Transcript Task Force on School Cost Reduction
Task Force on School Cost Reduction
PASBO Annual Conference Thursday, March 6, 2008
Task Force Background
Established by Special Session Act 1 of 2006 to: Examine spending trends Evaluate budgetary pressures driven by external mandates and cost factors Identify options and recommend change Composed of: School Board leaders Teachers’ union leaders School Business officials Other experts and professionals Appointed by Governor and General Assembly
School Costs
School spending during 2004-05 reached $20.8 billion
2004-05 Allocation per Student
Operation of Noninstructional Services, $197.93
Facilities Acquisition and Financing, $1,114.47
Support Services, $3,217.05
Instruction, $6,322.27
Cost Drivers
Costs have outpaced the CPI across all major categories
Increase in Major Expenditure Categories by ADM as Compared to the CPI
100% 80% 60% 40% 20% 0% 49% 45% 52% 45% 78% CPI
Cost Drivers
Instructional Expenditures – responsible for 54% of total cost growth since 1995-96 Special and Gifted education – 97% increase Regular education – 35% increase Employee Benefits – 132% increase Charter Schools - $364 million statewide annually 100% 80% 60% 40% 20% 0%
Increases in Instructional Expenditures as Compared to CPI
97% 44% 35% 32% CPI
Cost Drivers
Support Services – responsible for 30% of total cost growth since 1995-96 Student Transportation – 58% increase Administrative Services – 42% increase Tax Collection - $78.8 million statewide Facilities and Financing – responsible for 14% of total cost growth since 1995-96 Debt Services - 90% increase Non-instructional Services – responsible for 2% of total cost growth since 1995-96 Increased by 48% increase Largely driven by student activities Federal and State Mandates NCLB IDEA
Task Force Focus
Tax Collection Health Care School Construction and Green Building Special Education Transportation Charter and Cyber Charter Schools Shared Services Mandate Waivers
Tax Collection
Currently...
560 tax collectors DCED estimates $237 million earned income taxes never collected; $127 million would be available for schools
School District Expenditures on Tax Assessment and Collection Services over Time
$80,000,000 $78,000,000 $76,000,000 $74,000,000 $72,000,000 $70,000,000 $68,000,000 $66,000,000 $64,000,000 $62,000,000 $60,000,000 19 95 -9 6 19 96 -9 7 19 97 -9 8 19 98 -9 9 19 99 -0 0 20 00 -0 1 20 01 -0 2 20 02 -0 3 20 03 -0 4 20 04 -0 5
School Year
Tax Collection
Recommendations
Consolidate collection of Earned Income Tax, employing fewer tax collectors and clarifying withholding rules for employers Consolidate to 66 countywide tax collectors Uniform rules, regulations, forms and codes All EIT would be withheld by the employer Businesses would only need to remit to the county in which their payroll operation is located Estimated Impact - $127 million
Health Care
PASBO estimated that health care premiums rose by 24% between 2003 and 2005 PEBTF premium increases averaged 5.6% between 2003 and 2006
Health Care
Recommendations
Establish a statewide system for all school districts to jointly purchase health care benefits When school districts maximize their purchasing power, the commonwealth will use tax dollars more efficiently while protecting the health care benefits that teachers and other school district employees receive Estimated Savings – believed to reach hundreds of millions of dollars according to some analysts
School Construction
In 2006: 53 school construction projects Approx. 80% alterations and additions
2006 Average Construction Costs/Sq. Ft. by Project Type
$200.00
$180.00
$160.00
$140.00
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
Cost Per Sq, Ft.
Number of Projects Addition $81.76
3 Addition/Alteration $101.18
33 Alteration $80.41
6 New Build $176.99
11 5 0 15 10 35 30 25 20
School Construction
PDE provides reimbursement through the Plan Con process Act 34 of 1973 20-year rule Contracting Thresholds Prevailing Wage Multiple Prime Contracting
School Construction
Recommendations
Increase and index limiting thresholds for construction related expenses in line with original intent Work done by school personnel from $5,000 to $25,000 Projects not done by school personnel and costing between $10,000 and $25,000 would require three quotes (n0w $,000-$10,000) Projects of $25,000 or more require schools to advertise and solicit bids (now $10,000) Provide school districts with flexibility related to prime contracting
School Construction
Recommendations
Increase assistance to school districts to more strongly encourage green building Increase PDE technical assistance to districts throughout the many phases of the construction process, including releasing information on actual school construction costs
Special Education
Represents 15% of the 1.8 million children enrolled 4% classified as gifted Spending has grown by 83.4% since 1996-97
Special and Gifted Expenditures vs. Total Instructional Expenditures
10% 8% 6% 4% 2% 0% Percent increase in Instructional Expenditures Percent increase in Special Educ Expenditures 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 4% 2% 3% 4% 5% 5% 5% 3% 6% 7% 5% 8% 8% 8% 8% 9% 9% 9%
Special Education
State Special Education Funding Base Supplement Inflation Index Supplement Minimum 2% increase Additional Funding Contingency Funds Core Services Institutionalized Children’s Program
Special Education
Recommendations
