School Finance Synopsis

 

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C. Education Resource Block Grant Model

 

The Education Resource Block Grant Model, commonly referred to as the MAP model, is based upon recommendations contained within the cost of education study completed and submitted to the Legislature by Management Analysis & Planning Associates (MAP) in April 1997.  The model provides the Legislature a mechanism to ensure each Wyoming student receives an equal opportunity to receive a proper education (legislatively determined basket of educational goods and services) by specifying the instructional and operational resources necessary to provide this basket.  The model accomplishes this by systematically determining the competitive market costs of educational operating resources and aggregating these costs within each school district.  A total revenue amount in the form of a "block grant" is provided to each school district to facilitate provision of the basket.  The actual dollar amount of the block grant is a function of an interaction between the model components necessary for implementation of the basket and the characteristics of the schools and students within a particular district.

 

1. Average Daily Membership

 

The model uses students, measured by average daily membership (ADM), as the basis upon which resources are distributed.  This method of computing student enrollment is a carry-over from the pre-existing classroom unit-based foundation program, and simply represents the aggregate number of students present compared to student absences and the number of days schools are in session.  Several points with respect to ADM are worthy of note:

 

·        ADM is based upon prior year student enrollments;

 

·        To compensate for annual student enrollment fluctuations, ADM is averaged over three prior years;

 

·        ADM for kindergarten students is divided by two to reflect half-day kindergarten programs and to generate full-time equivalent (FTE) attendance.

 

For any school year, and upon request of a school district, the ADM may be recomputed to compensate for any significant increase in student enrollment during that school year.  This adjustment is referred to as "recalculation".  A recalculation is made if during the first sixty days of the school year, the ADM of a district has increased by either 100 or ten percent over the same time period during the previous school year.  Additionally, a recalculation of ADM is made if by February 1 of the school year, student enrollment has increased by fifteen percent over the first sixty days of the prior school year.

 

2. Model Prototypes

 

A "prototype" is constructed for three different grade-level groupings, with enrollment and class sizes specified for each grouping.  Different assumptions are made for each of the three school prototypes as to the resources and associated costs necessary to provide the basket.  These resources or cost elements are values used by the model to determine overall education operating costs and to compute school district operating revenue eligibility.

 

The model, as adopted by the Legislature, is based upon the following grade-level configurations and sizes:

 

Grade-Level Grouping            Class-Size          School Size

 

Elementary (Grades K-5)                  16                          288

Middle (Grades 6-8)                           21                          300

High School (Grades 9-12)               21*                         600

 

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*Class size for the high school model prototype in effect during school year 1998-1999 was 19, which was subsequently increased by the 1999 Legislature to 21 commencing with the 1999-2000 school year.

 

 

The model assigns students to the appropriate prototypical grade-level grouping in the event a district uses grade-level groupings different from the prototypes.  It is important to note that the prototypical school configuration is used only to compute school district revenue eligibility.  The model does not dictate practice.

 

By national standards, class sizes and total enrollment specifications for each model prototype are small.  The Legislature chose to retain small school and class sizes in adopting the current prototypical model configurations.  These configurations, when compared to existing Wyoming school sizes, are larger than most schools, but most Wyoming students are enrolled in schools which are as large or larger than the prototypes.  A relatively small number of Wyoming school districts comprise a significantly large percentage of total statewide student enrollment.  It is also important to recognize that the class size assigned by the model to any prototypical school will become the primary driver of overall education costs.

 

The model assigns dollar values to each defined characteristic or component within each prototypical school.  The dollar values represent cost elements.  The primary source of information used in determining the costs of these prototype components is district actual expenditure data or that price paid by districts for specific goods and services involved with the provision of any one model component.  Only in a few isolated instances has data been derived from sources other than district expenditure data, primarily due to the lack of sufficient district information.

 

The 1998 and 1999 Legislatures updated expenditure data used in determining component costs to reflect school year 1996-1997 district actual expenditures.  Prior to this update, model component costs were based upon school year 1995-1996 expenditure data, which represented the most current expenditure data available at that time.

 

3. Prototype Components

 

Twenty-five specific cost components necessary to deliver the basket are contained within the prototype for each grade-level grouping.  These cost components can be grouped into five major categories, as follows:

 

Personnel

Supplies, Materials, Equipment

Special Services

Special Student Characteristics

Special School/District/Regional Characteristics

 

(a)   Personnel.

Personnel costs consume a significant majority of the total operational budget for any school district.  The primary determinant of the number and type of positions a district requires is class size.

 

The model separates personnel into two categories based upon levels of professional and occupational training and required state licensure.  This differentiation results in certified personnel (requires state certification) and classified personnel (certification not required as a requisite for employment).  Within the certified personnel category, several subcategories are established consisting of teachers, substitute teachers, specialized professionals (counselors, psychologists, etc.), librarians and pupil services personnel, and administrators.  Three additional subcategories are identified within the classified category which include instructional aides, clerks and data entry personnel, and operations and maintenance personnel.  The cost factor for each subcategory is based upon an aggregate amount or "total compensation package" including salaries, mandatory fringe benefits (retirement) and health benefits.

