Big money

Board of Regents asks state lawmakers for additional $2.1 billion in school funds

PHOTO: Monica Disare
Regent James Tallon after a recent Board of Regents meeting.

In the run up to the legislative session, the state’s education policymaking body staked out an “aggressive” position to increase state education funding over the next three years, including a $2.1 billion increase next year over last year’s $24.8 billion budget.

Central to the board’s proposal is a three-year phase-in of “foundation aid,” a formula created over a decade ago and derailed by the recession that aims to provide sufficient funding to districts with high-needs students. In New York City, 30 percent of the state’s allocation to the city comes from foundation aid, according to the city’s Independent Budget Office.

The Board of Regents is poised to call for a full phase-in of $4.3 billion in total aid by the 2019-20 school year, including $1.47 billion to be provided next year.

“We thought it appropriate for the Regents to remind everybody that foundation aid is something the Regents made a commitment to a long, long time ago,” said Regent James Tallon,who chairs the Regents state aid subcommittee. “And therefore, in doing the three-year phase-in, I think we’re being aggressive.”

The state’s foundation aid formula was created in response to a lawsuit claiming the state does not provide enough funding to give each child a sound basic education. Funding increases were put on hold during the recession, while many districts across the state absorbed education budget cuts. The state restored some recession-era cuts last year, leaving advocates hopeful the state legislature will refocus its commitment on restoring foundation aid this year.

Still, extra education funding is far from a done deal. The Board of Regents has no formal power over the legislature, so their proposal is only a suggestion for lawmakers. Making matters more complicated, the state recalculated the amount districts are owed in foundation aid after November and increased the total owed to districts by $500 million, mainly because of increased student enrollment in high-needs districts.

“We are by no means out of the woods,” Tallon said. He also acknowledged that budget constraints could make a full restoration of aid an uphill battle. “We’re not unmindful of the fact that the state is in one of these cycles that going to place a lot of constraints on revenue,” Tallon said.

The increase in foundation aid represents a large portion of the Regents proposal, but there are a number of other initiatives that bring the board’s total suggested increase to $2.1 billion. The other budgetary asks include $100 million to support English Language Learners and $60 million to build career and technical education programs. The total ask is a bit less than the $2.4 billion increase Regents proposed last year, but far more than the $1.5 billion in additional funds that ended up in the final budget.

State officials also suggesting changes to how the aid formula calculates poverty. Like most states across the country, New York has long used free and reduced-priced lunch to calculate student need. But that metric has become increasingly flawed as more schools offer universal free lunch, leading fewer families to fill out the free lunch form.

Instead, the Regents have suggested switching to “direct certification,” which counts students whose families are engaged in other programs like Medicaid or the Supplemental Nutrition Assistance Program (SNAP). State officials said they expect the proposal — which suggests using a blend of free and reduced-priced lunch and direct certification while the state makes the transition — to have little effect on the total funding directed towards New York City.

On Monday, the Regents gave preliminary approval to the proposal. They are expected to cast a final vote on the state aid proposal on Tuesday.

money matters

Why money for Memphis schools is about to be based on students, not adults

PHOTO: Laura Faith Kebede
Under a budget model switch, Shelby County Schools would focus more on the types of students in their buildings and less on the number of staff per school.

Educators generally agree that a one-size-fits-all approach to teaching doesn’t work. Now school leaders in Memphis are saying it doesn’t work when distributing money to schools, either.

Beginning this July, Tennessee’s largest district will pilot student-based budgeting at up to eight schools, with the expectation of expanding to the entire district in three years. The goal is to distribute money more equitably.

Under the new method, each student brings to their school a certain dollar amount, which can grow based on factors like whether the student has a disability, is an English language learner, or comes from a low-income family.

That’s a big change from traditional budgeting, which distributes money primarily based on how much it costs to pay the salaries of adults who work in a building. The traditional model usually allocates less money to schools with high-needs students because they generally employ less experienced and lower-paid teachers.

The new approach would give principals more say in how they allocate money within their building. The system also appeals to those who want schools with greater challenges to receive more funding. And recently, student-based budgeting got a boost from President Donald Trump, whose proposed budget includes $1 billion in incentives for school districts with poor students that make the switch.

Leaders with Shelby County Schools have been working for more than a year with Education Resource Strategies, a Massachusetts-based consulting organization, to lay the groundwork for the transition. The method already is being used in districts in Nashville, Indianapolis, Denver, Boston and Houston.

David Rosenberg, a partner at Education Resource Strategies, said traditional budgeting models cater to the most politically savvy principals who find funds for academic programs and interventions in system loopholes. Student-based budgeting changes the dynamic to empower principals, making them more like CEOs than strict academicians. It also means principals will have to learn more about the complexities of budgeting.

