Show me the money

Districts take wary view of new transparency law

Sample district transparency template

School district lobbyists did their best to kill the idea during the 2014 legislative session, but now that new financial reporting requirements are law, school districts and the Colorado Department of Education are scratching their heads and sorting out how to make them work.

There have been ripples of anxiety – and not a little confusion — in many districts as details of the mandate started to sink in after both the legislative session and the school year ended.

“People are grumpy,” said Glenn Gustafson, chief financial officer for Colorado Springs District 11. “No doubt about it.”

Some district leaders don’t necessarily see the requirements as an impossible burden, but they wonder about the value of the changes.

The financial transparency requirements are part of House Bill 14-1292, the Student Success Act that was at the center of fierce school finance policy debates during the 2014 session. (See this Chalkbeat Colorado story for details on all the bill’s provisions.)

What the law says has to be done

While many nuts and bolts of implementing the transparency requirements remain to be worked out, the new mandate goes significantly beyond a 2010 transparency law (get details on that here) and requires three main things:

Uniformity – The law requires greater standardization in how districts display financial information on their websites. “All districts will have to report [data] in the same fashion,” said Leanne Emm, associate commissioner for school finance at CDE.

Data for every school – Districts ultimately will have to report spending information for individual schools, information that some districts report now but others don’t.

One-stop shopping – Three years from now there will be a single website containing financial information about all districts and schools. The law requires the website to be designed so as “to ensure the greatest degree of clarity and comparability by laypersons of expenditures among school sites, school districts, the state Charter School Institute, and boards of cooperative services.” (The site will be created by a to-be-selected contractor, not CDE.)

What worries districts

A wide variety of district officials interviewed by Chalkbeat raised four main concerns about the law:

Implementation – District officials generally agree that compliance will be relatively painless for large districts but presents a greater challenge to some medium-sized and small districts. “It is going to be a lot of work for a lot of people. It depends on how big you are and how many people you have working for you,” Gustafson said.

Comparability – Even with the requirement for greater uniformity, some district officials wonder if district and school data will be fully comparable. They raise the question of likely district differences in how they account for costs borne by multiple schools – things like the salaries of special education teachers, psychologists and other staff who split their time among buildings.

“It is a significant change to set up your personnel systems [to account for] a teacher or even a principal who works at several different schools,” said Bill Sutter, chief financial officer of the Boulder Valley School District.

Use & Misuse – District officials say they support transparency as an ideal but are openly skeptical that new financial data will see much use by the public.

“Who’s going to actually look at this website?” asked Tracy John, business manager of the 606-student Peyton School District northeast of Colorado Springs.

Anecdotally, districts say there’s little public use of financial information currently available online. “I don’t receive very many calls about transparency,” said Guy Bellville, chief financial official of the Cherry Creek Schools.

And districts are nervous that advocacy groups will use school-level financial data for their own ends, ignoring the context and nuances of why districts spend money as they do.

“Rather than build confidence in school budgeting decisions, it is more likely to provide ammunition to public education detractors who have no interest in learning the deeper context or complexity that comes with school budgeting,” argues Jason Glass, superintendent of the Eagle County Schools.

Impact on student achievement – “Tell me how this is going to impact student achievement,” Gustafson said. “This is a distraction that takes away from student achievement.” Said Boulder’s Sutter, “I’m fairly certain there are no studies about how one more accountant in the district office is going to affect outcomes.”

Another view on data use

Sen. Mike Johnston, a prime sponsor of HB 14-1292 and the instigator of much recent education reform legislation, has a different take on the law.

The Denver Democrat made his case at a recent meeting of district finance officials and CDE staffers who are starting to flesh out the details of implementing the law.

“People will use the data depending on how easy it is to use,” he said. “I think it’s just a matter of presenting information in the right way.”

Johnston also made the pitch that greater financial transparency might make voters more sympathetic to increased funding for education.

During the Amendment 66 campaign in 2013 many voters has “this misperception that education was this large overfunded bureaucracy.” He argued the state needs “to allow parents to understand in regular language where the dollars go in their schools. Our belief is doing this well will paint a clear picture to parents and taxpayers about where those dollars are going. … This makes it easier to make that case” for more funding.

Education interest groups have a variety of reasons for supporting greater financial transparency. Reform groups that advocate for funding equity hope it will provide greater insight into whether low-performing schools are getting the money they need to help at-risk students. Charter schools think greater insight into district spending will show whether or not they’re getting an appropriate share of funding. Republican lawmakers hope transparency will shed more light on pension costs. And others hope transparency is a step toward greater control of money at the school level and even “backpack” funding for individual students.

Transparency a second-tier trend

While financial transparency doesn’t have the high profile of issues such as Common Core State Standards or testing, “it’s a trend we’re seeing right now, and it’s been going on for awhile,” said Mike Griffith, senior school finance analyst for the Education Commission of the States.

“Most states require districts to report on financial data,” Griffith said, and now policymakers are saying, “You need to start accounting on a school-level basis.”

Part of the trend is rooted in overall technological change. “As the technology has advanced and people have gotten used to looking things up … that has pushed policymakers.”

