School Finance

State revenues remain on steady course

New state revenue forecasts don’t significantly change the amount of money available to spend on K-12 schools, the issue expected to dominate education debates during the upcoming legislative session.

OSPBReportCover122013The quarterly revenue forecasts issued Friday also included the annual projections on school enrollment provided by legislative economists.

Statewide school enrollment projections show increases of 1.5 percent in 2014-15 and another 1.4 percent the following year. Assessed property values are expected to rise 2.2 percent next year, 5.9 percent in 2015 and 2.9 percent in 2016.

Enrollment is important for school districts because it’s the key factor in determining how much state funding they receive. And growth in property values influences how much money districts can raise locally.

Overall, “Colorado’s economy is continuing to expand and should see solid growth through the remainder of 2013 and 2014,” said the forecast from Legislative Council staff economists.

The projection from the executive branch Office of State Planning and Budget also cited growth but noted, “The economy is always vulnerable to adverse, often unexpected, events that could strain budget conditions.”

Economic activity drives state tax revenues, and both forecasts see little change in revenues from September’s predictions. The December forecast sets the table for budget discussions during the first part of the 2014 legislative session, and the March forecast drives final budget decisions.

Natalie Mullis, chief legislative economist, told lawmakers, “Right now is when you have the greatest budget flexibility,” because in future years automatic diversions to transportation and constitutionally required tax refunds may limit spending on other programs.

The December forecast is closely watched by the education community because it includes a school finance projection from legislative staff.

Economist Todd Herreid’s presentation to the Joint Budget Committee laid out these key projections:

  • To maintain current 2013-14 per-pupil funding of $6,652, lawmakers will need to add $55 million to the budget to account for enrollment growth higher than projected last spring, when the budget was written.
  • Schools will need an increase of $260 million over current spending of about $5.5 billion to cover 2014-15 enrollment growth and inflation, as required by the state constitution. That would take average per-pupil funding to $6,845.
  • The increase would have to rise to $297 million if lawmakers want to maintain what’s called the “negative factor” at current levels.

The negative factor is a formula lawmakers have used in recent years to keep K-12 funding at a level necessary to balance the overall state budget. It’s estimated that use of the factor has left school funding at least $1 billion lower than it would have been otherwise.

School districts and education interest groups are going to push hard to reduce the amount of the negative factor, something that might meet resistance from the Hickenlooper administration and the JBC because of their concerns about pressuring other parts of the state budget and about creating a level of K-12 spending that could be vulnerable to cuts during future downturns.

During a pre-session meeting with reporters Thursday, Hickenlooper said he was open to discussions about reducing the negative factor but didn’t indicate how high he might be willing to go.

A key focus of negative factor debates will be the State Education Fund, a dedicated account used to support both base school funding and special programs.

Map
Map shows projected enrollment changes by district. (Click for larger view.)

Because some recent state surpluses have been channeled into the fund, it’s expected to have a balance of more than $1 billion this year. That’s a tempting target for lawmakers interested both in trimming the negative factor and in funding pet projects. But the JBC and the administration want to carry a reasonable State Education Fund balance into future budget years as a cushion.

The legislative staff enrollment projections show continuation of regional differences that have existed for several years.

While statewide growth is projected at 1.4 percent, growth of 1.7 percent is forecast for Denver-area districts, and 1.6 percent is expected for the northern Front Range, while several rural areas are expected to see very small or no enrollment growth.

Do your homework

$$ and schools

Memphis philanthropists, school leaders talk funding strategies at D.C. forum

PHOTO: Marta W. Aldrich
Philanthropic and education leaders from 16 cities, including Memphis, attended a forum Oct. 5 in the nation's capital hosted by the DC Public Education Fund.

Memphis school and philanthropic leaders were in the nation’s capital Thursday to hear how a local philanthropic group has raised $120 million for school initiatives in Washington, D.C.

The Memphis contingent joined representatives from 16 other cities at a one-day forum hosted by the DC Public Education Fund on its 10th anniversary. The goal was to learn about how private donors have contributed to a decade of growth in District of Columbia Public Schools, its organizers said.

Memphis has an active philanthropic community seeking to improve the quality of public education through Shelby County Schools, the state-run Achievement School District, and the city’s charter schools. Millions of dollars in education grants from national organizations like the Bill & Melinda Gates Foundation and Walton Family Foundation also have flowed into the city. This month, the last of a $90 million Gates grant that launched in 2009 for teacher and leader development will dry up for Shelby County Schools. (The Gates and Walton foundations also support Chalkbeat.)


