2/26/2009 1
Education Financing – An Overview
BCSTA Trustee AcademyFebruary 26, 2009
Joan Axford / Frank Regehr
2/26/2009 JA/FR 2
Agenda / Overview
Ministry of Education and Provincial Budget Process
History of Block Funding and Allocation System
Review of Allocation SystemFunding PredictabilityEffect of Enrolment DeclineThe Saanich Story
2/26/2009 JA 3
Predictability
Just about the time you think or believe you have mastered the funding and budgeting process, there will be an announcement and all will change
Always begin every statement about funding and budgets with a disclaimer:
“based on the most recent information”
2/26/2009 JA 4
Ministry of Education Budget
Ministry of Education Budget 2008/09
Support Services
1%
Management Services0.36%
Public Libraries0.28%
Debt Service10%
Education Programs88.26%
2/26/2009 JA 5
Ministry Budget in Provincial Context
In 2001/02 the Ministry of Education Budget was $4.861 billion or 19.3% of the total Provincial Budget
In 2008/09 the Ministry of Education Budget is $5.675 billion or 15.05% of the total Provincial Budget
2/26/2009 JA2/26/2009 6
Cabinet and Treasury Board establish the overall budget and Individual Ministry Amounts
Ministry of Education sets priorities within the set overall amount
Ministry of Education allocates dollars to school boards
School Boards establish budgets and sets spending priorities
School Boards allocate funding to schools and programs
Schools allocate funding to classrooms/programs
2/26/2009 JA 7
Provincial Government Establishes the total funding for Public Education; Allocates the funding to the 60 school districts; Issues budget instructions and common format for budget
documents; Issues accounting instructions for common allocation of costs.
School Boards Determine local revenues; Prioritize expenditures; Allocate budgets to programs/services; Prepare budget documents and approve
budget.
2/26/2009 JA
History of Block Funding
Block Funding was introduced in 1990 in response to the 1988 Royal Commission for Public Education
It was recommended as a way to determine the amount of provincial funding needed for educational services
It was recommended that the distribution of the funding be done by a stable, predictable, supportable allocation system
8
2/26/2009 JA
History of Block Funding
The Royal Commission recommendation was that the block be increased annually by an education price index which recognized the unique costs of public education
The allocation system of the day, a resource cost model, was supported by the system and recommended for retention
The resource cost model was very detailed and provided a service level for each specific function such as class size, library and counseling services, etc.
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2/26/2009 JA
History of Block Funding
No government has been able to increase the block by a price index and in fact the block was frozen for 3 years (2001/02 to 2003/04) and was unable to fund year 2 and 3 of the previous teachers settlement in 2001-2003
The resource cost model lost favour in the 1990’s because the per pupil amounts allocated to districts differed and were not understandable
10
2/26/2009 JA
History of the Allocation System
In 1995/06 the allocation system was re-stated in a simpler form to reflect common core grants and specific grants to recognize district differences
The core grants allocated a standard amount of money per student, per school, and per district and provided funding for basic classroom, libraries, supplies, equipment, school administration, etc
Specific grants allocated amounts for operations and maintenance, transportation, special education, ESL
2/26/2009 JA
History of Allocation System
The allocation system today was introduced in 2002/03. It was announced as a new, streamlined funding formula,
honouring government's commitment to give school boards more flexibility, autonomy and control over the delivery of education services.
The new, simplified funding formula now comprises a student base allocation plus supplementary grants. There are 5 broad categories for supplementary grants: Unique student needs, including special needs, English as a
Second Language, Aboriginal Education, and Adult Education programs;
Enrolment Decline, where enrolments decrease by more than one per cent in a year;
Salary Differentials, for districts with higher average teacher salaries;
Transportation and Housing; and Unique Geographic Factors.
