Charter Funding: the SEEK Portions

| Post By Susan Perkins Weston |

On March 15, shortly after approving legislation to create Kentucky charter schools, the  General Assembly approved House Bill 471, an appropriation bill that was amended to include rules for charter funding. Based on that bill, here’s a rough idea of what Kentucky charter schools may receive from SEEK funding:

• $3,862 per pupil (counting average daily attendance rather than enrollment)
• $579 more for each student eligible for federal free lunches
• $927 more for each student with a communication disability
• $4,518 more for each student with a moderate disability
• $9,075 more for each student with a severe disability
• An average of $346 per pupil for transportation, with the amount varying by district

The funding bill provides that a “local school district where a public charter school is located shall transfer the public charter school's portion of the local school district's funding calculated pursuant to KRS 157.360" and then adds that three percent can be retained for use by charter school authorizer. The amounts above show this school year's SEEK fund base guarantees and add-ons as set in 157.360, reduced by the three percent. A combination of local and state tax dollar provide those amounts in each district.

However, charter schools may not be allocated those exact amounts. House Bill 471 goes on to say that the "public charter school's portion shall be allocated in the same manner as the school allocation model used by the local school district based on applicable data provided by the public charter school.” That school allocation model seems to be a formula each district will create and transmit to Frankfort, where the Kentucky Board of Education will have authority to find models deficient and request revisions.

For transportation, the amount a charter school can receive will depend on whether the school district chooses to transport the charter school students. If the district transports, the district keeps the transportation dollars. If not, that part of the funding goes to the charter school.

SEEK also has two optional parts that allow districts to raise additional revenue:

• For Tier 1, districts can set tax rates to raise more than the minimum 30¢ per $100 of taxable property, and the state contributes to equalize resulting revenue. This year, Tier 1 revenue averaged $1,101 per pupil statewide, drawn from both local and state funds.
• For Tier 2, districts can set even higher rates, but receive no state equalization. This year, Tier 2 revenue averaged $1,282 per pupil statewide, drawn solely from local funds.

House Bill 471 does not give charter schools any access to those Tier 1 and Tier 2 dollars. That's clear in two ways. First, the passage quoted above in blue refers to KRS 157.360, but Tier 1 and Tier 2 funding is governed by KRS 157.440. Second, the bill has explicit language saying that the funds allocated to charter schools shall not include “local funds raised pursuant to KRS 157.440(2)(a),” and that subsection sets the Tier 2 rules.

Beyond SEEK, charter schools will be eligible for categorical funding, meaning the kinds of state and federal dollars that come with strings attached. Watch for a future post that estimates those amounts.

For number lovers, here are my calculations for SEEK base, add-ons and the retained 3%:

The Tier 1 and Tier 2 estimates flow from the statewide version of these recent reports from the Council for Better Education.

A New Postsecondary Funding Model – A Positive Step for Future Investments, but Details and Transparency Matter

| by Perry Papka, Senior Policy Director |

The Kentucky State Senate this week passed Senate Bill 153, sponsored by Senator David Givens, establishing a new, comprehensive funding model for Kentucky’s public postsecondary education institutions.  The legislation is an outgrowth of recommendations made in December of last year by the Postsecondary Education Working Group and would tie a significant portion of state support for both 2-year and 4-year institutions to performance metrics.

What could this new approach mean for future investment?

Properly structured and adequately funded, a new comprehensive funding model represents an opportunity to move toward a more transparent and accountable system of postsecondary education – better ensuring that Kentuckians have access to affordable, high-quality postsecondary education.

This approach can be a positive step to help close persistent attainment gaps and be a vehicle to support additional investments in postsecondary education – investments that are undoubtedly necessary to reach the state’s educational goals. 

This can also be the first step Kentucky needs to more effectively link decisions and policies on state appropriations, student aid, and tuition to better define the expectations of institutions and students.  Lack of transparency in how postsecondary education is financed, and how the varying financial components interact, ultimately leads to less effective and efficient use of public resources and makes it more challenging for Kentuckians to reach their educational, economic, workforce, and civic potential.

What does Senate Bill 153 actually do?

Calls for renewed accountability for the state’s investment in postsecondary education are not new. Over the last three budget cycles, the Council on Postsecondary Education (CPE) has proposed some level of performance funding for institutions based on either achievement toward targets and goals or shares of degrees produced. All of these proposals applied only to new funding requests, and with budget reductions of 18.2% since 2008 – equivalent to $197 million – none of these proposals were adopted by the General Assembly.

The current state budget initiated the process to create a new, comprehensive funding model that would include performance metrics. As part of that process, the Postsecondary Education Working Group - comprised of institutional presidents, the Governor, and legislative leadership - provided formula recommendations for the new model on December 1, 2016 after meeting five times throughout the latter half of 2016.  The budget included a powerful incentive for this group to reach consensus - in 2018, 5% of funding ($43 million) must be allocated through the new model.  (The Prichard Committee provided feedback to the working group during the development of the funding model.)