Here’s how $90 million from Bill Gates spurred sweeping changes in Memphis


In recent years, Memphis philanthropists have sought to become more coordinated in their investments through the Memphis Education Fund, formerly known as Teacher Town. It’s considered a younger peer to the DC Public Education Fund, and both act as an intermediaries between their cities’ school systems and philanthropies. The older D.C. organization works closely with D.C. Public Schools to identify needs and fill them in collaboration with foundations.

The forum’s speakers included D.C. Public Schools Chancellor Antwan Wilson and two of his predecessors, Michelle Rhee and Kaya Henderson, who brought sweeping reforms to the district from 2007 to 2016.

The forum was meant to “reflect on a decade of transformation and to celebrate DCPS’ progress as the fastest-improving school district in the nation,” said Jessica Rauch, executive director and president of the DC fund. “Other cities are coming to learn from our partnership model and, we hope, will be inspired to implement some parts of our approach in their home cities.”

That means more than just writing checks. The agenda included strategies for supporting innovations in curriculum, celebrating excellent educators, empowering males of color, and partnering with families to accelerate student learning.

The gathering of philanthropic and school leaders took place at the newly modernized Paul Laurence Dunbar High School, the nation’s first public high school for black students.

study says...

Democratic governors boost funding for schools with more black, Hispanic students. (Test scores, not so much.)

PHOTO: Andy Cross, The Denver Post

Elections have consequences, goes the common saying — and that turns out to be true in schools.

A new study finds that electing a Democrat for governor leads to more money being spent in districts with more students of color, though there’s no evidence that meant higher test scores or smaller achievement gaps.

“School districts with a high share of minority students receive significantly greater transfers from the state government than other districts when a Democrat is elected,” write researchers Andrew Hill and Daniel Jones in the peer-reviewed Journal of Economic Behavior and Organization.

It’s one of only a few studies to directly examine how politicians’ partisan affiliation affects education policy. Another recent analysis found that Democratic school board members in North Carolina led to more racially integrated schools.

Of course, state governors don’t unilaterally make education policy, but they are likely to have significant sway, as this study suggests.

In order to isolate the effect of electing a Democrat versus a Republican, the latest study looks at governors’ races between 1990 and 2013; the paper focuses on 67 closely decided races of the nearly 300 elections. The idea of this common research approach is that the results of a narrowly decided election are essentially random.

First the researchers look at whether a governor’s party led to a greater overall increase in education spending. The effects here were modest: Democratic governors increased K-12 spending by about $100 per person more than Republicans, though there was no difference in higher education expenditures.

But when looking at how resources were distributed — rather than how much money was spent overall — the results were more stark.

Electing a Democratic governor led to an increase of about $500 per student for districts with a majority of black and Hispanic students, relative to whiter districts, simply because under them the money was distributed evenly between high-minority and whiter districts. In contrast, under Republicans total spending was higher in whiter districts.

Similarly, the study finds that Democratic governors targeted additional money to colleges and universities that serve more students of color.

So did this this distribution of spending lead to higher achievement or smaller test score gaps? Apparently not, according to the researchers’ analysis of the federal NAEP test.

“We find no evidence that a Democratic governor leads to higher NAEP scores during her term,” Hill and Jones write. “Moreover, despite the large shift in funds to school districts with a large share of minority students, we do not observe a shrinkage of the black-white score gap.”

It’s not clear why that’s the case — and perhaps surprising in light of recent research showing that students benefit when more money is spent on schools.

It could be that other policy changes by governors swamp school spending effects, that gains from school spending take several years to manifest on NAEP, or that spending went to areas that might be beneficial but don’t show up in test scores. It’s also possible that the increase in spending was simply not an effective way to improve schools.

The paper also examines why governors from different parties distribute money differently — is it based on politics or policy? It looks to be more the latter. Democrats were not any more likely to send money to districts with higher share of Democratic voters or electorally competitive districts.

But in other respects governors do seem to be affected by politics. “Lame duck” Democrats — those in their final years in office who could not run for re-election — seemed to lead to a greater increase in overall spending.

K-12 education spending “increases when a Democratic governor is elected, and this increase is substantially larger during ‘lame duck’ terms,” the study says. “It seems as if governors are constrained by political considerations when increasing spending on elementary and secondary education; although it increases, their preferences might be for even larger increases.”