School Funding Facts

1

• School Funding Facts Figures
• Associated School Boards of South Dakota
• Brian Aust Director of Communications
• December 17, 2007

2
What well talk about

• Numbers, Rankings, Statistics
• Comparing South Dakota to the nation and other
  states
  
• Why are teachers paid poorly in South Dakota?
• School district budgets
• South Dakotas budget

3
Why are we talking about it?

• Inadequate funding is a major problem for South
  Dakota schools
  
• Adequacy Study State short by 133 - 400
  million
  
• More than 20 million in opt-outs
• Program cuts
• Hiring and keeping teachers
• A need to expand the discussion
• Look outside our box to examine trends, see how
  other states are reacting to the challenges
  facing education in an NCLB world
  
• Create urgency and expectation to act

4
The data we use

• School finance data taken from U.S. Census Bureau
  figures
  
• Most accurate, current data available
• Released earlier this year, data from 2005
• Other education data taken from National Center
  for Education Statistics
  
• Other data taken from reliable government
  sources.

5

• Revenue Realities
• South Dakota ranks last in the nation in state
  per-student investment in K-12 education

6
Revenue Realities
Most federal funds must be used for specific
federal programs and contain supplement-not-suppl
ant clauses that ensure federal funds do not
replace local or state dollars.
Represents a 33 increase since the passage of
NCLB
7
Revenue Realities
8

• Spending Realities
• South Dakota ranks 31st in the percent of funds
  spent on instruction

9
Spending Realities
Definition of instruction expenditures
excludes several expenditures that are essential
to provide a quality education, including
expenditures on administration, curriculum
development, teacher training, essential support
personnel (guidance counselors, nurses), and
transportation.
10
Spending Realities
South Dakota has a lower student-to-teacher
ratio than 39 other states. Generally speaking,
lower student-to-teacher ratios are desirable.
Compared to most states, South Dakota
districts employ less administrative and support
staff relative to the student population served.
11

• Rural Realities
• Other rural states invest significantly more on
  K-12 education than South Dakota

12
Rural Realities

• WAIT A MINUTE!
• South Dakota ranks 41st in expenditures why do
  our public schools need more?
  

13
Rural Realities
States spending less that South Dakota, from
highest to lowest, are North Carolina, Kentucky,
Alabama, Tennessee, Nevada, Oklahoma,
Mississippi, Idaho, Arizona and Utah.
14
Rural Realities

• Education systems in low spending states do not
  look like South Dakotas system
  
• Serve many more students, higher student-teacher
  ratios
  
• Why does South Dakota spend more?
• South Dakota Only one characteristic is
  recognized as requiring more funds to educate a
  student
  
• Attending a small school
• Small school adjustment (additional 800)
• Sparsity factor (to qualify 0.5 students/sq
  mile)
  
• SFR looks at national-level sparsity.

15
Rural Realities

• Low spenders are not as rural as South Dakota
• SD Comparison Assumes Wilmot School District
  could realize the same economies of scale as the
  Aberdeen School District
  
• Wilmot 7,652 Aberdeen 6,404
• Just like economies of scale work for some South
  Dakota districts, economies of scale work for
  states too
  
• Simply South Dakota is too rural to be compared
  to the low spenders in the nation.

16
Rural Realities
17
Rural Realities
States with less than 5 students per square
mile include Nebraska, Nevada, Idaho, New Mexico,
South Dakota, North Dakota, Montana, Wyoming and
Alaska
18
Rural Realities
States with less than 5 students per square
mile include Nebraska, Nevada, Idaho, New Mexico,
South Dakota, North Dakota, Montana, Wyoming and
Alaska
19
Rural Realities

• What does this tell us
• Other states embrace their rural nature and
  provide public education with resources to
  overcome economies of scale
  
• Rural states spend below the national average,
  but significantly higher than South Dakota
  
• Rural states have different needs
• South Dakota, which contributes nearly 1,900 per
  student less than other states, does not
  adequately fund K-12
  

20

• Regional Realities
• South Dakotas low cost of living does not
  compensate for low teacher salaries

21
Regional Realities

• Why compare South Dakota to surrounding states?
• Competing for limited supply of teachers
• Since 2005, some surrounding states have devoted
  significant increases to K-12
  