 
Senate Bill 153 essentially codifies the recommendations of the Postsecondary Education Working Group, which all institutional presidents endorsed.  A new, comprehensive funding model would ultimately distribute 100% of allocable resources to postsecondary institutions via three major categories: 30% for campus operations, 35% based on student credit hours earned, and 35% based on student success outcomes represented by a set of performance metrics.  You can download our complete summary of the legislation for easy reference.

Can Senate Bill 153 be improved?

As with any legislation, details and transparency matter.  While Senate Bill 153 overall represents a positive step forward, certain elements would benefit from greater consideration and would provide CPE and postsecondary institutions clearer guiderails to follow during implementation:

• Weighting for Priority Populations - Additional weight for underrepresented student populations is critical to close the state’s attainment gaps and reach statewide attainment goals.  The working group’s recommendations would weight STEM-H degrees more heavily than priority populations for the 4-year institutions. Given the state’s need to close attainment gaps between diverse population groups, priority populations should be weighted equal to or higher relative to types of degree fields.
• Fields of Study Definition - STEM-H (science, technology, engineering, math, and health) degrees need appropriate classification and definition to align with the state’s employment and educational needs.  Helpful would be a STEM-H definition establishing the process by which degree fields are classified, and that also includes STEM educators in primary and secondary education to align with high demand for qualified K-12 teachers. 
• Implementation and Review of Comprehensive Funding Model -The formal review process established in the bill is critical to guard against unintended consequences, foster engagement, and ensure transparency.  To fully achieve these goals, the working group should be inclusive of other stakeholders such as students, business and civic leaders, and other public policy experts - including representation from the Kentucky Higher Education Assistance Authority (KHEAA) and the Kentucky Center for Education and Workforce Statistics (KCEWS).
• Transparency of Funding Model and Data  - To broaden public understanding and stakeholder engagement, the funding model and its data elements should be made publicly available by a date certain annually on CPE’s web-site – including definition and funding levels of non-formula mandated programs, specific formula adjustments related to cost and level and type of degrees and credentials, STEM-H degree field classifications and justification for inclusion, and data with regard to enrollment and distribution of priority populations.  This same level of public reporting should apply to any report and recommendations made by the working group every three years.
• Ambitious Statewide Goals - CPE’s target in the 2016-2021 Strategic Agenda of increasing Kentucky’s educational attainment to 58% by 2025 is laudable and inclusion by reference of the attainment goal adopted in the strategic agenda would enhance the funding model’s link to statewide goals.
• Respect for Institutional Missions – Given the unique missions assigned to institutions by the 1997 Postsecondary Education Improvement Act, concerns remain about unintended consequences related to how the research and comprehensive sectors are treated relative to one another – particularly with regard to affordability to students and families.  Guidance to the permanent working group to evaluate every 3 years should include - at a minimum – the effect of the model on key principles, including:
• Access – Ensuring educational opportunities remain inclusive of all Kentucky students.
• Affordability – Affordability is not explicitly addressed in the funding model, yet is a significant barrier for many students.  Understanding the impact of the new model on tuition, as well as state and institutional financial aid is critical to more adequately link the financial components of postsecondary education.
• Quality – Assessing quality presents significant challenges, but the review process should begin to consider potential measures - such as student learning and engagement – on which a future framework can be built.

(Learn more about performance-based funding in our report from the symposium we hosted in June of 2016 in partnership with the Kentucky Chamber of Commerce - Performance & Outcomes-Based Funding: Lessons for Accountable Investment for Postsecondary Progress in Kentucky.)

Postsecondary Funding - A Mixed Bag for Kentucky

Lawmakers in Frankfort concluded the 2016 Regular Session of the General Assembly in a flurry of activity during the waning hours of Friday April 15.  Putting aside the on-going legal dispute over current year cuts to postsecondary institutions and any potential vetoes the Governor might still make, the impacts of the enacted FY 2016-2018 budget on postsecondary education were a mixed bag.

On the one hand, most campuses received a 4.5% reduction, one-half of the 9% originally proposed by both the Governor and the Senate.  This amounts to a total reduction of $59.1 million over the biennium and represents an 18.2% decline in yearly funding since FY 2008, or $197 million.  Kentucky State University, in recognition of significant challenges facing the campus, was exempted from the funding reductions and received long-sought additional funds to fully match the federal requirement for land-grant programs.  Additionally, Western Kentucky University and Northern Kentucky University received additional appropriations in FY 2018 to help bring their state allocation per student to the average of the other regional campuses.  Overall, the enacted budget continues the pattern of state disinvestment in Kentucky’s postsecondary institutions that has persisted since 2008. A disinvestment whose costs are ultimately born by students and families.

On the other hand, student financial aid fared substantially better in the final compromise - increasing across all programs by $117.9 million over the biennium.  Need-based aid through the lottery-funded College Access Program (CAP) and Kentucky Tuition Grant (KTG) increased by $55 million – which could serve up to 30,000 more financially disadvantaged students.  This represents significant increases to the main need-based programs that have been flat funded for nearly 10 years. Two new programs were created to help increase college access and attainment.  The Work Ready Kentucky Scholarship received $25.3 million over the biennium and would provide essentially free tuition to recent high school graduates enrolled in associate’s degree programs at Kentucky community colleges, public universities and private colleges.  The Dual Credit Scholarship received $15 million over the biennium and will assist eligible high school students in paying for courses for which college and high school credit is awarded.