2/26/2009 JA
Recent Changes to the Block
Block 2001 to 2004 $3.794 billionSalary Increases $432 millionLiteracy, arts, special ed $202 millionDistributed Learning $7.7 millionGAAP $35.0 millionReduction in 2001/02 ($3.5 million)Total Increase $673 millionBlock 2008/09 $4.467 billion
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2/26/2009 JA 14
Effect of Enrolment Decline on Per Pupil Block
Comparison of Provincial Funding 2001/02 to 2008/09
10.23%
17.74%
26.82%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Change in Total Block Change in Per Pupil Block Change in Core Per Pupil
2/26/2009 JA
Provincial Funding Shortfall The Provincial Block has increased by $673 million since 2001/02 Government allocations within the block since 2001/02 result in the overall block
amount being utilized for new expenditures and a shortfall in funding to provide for the maintenance of existing services:
Formula Costs Pressures Distributed Learning $53,312,655 GAAP $35,002,907 Targeted Literacy, Arts and Special Needs $152,000,000 Summer School $3,658,080 Course Challenge $396,012 Special Needs increases $220,409,739 Labour Settlement $458,178,052 Total $922,957,445 Actual Increase to the Provincial Block $673,000,000 Shortfall $249,957,445
2/26/2009 JA
Provincial Funding Shortfall
We know that in our district we can save about $2,828 per pupil in associated costs as enrolment declines, so for a provincial enrolment decline of 41,000 pupils this would reduce the shortfall by $118.2 million and leave an actual overall shortfall in funding to maintain services of $132 million.
It is clear that boards are facing cost pressures which exceed the provincial ability to fund. We estimate that Saanich is short by $2.22 million caused by funding increases not keeping pace with cost pressures.
2/26/2009 FR 17
Provincial Education Funding - Operating
2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09
Coquitlam $ 7,471Central Okanagan $ 7,493Central Coast $20,476Stikine $22,968
Tries to be equitable - definitely not equal
2/26/2009 FR 18
Equal Funding – 2008-09 – All Districts
$5,851/school age student= $3,150 million
$4,000/adult student (approx) = $ 32 million
Home school and course challenges= $ 0.5 million
2/26/2009 FR 19
Equal Funding – 2008-09 – All Districts
Unique students = $308 millionLevel 1 $32,000Level 2 $16,000Level 3 $ 8,000
Unique students = $120 millionESL $1,174Aboriginal $1,014
2/26/2009 FR 20
Equal Funding – 2008-09 – All Districts
TOTAL unique student funding – addition to per pupil block (not including adult)Stikine $2,328Vancouver Island West $1,783Prince Rupert $1,692Central Okanagan $ 568 Revelstoke $ 511Arrow Lakes $ 491
2/26/2009 FR 21
2008-09 Supplements for Enrolment and Funding Decline
School Age Decline >1% up to 4%$2,926 per student = $9 million
School Age Decline >4% $4,388 per student = $1 million
o Cumulative decline @$2,926 = $2millionFunding protection - $$$ not
less than previous year = $7 million
2/26/2009 FR 22
2008-09 Supplements for Enrolment and Funding Decline
Addition to per pupil block18 districts $ NilBoundary $ 943Fort Nelson $ 995Gold Trail $1,321
2/26/2009 FR 23
2008-09 Supplement for Teacher Salary Differential
Additional funding to districts with higher average salary
Based on formula to calculate number of teachers funded
Intended to fund actual cost difference between districts
Does not fund teacher allowances, principal salaries, teachers of adult students
2/26/2009 FR 24
2008-09 Supplement for Teacher Salary Differential
2008-09 Total Funding $96 millionAddition to per pupil block
Vancouver Island West $ NilGold Trail $ 43Kootenay-Columbia $362Stikine $473
2/26/2009 FR 25
Supplement for Labour Settlement Costs
Funding for teacher, support staff, and admin staff labour cost increases since 2006
Ministry formula started in 2006 recognizes TOC cost increases as estimated in 2006 Category 5+ teacher grid placements as
estimated in 2006 Estimated teacher grid harmonization costs Remainder of $345 million allocated
proportionately based on district salary expenditures
2/26/2009 FR 26
Supplement for Labour Settlement Costs
2008-09 Total Funding $458 millionAddition to per pupil block
Abbotsford $ 750Burnaby $ 812Campbell River $1,103Stikine $2,328
2/26/2009 FR 27
Supplement for Unique Geographic Factors
Small Communities – ElementaryUp to $126,000 / > 5 km / < 250 FTE $29 million
Small Communities – Secondary Up to $374,500 / > 25 km / < 635 FTE $19 million