Alter the state special education formula to provide funding on a tiered system based on the services a student receives Provide increased state funding for high quality early childhood education in the elementary grades Develop best practices in transitioning students from special education programs Redo the charter school special education formula to enable the resident school district to better align funding with charter school special education costs
Transportation
Approximately $1 billion annually (5% of the total statewide expenditures) Increased by 58%
Year
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Average Transportation Expenditures Per Student Transported
Public Transportation* Non-Public Transportation Average Per Student** Non-Public as % of Average
$485.21
$501.20
$516.52
$533.72
$548.16
$578.50
$625.84
$653.74
$688.25
$728.01
$566.56
$535.13
$533.69
$523.66
$549.03
$566.70
$612.65
$647.37
$827.02
$971.49
$495.64
$505.58
$518.72
$532.44
$548.27
$576.99
$624.16
$652.95
$704.85
$756.04
117% 107% 103% 98% 100% 98% 98% 99% 120% 133%
Transportation
Recommendations
Eliminate the requirement to bus students outside district boundaries and only require districts to transport on days when public school is in session Optimize fuel cost management to slow long term growth costs Encourage district to adopt transportation best practices
Charter and Cyber Charter
Now 117 charter and cyber charter schools in PA $364 million in 2004-05
Rising Statewide Charter School Expense
$400,000.00
$350,000.00
3.18% 500 450 400 $300,000.00
2.65% $250,000.00
350 300 2.19% $200,000.00
1.68% 250 200 $150,000.00
$100,000.00
$50,000.00
1.16% $0.00
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 Total Charter School Tuition districts paying charter school tuition $106,584.00 $160,957.00 $221,388.00 $286,505.00 $364,052.00
167 449 483 482 495 0 150 100 50
Charter and Cyber Charter
Traditional student tuition for charter and cyber charter students Special Education student tuition for charter and cyber charter students
Non-Special Education Cyber Charter School Tuition
100 80 60 40 20 0 200 180 160 140 120 38 187 1 $5,000.00
$6,000.00
$7,000.00
159 64 $8,000.00
$9,000.00
26 13 3 2 0 1 1 $10,000.00
$11,000.00
$12,000.00
$13,000.00
$14,000.00
$15,000.00
$16,000.00
Tuition Range
Charter and Cyber Charter
Additional concerns Truancy Competitive Grants
Charter and Cyber Charter
Recommendations
Primarily Brick and Mortar Change charter school law to include grants in the list of items exempt in calculations of charter school tuition rate Permit school districts to weigh fiscal impact as a criterion when considering new and expanded charter schools Align the budgeting process of school districts with enrollment planning for charter schools
Charter and Cyber Charter
Recommendations
Primarily Brick and Mortar Provide best practices and guidance to school districts that will support them in creating effective truancy monitoring partnerships with their charter schools Increase guidance to school districts throughout the charter drafting process to ensure a high-quality charter agreement
Charter and Cyber Charter
Recommendations
Cyber Charter Establish a single, statewide tuition rate to be applied to all cyber charter schools.
Continue to collect and analyze data on the cost of cyber education
Shared Services
Approximately $314 per student on administrative costs 50% increase $210 million statewide on central services
Growth in Central Service Expenditures
$250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 19 95 -9 6 19 96 -9 7 19 97 -9 8 19 98 -9 9 19 99 -0 0 20 00 -0 1 20 01 -0 2
School Year
20 02 -0 3 20 03 -0 4 20 04 -0 5
Shared Services
Recommendations
Expand the approach of shared services to include a variety of entities including districts, intermediate units, counties and other local governments Draft a report of best practices that shows districts how cost savings can occur through consortia
Mandate Waivers
Education Empowerment Act, Act 16 of 2000 Effective for three years Districts must submit an evaluation Annual report from PDE to the chairmen and minority chairmen of the House and Senate Education Committees
Mandate Waivers
Decreasing number of requests Construction changes
Mandate Waivers by Category
40 30 20 10 0 90 80 70 60 50 2000 2001 2002 2003 2004 2005 2006 Alt. Ed Certification Construction Purchasing Special Ed.
Unclassified VoTech
Mandate Waiver
Recommendation
Increase the quality of PDE communication regarding Mandate Waivers Include more strategic information about the experiences of school districts in achieving cost savings
For More Information
www.pde.state.pa.us
Pre K – 12 Finances Task Force on School Cost Reduction
The Rendell Administration’s Strategy for Driving Down the Local Burden
A new school funding formula that will invest $2.6 billion over the next six years to help school districts move towards their adequate funding targets.
All homeowners will receive property tax relief in July – an average of $185 for every household – and total property tax relief will reach $854 million in 2008-09. Older Pennsylvanians have already received nearly $115 million in the program’s first year, and first-ever controls on local tax increases are keeping school property taxes in check.
Legislation to create a statewide school health benefits system will bring down the cost of health care for school districts – addressing a leading cost driver while preserving the quality of benefits for educators.
The state is encouraging voluntary consolidation of school districts that choose to combine their efforts to boost achievement and save taxpayers money.
“Common Cents” makes it easier for school districts to share services to improve efficiency and avoid costly duplication of back-office, instructional, transportation and other expenses.