Arkansas Costing-Out 2003


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State Funding Context

 Total Number of Students, 2001-2002: 449,805
 Total Public School Expenditures, 2000-2001: $2,505,279,000
 Average Per-Pupil Expenditures, 2000-2001: $5,568
 % Eligible for Free/Reduced Lunch: 47.2%
 % in limited-English-proficiency programs, 2001-2002: 2.9%

Study Title: “An Evidence-Based Approach to School Finance Adequacy in Arkansas”
Date Completed: September 2003
Calculated Base Costs: The study created an evidence-based matrix describing the resources each school needs to provide students with an adequate education. The matrix includes adjustments for students living in poverty and for English language learners. The authors also recommend a substantial increase in teachers’ salaries. The cost of implementing the matrix and salary increases varies by district, with a mean of $6,230 per pupil in 2003 dollars.
Major Recommendations:

 Increase school funding by $848.3 million, an increase of about 34%, including:

 $224.6 million to implement evidence-based resource matrix
 $356 million to increase teacher salaries
 $100 million to create expanded preschool programs for all students age 3 and 4 from families with an income at or below 200 percent of the poverty level
 $167.7 to create a needs-based financing formula wherein state funds supplement local property tax revenues as needed to fully implement the resource matrix and raise teacher salaries

 Reform the teacher pay schedule by:

 Implementing a performance-based pay system that awards salary increases to teachers who master instructional skills proven to increase student achievement.
 Using “adders” to attract teachers to certain geographic areas and for teachers in shortage areas, such as mathematics and science.
 Phase in program over a period not to exceed two biennia, making allowances for inflation

Special Features of the Study:

 The study’s recommended resource matrices are based on “effective school” models that are focused on improving instruction through professional development and a performance pay structure. The authors recommend significantly restructuring schools and reallocating resources to implement the models on which the figures are based.

 The study emphasizes the importance of preschool, recommending an expanded pre-kindergarten program for low-income families, full-day kindergarten, and class sizes of 15 in grades K-3.

 In determining appropriate levels of teacher pay, the researchers considered the geographic cost-of-education index, as well as salary benchmarks in competing states and industries.

 The authors based the resource matrices on a school size of 500 students, for elementary, middle, and secondary schools, despite the fact that most Arkansas schools are smaller than this.

Implementation: After the state missed the January 2004 deadline for compliance with the Lakeview School District v. Huckabee decision, the court appointed special masters to evaluate the state’s progress. The legislature, then in special session, acted quickly to pass education legislation addressing some of the costing-out report’s recommendations. Measures passed include:

 A new school funding formula designed to comply with at least some court mandates
 An increase in state sales tax to raise revenue for schools
 A raise in minimum teacher salaries from $21,680/year to $27,500/year
 $40 million in funding for preschool programs for next year
 Additional accountability measures for schools
 $10 million to assess building needs

In their report, the special masters applauded the state’s progress, but also noted that it didn’t fully follow the costing-out report’s recommendations. The legislature failed to implement:

 A reduction in class size to 15 in grades K-3
 A 10% across-the-board teacher pay increase
 $100 million for preschool programs over the next two years

Methodology: Effective Strategies
The Arkansas Joint Legislative Committee on Educational Adequacy, formed in response to the state Supreme Court’s decision in Lakeview v. State, contracted for research and consulting services with school finance experts to recommend a set of prototypical school models. The Joint Committee defined an “adequate education” as one meeting the state’s current curriculum frameworks and testing system.

 Used recent research on the links between various school resources and structural features and school performance.

 Synthesized the findings of professional judgment panels in 5 other states, paying close attention to recommended numbers of faculty and staff.

 Developed three prototypical schools and grade configurations to provide models for the resource matrices, including a K-5 elementary school, a 6-8 middle school, and a 9-12 high school, all with 500 students.

 Researchers supplemented the effective strategies approach with a quasi-professional judgment approach. They convened 2 professional judgment panels made up of 70 leading Arkansas educators, who reviewed the Joint Committee’s resource matrices and made recommendations pertaining to class size, faculty and staff, and pro-ration of resources for schools significantly smaller or larger than the model schools.

Additional Factors: The study does not take into account facilities, food service, or transportation. The study does take into account extensive professional development and increased planning and preparation time for teachers.
Public Input: None
Prepared for: Arkansas Joint Committee on Educational Adequacy
Prepared by: Lawrence O. Picus and Associates