The budget also initiates the process by which postsecondary institutions will receive part of their funding based on performance against certain metrics.  Beginning in FY 2018, 5% of funding will be performance-based, rising to 15% in FY 2019 and 25% in FY 2020 and beyond.  A working group is established that will provide formula recommendations for the performance-based model to the Governor and General Assembly by December 1, 2016.  While in the early stages and not yet defined, this should be the first step in a process of recognizing that public investment will require accountability for progress toward well-defined system, institutional, and student outcomes and performance goals.

As the title of this post suggests – a mixed bag - perhaps one step backward and one step forward.  Issues of affordability and ensuring access to postsecondary opportunities for all Kentuckians’ make further reductions to institutional funding difficult to stomach.  A renewed commitment to state-funded financial aid programs, however, signals hope that perhaps progress is possible.

In the future, Kentucky needs to more effectively link decisions and policies on state appropriations, student aid and tuition to better define the expectations of institutions and students.  Lack of transparency in how postsecondary education is financed, and how the varying financial components interact, ultimately leads to less effective and efficient use of public resources and makes it more challenging for Kentuckians to reach their educational, economic, workforce, and civic potential.

A Tale of Two Maps

| By Susan Perkins Weston |

I groaned when I first saw NPR's magnificent new map of district-level spending per pupil across the country, part of a newly launched "School Money" project. Then I looked a little closer.



The shot above zooms in on the Kentucky part of NPR's illustration, showing:

• Red for spending 33% or more below national average (after a regional cost adjustment)
• Orange for spending 10% or more below national average
• Off-white for spending around average, between 10% below and 10% above
• Light green for 10% or more above average
• Dark green for 33% or more above average

My groan was because Kentucky doesn't offer much green. Owsley County is the single light green spot on the eastern side of the  map. Anchorage Independent provides the one dark green speck on the Kentucky map, nearly invisible inside Jefferson County. There really is bad news here, because most of our children receive school funding that isn't close to what's available across the nation.

But there is something else to see.

Owsley County has some of the deepest poverty in the nation --and the map shows it as having higher funding per pupil than most of the state. Owsley is surrounded by other Appalachian counties facing huge economic challenges, but those are the counties with funding most like national average.

In some ways, the NPR funding map looks a bit like a reverse-color version of this one from the Kids Count Data Center:

This one shows 2013 child poverty, with the darkest orange showing the deepest concentration of poverty, clustered heavily in the mountain counties. On this map, Owsley County has the highest child poverty rate in the state.

Comparing the two map shows that (roughly and with exceptions) Kentucky spends more on education where families have fewer financial resources to contribute. That, I submit, is a bit of good news inside Kentucky's low-funding bad news. Spending more for students who need more makes sense for a state committed to equipping each and every child to flourish and contribute as adults.

Added note: NPR's article and map are truly wonderful. The article gives a vivid sense of how much harm weak funding can do, and the map lets you click on any county to see its 2013 funding. Do check them out!

P-12 Funding: Action By the General Assembly

 | By Susan Perkins Weston | 

The General Assembly approved a budget on Friday, which is now awaiting action by Governor Bevin.  Unless the Governor vetoes some portions of the budget, it looks like the coming year will see a few major items get small increases and most parts of education funding continue without cuts. Here come some details.

The General Assembly’s budget provides a few increases in the 2017 Department of Education budget compared to 2016, including:

• $14 million more for facilities
• $9 million more for health insurance
• $8 million more for the teacher retirement employer match
• $4 million more for the SEEK base guarantee, Tier 1 and transportation
• $2 million in new funding for 'a review of the classification of primary and secondary school buildings”

The General Assembly did not include line items for two other investments made in past years. That is, the budget does not explicitly show:

• KETS funding that was budgeted at $23 million in 2016. The Kentucky Education Technology System has been shown as a line item in every budget since 1990.
• Added staffing for vocational/technical schools budgeted at $3 million in 2016. Those dollars were new in the budget for the last biennium and were shown as an effort to build college and career readiness.

Those two changes may not quite be complete cuts, though.

That’s because there’s one more big change:

• $28 million more is appropriated to the Department but not governed by a specific line item.

Since those dollars are not governed by a line item, they may turn out to go to technology, technical schools, or both. The amounts spent on those items could be higher or lower, and the uses could be exactly like past years or vary in small ways or vary in big ways.

Funding is unchanged for a number of other initiatives, including extended school services, family resource/youth service centers, gifted and talented, instructional resources (textbooks), the mathematics achievement fund, preschool program, professional development, Read to Achieve grants, safe schools , state agency children, and state-operated technical centers.

Outside the Department of Education budget, there are three other items that matter deeply to K-12 education:

• $541,900 less for the Education Professional Standards Board
• $13 million more for the School Facilities Construction Commission
• $480 million more to the Kentucky Teachers Retirement System.