• North Dakota 100 million, more to come
• Iowa 178 million for teacher salaries
• Wyoming 40,000 average starting salary
• Facing declining enrollment, just like SD

22
Regional Realities
23
Regional Realities
24
Regional Realities
25
Regional Realities

• South Dakota receives less per-student and spends
  less per-student than surrounding states
  
• Lowest state revenue
• Lowest average teacher salary

26
Regional Realities

• 56 million If we want to bring teachers up to a
  regional average
  
• But, just looking at average salary is an
  incomplete comparison
  
• Multiple factors influence teacher salaries
• Adequacy study comparison included starting
  salary, experience, education, and COST OF LIVING

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Regional Realities
Taken from Estimating the Cost of an Adequate
Education in South Dakota.
28
Regional Realities

• 32.4 Million If we wanted to pay teachers
  comparably ALL FACTORS CONSIDERED
  
• Supply/Demand
• Demand for teachers is high
• Supply is short
• Salaries become issue
• Low salaries hamper South Dakotas ability to
  compete
  
• Application pools dwindling, staff positions
  going unfilled
  

29

• State Aid Realities
• Low state funding is a barrier to hiring, keeping
  teachers

30
State Aid Realities

• South Dakotas state aid formula is the primary
  source of school districts discretionary
  revenue
  
• Increasing teacher salaries requires additional
  state aid
  

31
State Aid Realities

• After excluding federal revenues, the state aid
  formula makes up 84 of a districts
  discretionary revenue.
  
• Vast majority of fed funds arent discretionary

32
State Aid Realities

• Salaries and benefits comprise 81 of SD
  districts expenditures
  
• Increases in salaries and benefits cannot exceed
  the increase in the state aid formula over an
  extended period of time
  
• If they do, the districts budget will inevitably
  go in the red

33
State Aid Realities

• Relationship is not only theoretical
• Between 1998 and 2005, South Dakotas average
  teacher salary as increased by 22, or 2.9
  percent per year.
  
• Over the same period of time, the per-student
  allocation, the amount guaranteed by the state
  aid formula, has increased 19, or 2.5 per year.

34
State Aid Realities

• SoIf South Dakota ranks 41st in the amount spent
  on K-12, why are South Dakota teachers paid 51st
  in the nation?
  
• State aid is based on a low per-pupil amount that
  doesnt reflect the needs of our rural education
  system
  
• and the state provides the lowest amount of
  per-student aid in the country
  
• meaning districts have less discretionary
  revenue that can be used to give increases to all
  teachers.
  
• Local property tax payers carry too much of the
  burden already its time for the state to
  provide additional funding for K-12 education.
  

35

• State Budget Realities
• Percent of the state budget devoted to K-12 has
  declined over the past decade.

36
State Budget Realities

• Since 1998, state lawmakers have shifted
  approximately 7 cents of every state dollar away
  from K-12 education and toward other areas of
  state government.
• Percentages calculated using general
  appropriations bills, retrieved from Legislative
  Research Council.
  
• Percentages include general state aid to
  education and state aid to special education.

37
State Budget Realities

• Overall, education is less of a priority than it
  was a decade ago
  
• K-12s share of the education budget is lower
  than a decade ago
  
• If the relationship stayed the same from 1998 to
  2008, K-12 could have approximately 764 more
  per student today (approx. 92 million).

Percentages based on each general appropriation
bills from each year.
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• Closing Comments

39
Closing

• K-12 Education in South Dakota is not adequately
  funded
  
• First step is to realize the problem help
  parents, community members and legislators
  understand
  
• Statistics only go so far tell your story.
• South Dakota must embrace our rural nature and
  provide districts with adequate resources to
  overcome the challenges of delivering education
  in South Dakota.
• Dont tell me your priorities, show me your
  budget.
  
• K-12 needs to be a priority again

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Closing Comments

• Watch for School Funding Realities in the coming
  weeks
  
• Additional realities, more graphics, and expanded
  data.
  

41
Closing Comments

• Questions
• Brian Aust
• ASBSD Director of Communications
• 605.773.8382
• baust_at_asbsd.org