“It works because you make it more flexible for schools and teams for how they see fit within parameters the district provides,” Rosenberg said.

During the next few months, the Memphis district will analyze how money is being allocated to its schools — which ones don’t have enough funds and which ones have too much under the new formula. The change will create winners and losers, and it’s the losers that concern some school board members.

PHOTO: Caroline Bauman
Lin Johnson, finance chief of Shelby County Schools

The board is generally supportive of student-based budgeting and is scheduled next week to vote on a resolution endorsing it. But board members also want the transition to be as painless as possible in a district that they say is underfunded by the state.

Finance chief Lin Johnson reassured board members at a work session this week that the district can mitigate losses for schools with less money. Options include tapping a separate pool of money to lessen the shock and giving some schools an extra year for the transition.

“The goal is not to fund all schools equally, but equitably (and) to make sure the funding we have is meeting the unique needs of students,” he said. “We need to work with schools to provide training and examples, to give schools the support they need to maximize the resources that they have.”

In Metropolitan Nashville Public Schools, which fully switched to student-based budgeting 2015, about 60 percent of schools received more money than the previous year. The rest received the same amount.

In other districts, the model has had the effect of shaking up central office structures, increasing the need for fiscal oversight, and stretching principal capacity.

Below is a video from Nashville’s school district to explain how student-based budgeting was rolled out there.

Compromise

Teacher pay overhaul would establish merit pay, tackle salary inequities

PHOTO: Laura Faith Kebede
Trinette Small, chief of human resources for Shelby County Schools, explains the district's proposal for a new teacher pay structure.

Since 2014, Superintendent Dorsey Hopson has tried to establish a merit pay plan for teachers in Shelby County Schools but, for one reason or another, it’s eluded the district.

Now, his team is trying again — and they’ve come up with a proposal that they hope will help Tennessee’s largest district retain its most talented teachers, while also appealing to teachers that previously have balked at shifting to performance-based pay.

The proposal unveiled Tuesday would address inequities in the pay structure that have given higher salaries to newly hired teachers than to existing teachers with the same experience for up to 10 years.

Any subsequent raises would be based on teacher evaluation scores of 3 to 5 on the state’s 1-to-5 model, which is based on classroom observations and student test scores.

The plan also would resurrect additional compensation for job-related advanced degrees — but only in the form of bonuses if the teachers rate 4 or 5. The same goes for hard-to-staff teaching positions such as in special education, math and science, as well as veteran teachers who have reached the district’s maximum salary, which would go from $72,000 to $73,000.

The overhaul would take effect next school year using $10.7 million earmarked in Hopson’s proposed $945 million spending plan for 2017-18. The school board is scheduled to vote on the budget in April.

Recruiting and retaining effective teachers is a high priority as Shelby County Schools seeks to boost test scores in low-performing schools with many poor students. And research shows teachers have the most influence on student achievement.

Trinette Small, chief of human resources, said the district has to keep its pay structure competitive to retain its most effective teachers, especially with six municipal school systems nearby.

“This is trying to get base pay stabilized,” Small told school board members during a budget review session. “This is an investment in teachers but this is something we can afford.”

In exit surveys, a fourth of high-performing teachers cited noncompetitive pay as their reason for leaving the district, she said. And most who left had the second-highest evaluation score.

The plan pleased school board members, and parts of it appeared to appeal to teachers unions, although its leaders still had some concerns.

Chairman Chris Caldwell said the new structure positions the district for a more stable learning environment.

“The big point about the change was to have (pay) merit-based and not just longevity-based because at a certain point, they plateau,” Caldwell said. “The main thing we got to worry about is student draining and teacher draining.”

School board member Mike Kernell said the plan should boost teacher morale by addressing inequities in the system. “I think by resetting this, we’re going to start seeing more experienced teachers at the right level starting to help the younger teachers without the resentment that you’re making $2,000 less,” he said

Tikeila Rucker, president of the United Education Association of Shelby County, was mostly pleased with the proposal but took issue with tying pay for advanced degrees with evaluation scores. Teachers should be rewarded in their base pay for advanced degrees, not through bonuses, she said.

Rucker and Keith Williams, executive director of the Memphis-Shelby County Education Association, both said the initial leveling up should apply to all teachers on the former step schedule up to 17 years, instead of stopping at 10.

“If you’re going to abandon the schedule system, at least level everyone up,” Williams told Chalkbeat. “If it’s not going to benefit everybody, you might as well throw it in the trash.”

Small said the leveling up is meant to make teacher pay competitive with new hires. Since the district only incorporates up to 10 years of experience in pay for new teachers, the leveling up was limited to the same.

The New Teacher Project provided consultation on the district’s pay plan by gathering data, conducting focus groups and crafting the compensation model.

Editor’s note: This story has been updated to show the district proposes to level up pay up to 10 years of experience.