That $480 million is the largest number in this whole blog post, and there's room to argue that it ought to be cited right at the beginning.  It's here at the end because those dollars aren't about paying for 2017 education.  They're about compensation owed to those who taught our children in years past. Filling the KTRS shortfall is about finishing paying for 2016, 2015, 2014, and years and years and years of earlier work with students.  The shortfall is about money that owed and must be paid, and the state will be making quite a few more big payments in the coming years to finish paying off that debt.  However, those payments won't allow any 2017 school to add a book to its library or a laptop to its inventory, much less an added teacher or a teacher with a better paycheck –and that's why it's not the starting point for this summary of what's coming next in P-12 funding.

Our new PrichBlog summary shows added detail, including changes for the 2018 budget and a detail page on small programs that receive less than $5 million in funding. You can download that here, or view the complete budget bill by going here and clicking on the link that says HB303.

P-12 Budgeting: Legislative Action So Far

 | By Susan Perkins Weston | 

Wednesday, the Senate Appropriation and Revenue Committee voted out its version of a budget for Kentucky P-12 education, and today the Senate as a whole voted approved that plan. Compared to the state budget for the current 2016 fiscal year, the Senate committee plan for 2017 would:

• Increase SEEK base and Tier 1 funding, facilities, retirement and health insurance
• Cut many line items that fund specific kinds of support for student learning
• Eliminate entire line items, including KETS technology, Kentucky School for the Blind, and Kentucky School For the Deaf
• Increase dollars not controlled by line items, giving the Department of Education the capacity to restore some of the funding from the eliminated line items
• Leave a puzzle about the total funding for SEEK

Details follow, along with notes on how the Senate approach differs from the House edition.  A conference committee will almost certainly be needed to work out a final budget that can be enacted into law.

INCREASES
Compared to FY 2106's budget, the Senate version would provide:

• $5 million more for the SEEK formula (when combined with growing local revenue, enough to continue the 2016 base guarantee of $3,981 for a growing number of pupils, along with student need add-ons and equalize local Tier I revenue)
• $14 million more for SEEK facilities
• $8 million more for the retirement match for teachers
• $9 million more for health insurance for school district employees

 These increases match the budget plan approved by the House.

CUTS TO PROGRAMS
The Senate budget would offer:

• $8 million less for preschool
• $3 million less for family resource and youth service centers
• $2 million less for ESS tutoring
• $1.5 million less for textbooks and other instructional resources
• $1.5 million less for Read to Achieve grants
• $1.1 million less for professional development
• $0.9 million less for children in state agency care
• $0.9 million less for safe schools and alternative schools
• $0.6 million less for gifted and talented programs
• $1.7 million less from 14 smaller grants

The House version would not make these cuts, which are closely aligned with the Governor’s budget proposal for 9% cuts to many programs.

ELIMINATED LINE ITEMS
The Senate plan would provide no funding for some line items that appeared in the budget for 2016, including:

• $23 million gone for KETS education technology
• $10 million gone for Kentucky School for the Deaf
• $7 million gone for Kentucky School for the Blind
• $6 million gone from eight smaller grants

The House budget would eliminate the KETS line and the added vocational staffing, but continued the other line items.

FUNDING NOT CONTROLLED BY LINE ITEMS
Some of those eliminated line items may still receive support, drawing on $35 million that the Senate approach would provide to the Department of Education without assigning them a specific use, including:

• $20 million for KDE Operations and Support Services that is not addressed in the line-item amounts
• $15 million for KDE Learning and Results Services that is not addressed in the line item amounts

The House plan would offer non-line-item funding totaling $28 million.

A SEEK PUZZLE
The SEEK section of the budget includes thirteen line items that add up to more than the General Fund total. That is, the budget bill would:

• Shows $3,036,462,000 in line items for SEEK base, Tier I, facilities, retirement, and other entries
• Shows $3,035,747,400 as the SEEK General Fund total
• Leaves $714,600 as the puzzling difference between the two

The House version would create the same puzzle!

ADDITIONAL DETAILS
You can download a PrichBlog comparison of the House and Senate  versions of the budget legislation here. Check out the legislative record on this bill here: click on the links for HCS and to download the full bill versions.  

Financial Aid and Lottery Dollars in the Governor's Budget Proposal

| By Susan Perkins Weston | 

The Kentucky Higher Education Assistance Authority (KHEAA) will be able to offer almost $251 million in FY 2017 financial aid if Governor Bevin's budget proposal become law. 

Here's a breakdown for the programs included in the KHEAA budget, with yellow shading for cuts and green shading for increases and a new workforce training and development program.

Counting the workforce proposal as a lottery funded effort, this plan honors the state law that calls for nearly all lottery dollars to flow to postsecondary education. 

However, that also means overriding the legal provision calling for the College Access Program and the Tuition Grant Program to receive 55 percent of those dollars.  Those two needs-based programs will receive $35 million less than promised in statute, with those dollars moved to the workforce initiative and to KEES scholarships awarded based on grades and test scores.  The chart below shows the available dollars and compares the statutory approach to the one the Governor proposes.

 

Source note: The dollar figures above reflect the 2016-18 Executive Budget released by the Office of State Budget Director.  KRS 154A.130 sets the rules for allocating lottery proceeds, with $3 million annually committed to literacy development and the rest divided between 45 percent to KEES and 55 percent to CAP and Tuition Grants.

