Paul Haas

Paul Haas

Author


A Simpler Look at School Funding (Nothing is Simple)

With all the talk about the Governor’s Tax Package being so important to education, it may help if you have little background.

For now, we won’t go into specific taxes or propositions- just speak about funding in generalities. The simple formula is a portion of state revenues goes into the coffers and is then redistributed to schools.

There are a number of  programs that qualify a school for additional funding either through the state or federal government. BUT as a result of the State Budget Crisis  many of the state program dollars have been placed in what is known as, “Flexibility.” So, for now,  we will take that variable out of the equation.

The primary factor for determining how much funding a school receives is based on student attendance. Every day a student shows up equates to money to the school district and ideally the school.

So the equation looks like this:

x * y= z

“x” is the number students; “y” is dollar value assigned to all students; and “z” is the amount of money a school receives.

A district with 100 students (x), times an estimated per student value of  $5000.00 (y)= $500,000 (z).  These numbers are not actual- just being used as an example.

Each year the state determines “y” the value of a student based upon the economic status of the State. Ideally, if the state were not in a budget crisis, the value would go up each year to match the cost of living (COLA). However, California is in a budget crisis so the value becomes negotiable.

This year, the negotiation is based on the Governor’s ” Tax Initiative. If the Tax Package passes, the value of “y” will remain the same as last year.

If the Package fails, the value of “y” will decrease. Estimates are between $400.00 and $525.00 per student. This would have a severe impact on school budgets.

If the Package fails, the formula would look like this:

x * (y-400.00 or 525.00)= z

Using the earlier example, the new “budget” would look like this:

x=100 * y= (5000-400= 4600) = z = $460,000

x=100 *y= (5000-525=4475 ) = z= $447,500

The district would be serving the same number of students but with somewhere between 9%  to 11.5% less money. The impact is even greater when you figure in the cost of doing business continues to increase.

Make sense? Simple?

Back to Flexibility… Over the past few years the value of “y” has decreased or remained flat. School districts have remained functional as a result of “Flexibility.” Flexibility allows districts to sweep funds from various programs into the general fund and used to keep schools operating.

Unfortunately the programs that get “swept” then do not have money to operate. For example- a district may sweep the funds they receive for Gifted and Talented Education (GATE). Those funds may be used for other expenses with no penalty. The district gets its GATE money- but is not required to spend it on GATE. The district gets the money- but is not accountable for the service (flexible).

The decision to “sweep funds” is a district decision so it is not being  invoked the same way by each district.  “Flexibility” was supposed to be a temporary stop-gap, BUT it has been extended because the budget crisis has yet to be resolved. So don’t plan on seeing any of the programs that have been swept reappearing unless state revenues make a dramatic comeback.

 

 

4 Comments

September 14, 2012

Dennis

Thanks Paul! Excellent explanation to a complex issue.

September 14, 2012

Teresa Lightle

Thanks for making it simple Paul

September 19, 2012

Brian Swagerty

Simple, clear picture of how schools are funded. It is important to note the consequences of the State "freeing" the school districts from "having" to offer certain programs. That list of programs is very large and includes such "extras" as music, the arts, outdoor education, and field trips, not to mention gifted programs (which you did) and industrial arts programs.. It makes it even more important for a parent to be informed on how their district decided/s how to spend what few dollars are left.

September 20, 2012

Paula Roediger

Thanks for shining a light on school funding, Paul. Nice explanation. Also, folks may not realize the impact of deferred funding schools have to contend with.

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