Post on 31-Dec-2015
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January 21st Lincoln Institute
Michael Griffith
Senior Policy Analyst
Education Commission of the States
The only nationwide education interstate compact
Founded in 1965 to enlighten, equip and engage education policy makers
53 member states, territories and the District of Columbia
Web Site: www.ecs.org
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Education spending – A national picture
The increased federal role
National Funding Problems
Solutions
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Average Spending Per Pupil
Adjusted for Cost of Living
National Average $10,506 $10,506
Rhode Island $18,729 (1) $15,389 (2)
Vermont $15,466 (4) $13,810 (3)
Maine $13,978 (7) $12,489 (7)
Massachusetts $13,804 (8) $12,357 (10)
New Hampshire $13,112 (10) $11,738 (13)
Connecticut $14,472 (6) $11,236 (18)
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Federal State Local
National 9.4% 47.1% 43.5%
Connecticut 6.7% 37.9% 55.4%
Maine 10.8% 38.5% 50.7%
Massachusetts 7.9% 37.6% 54.4%
New Hampshire 5.4% 37.0% 57.5%
Rhode Island 8.2% 40.5% 51.3%
Vermont 8.0% 86.5% 5.5%
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In the past three years all states have made some cuts in education spending.
Number of States that made cuts to their K-12 primary funding formula:◦FY 2008-09: 20 states◦FY 2009-10: 30 states◦FY 2010-11: 38 states
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During the last four economic downturnsState funding tended to decrease as a percentage of
total K-12 education fundingLocal funding tended to increase as a percentage of the
total, andFederal funding remained flat or slightly increased
A greater reliance on local funding creates greater inequity between the “haves” and the “have-nots”
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American Reinvestment & Recovery Act ($100 billion)Funding: Early Learning ($2 bill) K-12 ($70 bill) Higher Ed. ($28 bill)
Education Jobs Fund (Edu-Jobs)($10 billion)States must distribute the funding in FY 2010-11 but
districts have until FY 2011-12 to spend it.
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Fiscal Year Fiscal Year 2007-08 2010-11*
State 47.9% 40.3%
Local 43.3% 44.0%
Federal 8.8% 15.7%
Each 1% swing in funding represents $5.7 billion
*Estimated
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NCLB
ARRA &Edu - Jobs
Pensions
Health Care
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Teacher Pensions: Pew estimates that there is a $500 billion shortfall nationwide.
State Liabilities (2008)◦ Connecticut $15.8 billion◦ Maine $ 2.7 billion◦ Massachusetts $21.8 billion◦ New Hampshire $ 2.5 billion◦ Rhode Island $ 4.3 billion◦ Vermont $ 0.5 billion
Funded below 80% level
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Health Care Costs:
◦Account for 6% to 8% of all K-12 spending
◦These costs are increasing by 10% to 15% each year
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What We Need are Solutions!
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Other than cutting benefits what can states do?
Move new employees to defined contribution plans – like 401k plans
Create hybrid systems
Increase vesting time for new employees
Close loopholes in the system
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What can state’s do other than cutting services or increasing employee contributions?
Move to joint purchasing:◦Michigan: All school districts must now
participate in the state’s health care pool
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Salaries & benefits drive education costs:◦ 65% goes to educator salaries & benefits◦ 15% go to other staff salaries & benefits
Benefits alone account for 20% of education spending
Total administrative costs account for 7.5%
Transportation costs account for 4.2%
Instructional supplies (including textbooks) 3.3%
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180 School Days Average Class Size of 25
175 School Days Average Class Size of 25
180 School Days Average Class Size of 26
Number of Students 1,500 1,500 1,500
Average Class Size 25 25 26
Number of Days 180 175 180
Total Teaching Costs $4,073,925 $3,960,760 $3,917,236
Total Savings $113,165 $156,689
Percentage Savings 2.8% 3.8%
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Promote school district purchasing co-ops◦ A study in Delaware found that if school districts pooled their
purchasing power, they could reduce their costs from 8% to 14%.
Encourage districts to work together to educate high-need special education students. ◦ Studies have found that this can result in both improved quality of
education and reduce costs.
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Texas: Combining services The state is providing financial incentives to districts
that are willing to combine services
School district consolidation Maine has been working on this over the past 3 yearsKansas, Michigan and other states are currently
reviewing this option
Iowa provides financial incentives to districts to consolidate
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Some districts are moving to a four-day school weekECS has found that 120 districts (less than 1% of total)
make use of a four-day weekDistricts who move to a four-day week tend to save less than
3%
In 2009-10 Hawaii shortened it’s school year by 15 daysTeachers are donating 6 days in order to eliminate 15
furlough daysBanks provided funding to schools to help them bridge the
gap
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Adopting New Funding SystemsOhio and Rhode Island in 2010Pennsylvania in 2009
All three states took the opportunity to streamline their systems
New York has recently allowed districts greater flexibility in spending
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California: Changing Kindergarten Start Date◦ California is pushing date from Dec 2nd to Sep 1st
◦ This will reduce Kindergarten enrollment by 100,000
◦ State grants will be made available for Early K programs
◦ This change will produce $700 million in savings
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Traditionally it takes 18 to 24 months for state budgets to recover after a recovery begins
Most economist agree that a recovery started in 3rd or 4th quarter of last year
If this recovery holds education budgets will begin to see improvement in mid to late 2011
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303-299-3619mgriffith@ecs.org
www.ecs.org
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