Griffith added, “When the idea is presented to policymakers they get excited because they like data. The question is what they do with it when they get it.”

On the school district side, he said, “There’s another fear – they’re going to have to change the way they do business.”

As Colorado administrators discuss the new law, Michigan and Rhode Island are frequently mentioned as possible examples to follow.

Michigan’s state system is under construction; get more information here. To see how districts report, see this page on the Lansing School District site. (All Michigan districts are required to have a prominent financial transparency logo on their home pages. But school-level data isn’t currently required.)

Learn more about Rhode Island’s system here.

The transparency to-do list

The state transparency website doesn’t have to launch until July 1, 2017, but that doesn’t mean CDE and districts don’t face a lot of work – starting now.

A subcommittee of CDE’s Financial Policies and Procedures Committee is working to develop a standard template for districts to use on their websites and hopes to finish that by October.

The full FPP group is supposed to develop a recommendation for the State Board of Education on how to report district revenues.

CDE plans to have a request for proposal finished by the end of the year. This contains specifications that outside bidders will have to meet if they want the $3 million contract to build the statewide website.

Districts will have to use the new template starting July 1, 2015, posting the financial information required by the 2010 transparency law.

In late 2016 or early 2017, using a second template developed by the state, districts will have to post individual school financial data on their sites.

Using data provided by districts, the contractor is supposed to launch the statewide site July 1, 2017.

Emm said the current 2014-15 school year “is almost a planning year” but that districts will have serious work to do starting in about February.

But it’s not fully clear what that work will require. “School districts will not understand what’s required until the FPP completes the template,” said Cherry Creek’s Bellville.

Finding district information can take some effort

District leaders and lobbyists last spring repeatedly made the point that state law already requires posting lots of financial information on district websites, making a new mandate unnecessary.

They were right that the 2010 law requires districts to post annual budgets (full budgets and summaries), audits, quarterly financial statements, salary schedules, check registers, credit and purchase card statements and investment performance reports. (See CDE’s suggested – not mandatory – current template for displaying that information.) The new law allows districts to drop quarterly statements, check registers and card statements after July 1, 2017.

But in many ways the current system is more translucent than it is transparent.

Chalkbeat clicked around the websites of Colorado’s 10 largest districts plus eight more districts of varying sizes – one district with about 1,000 students, another with about 900 students and so on down to a 100-student district.

Overall we found that if you’re looking for district financial information, be prepared to make educated guesses about which homepage link to click and be ready to do a fair amount of clicking, scrolling and opening of large PDF files.

Here are some highlights (and lowlights) of what we found, along with a few hints to help your searches.

  • Home page links to transparency information aren’t consistent. We found them near the top of some pages, in the middle of others and at the bottom of some. (Boulder Valley gets kudos for its blue “BVSD Financial Transparency” button near the top of the home page. Dougco has a Transparency link in a row across the top of the home page.)
  • The link doesn’t always read “Financial Transparency.” If you don’t see those words, look for links with wording like District Finance, District Office, Financials, Administration, Finance & Budget and even About. Pull-down menus generated by such links sometimes reveal a Financial Transparency link.
  • When all else fails, type “financial transparency” into the search window on the district’s home page and see what you find.
  • District budgets and budget summaries can contain a wealth of information, including school-level information for some larger districts. But every district uses its own format. Cherry Creek, for instance, provides easy-to-read information for every school, including photos and demographic details. Other districts’ budgets contain multiple number-crammed spreadsheets of school information. Some districts provide per-pupil spending by school; others don’t.
  • You’ll need to click and scroll. Once you find it on the website, open your district’s budget in Adobe Acrobat or another PDF reader, use the table of contents column on the left and start hunting.

budget debate

Under the House budget plan, suburban districts would get more money while some urban districts would get less

PHOTO: Alan Petersime
Kindergarteners using the computer at IPS School 90.

Suburban schools, English-learners and virtual schools would fare well under the Indiana House’s 2017 budget plan, while Indianapolis Public Schools and other urban districts would see drops in state support.

In the Republican-crafted two-year budget draft, presented to the House Ways and Means Committee today, Indiana schools are projected to get an extra $273 million to support student learning, a 2.8 percent increase overall. Basic per-student funding that all districts get would also increase to $5,323 in 2019, up 4.6 percent from the $5,088 they received in 2017.

Much like in 2015, almost every district in Marion County would see a slight increase in state funding, with the largest bumps going to Beech Grove and Perry Townships. Each would get nearly 8 percent more in tuition support — the state’s contribution that funds each student’s education. Both districts’ boosts can be attributed in part to growing student populations.

Only one district in the county is expected to lose funding. IPS would see a big decline in state aid under the proposed budget, down by nearly 5 percent. That’s partially because enrollment is projected to decline over the next two years. But the largest drop would come from a reduction in the “complexity index” — extra dollars districts receive to educate poor students. That amount would fall by $9.4 million by 2019.

During her campaign, state Superintendent Jennifer McCormick called for adjustments to the complexity index, but House lawmakers kept the calculation as it was. It will continue to rely on how many families qualify for food stamps, foster care and welfare programs.

