Court orders Legislature to double education money
The Kansas City Star, June 3, 2005

TOPEKA - The Kansas Supreme Court ordered lawmakers today to come up with an additional $143 million for public schools by July 1, a decision that assures a rare special session of the Legislature.

Lawmakers approved an additional $142 million school funding package at the end of March. To go any higher, they said at the time, would require a tax increase or deep cuts in other programs.

In a unanimous decision, the court said the level of funding wasn't adequate and said the level should have been set at $285 million above the amount schools received last year.

The court relied on a 2001 study of education costs by the consulting firm of Augenblick & Myers, which said lawmakers need to increase state spending by $853 million.

"The state cites no cost study of evidence to rebut the 2001 study by Augenblick & Myers, the consultants retained by the Legislature," the court said in an opinion summary. "Thus, the A&M study is the only analysis resembling a legitimate cost study before us."

The court also struck down - for now, at least - several new provisions sought by Johnson County lawmakers allowing districts to raise more property taxes.

Much of the $142 million approved by lawmakers was earmarked for special education students, bilingual programs and low-income students who were failing academically.

Other provisions increased the ability of school districts, especially those in Johnson County, to tap more local property tax dollars. Because schools there have fewer low-income and English language learners, the county's share of the $142 million would have been small compared to less affluent areas.

The Republican school finance package was approved along party lines with most Democrats opposed, including Gov. Kathleen Sebelius.

In was passed in response to a January decision by the Supreme Court that found the old finance formula unconstitutional and order the Legislature to correct it by April 12, a deadline lawmakers easily met.

The court held a hearing May 11 to hear arguments from both sides of the education lawsuit on whether the $142 million plan put school spending back on a constitutional track.

During that hearing, questions from the justices indicated concern over how the funding level was determined, what role politics played in that decision and whether the new plan unfairly favored wealthier districts.

Lawyers for the plaintiffs, the Dodge City and Salina school districts, argued that the new plan fell short of providing enough dollars to ensure that every student was provided an adequate education. The urged the court to find it unconstitutional.

Attorneys representing the state told the court that lawmakers had followed the court's order to the best of their ability and had provided the money for a suitable education.

Getting the property tax provisions into the plan was a goal of Johnson County lawmakers and legislative leaders who feared they could not pass a bill without Johnson County support.

Even before it was announced, the timing of today's ruling raised red flags for retiring Olathe Superintendent Ron Wimmer.

He said he was concerned that a relatively early decision could signal that the legislative package had raised significant judicial concerns and required lawmakers to return to Topeka this summer for a special session.

Schools plan has $1 billion tax jump
Districts' lawyers hope to have proposal ready in next couple of weeks
By Scott Rothschild, Journal-World, January 29, 2004

LINK

Topeka - Legislation to increase taxes by nearly $1 billion and overhaul the school finance system will be filed, debated and voted on, officials said Wednesday.

Attorneys for school districts that won a court ruling against the state said they hoped to have the bill ready in the next couple of weeks.

Increasing taxes by $1 billion "is possible and not as drastic as some would have you believe," said John Robb, of Newton.

Robb and Alan Rupe, of Wichita, represent the Salina and Dodge City school districts that alleged that the way the state funded education discriminated against minority students.

In December, Shawnee County District Judge Terry Bullock, of Topeka, agreed, ruling the $2.6 billion school finance system was unconstitutional, and gave the Legislature until July 1 to fix it. Bullock said the state shortchanged students by about $1 billion and cheated school districts with high minority enrollment from a fair amount of funding.

Wednesday, Rupe and Robb were invited to the Capitol -- a first in the nearly five-year history of the court battle -- to discuss the case with the Senate Education Committee.

Rupe said their proposed legislation would implement the Augenblick & Myers report on funding, which was cited by Bullock in his court order, as necessary to repair inequities in school finance. Plus, he said, the bill would increase state income, sales and property taxes to fund the measure. The Augenblick & Myers report was a consulting group's study of state school financing commissioned by the Legislature.

Neither attorney would provide details of the increases, saying they had only seen a rough draft of the bill earlier in the day.

But Rupe noted that while state taxes would increase, local property taxes in many districts would fall because there would be no reliance on local property taxes to supplement state school funding.

Education Committee Chairman Dwayne Umbarger, R-Thayer, said he was glad the schools represented by Rupe and Robb were going to put together the legislation.

