peer Education Program $97.1 Million of DOE Budget = 6% Educational Research & Development Trust Funds (Grants, Donations, Athletics, Olelo) Hawaii Content/Performance Standards, Restructuring Etc… $562 per student Separate funding is allocated to ensure that specific programs are established and supported for broadened education.

Federal Funds Title 1 No Child Left Behind Impact Aid Vocational Education Smaller Grants $175.8 Million of DOE Budget = 11% $1,017 per student

Special Education (SPED) Teachers Classroom Supplies Educational Assistants SPED Requirements at Schools Centrally Expended for SPED and Student Support Programs Federal Funds Special Olympics School Based Behavioral Health Services for Children with Autism Student Support Services Recruitment and Retention Incentive Educational Assessment/Prescriptive Services Special Education Database Extended School Year Home/Hospital Instruction Etc… $186.0 Million = 11% of Budget $1,076 per student $159.5 Million = 10% of Budget $923 per student

Special Education (SPED) $345.4 Million (SPED Combined) = 21% of Budget 18,172 special education students projected enrollment in FY % of total student enrollment $10,234 per SPED student SPED Requirements at Schools Centrally Expended for SPED and Student Support Programs $8,775 per SPED student $19,010 per SPED student

Food Services $94.5 Million 6% Student Transportation $51.3 Million 3% Utilities $56.1 Million 3% Facilities (Repairs & Maintenance, School Inspection, State Administration, etc.): $42.8 Million 3% Other Parts of the DOE Budget for Students $484 per student $242 per student $297 per student $247 per student $547 per student $325 per student

All Other Centralized Expenses Complex Area Administration Office of Curriculum, Instruction, and Student Support (Teleschool, Adult Education, Federal Funds for Homeless, National Science Foundation, NAEP, Etc.) Office of Human Resources (Teacher Improvement Services, Leadership Development, Etc.) Office of Information Technology Office of the Superintendent (Systems Accountability: Testing, Evaluation, Planning, Etc.) Office of Fiscal Services All Other (Board of Education, HTSB, and Art in Public Places) 5% of DOE Budget - $86.7 Million In addition to supporting student achievement, the remaining 5% of the DOE Budget supports a combination of the schools, the complex areas, and the state level functions. Many of these impact student education directly and all others affect student education indirectly. 1.0% 1.1% 1.0% 1.1% 0.5% 0.3% 0.2% $ 99 $107 $ 98 $109 $ 44 $ 24 $ 20 $502 per student Per Student5% Breakdown Complex Area (ICAA) = $17.1 Million; Remaining State Offices = $69.6 Million

Summary Expended by Principals for Students 70% $6,719 per student 42% 28% Centralized Expenses for Students 25% $2,339 per student Other Centralized Expenses for Schools 5% $502 per student WSF Categorical, SPED, Federal 95% of Budget Budget per student is based on SY Projected Official Enrollment Count

Summary Budget Breakdown Per Student Weighted Student Formula 42% $4,064 per student SY : 172,806 Students Projected 95% of Budget = $9,058 Average Per Student Other Student Funding at Schools 52% $4,994 per student All Other Centralized Expenses at 5% $502 per student Affects Schools, Complex Areas, State Offices, etc. 100% of Budget = $9,559 Average Per Student

HSA Results

The Big Picture The DOE budget (including fixed costs) represents: 38.53% of the entire state general fund budget 22.49% of the entire state budget for all means of financing

Race to the Top (RTTT) RTTT grants are aimed at rewarding states that have ambitious yet achievable plans for implementing compelling and comprehensive education reform Hawaii will receive $75 million, the maximum for a state its size, over a four- year period The money is meant to start reforms, to leverage reforms. This is not intended to replace our general fund budget reductions. Kathryn Matayoshi, Superintendent Summarized from The StarAdvertiser, 08/25/10

Race to the Top (RTTT) Placed in top three! (applicants judged on a 500-point scale by a five-member expert panel) Compared Top 3 Phase II WinnersScoreto Hawaii Massachusetts points New York points Hawaii462.4 Only 2 Phase I Winners Tennessee Delaware Summarized from The StarAdvertiser, 08/25/10

Race to the Top (RTTT) The four-year, $75 million grant will help kick-start reforms across Hawaiis public school system. Here is how it will be spent: $33.2 million Cultivate, reward, and leverage effective teaching and school leadership by instituting performance-based contracts for teachers and principals tied, in part, to student performance growth. Funds will also go to professional development, bonuses for highly effective teachers, and other initiatives. $18.7 million Turn around the lowest-performing schools by targeting programs in zones of school innovation, expanding pre-kindergarten opportunities, and extending classroom time. $9.3 million Boost student achievement and classroom rigor by implementing the national common core standards curriculum, aimed at standardizing what students across the country learn. $7.2 million Improve student performance data collection and use, allowing teachers, parents, schools, and the DOE to quickly see when a student is struggling and track how a student performs from kindergarten through graduation (and through college). $6.5 millionReorganize to improve and streamline how the Department of Education monitors and supports reforms. Summarized from The StarAdvertiser, 08/25/10

Race to the Top (RTTT) Questions about RTTT? For more information, please access the DOEs website for RTTT

Questions? CONTACT US: Department of Education Office of Fiscal Services 1390 Miller Street, Room 319 Honolulu, HI Phone Fax Visit our website: