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Final 2013 Monitoring Report MON ITORING THE COST-BASIS OF THE K-12 WYOMING FUNDING MODEL Prepared by the LSO School Finance Section Prepared for Joint Education Committee & Joint Appropriations Committee Final Report – October 2013 Monitoring the Cost-Basis of the K-12 Wyoming Funding Model REPORT PURPOSE The 2010 recalibration of the Wyoming education resource block grant funding model determined funding for K-12 education exceeded the cost-basis of providing the statutorily required educational program to Wyoming school children. Although the 2011 Legislature forwarded K-12 funding at levels above those specified within the 2010 recalibration report as cost-based, it also recognized a need for a more robust or sophisticated process to monitor the cost-basis of the block grant model as it converges over time with Legislative funding levels. This monitoring process was established by law to provide the Legislature with a series of reports designed to enable informed decisions on model funding in the context of the overall statewide budget process. JOINT EDUCATION COMMITTEE MEMBERS Senator Henry H.R. "Hank" Coe, Co-Chairman Representative Matt Teeters, Co-Chairman Senator Jim D. Anderson Senator Paul Barnard Senator Bill Landen Senator Chris Rothfuss Representative Cathy Connolly Representative John Freeman Representative Hans Hunt Representative David Northrup Representative John Patton Representative Jerry Paxton Representative Garry Piiparinen Representative Albert Sommers JOINT APPROPRIATIONS COMMITTEE MEMBERS Senator Eli Bebout, Co-Chairman Representative Steve Harshman, Co-Chairman Senator Dan Dockstader Senator John Hastert Senator Curt Meier Senator Drew Perkins Representative Donald Burkhart, Jr. Representative Ken Esquibel Representative Glenn Moniz Representative Bob Nicholas Representative Tim Stubson Representative Sue Wallis LEGISLATIVE SERVICE OFFICE STAFF Dave Nelson, School Finance Manager Tania Hytrek, Staff Attorney Matthew Willmarth, School Finance Analyst Final Report – October 2013 i LSO SCHOOL FINANCE SECTION • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307)777-7881 • FAX (307)777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us Monitoring the Cost-Basis of the K-12 Wyoming Funding Model Table of Contents 2013 Monitoring Report ............................................................................................................................... 1 Wyoming Funding Model Resources: Consultant Recommendations vs. Current Law ........................... 1 Professional and Non-Professional Personnel ......................................................................................... 3 Non-Personnel (Educational Materials and Supplies, and Utilities) ....................................................... 3 Additional Information .............................................................................................................................. 6 External Cost Adjustment ......................................................................................................................... 7 Appendices Appendix A – Funding Comparisons “Wyoming Funding Model Resources: Consultant Recommendations vs. Current Law, School Years 2006-2007 to Estimated 2013-2014”, October 2013, Legislative Service Office Appendix B – Monitoring Labor Market Cost Pressures 1. “Current Status of Cost Pressures on Teacher Salaries in Wyoming”, Fall 2013, Department of Workforce Services Research and Planning Division 2. “Monitoring School District Human Resource Cost Pressures”, Fall 2013, Department of Workforce Services Research and Planning Division Appendix C – Certification letter from Dr. Christiana Stoddard on work performed by Department of Worforce Services Research and Planning Division Appendix D – Department of Education Resource Use Report “Continued Review of Educational Resources in Wyoming, 2005-06 through 2012-13, Report Update”, October 14, 2013, Department of Education Final Report – October 2013 ii LSO SCHOOL FINANCE SECTION • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307)777-7881 • FAX (307)777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us Monitoring the Cost-Basis of the K-12 Wyoming Funding Model 2013 MONITORING REPORT The 2010 recalibration of the Wyoming education resource block grant funding model (the “Model”) determined funding for K-12 education exceeded the cost-basis of providing the statutorily required educational program to Wyoming school children. Although the 2011 Legislature forwarded K-12 funding at levels above those specified within the 2010 recalibration report as cost-based, it also recognized a need for a more robust or sophisticated process to monitor the cost-basis of the Model funding levels as they