 

An adjustment for differences among districts in the experience level of teachers is included within the aggregate cost factor for certified personnel, which is commonly referred to as the teacher seniority adjustment.  The adjustment provides equity among districts resulting from seniority differences by comparing the cost of seniority for each district to the statewide cost for seniority.

(b) Supplies, Materials and Equipment.

Per student costs for supplies and materials are based upon data reflecting existing school district practice, and vary by prototypical school to capture instructional program differences.  Included within the supplies and materials cost component are items regularly used by teachers and other employees in the day-to-day instructional, clerical and custodial operation of the school.  Of note, the model increases per student costs for textbooks to ensure a six year replacement cycle.

 

The equipment cost component is designed to reflect district expenditures for equipment items used for instructional purposes such as computers, calculators, scientific displays, vocational education equipment and specialty items such as gymnastic equipment.

 

Technology.  Special mention is made of technology due to the relative importance given this component by the Legislature.  Technology is considered to hold promise for improved student knowledge, especially in small remote schools.  In addition to including a model component providing per student equipment funding within the total block grant amount, the Legislature has provided for education technology in the following programs:

 

 

 

 

(c) Specialized Services.

(i) Food Service.  With the exception of schools eligible for the small school adjustment, the model assumes food service is self-sustaining.

 

(ii) Student Activities.  The model component for student activities captures costs associated with such activities as athletic events, debating teams and student government.  District expenditures for this component vary significantly between high and low revenue (rich and poor) districts.  The model imputes a statewide average per pupil cost for this component, varied according to prototypical school type.  Additionally, the small school adjustment provides reimbursement for actual student activity expenditures and the transportation adjustment provides reimbursement for student transportation expenditures associated with activities.

 

(iii) Professional Development.  To provide districts the ability to ensure instructional personnel have regular access to training, the model incorporates a cost component for professional development.  Actual district expenditures under this category were increased to address anticipated future needs in this area.  The imputed costs vary slightly by prototypical school model.

 

(iv) School District Operation.  Maintenance and operation, administration, transportation and assessment are expenditure categories incorporated within the model formula to reflect costs assumed to be borne by the district to serve the schools within its boundaries.  These components are costed on a per student basis, varied by school prototype.

·        Maintenance and operation expenses are computed as a function of ADM and are often referred to as routine maintenance expenses primarily involving daily custodial and groundskeeping activities, minor equipment and facility repairs and preventive maintenance programs.  The costs imputed under this component are separate from expenses incurred by districts for major maintenance needs.  Major maintenance payments address deferred maintenance and other major maintenance needs and are discussed later in this report.

·        Administration expenses are intended to address district expenditures for functions such as central district administration, business administration and local school board expenses.  The model also aggregates into the overall administration cost component expenditures for transportation incurred by district employees and officials.  This cost category is separate and apart from the adjustment for student transportation expenses.

·        Transportation expenses reflect district incurred costs for actual home-to-school and student activities transportation and are computed on a statewide per student average cost basis.  This amount is subsequently adjusted for each district based upon actual cost experience.  Because of the complexity of the model adjustment for this component, a separate section of this report is devoted to a discussion of this computation.  The model also provides reimbursement for school bus purchase/lease capital expenditures incurred by districts through an adjustment to the prototypical model.  This adjustment is also discussed within the section devoted to the transportation adjustment appearing later within this report.

·        Assessment is a cost component reflecting district expenditures for administering student assessments conducted by the district apart from and in addition to the statewide student assessment.

(d) Special Student Characteristics.

The model attempts to avoid segregation of students with special needs by assuming resources for small schools, small class sizes, teaching specialists and professional development sufficient to enable teachers to deal more effectively with special needs students within the classroom setting.  The model identifies four categories of special students:

 

(i) Special Education.  The special education component reflects programs and ser-vices provided to individuals identified with specific disabilities for which there exists a legal right to appropriate educational services.  A statewide average per student amount for special education is incorporated into the prototypical model, which is subsequently adjusted to reflect district actual expenditures.

 

(ii) Gifted Students.  To address programs and services for the special needs of gifted students, the model includes a component providing a set dollar amount per identified student.  The component is developed under an assumption that three percent of the entire student population is comprised of gifted students.  This assumption is based upon a broader measure of intelligence and special talents, compared to a more focused but recognized measure of two percent.

 

(iii) Limited English Proficient Students.  Additional resources are available under the model to address the special needs of districts in providing programs and services to large concentrations of students whose first language is other than English.  A component amount is incorporated into the model which is predicated upon school site concentration levels of students identified and assessed as limited English proficient pursuant to State Department rules and procedures.