Small Communities – Grade 11 and 12 Up to $150,000 / < 215 FTE $ 8 million
2/26/2009 FR 28
Supplement for Unique Geographic Factors
Low enrolment $47 millionUp to $1.25 million / sch. dist.Maximum funding at 2,500 FTEPhased to $0 at 15,000 FTE
Rural factor $21 millionDistance to Vancouver/regional centre
2/26/2009 FR 29
Supplement for Unique Geographic Factors
Climate $ 9 millionHeating and cooling using district’s degree day temperatures
Sparseness factor $12 millionDispersion within district
2/26/2009 FR 30
Supplement for Unique Geographic Factors
Addition to per pupil blockVancouver $ NilSurrey $ 4Conseil Scolaire $ 2,554Central Coast $10,220Stikine $11,161
2/26/2009 FR 31
Supplement for Transportation and Housing
Formula based on bus routes mileage and costs approved for 2001-02
2008-09 funding for each district remains at 2001-02 level
Subsequent issues affecting transportation costs include: enrolment decline school closures changes to costs or bus routes
2/26/2009 FR 32
Supplement for Transportation and Housing
Addition to per pupil blockNew Westminster $ 3Prince George $ 290Cariboo-Chilcotin $ 932Stikine $1,376
2008-09 Funding $86 million
2/26/2009 FR 33
Supplement for Summer Learning
Addition to per pupil block23 school districts $ NilRichmond $ 66Vancouver $ 70Nisga’a $ 73
2/26/2009 FR 34
Supplement for Summer Learning
Funding first established in 2007
In 2008, funded $400 per full credit courses and $200 for any other course $ 13 million
2/26/2009 FR 35
Holdback Supplement – 2008-09
Funding is calculated 4 times per year: 1) March – estimate for next school year 2) November – funding recalculated using September enrolments 3) February – Distributed Learning and special education students funding using February enrolment 4) May – DL students funded using May enrolment
2/26/2009 FR 36
Holdback Supplement – 2008-09
Ministry funding holdback for Nov/Feb/May count $84.5
million November 2008 allocation $47.5
million Funds available for Feb/May $37.0
million Ministry commits to allocation
of all funds
2/26/2009 FR 37
2008-09 Fall Recalc = $4,467 Million
Summer Learning
Transportation
Unique GeographicFactorsLabour Settlements
Teacher SalaryDifferentialUnique Student Needs
Enrolmentdecline/protectionHoldback
Basic EnrolmentFunding
2/26/2009 JA
Ministry Education – Autumn 2008-09
2/26/2009 FR 39
Per Pupil Block Amount
0
5,000
10,000
15,000
20,000
25,000
99 Province 87 Stikine 59 PeaceRiver South
70 Alberni 43 Coquitlam
Summer Learning
Transportation & Housing
Unique Geographic
Labour Settlements
Teacher Salary Differential
Unique Student Needs NotIncluding AdultEnrolment Decline & FundingProtectionBasic Enrolment Funding
2/26/2009 FR 40
FINAL 2008/09 PER PUPIL BLOCK RATES ADJUSTED FOR PROVINCIAL LEARNING NETWORK AND ANNUAL FACILITY GRANT
2008-09 FTE Pupil + Adult FTE
Ministry Block $$$ per FTE
Final District Funding Allocation for operating
43 29,687 7,471$ 221,786,892 23 21,037 7,493$ 157,637,305 40 6,618 7,494$ 49,590,297 45 6,160 7,498$ 46,185,216 34 18,602 7,518$ 139,860,522 41 23,829 7,543$ 179,749,552 36 65,085 7,582$ 493,482,234 35 18,284 7,598$ 138,918,416 61 19,052 7,608$ 144,952,182 38 21,903 7,617$ 166,829,010 37 15,827 7,618$ 120,578,428 44 15,631 7,639$ 119,405,530 42 14,151 7,698$ 108,927,608 33 12,488 7,707$ 96,240,938 39 55,477 7,837$ 434,757,271 63 7,667 7,984$ 61,209,740 68 13,973 8,042$ 112,373,427 22 8,577 8,043$ 68,978,423 62 8,226 8,181$ 67,289,871 79 8,538 8,187$ 69,900,158 75 6,311 8,190$ 51,689,157 67 6,581 8,240$ 54,226,034 73 14,320 8,247$ 118,100,420 71 8,293 8,401$ 69,676,383 48 4,042 8,442$ 34,116,451 57 14,092 8,457$ 119,185,252 69 4,659 8,551$ 39,841,084 20 4,142 8,713$ 36,086,890 83 7,018 8,742$ 61,356,128
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
43 23 40 45 34 41 36 35 61 38 37 44 42 33 39 63 68 22 62 79 75 67 73 71 48 57 69 20 83 72 70 5 28 53 60 19 47 54 91 27 82 6 58 78 46 8 64 59 52 81 51 85 10 93 74 50 92 84 49 87
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2008-09 FTE Pupil + Adult FTE
Ministry Block $$$ per FTE
2/26/2009 FR 41
Provincial Education Funding - Operating
2008-09 funding = $4.467 billion Same formula for all districts Per pupil block value – operating 2008-09
Coquitlam $ 7,471Central Okanagan $ 7,493Central Coast $20,476Stikine $22,968
Tries to be equitable - definitely not equal
2/26/2009 FR 42
Diverse Province
District differences include:Compact or dispersedLarge or smallMetro or remoteStudent diversity – incidence of unique
studentsUnderstandable formula?
