A Survey of Finance Adequacy Studies

	ECS StateNotes
	Finance – Adequacy/Core Cost

700 Broadway, Suite 1200 Denver, CO 80203-3460 303.299.3600 Fax: 303.296.8332 www.ecs.org

A Survey of Finance Adequacy Studies

September 2001

This report, prepared by Mike Griffith, ECS policy analyst, provides a summary of adequacy studies that have been undertaken for a government entity, or for a private group, and then made public. It does not include adequacy studies that were not made available to the general public for one reason or another.

Illinois

Year:

2001

Study Undertaken by:

Augenblick & Myers

Study Undertaken for:

The Illinois Education Funding Advisory Board, which was charged with producing a school finance report to the state legislature, including recommended changes to the state’s school finance system.

Method Used:

Successful Schools Model – District Level

Base Cost Figure:

	2001
Prior to Study:	$4,425
Recommended by Study:	$4,600
The recommended base cost figure does not include “at-risk” funding which was determined to be between $1,697 to $2,329 per identified student, depending on the percentage of at-risk students in a district.

Total Education Spending:

2000-01

Recommended by Study: (incomplete information)

Education Expectations:

A successful school was defined as one that will have 83% of its students meet standards for the Illinois Standards Achievement Test (ISAT) by 2004 (which was five years beyond 1999, the first year the test was given). The ISAT test is given in reading, writing and math to 3rd, 5th and 8th graders in the state.

What Drove the Study:

The legislature wanted to re-evaluate school funding in the state in light of the emergence of testing and standards for Illinois schools and students.

Notes:

This study was presented to the advisory board in August 2001, and information from it will be incorporated in the board’s report to the legislature.

Louisiana

Year:

2001

Study Undertaken by:

Augenblick & Myers

Study Undertaken for:

State Board of Education

Method Used:

Successful Schools Model – School Level

Base Cost Figure:

	Elementary	Middle School
Prior to Study:	$3,103	$3,103
Recommended by Study:	$4,174	$4,234
These base cost numbers are for the 2000-01 school year. The recommended base cost figure includes at-risk funding, but not special education funding, capital outlay and vocational education. The base prior to the study does not include funding for at-risk programs.

Total Education Spending:

	2000-01
Prior to Study:	$2.57 billion
Recommended by Study:	(Incomplete information)

Education Expectations:

Schools scoring a grade of over 100 on the State Performance Score and any school that improves its grade by at least 75% over a two-year period would be seen as a successful school.

What Drove the Study:

The state wanted to re-evaluate the foundation formula. One of the reasons for this re-evaluation was the establishment of a new education standards system in the state.

Notes:

This study looked at elementary and middle school programs but did not include information about high school spending. The report was presented to the state in June 2001 and it has not yet had an impact on the state’s education funding formula.

Mississippi

Year:

1993

Study Undertaken by:

Augenblick, Van de Water & Myers

Study Undertaken for:

The Task Force on Restructuring the Minimum Education Program, which operated out of the State Department of Education.

Method Used:

Successful Schools Model – District Level

Base Cost Figure:

	1991-92
Prior to Study:	$2,005
Recommended by Study:	$2,614
Under the proposed system, local school districts would be expected to pay a share of the base cost program. The state’s share of the base cost would range from $1,683 to $2,500, depending on a local school district’s property tax wealth.

Spending on Education:

	1991-92
Prior to Study:	$800 million
Recommended by Study	$889.2 million
These figures are the total cost to the state for the base cost program. This base cost figure does not include teacher retirement, for which the state makes separate payments.

Educational Expectations:

The study identified schools by using socioeconomic information including: percent of students receiving free/reduced price lunch, the local operating tax levy, the assessed valuation per pupil and school size. Once districts were identified to be within a "normal" range for each of those categories, the study looked at their institutional cost. The information that was reviewed to determine instructional cost included: accreditation level, number of Carnegie units offered at the high school level and the average teacher experience in the district.

What Drove the Study:

The state wanted to review its rationale for education spending.

Notes:

The state incorporated the information from this study into its school finance system, which is still in place in Mississippi.

Ohio

Year:

1997

Study Undertaken by:

Augenblick & Myers

Study Undertaken for:

The School Funding Task Force, under contract with the Ohio Department of Education

Method Used

Successful Schools Model – District Level

Base Cost Figure:

1995-96
Prior to Study:	(Incomplete information)
Recommended by Study:	$3,930

Spending on Education:

	1995-96
Prior to Study:	(See note below)
Recommended by Study:	(See note below)
In FY 1996-97, the year that this study was undertaken, the state funding for the “basic aid” program was $1.28 billion, with the base cost figure being $3,500. In the FY 2001-02 budget, which incorporated most of the changes recommended by this study, the funding for the “basic aid” program was $2.93 billion, with the base cost figure being $4,814. The state of Ohio was able to pay for this increase in school funding by reprioritizing the items in its state budget.