Notes on Governor Bevin's P-12 Budget Recommendations

| By Susan Perkins Weston | 

Total state P-12 funding for FY 2017 will be essentially the same as the originally budgeted amount for the current year if Governor Bevin’s recommendations become law. The Governor’s General Fund proposal provides $4,093,226,500 for the Department of Education, while the bill signed two years ago by his predecessor provided $4,093,244,600. That’s a change of $18,100 and a decrease of 0.0004%, though rising costs probably mean the decline in buying power will be larger.

The more important shifts may be in how the money will be used. The budget proposal includes:

• $12.3 million more for equalized facilities than the FY 2016 budget bill
• $8.7 million more for local district health insurance
• $8.3 million more for local district teachers' retirement match
• $6.4 million more for Tier 1 equalization funding to school districts 

 

• $0.6 million less for gifted and talented programs
• $0.9 million less for education of state agency children
• $1.5 million less for SEEK base funding
• $1.5 million less for Read to Achieve grants
• $1.5 million less for textbooks and other instructional resources
• $2.3 million less for after school tutoring and other extended school services
• $4.7 million less for family resource and youth services centers
• $7.9 million less for preschool programs 

•  $14.7 million less for the rest of the Department of Education’s work, including additional dollars the Department distributes to schools and districts.

Of course, that list also invites many questions.

How are career and technical education, professional development, and KETS funding for school technology addressed?
The Governor’s budget recommendation does not show those programs with separate line items the way legislative documents do. Instead, they’re included in a single figure that may include several programs, use some federal dollars, or cover some of the Department’s operating costs. The numbers that are shown look like they probably include moderate reductions, but the detail just isn’t available yet.

How can SEEK base funding be down if the base guarantee is unchanged?
Governor Bevin did indeed say that base guarantee be unchanged, staying at $3,981 per pupil. There is also agreement that Kentucky will have more pupils to fund. However, the state guarantee is paid by combining local revenue with state dollars: the state pays what districts don’t bring in with taxes designed to raise 30¢ per $100 in taxable property. When that local revenue is rising fast enough, the state share can go down even if the number of students is going up. As a result, the Governor can indeed propose to keep the same guarantee and spend less to cover it.

What will happen to P-12 funding in 2018?
Under the governor’s proposal, the second year of the budget will cut $9.3 million more from the Department’s share of the General Fund. Major elements of that change will be increases for health insurance, retirement, and facilities, and decreases for SEEK base funding and Tier 1 equalization.

Will there also be cuts for the current 2016 fiscal year?
The Governor has indeed proposed cuts to spending in the current year, even before a new budget can be approved. For gifted and talented, extended school services, FRYSCs, Read to Achieve, state agency children, textbooks, and preschool, those cuts seem to be half the amount shown above for next year—or about $11 million from current funding. The Kentucky School Boards Association is reporting that the total is about $18 million.

How will the Education Professional Standards Board and the School Facilities Construction Commission be funded?
Those two P-12 agencies have budgets separate from the Department’s funding. EPSB is slated to receive an increase of $415,900. SFCC has a recommended increase of $13 million for 2017 (and 2018 funding will be another $5 million higher than that). When combined with the added dollars for facilities equalization in the Department section of the budget, there’s clear evidence that investment in facilities is a priority in this proposal.

Where is the money for the pension shortfall?
The Governor’s proposal includes paying an additional $323.8 million toward that problem in 2017 and very nearly as much in 2018. The pension challenge is a huge factor in why the rest of the budget is so tight. It’s also an obligation that Kentucky simply must meet. That said, the big added payments into KTRS are not paying to educate current students. They’re late payments for work educators did in years past. They must be paid, but paying them does not add to what we can to do for the learners in Kentucky schools today and in the next two years.

Source note: This blog post compares the 2016-18 Executive Budget released by the Office of State Budget Director to 2014’s House Bill 235.

Beneficial Returns to Public Investment in All Levels of Education (UK Research)

| by Perry Papka, Senior Policy Director |

Recent research published by the Center for Business and Economic Research (CBER) at the University of Kentucky highlights that public investment in all levels of education – early childhood, K-12, and postsecondary - yields significant beneficial returns to both students and society.  This information provides important data supporting continued strategic investment across the spectrum of the state’s public education system.

Early Childhood – Returns $5 for every $1 invested

Cost-benefit analyses conducted by the CBER in 2009 estimated that investment by Kentucky in expanded early childhood education would yield a return of $5 in public and private benefits for every $1 of public investment. The research also noted additional benefits beyond the financial return-on-investment such as: reduced need for special education, higher rates of educational attainment, reduction in health costs, reduction in the incidence of crime, and less demand for social welfare services.

With only 50% of Kentucky's children arriving in kindergarten ready for early success (see Figure 3 below), greater effort is needed to ensure that all children are given the opportunity to succeed.  CBER’s research reinforces the fact that investments in high quality early childhood education and care programs for at-risk children is not only a solution for reducing achievement gaps and improving academic performance, but pays long-term dividends to society as a whole.  
 