 

(iv) Economically Disadvantaged Youth.  The model also recognizes and addresses the additional services required for those students from economically disadvantaged backgrounds.  Although the relatively small pupil-teacher ratios existing within Wyoming enable teachers to provide necessary services and attention to economically disadvantaged youth (EDY), the model provides additional support for those schools enrolling large concentrations of EDY students.  A component amount is included within the model based upon the percentage of students by school type within the district qualifying for the federal free and reduced lunch program, which is compared to the statewide average.

 

DISCUSSION:  The model components for special student characteristics in large part address those student populations previously served under categorical programs included within the classroom unit-based foundation program.  These categorical programs were not included in the general operating funds of a district and were separate dollar amounts received through state grants.  Categorical programs included gifted and talented, compensatory education (at-risk students) and behaviorally disordered, and provided grants to districts for identified students capped at thresholds based upon percentages of total district enrollment.  However, the model does NOT trace funding available for these student populations to the individual child.  Rather, funding is provided through an amount added to the district block grant amount.

 

(e) Special School/District/Regional Characteristics.

Individual schools, districts and the regions of the state in which they are located can be significantly different from one another for a variety of reasons.  The model recognizes this uniqueness by making specific adjustments to the prototypical models to account for these differences.

 

(i) Necessary Small Schools.  Population sparsity or geographic features may necessitate district operation of small schools.  The Legislature recognizes that the operation of small schools generally costs more due to significant diseconomies of scale as fixed costs are spread over relatively few students.  To ensure delivery of the basket to students attending small schools, the model disproportionately subsidizes small schools to compensate districts for these additional operating costs.

 

Model adjustments are made for both necessary small elementary schools, defined as kindergarten through grade eight with an average of 200 students (ADM) or less for the current school year and the two preceding school years, and for necessary small high schools, defined as grades nine through twelve with an average of 400 ADM or less for the current and preceding two years.  An additional adjustment on top of the small school adjustment is made for unusually small elementary schools, defined as 30 or fewer K-8 ADM, and unusually small high schools, defined as 48 or fewer 9-12 ADM.

 

In accordance with law, the State Superintendent identified those schools existing on or before July 1, 1998, which qualified as small schools based upon statutory criteria.  After July 1, 1998, a new small school or a grade reconfiguration of an existing small school requires prior approval of the State Superintendent.  In addition, and commencing July 1, 1999, the State Superintendent is required to identify and review the cost effectiveness of each small school experiencing a significant decline in enrollment, defined as less than 75% of the average ADM for the preceding two school years.  The review applies only to qualification as a necessary small school and not to the authority of the district to operate the school.  The approval process requires the State Superintendent to consider the relative advantages of academic program quality, school facilities, capacity and student travel time, any extraordinary circumstances facing the district and the cost effectiveness in comparison to other alternatives in providing the basket.

 

An additional necessary small school qualification criteria was imposed by the Legislature for school years 2000-2001 and 2001-2002.  To qualify, a school must be established before January 1, 2000, and the school meets the small school ADM criteria for the first sixty days of the 1999-2000 school year or the school meets the ADM criteria solely from a decrease in students in the geographic area and not from grade reconfiguration.

 

A separate section of this report is devoted to a discussion of the mechanics of this model adjustment.

 

(iii) Small District Adjustment.  Similar to the rationale for an adjustment for necessary small schools, the model incorporates an additional adjustment to compensate small school districts for disproportionate fixed costs incurred in delivering the basket to resident students.  The adjustment applies to districts under 1350 ADM and provides additional funds for small districts operating schools in more than one community, for small district administrative costs and for district maintenance and operations funds.

 

A separate section of this report provides a more detailed discussion of the model adjustment for small districts.  Additionally, this adjustment was added by the 1999 Legislature as one component of a small school funding package.

 

(iii) Regional Cost-of-Living Adjustment.  To compensate for differences in the real costs of providing the basket in different regions of the state, the model provides an adjustment based upon a revenue index calculated from consumer prices.  An index of consumer prices better defines the relationship between educational costs in different communities than does a measure based solely upon community expenditure levels.

 

The revenue index used by the model is a modified version of the Wyoming Cost-of-Living Index (WCLI), termed the revised-net-WCLI-2.  The WCLI includes 140 separately priced items, aggregated into several categories consisting of housing, transportation, food, recreation and personal care, medical and apparel, and weighted in the order presented.  The revised-net-WCLI-2 eliminates medical and the shelter rental subcomponent of the housing component, and re-weights the balance of index items accordingly.  To avoid erratic fluctuations in the adjustment, the model uses a rolling average of the revised-net-WCLI-2 index numbers rather than basing the adjustment only upon the most recent data.

 

The regional cost-of-living adjustment is applied to eligible district personnel costs and uses Albany and Laramie counties as the basis to which all other counties are adjusted.  A base comprised of Albany and Laramie counties provides a broad representative labor market, not readily available elsewhere within the state.

 

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