"I think this will expedite the process," Umbarger said, adding that he would hold hearings and a vote in his committee on the measure.

But, he said, he doubted it would pass.

"I'm not betting on it, and I don't gamble," he said. "The question is how much money is the Kansas taxpayer willing to fork over."

Gov. Kathleen Sebelius has proposed a $304 million tax increase to fund a three-year plan for schools, but Rupe said that was inadequate.

"The kids with the greatest needs receive the least amount of money," under the current funding system, Rupe said.

Rupe said large and medium-sized school districts with high enrollments of minority and limited English proficiency students were getting the least amount of per-pupil aid from the state.

"That's not rocket science. It's a system that Judge Bullock found unconstitutional," he said.

In addition to Dodge City and Salina, a group of 13 more school districts are part of Schools for Fair Funding Inc., which will push for the legislation.

Lawrence Supt. Randy Weseman said the Lawrence school district didn't join the group because of fiscal constraints on the district's budget.

But Weseman said the Lawrence school district supported the findings of the Augenblick & Myers report and Bullock's ruling in the finance lawsuit.

School Finance: Laying Down the Law

SchoolFunding.info

A Costing Out Primer

LINK

An education adequacy costing-out study determines the amount of money actually needed to make available all of the educational services required to provide every child an opportunity to meet the applicable state education standards. A variety of approaches for undertaking such studies have been used in recent years in many states, including Kansas, Kentucky, New York, Ohio, Maryland, Montana, and Texas--in some cases as part of the development of a new funding system ordered by a state court. This policy brief describes briefly the concept and history of costing out and offers an overview of the four methodologies used for this purpose.

I – AN HISTORICAL OVERVIEW

Ever since states began to appropriate money to local communities to assist with the cost of education more than a century ago,1 state education finance systems have purported to provide a base adequacy amount. In its first incarnation, such state funding took the form of a flat state grant for each school child, theoretically in an amount sufficient to provide a minimum education. Because of insufficiencies in state funds and the inequity of providing the same amount of funding for students in both poor and wealthy districts, during the 1920s many states began adopting "foundation" programs. These required local school districts to levy taxes at a rate that was aimed at generating enough revenue to fund a minimum education, with the state supplementing the amount actually raised by poor districts when they did not yield the minimum "foundation level."

From the beginning, however, good intentions to support a meaningful foundation level were never realized. No real system was established to determine what the minimum foundation amount should be, and rarely were these foundation amounts set in accordance with any realistic analysis of the actual cost of a minimum education. Instead they tended to be established by the legislature based on the amount of funding currently available for educational funding without any relationship to actual needs.2 Even the base amounts initially established tended to erode over time because of budget pressures and competing political priorities.

The first sustained attempt to overcome the limitations of the historical foundation funding approach was undertaken in the early 1980s by Jay Chambers and Tom Parrish in two groundbreaking studies performed in Alaska and Illinois. In an attempt to "develop a basis for providing cost-based adjustments to the education funding allocations school districts received from the state,"3 they created a "Resource Cost Model" ("RCM"), which sought to identify and enumerate the specific resources that would allow for adequate educational opportunity.

The Resource Cost Model was further developed and enhanced in the 1990s in response to the standards-based reforms adopted in almost all of the states. These reforms established academic standards in each major subject area that reflected the state's expectations of the specific knowledge and skills that students should possess at the culmination of their high school education. The standards provided education finance researchers useful output measures for determining the "quantity and precise mix of resources needed to reach desired goals in education."4 The significance of these state outcome standards was further enhanced in 2001 by passage of the federal No Child Left Behind Act,5 which requires states to ensure that all students are proficient in the standards by 2014.

Judicial orders in education adequacy cases provided further impetus for methodological advances. Of particular significance in this regard was the 1995 order of the Wyoming Supreme Court,6 which required the state to calculate the cost of the "basket of goods and services" needed to provide all students with a "proper" education. Refining and expanding the Chambers-Parrish RCM, James Guthrie and Richard Rothstein developed a "Professional Development" approach, in which teams of professionals were asked to design an educational program that would meet stated proficiency goals, and to identify all of the specific resources that would be necessary for its success. After the basic prototype was established, the members of the professional judgment panels were also asked to consider whether extra resources would be required to provide certain types of students, such as those from low-income families, students with disabilities, or English Language Learners, with an adequate education. Once team members had identified the set of inputs required to achieve the stated goals, researchers determined the precise cost of obtaining those goods and services for Wyoming school districts through an extensive series of economic analyses and market pricing assumptions.7