Source: Prichard Committee for Academic Excellence. Progress and Next Steps for Early Childhood in Kentucky: Birth through Third Grade (January 2016)

K-12 – Kentucky Schools Perform Better than Expected Given Challenges Faced

Earlier this month, CBER released a new issue brief highlighting Kentucky’s progress in education over the last 25 years. The research shows that across twelve broad measures of educational attainment and achievement, Kentucky ranks the same or higher than 34 other states and lower than only 15 – a far cry from very near the bottom in 1990. 

Moreover, while acknowledging that work remains to reach the achievement goals Kentucky has set for students and schools, the data shows that Kentucky is one of only eight states (see map in Figure 2 below) whose academic performance – as measured by the National Assessment of Educational Progress (NAEP) – for every $1,000 in per pupil investment is better than to be expected given other obstacles students face such as poor health, poverty, disabilities or parents with low educational attainment. 

The bottom line is that Kentucky’s schools are cost-effective in providing a strong return-on-investment given significant demographic challenges facing many Kentucky communities. 

Source: Childress, Michael. Kentucky’s Educational Performance & Points of Leverage (January 2016) Center for Business and Economic Research, University of Kentucky.



Postsecondary – Higher Education has Significant Pay-Off for Individuals and the State
In October of 2015, CBER released a series of seven issue briefs highlighting the dynamic effects of educational attainment on Kentucky’s economy. Noting concern that Kentucky’s postsecondary educational attainment is lower than the national average, the research examined the effects raising attainment levels to the national average across seven key outcomes: income/earnings, employment, state income taxes, Medicaid costs and participation, health, crime, and participation in the federal SSI and SNAP programs. 

Not surprisingly, the analysis found that greater educational attainment leads not only to better employment outcomes, higher earnings and more tax revenue, but also lower crime, less chronic disease, and lower demand for public service programs. While these positive outcomes might have been expected in the state’s urban centers, the research showed similar effects to education across rural regions of the Commonwealth as well (see figure 1 below).

Source: Bollinger, Chris. Education Pays Everywhere! (September 2015) Center for Business and Economic Research, University of Kentucky.



CBER’s findings also estimate that raising Kentucky’s educational attainment level to the national average would generate $903 million annually in new tax revenue and cost savings.  Specifically, the state would realize approximately $500 million in additional income tax receipts, $200 million in Medicaid cost savings, $200 million in other healthcare cost savings, and $3 million in crime-related cost savings. 

Conclusion

Kentucky’s long-term success in continuing progress in student achievement, ensuring a dynamic, talented workforce, and developing thriving communities will be made stronger through increased investment that recognizes our educational system as a seamless web of opportunity for all citizens. The recent findings by the University of Kentucky’s Center for Business and Economic Research reinforce this notion and offer important reminders that the smart money is on public investment in a high-quality educational system – from early childhood through postsecondary – which is certain to yield significant returns to the Commonwealth of Kentucky.

Kentucky School Staffing (National Comparisons)

In the fall of 2012, Kentucky enrolled 1.38 percent of all students enrolled in public schools nationwide in pre-kindergarten through grade 12.

Our share of public school staff was at or below that 1.38 percent level in three categories, with Kentucky having:

• 1.02 percent of student support staff nationwide
• 1.21 percent of administrative support staff
• 1.36 percent of officials and administrators
• 1.38 percent of teachers

Our share of public school staff was above the nationwide level in the other categories, including:

• 1.46 percent of guidance counselors
• 1.48 percent of Instruction coordinators
• 1.87 percent of Instructional aides
• 1.94 percent of principals and assistant principals
• 2.09 percent of school and library support staff
• 2.10 percent of other support services staff
• 2.33 percent of librarians

If instead, Kentucky schools and districts had consistently had 1.38 percent of each kind of staff, we would have had:

• 1,021 additional student support staff members
• 325 additional administrative support staff
• 136 more teachers
• 10 more officials and administrators

• 7 fewer guidance counselors
• 69 fewer instruction coordinators
• 443 fewer librarians
• 955 fewer principals and assistant principals
• 2,028 fewer school and library support staff
• 3,560 fewer instructional aides
• 8,225 fewer other support services staff

Back in March 2009, I posted a similar analysis using Fall 2005 data. As I wrote then:

I’m not arguing that Kentucky should staff schools to those averages. There may be important benefits to what we do differently, and our students may have different needs. I do think, though, that this is an interesting mirror to look in, inviting us to think about how we currently staff public education.

Coming back to this analysis this time, I still see that issue, and I have these added thoughts:

• We have 1,087 librarians spread over more than 1,200 schools. That may be the starting example of where our added commitment is a good idea, especially as we ask students to go deeper on research, designing their own investigations, and learning through major projects. 

• We’re now asking our principals to do sustained observations and give thoughtful feedback for every teacher: for that big growth in responsibility, our added numbers may again be just right.

• Other support staff seem likely to include food workers, custodial workers, and bus drivers. In other states, that work is often handled by contracting companies, and it's possible that Kentucky isn't so much engaging more workers as engaging them in  a way that shows up under staff rather than service fees.

• I'd love to know what other states are doing (and Kentucky apparently isn't) in student support services!

