K-12 Funding and Low-Income Enrollment: Notes on the New OEA Analysis

by | Mar 21, 2019

Last November, Kentucky’s Office of Education Accountability released a valuable study of “State And Local Funds Distributed To Higher Poverty Schools.” Here, I’ll spotlight some valuable findings and then share the law, data, and policy implications I see.

Right at the outset, readers should know the report’s one recommendation is that the General Assembly “may wish to …. consider switching to a Weighted Student Formula at the school level.” Keep that big possibility of substantial changes to our education funding system in mind as you think about the details that follow.

PERFORMANCE: INCOME DOES MATTER

We know students eligible for free or reduced-price meals have lower average KPREP results, and the OEA study deepens that analysis by looking at results based on how many years students were eligible for f/r meals, to give a sense of the impact of persistent low-income status. Here’s how those results reveal potent achievement gaps:

These outcomes justify attention to the rest of study, telling us why we should care whether added funding, designed to allow added supports, flows to schools where more students come from those low-income families.

LAW: DISTRICTS CONTROL SCHOOLS GET ADDED DOLLARS BASED ON LOW-INCOME ENROLLMENT

The SEEK formula guarantees school districts extra funding for students eligible for free meals. This year, that “add-on” provides $675 more per pupil if a district seeks maximum Tier 1 funding. However, those dollars do not have to go to the schools those eligible students attend. In school council allocations, school boards can choose whether they consider student income data in funding certified staff, funding classified staff, or distributing Section 7 dollars (any part of the General Fund not needed for districtwide costs, school staff, or “other minimum” funding for books, lab supplies, and the like.)

SURVEY: FEW DISTRICTS HAVE SYSTEMS FOR PROVIDING ADDED DOLLARS

In responses to an OEA survey, only six superintendents reported that they provided funds based on poverty. For example, Owensboro provides an extra $18 for each student eligible for F/R meals, and Fayette County uses a more generous staffing ratio for schools where 75% of students qualify for those meals.

SPENDING DATA: STATEWIDE, SCHOOLS RECEIVE MORE AVERAGE MONEY IF THEY HAVE MORE LOW-INCOME STUDENTS

On average, the schools with the higher proportions of low-income students had more dollars to spend. Based on FY 2017 district reporting, the schools with the highest f/r meal eligibility averaged:

  • $337 more spending at the elementary level than schools with the lowest eligibility
  • $428 more spending at the middle school level
  • $786 more spending at the high school level

For this analysis, OEA sorted schools at each level based on f/r meal eligibility rates, split them into four groups of nearly equal enrollment, and compared those groups’ reported FY 2017 spending from state and local sources, excluding special education costs.

SPENDING DATA AGAIN: IN DISTRICTS WITH MULTIPLE SCHOOLS, SCHOOLS WITH THE MOST LOW-INCOME STUDENTS DO NOT CONSISTENTLY RECEIVE THE MOST MONEY

In districts with multiple schools, schools with the most low-income students often did nothave more state and local funding to spend than others at the same level. Based on the same FY 2017 district reporting:

  • 40% of districts with multiple elementary schools gave the one with the most f/r meal eligibility the most funding per pupil
  • 39% of districts did that for middle schools
  • 60% of districts did so for high schools

 Are you puzzled about how district-level finding work with the statewide one just above? I am. I can imagine several possible explanations, but the report does not share enough data detail to check my hunches. Whatever is happening, however, this is is tentative evidence that students with added needs based on low family incomes may not be consistently receiving added learning supports.

OEA RECOMMENDATION: CONSIDER A WEIGHTED FORMULA THAT REFLECTS FAMILY INCOME

After sharing this analysis, OEA offers a tentative recommendation:

The General Assembly may wish to revisit how districts allocate funds to schools within districts and consider switching to a Weighted Student Formula at the school level that would provide funds based on the number of students enrolled and those students’ needs. This may help equalize funding between the highest- and lowest poverty schools within districts.

The report notes that some school districts in other states now use that approach, including Baltimore, Boston, Cincinnati, Indianapolis, and New Orleans.

A LEGAL NOTE

I want to point out that a weighted student formula could also be enacted by the Kentucky Board of Education. Section 8 of our school-based decision making law assigns KBE responsibility for setting the school council allocation formula, based on recommendations from the Commissioner of Education.

A DATA NOTE

I’d like to know more about how closely the district reporting for FY 2017 has been reviewed. From long work for school councils, I know that districts sometimes have dollars that are spent at the school level but not allocated to councils. For example, if a principal is paid to work extra days or a coach to work extra hours, that added money is not allocated to the school councils. Itinerant art and music teachers who travel from school to school are also counted “districtwide” for SBDM purposes. I find it easy to imagine that some districts may have adjusted their reporting to show that funding as going to the school level, while others did not. Similarly, can we be sure districts aren’t reporting staff spending based average salaries for each position or the 95% of average that used to allocate for vacant slots? I wish OEA had shared thought on how likely the district reports are likely to be consistent, comparable, and complete.

A FEW POLICY NOTES

First, because students from low-income families need additional support, we should pay attention to whether and how added dollars flowing toward their schools, not just to their districts. OEA’s evidence that it does not work that way in some districts deserves study, attention, and concern.

Second, funding schools with a weighted student formula would make it simpler to argue that equivalent dollars should flow to public charter schools and other proposed models of school choice. This discussion could have important connections to other policy debates.

Finally, when we think about funding models where “dollars follow the students, we need to remember that subtracting students does not consistently yield proportionate cost reductions. I shared illustrations of that issue last week, and it matters here, too. A weighted student formula can be expected to create disruptions in schools with rising and falling enrollment, and likely also create substantial disruptions across schools with more and less staff seniority and associate pay rights. We should discuss those implications frankly, as “cost curve” issues that matter in every major productive enterprise.

 

SOME SOURCE LINKS FOR FURTHER READING

The full report is available for download here

KBE authority over school council funding is set in KRS 160.345(8) 

Current school council allocation rules are set by 702 KAR 3:246, with rules for staff funding found in Sections 4 and 5, and rules for allocation remaining funds found in Section 7.

 

 

ABOUT THE PRICHARD COMMITTEE

Since 1983, the Prichard Committee has worked to study priority issues, inform the public and policy makers about best practices and engage citizens, business leaders, families, students, and other stakeholders in a shared mission to move Kentucky to the top tier of all states for education excellence and equity for all children, from their earliest years through postsecondary education.

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