A second major methodology was created by John Augenblick and John Myers in response to the education adequacy order of the Ohio Supreme Court in DeRolph v. State.8 This technique was originally called the "empirical" approach, but has come to be known as the "successful school district" method. It sought to identify those school districts that are currently meeting state standards, and then to use their average expenditure amount as a fair estimate of the actual cost of an adequate education. After removing "outliers," the Ohio researchers chose a sample of successful school districts by reference to six specific measures of student achievement and eight input measures, such as pupil teacher ratio and average teacher salary.9

The significance of the new costing-out methodologies is that they attempt to determine a true foundation level by identifying the specific conditions necessary to provide all children a reasonable educational opportunity and systematically determining the amounts necessary to fund each of these needs.10 Over the past 10 years, professional judgment and successful schools studies have been undertaken in over two dozen states, and two additional methodologies, the "expert judgment" and the "cost function" approaches, have been utilized in a more limited number of instances.11

A number of states have begun using accepted costing-out methodologies to determine the actual costs of meeting the mandates of the federal No Child Left Behind Act (NCLB). The Act includes requirements that states develop assessments based on state standards in grades 3-8, meet yearly proficiency targets, and implement a variety of remedies and sanctions when districts and individual schools fail to meet these targets. Studies in Hawai'i and Minnesota have focused on the administrative costs of implementing the Act, while studies such as those in Texas and Ohio have begun to address the issue of identifying the substantially larger costs of meeting yearly proficiency targets. A sound, consistent methodology for identifying and comparing the costs of achieving proficiency in all 50 states has not yet been developed.

II - A METHODOLOGICAL OVERVIEW

1. Professional Judgment Studies

Professional judgment has been the predominant costing out approach in recent years. In addition to the original and a follow-up Wyoming study, professional judgment has been utilized in at least 13 other states: Oregon, South Carolina, Maryland, Kansas, Nebraska, Indiana, Colorado, Missouri, Kentucky, North Dakota, Washington, Montana, and New York. Most of these studies have utilized techniques modeled after the original Wyoming model, but a number of variations on the basic theme have emerged. For example, the Oregon Council on the Oregon Quality Education Model, a 23- person body of legislators, educators, business leaders, advocates, and other community representatives appointed an expert staff and four separate subject-area work groups that devised prototype elementary, middle, and high schools. For each prototype the Council set forth a detailed list of "program elements," such as core staff, program staff, additional instructional time for students to achieve standards, and district administrative overhead. "Tangible assumptions" having a direct relation to cost, such as class size, age of building, and numbers of computers per pupil were then determined and specific cost assumptions for each prototype school calculated.12

The most extensive of the recent professional judgment studies is the New York Adequacy Study undertaken jointly by the American Institutes for Research and Management Analysis and Planning in 2003 and 2004.13 This effort involved 10 professional judgment panels (two consisting of educators from New York City, two from other urban districts, two rural, two suburban, and two focusing on special education). The results of their deliberations were synthesized through an elaborate set of computer analyses and then reviewed by a panel of outside experts, a stakeholders' panel, and a summary professional judgment panel before the specific elements of the synthesized prototype educational models were subjected to economic analyses and market pricing review. A geographic cost of education index was also compiled for this study and a small successful schools study was undertaken both to identify candidates for the professional judgment panels and to provide comparative data on salary patterns. Extensive public engagement processes were employed to identify the precise output standards that should be utilized by the panels and to provide further perspectives on the panels' recommendations.

2. Expert Judgment Studies

In two states, Arkansas and Kentucky, studies were recently conducted that derived resource needs from the literature on "proven effective" school reform models and from the judgments of "experts" who have developed or analyzed those models. In other words, in place of the diverse team of teachers, administrators, and school business officials that comprises the typical professional judgment panel, judgments in these studies are made by a small group of educational policy experts.

For example, in a recent Kentucky study, Allan Odden, Lawrence Picus, and Mark Fermanich set forth and then costed out each element of a high quality instructional program that was based on the latest "state of the art" research. This model included publicly funded pre-school programs for children aged 3 and 4 from poverty backgrounds, full day kindergarten, school sizes of 300-600 at the elementary level and 600-900 at the secondary level, school-based instructional facilitators, class sizes of 15 in grades k-3 and of 25 in other grades, collaborative professional development and extra help strategies for struggling students, family outreach, and technology.14 Overall this study concluded that Kentucky would need to increase spending by $740 million, or 19% above actual expenditures in the base year, to finance adequacy.