Source note: the data for this analysis comes from the Digest of Education Statistics, using tables 203.40 and 213.20 The staff analysis is based on full-time equivalent positions.

Kentucky State Preschool Rankings

Kentucky just received some strong rankings for our state preschool efforts, placing us...

17th in percent of 4-year-olds enrolled in state prekindergarten, with 30% of 4-year-olds enrolled in our state-funded program

10th in percent of 3-year-olds enrolled in state kindergarten, with 7.4% of that age group enrolled in the state program

30th in  resources based on state spending of $3,469 per enrolled child

11th in resources based on all reported spending, which totals $6,818 per enrolled child

Those rankings and numbers come from The State of Preschool 2013-14, just released by the National Institute for Early Education Research, which also credited Kentucky's state program with meeting...

9 of 10 state pre-k quality standards, missing only the one that calls for assistant teachers to have child development associate or equivalent credentials.

Do note that the participation rates above are just for the state program. Adding in federal Head Start, the report shows 17% of three-year-olds and 46% of four-year-olds in Kentucky benefit from publicly supported programs.

It's also worth noting some uncomfortable one-year changes shown in the report. In 2013-14, Kentucky state preschool enrolled 90 fewer three-year-olds and 169 fewer four-year-olds than in 2012-13.  In the same period, state funding did not keep up with inflation, so that preschool buying power went down $186  per enrolled child.

However, there is good reason to expect those trends to turn around in 2015-16, when the state budget will add nearly $19 million in funding, estimated to be enough to allow another 5,000 children to participate in our state preschool program.

Those results show Kentucky doing better than most states, definitely a cause for a moment of genuine pride in our investment in the futures of these young Kentuckians.

Most districts losing educators, even as state total grows

From 2004 to 2014, most Kentucky school districts reduced their certified staffs, even as the statewide total increased by 2%. Certified employees include teachers and other educators whose positions require state certificates, including librarians, counselors, principals, superintendents, and some other positions.

The changes can be seen in more detail in this table:

 Thus, three important patterns:

• The growth tilted toward the larger districts, with smaller districts on average seeing declines and the medium-sized districts taking the greatest losses.
• The growth was heavily concentrated in the county systems, rather than independent districts.
• Appalachian districts took heavy losses even as the others grew.

The Appalachian situation is arguably even tougher than these numbers show.  They reflect Appalachian Regional Commission's designation of 54 counties and their 18 independent districts, but a handful of the included locations had very different experiences.

Madison County added 73 certified employees for a 13% growth rate. A set of seven districts (Bath, Clark, Corbin, Laurel, Madison, Montgomery, and Pulaski) together added 247 teachers and 10%.  If those seven were left out of the regional count, the remaining districts would show an 11% decline.

What unites those districts that have been able to add educators over the last decade?  For six of them, you can exit an interstate highway and your off-ramp will put you inside the county seat.  Pulaski doesn't fit that category exactly but it's already at the junction of major east/west and north/south routes, and there's steady campaigning to extend I-66 along that same path.  Roughly, this means the growth zones are in the places most connected to other regions, and the losses deeper in the Appalachian part of the state are heavy indeed.

Here's a second table counting the districts seeing the various kinds of changes:

 

Over this same period, Kentucky schools saw a 5% increase in the number of students in average daily attendance, so a 2% increase in certified staff falls clearly short of keeping pace.

Adding Students, Unevenly

From 2004 to 2014, Kentucky public schools saw a 5% increase in the number of students in average daily attendance, but that growth was far from evenly distributed: more than half of our districts actually saw their numbers decline. Additional differences can be seen in a table of results sorted by district size, type, and region:

Thus, three important patterns:

• The growth tilted toward the larger districts, with smaller districts on average seeing declines
• The growth was faster in the county systems (taken as a group) than in independent systems
• The growth was concentrated outside Appalachia (using the Appalachian Regional Commission's designation of 54 counties and adding the 18 independents in that part of the state)

The Appalachian picture looks relatively tame because a handful of districts on the edge of the region had powerful growth.  Madison County, for example, added 1,653 students to its average daily attendance, growing 19% in one decade. If Madison were not included in the Appalachian list, the rest of the region would show a 3% decline. Clark, Corbin, Laurel, Madison, Montgomery, Pulaski, and Rowan, with excellent highway access and opportunities to act as regional hubs, showed 12% growth --and leaving them out would show the remaining districts with a 6% decline.

Here's a second table counting the districts seeing the various kinds of changes, with one twist on the earlier patterns:

• Even though independent districts had slower growth as a set than counties as a group, a majority of independents expanded while a majority of counties shrank.

 

When thinking of those 88 districts with declining attendance, bear in mind that even small losses can bring big challenges. For example, even if layoffs are avoided, people who retire may not be replaced.  Over time,  as those who remain grow in seniority, payroll still creeps upward, making it hard to maintain existing programs and harder still to invest in innovations.  Most Kentucky districts are working in that difficult zone, even while public education as a whole expands.

