Wyoming State Legislature LSO School Finance Office 213 State Capitol Telephone: (307) 777-7881 Cheyenne, Wyoming 82002 Fax: (307) 777-5466 E-Mail: [email protected] DATE: October 30, 2012 TO: Members, Joint Education Committee FROM: Dave Nelson SUBJECT: School Finance Monitoring Report. In accordance with W.S. 21-13-309(u), the report provides a series of reports for use in the process to monitor cost pressures on the Wyoming education resource block grant funding model during periods between model recalibration. The report also provides a series of tools for use by the Legislature if it is determined the infusion of funding into the block grant model is necessary or otherwise deemed appropriate. The following series of reports are included, identified by report tab: LSO Report A report providing an overview of the monitoring process, the relationship of the reports to the monitoring process, an update on the competiveness of teacher salaries and a district survey on general fund special reserve funds and general fund expenditures on local enhancements. A Work Force A report on monitoring school district human resource Services cost pressures. B Stoddard A report on market cost pressures on teacher salaries. C WDE An update report on the continued review of the use of educational resources. 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 October 30, 2012 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. JOINT EDUCATION COMMITTEE MEMBERS Senator Henry H.R. "Hank" Coe, Co-Chairman Representative Matt Teeters, Co-Chairman Senator Paul Barnard Senator Kit Jennings Senator Bill Landen Senator Chris Rothfuss Representative Bob Brechtel Representative Donald Burkhart, Jr. Representative Cathy Connolly Representative John Freeman Representative Kendell Kroeker Representative Samuel Krone Representative Bunky Loucks Representative Michael Madden JOINT APPROPRIATIONS COMMITTEE MEMBERS Senator Phil Nicholas, Co-Chairman Representative Rosie Berger, Co-Chairman Senator John Hastert Senator Curt Meier Senator R. Ray Peterson Senator Michael Von Flatern Representative Amy Edmonds Representative Ken Esquibel Representative Steve Harshman Representative Bryan Pedersen Representative William "Jeb" Steward Representative Samuel Krone Representative Sue Wallis LEGISLATIVE SERVICE OFFICE STAFF Dave Nelson, School Finance Manager Tania Hytrek, Staff Attorney Matthew Willmarth, School Finance Analyst October 30, 2012 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 Introduction ................................................................................................................................................... 1 Professional and Non-Professional Personnel .......................................................................................... 1 Additional Information ............................................................................................................................. 1 Non-Personnel (Materials/Supplies and Utilities) .................................................................................... 2 External Cost Adjustment ......................................................................................................................... 2 Professional and Non-Professional Personnel .............................................................................................. 3 Wyoming School District Use of Resources ................................................................................................. 4 Competiveness of Teacher Salary Schedules ................................................................................................ 5 Average Starting Salary, First Step ........................................................................................................... 5 Average Salary Schedule Step Pay at MA+0, 15 Years of Experience .................................................... 6 Salary Schedule Step Increments .............................................................................................................. 7 School District Survey of Special Reserve Funds and Enhancement Expenditures ................................... 12 Special Reserve Funds ............................................................................................................................ 12 Construction and Maintenance of Local Enhancements on Buildings ................................................... 17 Non-Personnel (Educational Materials/Supplies and Utilities) .................................................................. 22 External Cost Adjustment ........................................................................................................................... 25 Appendices .................................................................................................................................................. 26 Appendix A – “Monitoring School District Human Resource Cost Pressures: A Report to the Wyoming Joint Education Committee Fall 2012”, Department of Workforce Services Research and Planning Division ............................................................................................................ 26 Appendix B – “Current Status of Cost Pressures on Teacher Salaries in Wyoming: Report to the Joint Appropriations Interim Committee and the Joint Education Interim Committee, October 25, 2012”, Dr. Christiana Stoddard ................................................................................. 26 Appendix C – “Continued Review of Educational Resources in Wyoming, 2005-06 through 2011-12, Report Update”, October 22, 2012, Department of Education........................................ 26 ii October 30, 2012 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 INTRODUCTION 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 major funding categories within the Model; i.e., certified (professional) staff, classified (non-professional) staff; non-personnel items (materials/supplies) and energy (utilities); 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. The 2011 monitoring report emphasized however, that the monitoring indicators are not to be considered in isolation of one another nor, as individual indicators. Nor are they intended to be seen as definitively signaling a degradation of the cost-basis of the Model. Rather, the report emphasized the indicators are to be viewed collectively when used by the Legislature for purposes of policy making decisions. In the event that several indicators may reflect deviations from "historical" ranges, as computed by state consultants, the 2012 Legislature chose to invest in the collection of a deeper set of cost data to confirm the presence of cost pressures on Model components which if confirmed, could be used to inform the Legislature of actions necessary to address any such identified cost pressure. This report begins the process to initiate that set of cost data which would buttress the indicators identified in the 2011 monitoring report. The series of information included within this monitoring report consists of multiple indicators for each Model category, as depicted below. PROFESSIONAL AND NON-PROFESSIONAL PERSONNEL The 2011 report series for the professional personnel Model category included five data-based indicators focused on teacher salaries related to labor market and demographic patterns, together with four data- based indicators related to district hiring capabilities. The 2011 report series for the non-professional personnel Model category also included specific indicators such as the comparability of non-teaching salaries and turnover rates. Reports conducted by the Research