3. Successful School District Studies

Since the original Ohio study, additional successful school district analyses have been undertaken in at least eight other states: Mississippi, Illinois, Maryland, Kansas, Louisiana, Colorado, Missouri, and New York. "Successful schools" is essentially a statistical modeling approach that calculates the cost of an adequate education based on specific data regarding resource inputs, student test scores, and other precisely defined outcome measures. To undertake such a study one needs a clear definition of an agreed upon set of input and output standards and a way to measure them consistently for all school districts in the state. One reason that fewer states have used this methodology than the professional judgment approach may be that sufficient data is simply not available in all locales.

Recent successful schools studies have added additional factors to the straightforward inputs and outputs analyzed in the original Ohio study. For example, a report prepared for the New Hampshire Adequate Education Costs and Municipal Grant Distribution Commission offered four alternative ways of identifying high-performing districts based on various combinations of input and output factors. One of these alternatives uses "efficiency factors" that eliminate from the pool of model school districts those that provide services beyond a specified maximum level.15 An inverse variation on this theme is the model proposed by the Council of Great City School Districts, which bases the adequacy amount on the total per pupil expenditures of the 10% highest achieving districts in the state.16 In Maryland, the empirical analysis was done at the individual school level because the state has a total of only 24 school districts.

Identification of the standard for success has also taken on added complexity. In the recent New York study undertaken by Standard and Poor's, "success" was defined four different ways, resulting in differing numbers of "successful" school districts.17 Each definition resulted in substantially different expenditure levels needed to eliminate the identified adequacy gap. For example, under the most rigorous definition of "success" (which included only school districts that met the States 2007-08 performance index targets under NCLB, had a Regents diploma rate above the state average, and had a dropout rate below the state average), the statewide spending gap, using the New York Geographic Cost of Education Index and certain specified special needs weightings, was $8.75 billion; if, however, the criteria for "success" was those districts that have a simple, unweighted average of 80% or more of their test takers scoring at our above the current proficiency level on grade 4 English Language Arts and Math tests and receiving passing grades on five Regents graduation exams (the definition used by the State Regents for their analyses), the spending gap utilizing the same variables would be reduced to $6.03 billion.

4. Cost Function Studies

Cost function studies attempt to determine, through analyses of performance measures and cost indices, how much a given school district would need to spend, relative to the average district, to obtain a specific performance target, given the characteristics of the school district and its student body.18 The cost function approach differs from the successful school district approach in that it attempts to determine not only a level of spending that is correlated empirically with academic success, but also how that level may change for districts with different characteristics serving different student populations.

Cost function analyses cannot be done in every state because they require extensive state-wide data on per-pupil school expenditures, student performance, and various characteristics of students and school districts. The statistical analyses undertaken to equate levels of expenditure with specified outcome targets are quite complex and often are difficult for policy makers to understand. For these reasons, cost function analyses to date have mostly been theoretical modeling exercises rather studies that are ordered or utilized by legislatures or courts.

Recently, however, both the plaintiffs and the defendants in West-Cove School District v. Neeley, a Texas education adequacy case, submitted cost function analyses to the Court. Cost function was considered a practical and appropriate methodological approach in Texas both because of the exceptional range of data that is available in that state and because of the large variations in district characteristics and the large number of districts whose needs must be assessed. The first study, undertaken for the Legislature's Joint Select Committee on Public School Finance by Lori Taylor and other researchers at Texas A& M University, concluded that, for 2004, current aggregate spending in the state was at a level sufficient to provide all districts in the state the resources needed to allow 55% of their students to meet the state performance targets for that year; if no funds were to be re-distributed away from districts spending at levels higher than the adequacy level designated by the study, an additional $226-$408 million would be needed. The cost function analysis prepared by Andrew Reschovsky and Jennifer Imazeki for the plaintiffs, which used 3 differing outcome standard definitions and a number of different policy judgments, concluded that between $1.65 billion and $6.17 billion would be needed to meet the 55% successful performance measure. After considering at length the methodological and judgmental differences between the studies, the trial court accepted the Reschovsky/Imazeki study.19