Education Expectations:

Six criteria were used to select successful school districts:

1. A passing rate of 75% on the 4^th-grade proficiency tests in reading, mathematics, writing and citizenship

2. A passing rate of 75% on the 9^th-grade proficiency test in reading, mathematics, writing and citizenship administered in the 9^th grade

3. A passing rate of 85% on the 9^th-grade proficiency test in reading, mathematics, writing and citizenship administered in the 10^th grade

4. A passing rate of 60% on the 12^th-grade proficiency tests in reading, mathematics, writing and citizenship

5. A dropout rate of 3% or less

6. An attendance rate of at least 93%.

What Drove the Study:

Court case: DeRolph v. State, 1997

Notes:

The state is awaiting a Supreme Court ruling on the legislature’s latest revisions to the state’s school funding system. The funding system that the court is ruling on is based on the findings of this study.

Oregon

Year:

1997 (revised in 2000)

Study Undertaken by:

Internally by a state-appointed commission

Study Undertaken for:

The Legislative Council on the Oregon Quality Education Model. The members of the council were 23 educators, lawmakers, business leaders and parents.

Method Used:

Professional Judgment Model

Base Cost Figure:

	2001-02	2002-03
Prior to Study:	$5,216	$5,444
Recommended by Study:	$5,762	$5,880

Spending on Education:

	2001-03
Prior to Study:	$5.089 billion
Recommended by Study:	$6.061 billion
Because of the high cost of implementing the full program, the commission recommended phasing in an increase in education spending over time. It suggested a $250 million increase in the first two-year budget, with further increases in the future.

Education Expectations:

The model assumes that all schools will be able to reach the performance goal of 90% of the students being at benchmark standards for the 3rd grade and each grade there after. In addition, the remaining 10% of students should be making progress toward the standards.

What Drove the Study:

The state legislature wanted answers to the following questions: How much money do schools need, where is the money currently going, what are the performance results from education spending, are targets being met and is the state properly fulfilling its obligation to provide a quality education for every student in Oregon.

Notes:

The state has not yet incorporated the findings from this study into the state education funding formula.

South Carolina

Year:

2000

Study Undertaken by:

Augenblick & Myers

Study Undertaken for:

South Carolina School Boards Association

Method Used:

Professional Judgment Model

Cost of the New Program:

Implementation would cost an additional $2.9 billion in 1998-99 dollars.

Spending on Education:

	2005-06
Prior to Study:	(See note below)
Recommended by Study:	$6.0 billion
The total state spending on education prior to the study in 1998-99 was $3.1 billion. The state would have to increase its spending on education by $2.9 billion over a six-year period to cover the cost of this new program.

Base Cost Figure:

	2005-06
Prior to Study:	(See note below)
Recommended by Study:	$6,189
The base cost amount prior to the study for FY 1998-99 was $4,990.
The recommended cost does not include at-risk and special education funding. When at-risk and special education funding are included, the recommended per-student funding for FY 2005-06 increases to $9,182.

Education Expectations:

The state uses the Palmetto Achievement Challenge Test (PACT) to measure students’ abilities in English and math. The performance expectations were that 85% of elementary students score at the level of “basic” or above by 2005-06, and that 75% of all elementary students score at the level of “proficient” or above by 2010-11. For middle school students, it was expected that 75% score at “basic” or above by 2005-06, and that 65% score at “proficient” or above by 2010-11. High school students are expected to make progress in meeting all the high school education criteria (graduation exam, attendance rate, dropout rate and participation in Advanced Placement courses) by 2005-06, and that by 2010-11, 100% of high school students should pass the 10^th grade graduation exam by the end of the 12^th grade.

What Drove the Study:

This study was driven by the passage of the Education Accountability Act of 1998 (EAA). The School Boards Association wanted a study of the cost school districts might face in complying with the requirements of the EAA.

What Drove the Study:

Notes:

The information from this study was used by the board to help influence state policies on the implementation of state standards and in policymakers’ debates on school finance.

Wyoming

Year:

1997

Study Undertaken by:

Management Analysis & Planning Associates

Study Undertaken for:

Joint Appropriations Committee of the Wyoming Legislature

Method Used:

Cost Based Block Grant Model (Professional Judgment Model)

Base Cost Figure:

		1995-96
Grades:	K-5	6-8	9-12
Prior To Study:	$5,964	$5,964	$5,964
Recommended by Study:	$6,165	$6,403	$6,781

Spending on Education:

The estimated additional cost for 1997 would have been $76.4 million, with $60.8 million of that coming from the state.

Education Expectations:

Once this program is implemented it will provide “Assured Opportunity (to all students) to Acquire Postsecondary Prerequisites.”

What Drove the Study:

Court decision: Campbell County v. State, 1995

Notes:

On February 23, 2001, the Wyoming Supreme Court accepted the state’s school funding system, which was based on the findings of this study, as constitutional.

The Education Commission of the States is a nonprofit, nationwide organization that helps state leaders shape education policy. It is ECS policy to take affirmative action to prevent discrimination in its policies, programs and employment practices.

To request permission to excerpt part of this publication, either in print or electronically, please fax a request to the attention of the ECS Communications Department, 303-296-8332 or e-mail ecs@ecs.org.