What's driving up the cost of our public schools

A state task force is trying to find ways to finance court-ordered improvements to education. Here's a look at the many factors running up the size of the bill that must be paid.
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Seattle's Roosevelt High School

A state task force is trying to find ways to finance court-ordered improvements to education. Here's a look at the many factors running up the size of the bill that must be paid.

Almost 1 million students will walk through the doors of the state’s K-12 public schools this month as the new school year begins. Their faces, native languages, and family finances will reflect the state’s rapidly changing demographics.

The growing student population and its diverse characteristics are of special interest to a task force of policy makers and citizens tasked with finding a way to “amply” fund K-12 education.

Expenditures for public schools account for almost half of the state’s $31 billion general fund operating budget in the current biennium. Estimates suggest that by the 2017-19 biennium the state will need to find an additional $3.2 billion in new revenue to fully implement enhancements to basic education as required by legislation that meets the state Supreme Court’s decision in the McCleary case. The court ruled that the state is failing to meet its constitutional duty to treat funding of education as its paramount duty. Principal enhancements are in four areas: materials, supplies and operating costs; reduced K-3 class size; full-day kindergarten; and student transportation.

At its second meeting on Aug. 28, the State Task Force on Education Funding was presented with a welter of numbers to sort through that describe some of the complexity of state education spending, including K-12 cost drivers. Education spending is determined by several cost factors that the state closely tracks and forecasts.

As I discussed in my report three weeks ago, the task force may be the group that can tackle what looks an impossible challenge. A look at the factors driving up costs is helpful in understanding the scope of the challenges before the task force, and the state itself, in providing the money to meet the educational requirements of 1 million or more students. 

The largest driver of education cost is, of course, pupil enrollment. The number of students, measured as student full-time equivalents (FTEs), increased at an average annual growth rate of 0.4 percent over the school years 1997-98 through 2011-12.  Enrollment over the next 10 years is forecasted to grow at a significantly higher rate, an average 0.7 percent annually, with the rate increasing even faster in the outlying years. At the end of that period, about 55,000 more K-12 students will be enrolled state-wide, equivalent to another school district the size of Seattle’s.

Another significant cost driver is the “staff mix” factor. State funds are allocated to districts based on the average experience and education levels of their certificated staff (teachers, guidance counselors, librarians, and other instructors). The state’s staff mix factor has been increasing since the 2007-08 school year and the start of the recession. Approximately 80 percent of state dollars for basic education funds the salaries and benefits of both certificated and non-certificated staff.

Inflation is often a forgotten cost factor. K-12 education spending in nominal dollars has grown 3.1 percent annually since 2001, increasing from $4.6 billion to $6.8 billion in 2013. However, when adjusted for inflation using the Seattle Consumer Price Index, the growth has been $400 million in real dollars. And both nominal and CPI adjusted funding have decreased since 2009 at the start of the recession when the legislature cut salaries and student transportation reimbursements.

Demographic diversity is also an important cost driver. The state’s population has become progressively more diverse as it has grown. And K-12 enrollment has mirrored this diversity.

Washington’s population grew by 830,000 from 2000 to 2010, an increase of 14 percent, which placed us 13th from the top in rate of growth. Although this was the state’s lowest rate of growth between decennial federal censuses since 1930, the state’s minority populations have grown rapidly. While 79 percent of the Washingtonians were identified as “Non-Hispanic White” in 2000, by 2010 this percentage had declined to 73 percent. Hispanics were the fastest growing minority group, increasing 71 percent since 2000, followed by Asians (49 percent increase) and multi-racials (41 percent increase).

The diversity has spread across the state and has also become concentrated. Of the 10 counties whose minority populations exceed 25 percent, eight are located in Eastern Washington’s agricultural areas; the other two, King and Pierce, are west of the Cascades. In 2000, Franklin was the only county with a minority population exceeding 50 percent. But by 2010, Adams (61.2 percent) and Yakima (52.3 percent) joined Franklin (56.8 percent) in this category. And Franklin replaced Clark as the state’s fasted growing county.

Hispanic students are now 20 percent of all K-12 students statewide and account for more than 50 percent of enrollment in 26 of the state’s 295 school districts. In contrast, the Seattle District is diverse in another aspect. In Seattle, 57 percent of its students represent a wide range of backgrounds: 19 percent black; 18 percent Asian; 12 percent Hispanic; 6 percent two or more races; 1 percent American Indian; and 1 percent Pacific Islander.

Demographic diversity is a cost driver in two ways: It can increase demand for transitional bilingual instruction and it can generate a need for program enhancements designed to improve student performance. In the latter case, the number of students who qualify for a free or reduced-price lunch serves as a proxy for funding enhancements that assist schools with underachieving students.

Bilingual enrollment has approximately doubled in the past 15 years and is forecasted to continue to increase faster than population and overall enrollment. In 2016-17 its headcount is expected to exceed 13 percent of the K-12 total. The state compensates districts for transitional bilingual, and more than half of instruction is provided by teacher aides, as opposed to certificated staff. Although Spanish is the predominant language, 141 foreign languages are represented among the bilingual students.

The Seattle School District provides a transitional program for children whose primary language is not English, and whose English skills limit learning. Students have arrived from about 100 countries and speak even more languages. 

Statewide 46 percent of the million students receive free or reduced-price meals. In Seattle, the proportion is 43 percent; in Mabton its 94 percent. Students qualify for a free or reduced-price lunch and breakfast depending on household size and annual income. Example: Students are eligible for a free lunch if their household of four persons earns less than $29,055. Income levels are set higher for a reduced price lunch.

The U.S. Department of Agriculture, which administers the program, charges 40 cents per reduced lunch and 30 cents per breakfast. The state, however, pays all reduced price lunch costs for K-3 students, and all reduced-price breakfast costs for public school students.

A cost driver not related to diversity is special education enrollment. The number of students with disabilities has grown at a faster rate than school population since 1997-98, and this trend is forecasted to continue at least out to 2020-21. Over the entire 24-year period special education’s average annual growth rate is 1.3 percent compared to 0.5 percent for total enrollment. The reasons for the disproportionate growth center on changes made by the Legislature that have increased eligibility.

The Task Force will review each of these cost drivers in the context of school funding formulas at its next meeting scheduled for Sept. 19. Also on the agenda will be two enhancements that are not currently funded as basic education, but were addressed in House Bill 2261 passed in 2009. These deal with an increase in instructional hours and the units required for high school graduation.  


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About the Authors & Contributors

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Dick Nelson

Dick Nelson is a former Washington State legislator. He currently contributes to the public debate on state and local fiscal issues through research and commentary. As when he was in the legislature, he prefers the Democratic Party.