Kentucky Funding More Equitable Than Most (EdTrust Report)

 

Here's an occasion for Kentucky pride: our school districts that serve the most students living in poverty receive more funding.  The Education Trust's new Funding Gaps report compares 2012 funding for each state's districts with the highest and lowest proportions of poor students and finds that:

• 11% more funding flowed to Kentucky's districts with the most poor students, as compared to the districts with the fewest poorest kids. 
• Only six states had a stronger record of added support for districts with the most concentrated poverty: Ohio, Minnesota, South Dakota, Delaware, Tennessee, and Indiana.
• Kentucky's added funding was enough to cover an estimated 40% additional cost to serve students in poverty, compared to what it takes to serve students from financially better-off backgrounds.

One caution: this study is good confirmation that we're sharing our "funding pie" relatively fairly, but it doesn't tell us whether "the pie" as a whole is big enough to meet our children's needs and equip them for adult success.  EdTrust compared Kentucky districts to other Kentucky districts, but not to the funding across the country or an estimate of adequate funding.

Still, this report is a plus for Kentucky.  We're investing in all our children on a relatively equitable basis, and that's a great good thing about our state.

The Funding Gaps report comes with plenty of additional detail, including interactive maps, reports on all states, and details on funding for districts with the most children of color (Kentucky looks good there, too).  Do check it out, and do let us know what you see as important or curious in the results.

--Posted by Susan Perkins Weston

2015 Quality Counts: Results for Kentucky

The 2015 Quality Counts report is out from EdWeek, using a new approach to grading Kentucky, the 49 other states, and the District of Columbia.

In three categories, we can still compare grades from 2013.  Quality Counts now grades Kentucky:

• C on Chance of Success, the same as 2013, while moving up from 38th to 35th.
• C on Equity and Spending, up from a C- in 2013, while moving up from 34th to 26th.
• C- on K-12 Achievement, the same as 2013, while moving down from 13th to 19th.

On one new category, Quality Counts grades us:

• C- on Early Childhood, with a rank of 26th. 

Quality Counts no longer gives grades on three kinds of state policy choices:

• Transitions and Alignment, on which Kentucky had a 2013 grade of A and ranked 4th.
• Standards, Assessments, and Accountability, where we had an A- and ranked 20th.
• Teaching Profession, where we had a B- and ranked 5th. 

Combining all those changes, Quality Counts now grades our state:

• C as an overall grade, down from a B-, with our rank dropping from 10th to 29th.

So, we do have a drop in grade and rank, driven by the elimination of policy commitments as a source of grades.  Those grades were about our state-level willingness to commit to big changes, but not about whether those commitments were altering what really happens for students. EdWeek used to give us credit for effort, and it seems pretty reasonable that they're now looking at what our efforts produce.

Opinion: Quality Counts 2015 ends up saying that Kentucky education is producing:

• Stronger results (19th in K-12 Achievement)
• With ordinary resources (26th in Early Childhood and in Equity and Spending)
• For students who face deeper challenges than those in most other states (35th in Chance for Success)

On balance, I think we should all pause and be pleased with these results for a full 90 seconds before we get back to work on moving our kids to the higher levels we know they can attain.

KSBIT and millions of dollars being charged to Kentucky districts

The Kentucky School Boards Insurance Trust (KSBIT) used to offer school districts two self-insurance pools: one for workers' compensation insurance and one for property and liability insurance.

For many years, the costs of participating seemed lower than the premiums charged by commercial carriers and many Kentucky districts signed on.  "These self-insured pools allow school districts to combine their resources while sharing the risk," according to the KSBIT board of trustees.

The part about "sharing the risk," highlighted above, has always been the catch.  If this kind of risk-sharing pool doesn't have enough money to pay expected claims, it can send the members an additional assessment to fill the gap--and KSBIT developed some big gaps.

The problems became very public in January 2013 and has been in the headlines pretty much ever since.  KSBIT no longer runs the pools, and the Kentucky Employers' Mutual Insurance (KEMI) has taken over handling claims by the former members, but KSBIT's former members are still on the hook to contribute enough to cover claims for the years they participated in each pool.

In May, the Franklin Circuit Court entered orders that specify each participating district's required payments for the $37 million worker's comp gap and the $8.8 million property and liability hole. 

Now districts are working out how to pay those shares off in varying ways, all of them painful.  For example, Fayette County will pay off its $3.1 million assessment over five years, and Madison County will pay $1.2 million over time as well.  Fleming County will pay $351,803 over 10 years, and Harlan Independent is working out plans to pay $258,728.

Unsurprisingly, many district leaders are concerned about how the hole got so deep and whether better choices by KSBIT leaders could have avoided these difficult new payments.  All reports seem to agree that the problems built up over multiple years.  I found this report on a briefing from Kentucky Commissioner of Insurance Sharon Clark helpful, but I still don't know enough to say much about how responsibility should be apportioned.  

Here's the question I most wish I understood: if KSBIT had charged the right amount every year, so that no district would be facing unexpected billing now, would it still have been a better deal than other insurance options?  Or, put another way, if districts could have known then what they know now, would they still have decided KSBIT was the best deal on offer at the time?

What I do know is that these payments are currently consuming resources I'd rather have available to serve kids now in Kentucky schools: the KSBIT collapse is definitely not good news!

--Posted by Susan Perkins Weston