See article for Notes

A Survey of Finance Adequacy Studies

In 2000, Augenblick & Myers provided an adequacy analysis for Maryland public schools. Below is the application for membership in the team that assisted in this effort:

Special Report

AUGENBLICK & MYERS - ADEQUACY ANALYSIS

I. INTRODUCTION

The Commission on Education Finance, Equity, and Excellence has contracted the services of Augenblick & Myers (A&M) to conduct an analysis of the adequacy of funding for Maryland's public schools. As a part of this analysis, A&M will use the "professional judgment model" to develop a base cost per pupil amount for all school districts (a parameter that could be used to establish the per student aid amount that is distributed under Maryland's foundation program). After developing a base cost per pupil amount, A&M will develop a series of adjustments to the base to reflect the cost pressures associated with students with special needs, including special education students, students from economically disadvantaged families, and students with limited English proficiency (LEP). The professional judgment approach requires A&M to use teams of educators to help develop the base cost per pupil amount. Below is a description of the way in which these teams will be used, the procedures that will be used to select the teams, and an application form for consideration for appointment as a team member.

II. PROFESSIONAL JUDGMENT APPROACH

The professional judgment approach that will be used by A&M involves the use of six teams of educators to specify the kinds of resources that are needed to achieve a particular set of objectives in prototypical elementary, middle, and high schools. A&M will also use an expert panel of educators to review the work of the prototype teams. After the needed resources have been identified, A&M will determine district level resource needs and price-out all of the needed resources to develop a total cost figure.

A&M will use two eight-person teams for each of the three kinds of prototype schools (i.e., two teams for the elementary school prototype, two teams for the middle school prototype, and two teams for the high school prototype). A&M will also use one eight-person expert panel to assist in reviewing the work of the prototype teams. MSDE, with the assistance of A&M, has developed criteria that will be used to select educators to participate in the prototype teams and the expert panel. MSDE has also developed a selection process that seeks to identify a good cross-section of knowledgeable and experienced educators that are representative of the State in terms of race, gender, and geographic region.

III. CRITERIA TO BE USED IN SELECTING PANEL PARTICIPANTS

A. Prototype Teams (total of six teams)
(1) Two Elementary School Teams (8 members on each team)

Current Position
2-3 elementary school teachers
2-3 elementary school principals
1-2 professors
1-2 association staff or other

Experience
At least 10 years in elementary education

Education
At least an M.A.

Recognition
Indications of recognized expertise would include awards, NBPTS certification, service on state, regional, or national committees

(2) Two Middle School Teams (8 members on each team)

Current Position
2-3 junior high/middle school teachers
2-3 junior high/middle school principals
1-2 professors
1-2 association staff or other

Experience
At least 10 years in junior high/middle school education

Education
At least an M.A.

Recognition
Indications of recognized expertise would include awards, NBPTS certification, service on state, regional, or national committees

(3) Two High School Teams (8 members on each teams)

Current Position
2-3 high school teachers
2-3 high school principals
1-2 professors
1-2 association staff or other

Experience
At least 10 years in high school education

Education
At least an M.A.

Recognition
Indications of recognized expertise would include awards, NBPTS certification, service on state, regional, or national committees
B. Expert Panel (one group with 8 members)

Current Position

2-3 superintendents
2-3 school district business officers
1-2 professors
1-2 association staff or other

Experience
At least 15 years in education, with 10 years in current title

Education
At least an M.A.

Recognition
indications of recognized expertise would include awards or service on state, regional, or national committees

C. Other Characteristics
A&M needs six eight-member prototype teams and one eight-member expert panel (56 people). In the aggregate, the members of the prototype teams and expert panel should be
somewhat representative of the entire State in terms of :

Geography
Race
Gender

IV. SELECTION PROCESS FOR PROTOTYPE TEAMS AND EXPERT PANEL

Post on MSDE's home page and the web site of the Commission on Education Finance, Equity, and Excellence notice of the Augenblick & Myers professional judgment study, along with the application form for professional judgment teams and information on the selection process for team members --- November 8, 2000

Commission on Education Finance, Equity, and Excellence
Dr. Alvin Thornton, Chairman

Contact Information

Maryland State Department of Education
200 West Baltimore Street
Baltimore, MD 21201

Resources in Education: From Accounting to the Resource Cost Model Approach