converge over time with cost-based levels. The 2012 Legislature adopted a monitoring process which: 1. Identifies this convergence through four major funding categories within the Model: professional staff, non-professional staff, educational materials and supplies, and energy; and 2. Targets each Model category to a recommended set of price indices or labor market indicators. This monitoring process was designed to use readily available state, regional and national data as part of a set of relatively simple, understandable indicators of cost pressures. These indicators are to be viewed collectively when used by the Legislature for policy making decisions. The indicators are not to be considered in isolation of one another as individual indicators nor are they intended to be seen as definitively signaling any degradation of the cost-basis of the Model. The following core principles guide this process: 1. Cost pressures are identified when indicators show changes relative to previous levels, and trends are best identified when there are broad based changes in several measures; 2. All indicators have some transitory year-to-year variation and as such, the process seeks high quality data series that are consistent over time; 3. As new data collections are developed and become available, it is important to retain enough consistency with former measures to enable tracking of evolving trends in market conditions; 4. Changes in supply and demand conditions and changes in district outcomes are monitored; and 5. If several indicators reflect deviations from "historical" ranges, the process invokes the collection of a deeper set of cost data to confirm the presence of cost pressure. The 2010 recalibration effort estimated legislative policy choices resulted in a level of funding which exceeded cost by roughly $101.4 million. The most current estimate of this gap between the legislatively established Model funding level and the cost-based funding level approximates $87.2 million for school year 2013-2014. This report builds upon cost data comprising the indicators identified in the 2011 and 2012 monitoring reports, with multiple indicators for each Model category, as depicted below. WYOMING FUNDING MODEL RESOURCES: CONSULTANT RECOMMENDATIONS VS. CURRENT LAW A comparison of cost-based funding levels (as recommended by school finance consultants) and legislative funding levels has been made for K-12 education funding for the past several years. The Final Report – October 2013 1 LSO SCHOOL FINANCE SECTION • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307)777-7881 • FAX (307)777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us Monitoring the Cost-Basis of the K-12 Wyoming Funding Model Legislature has chosen to fund the Model in excess of the cost-based funding levels since the 2005 recalibration. As seen in Table 1, the differences between cost-based and legislative funding levels range from $68.1 million in school year 2006-2007 to an estimated $82.7 million in school year 2014-2015. The different funding levels can also be viewed graphically in Figure 1. Table 1. Cost-Based Funding Levels Compared to Legislative Funding Levels, School Year 2006-2007 to Estimated School Year 2014-2015. Cost-Based Legislative School Year Funding Level Funding Level Difference 2006-07 $974,384,621 $1,042,455,724 $68,071,103 2007-08 $1,051,584,249 $1,120,165,940 $68,581,691 2008-09 $1,114,929,855 $1,197,393,853 $82,463,998 2009-10 $1,166,146,943 $1,249,205,436 $83,058,493 2010-11 $1,210,135,687 $1,284,605,026 $74,469,340 2011-12 $1,238,547,690 $1,339,959,055 $101,411,365 2012-13 $1,282,008,100 $1,374,603,701 $92,595,601 Est. 2013-14 $1,295,544,492 $1,382,731,000 $87,186,507 Est. 2014-15 $1,316,461,688 $1,399,139,786 $82,678,098 Source: LSO Calculations and Analysis of Funding Models. Figure 1. Cost-Based and Legislative Funding Levels, School Year 2006-2007 to Estimated School Year 2014-2015. $1,500,000,000 $1,400,000,000 $1,300,000,000 $1,200,000,000 $1,100,000,000 Cost-Based Funding Level $1,000,000,000 Legislative Funding Level $900,000,000 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Est. 2013- Est. 2014- 14 15 Source: LSO Calculations and Analysis of Funding Models. A few observations about the differences between the cost-based funding levels and legislative funding levels over time: • The difference in funding for school years 2006-2007 through estimated 2013-2014 is primarily attributable to legislative funding of smaller class sizes than consultants recommend; Final Report – October 2013 2 LSO SCHOOL FINANCE SECTION • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307)777-7881 • FAX (307)777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us Monitoring the Cost-Basis of the K-12 Wyoming
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