Colorado Costing-Out 2006

Note: This cost study is not a full study. It is an update of the 2003 Cost Study performed by Augenblick, Palaich, and Associates that was never officially released to the public. It uses much of the background information of the 2003 study, slightly modifying the methodology and using updated figures. The 2003 study can be found here.

State Funding Context

From NCES (most current available statistics):

Pre-K to 12 Students, 2004-05: 766,000
Annual Public School Expenditures, 2004-05: $5.4 billion
% Eligible for Free/Reduced Lunch, 2004-05: 31.5
% in limited-English-proficiency programs, 2004-05: 11.8

Study Title: Estimating Colorado School District Costs to Meet State and Federal Education Accountability Requirements
Date Completed: October 2006
Definition of Adequacy:  For the Professional Judgment methodology, adequacy was defined as “hav[ing] the necessary resources for students to meet specific state and federal requirements.” The primary requirements used in the study were (1) state accreditation requirements, (2) meeting standards on the Colorado Student Assessment Program (CSAP) tests, and (3) meeting AYP as required by NCLB, including 100% proficiency by 2014.

 For the Successful School Districts methodology, successful districts were defined as those that were both meeting state accreditation requirements and “on target” to meet all requirements as defined in the professional judgment study by 2014.

Calculated Base Costs: Professional Judgment 
Base cost per student:
Three examples, i.e. data points from a continuous function that relates district size to per pupil spending (see p. 9 of the study):

Small school districts (500 students): $11,639
Medium school districts (2,500 students): $8,146
Large school districts (10,000 students): $7,252

Special-needs additional weightings (fraction of base costs):
“At-risk” students (eligible for free or reduced price lunch): a range from 0.20 to 0.58, based on district size
English Language Learners: 0.50
Special Education: a range from 0.23 to 5.23, based on district size and level of special education needs

Successful School Districts
Note: the Successful School Districts methodology only calculates the base student cost, without determining special needs weightings. “Calculated Additional Costs” for this methodology use the weightings from the Professional Judgment method.
Small school districts (500 students): $9,381
Medium school districts (2,500 students): $6,566
Large school districts (10,000 students): $5,845

Calculated Additional Costs: Professional Judgment: $2.1 billion in 2004-2005 dollars (a 39 percent increase over 2004-2005 levels)

Successful School Districts: $630 million in 2004-2005 dollars (a 12 percent increase over 2004-2005 levels)

Major Recommendations:  Increase funding to target amount (no recommendations on a specific plan)

 Additional recommendations:

  • For students with multiple special needs, simply adding each applicable weighting may overstate the cost of their education
  • The definition of “at-risk students” may be too restrictive for identifying students that are at risk but not eligible for free or reduced-price lunches (e.g. highly mobile students).
Additional Findings: Based on the Professional Judgment methodology, 177 of Colorado’s 178 districts had spending below adequate levels. Based on the Successful School Districts methodology, 163 districts had spending below adequate levels.
APA raised the benefit rate from their 2003 cost study, due to an increase in retirement contributions.
To offset rising health care and insurance costs, many school districts have cut employee health benefits.
Districts may face a cost increase with expansion of student choice programs (these costs were not included in the study)
According to educators, student activities such as sports or clubs often increase student academic performance. Educators also deemed these activities necessary in order to keep students in school
A school business official panel indicated no major inefficiencies in district overhead expenditures.
APA estimated (but did not include in the study) the cost of teacher merit-pay programs, and determined an approximate cost of $1 million per moderate-sized district.
Methodology: Evidence-Based (Expert Judgment) Approach:
 This methodology was not used to determine any costs. Experts created a draft of resource requirements for Colorado schools, which was given to professional judgment panelists as a starting point for discussion.

Professional Judgment Approach:
 The study updated the work of professional judgment panels in the 2003 cost study in Colorado.
 The study used four new panels in addition to the work from the nine in the 2003 study: a school-level panel focused on small districts; a school-level panel focused on large districts; a panel composed of people who provide special-needs services; and a panel of school business officials.
 Panelists were presented with hypothetical schools of various sizes and demographics and were told to identify resources deemed necessary for meeting specific accreditation requirements and standards (provided in Appendix A of the study).
 The consultants later calculated the costs of the designated resources.

Successful School Districts Approach:
Successful School Districts were defined as those districts meeting both of two requirements: (1) considered “on target” to meet 100 percent proficiency by 2014, based on linear trends; (2) meeting Colorado’s current accreditation standards.
The requirements identified 58 successful districts, out of 178.
For the calculated additional costs (listed above), the weightings for special-needs students from the Professional Judgment portion of the study were applied to the Successful School District base costs.

Special Features:  This study did not consider capital funding for facilities, etc., transportation, food service, adult education, or community service costs, which are ordinarily excluded from adequacy studies.
 This study did include the cost of preschool.

 In the 2003 study, APA used nine professional judgment panels, consisting of “school level” panels, “district level” panels, and “expert review” panels. For the 2006 study, APA relied on many of the determinations of the 2003 panels, consulting only the new panels listed in the “Methodology” section.
 Taking into account inflation, the final per pupil cost determinations in the 2006 study were very similar to, and even slightly under, the cost determinations in the 2003 study.
 In the 2003 study, APA took “special education” as one weighting, whereas in the 2006 study, they broke it down into “mild,” “moderate,” and “severe” weightings.
 Weighting for “at-risk” students was very similar in the two studies.
 Weighting for ELL students was significantly lower in the 2006 study than in the 2003 study.

 The successful school district methodology in this study differed from the methodology in the 2003 study. In the 2003 study, APA used different “filters,” looking at specific performance levels and progress from previous years, as opposed to a determination of whether the district was “on target” to reach 100% proficiency by 2014. The difference in methodologies makes the results difficult to compare.

Public Input: None.


Implementation: None yet.


Prepared for: The Colorado School Finance Project, a nonprofit organization that collects and distributes research-based information and data on topics related to school finance
Prepared by: Augenblick, Palaich and Associates, Inc.

Fact Sheet prepared by Matthew Samberg, December 19, 2006