Although IPS and other urban districts — such as those in Gary, East Chicago and Hammond — lose either tuition support, per-student funding or both, many township and suburban districts saw increases.

In order to cover those increases in a year when state revenues are less than expected, Rep. Tim Brown, R-Crawfordsville, chairman of the budget-making House Ways and Means Committee, said the state did have to make cuts.

The House plan axes money for teacher performance bonuses. Last year, Indiana paid $40 million for the bonuses, which varied widely from district to district. High-performing teachers from wealthier districts got as much as a few thousand dollars, while those in poorer urban districts, such as Wayne Township, received less than $50.

Brown said the priority was finding a way to increase funding for all students.

“We made the decision, especially in this tight first year, to see what we could do to boost the foundation for every child in Indiana,” Brown said.

That move is likely to see pushback from the Senate. Sen. Luke Kenley, R-Noblesville, said he’d like to see the bonuses continue, albeit in a fairer way.

The House plan would also increase the budget for English-learners by 50 percent, going to $300 per student in 2018 and $350 per student in 2019, up from $200 per student in 2017.

Virtual charter schools, previously funded at just 90 percent of what other schools receive from the state, are bumped up to 100 percent under this plan. The proposal comes as Indiana’s online schools have struggled to find success — each one received an F from the state in 2016.

However, Brown argued they should be treated the same as other schools because “every child is equal.”

The overall $273 million boost to schools would also include an 11.3 percent increase in funding to Indiana’s taxpayer-funded voucher program, where families can use state dollars for private school tuition. Contributions are expected to move to $163 million in 2019, up from $146 million in 2017 due to higher anticipated participation.

The House plan sets aside less than what Gov. Eric Holcomb and McCormick have endorsed, but Brown said that the House’s plan — unlike Holcomb’s — is based on what was actually spent in 2017, not what lawmakers originally appropriated. State school districts enrolled fewer students than anticipated, so less money was spent.

The plan still has to pass out of Ways and Means before it heads to the full House, likely sometime next week.

The budget also includes:

  • $20 million per year for the state’s preschool program
  • $1.5 million per year for developing teacher “career pathways.”
  • $1 million per year to improve school internet access.
  • $2 million over two years for schools to use toward counseling and student support services, such as ones provided through groups like Communities In Schools.
  • $5 million over two years in incentive grants for schools and districts that consolidate services
  • $500,000 per year for dual language immersion programs
  • Kids with the most severe special needs would get a 4 percent increase in per-student funding over the next two years.
  • $12.5 million per year (up from $9.5 million) for the state’s Tax Credit Scholarship program
  • $12.5 million per year for the Charter and Innovation Network School Grant Program

Chalkbeat reporter Dylan Peers McCoy contributed to this story.

one hurdle down

Charter school funding bill clears Senate Education Committee

A student does classwork at James Irwin Charter Elementary School in Colorado Springs. (Denver Post file)

A bill that would require school districts to equally share money from local tax increases with charter schools cleared its first legislative hurdle Wednesday.

Senate Bill 61 advanced out of the Republican-controlled Senate Education Committee on a 4-3 party-line vote.

Supporters testified during a hearing last week that charter school students deserve equal access to taxes their parents pay each year.

Charter schools receive public money but operate independently, with greater autonomy over budgets, curriculum, and hiring and firing. Currently, it’s up to districts whether to share revenues from local tax increases with charter schools, and practices vary.

Opponents said the state would set a dangerous precedent, essentially breaking a compact between school boards and voters who approved tax increases known as mill levy overrides. Under the bill, charters would get a share from such tax measures approved by voters in the past and any that win approval in the future.

The bill was sponsored by state Sen. Owen Hill, a Colorado Springs Republican, and Sen. Angela Williams, a Denver Democrat. It is expected to win Senate approval but its future is cloudier in the Democratic-controlled House. Similar legislative efforts have failed in the past.

“What this bill is really about is the funding disparities that exist,” Williams told the Senate committee Wednesday. “Charters are public schools. They are schools that all our children attend … I don’t think any kid should be systematically underfunded because of the type of school they attend.”

Democrats on the education committee raised a number of concerns. Sen. Nancy Todd, an Aurora Democrat, said that while she fully supports school choice, the state has not been adequately funding the public school system.

“We are in a financial bind as a state,” Todd said. “I don’t believe that it is our role to step in and tell the local school districts what they have to do and how they are going to spend their money. Where does that stop?”

Democratic Sen. Rachel Zenzinger, who represents portions of Jefferson County, said she struggled with the bill. She too cited the financial pressures on districts, which continue to face shortfalls under Colorado’s complicated school funding system.

“I really feel at this time I can’t tie the hands of my local district people with another mandate from the state,” she said.

Sen. Tim Neville echoed other Republicans in saying he supports the bill to bring equality to school funding. He also pointed out that mill levy overrides approved by voters this fall included no language excluding charter schools.

The committee vote was 4-3, with Republicans Hill, Neville, Bob Gardner and Kevin Priola voting yes, and Democrats Todd, Zenzinger and Mike Merrifield voting no.