2/26/2009 FR
Provincial Funding/Student
2005-06 2006-07 2007-08 2008-09At Nov. 2008
Block funding – operating
4,027,603,717 4,243,496,038 4,345,211,469 4,426,685,547
School age and adult enrol
567,523 559,499 556,310 545,269
Total block funding per student
$ 7,097 $ 7,584 $ 7,811 $ 8,118
2/26/2009 FR
Provincial Education Funding$ per student w/o labour settlement & unique student increases
2005-06 2006-07 2007-08 2008-09At Nov. 2008
Block funding – operating
4,027,603,717 4,243,496,038 4,345,211,469 4,426,685,547
Unique student funds (not including adult)
390,289,475 399,204,975 414,879,981 428,173,434
Labour settlement funding
196,372,946 320,913,967 457,568,050
New program – summer learning
12,776,550
Remaining block funding
3,637,314,242 3,647,918,117 3,609,417,521 3,528,167,513
School age and adult enrol
567,523 559,499 556,310 545,269
Adj. block funding per student
$6,409 $6,520 $6,488 $6,470
2/26/2009 FR
SD’s – Additional Revenue Reported 2008-09 BudgetsProvincial Total $219 million
Provincial avg/student $ 402Port Alberni $ 68Vernon $ 812West Vancouver $1,829Nisga’a $2,438
E.g. international prog., rentals, interest
2/26/2009 FR 46
Predictability of Funding - Enrolment
Enrolment 2005-06 2006-07 2007-08 2008-09
Actual 567,837 559,499 556,310 545,269
Forecast 567,523 562,682 547,840 542,509
Increase (decrease) 314 (3,183) 8,471 2,761
2/26/2009 FR 47
Predictability of Funding - Enrolment
For two years – 2006-07 to 2008-09Enrolment up in 8 districts down in 52 districts down > 5% in 27 districts
Each student decline – ($5,851)Funding protection may delay impact> 200 in SD67
2/26/2009 FR 48
Predictability of Funding - Formula
Since 2006-07, new funding count February and May – Distance Learning
Since 2006-07, Labour Settlement $$$ now fund employees serving adult students and employees funded from SD businesses and other revenues
October 2007, Grades 10 to 12 FTE count In 2008-09, Summer Learning - $13 million
2/26/2009 FR05/03/23 49
Predictability of Funding
Ministry announced funding – March 2008 2007-08 $4.345 billion = + $116 million 2008-09 $4.467 billion = + $122 million 2009-10 $4.543 billion = + $ 76 million
Labour settlements costs 2007-08 $125 million 2008-09 $137 million 2009-10 ???
2/26/2009 FR05/03/23 50
Predictability - Holdback
Predictable for MinistryLess predicable for districts
2003-04millions
2004-05millions
2005-06millions
2006-07millions
2007-08millions
2008-09millions
Estimatee.g. Enrol.
$45.6 $46.0 $45.1 $45.4 $45.3 $84.5
Final $24.6 $25.4 $29.8 $ 0 $3.6 ?
% to SD’s 54% 55% 66% 0% 8% ?
2/26/2009 FR 51
Need for Predictability
Ability to forecast funding March/April is critical In my district
if too cautious = layoffs/programs reductions if too optimistic = potential for deficit
2/26/2009 FR 52
Budget Decision Making – SD67
Funding allocation 70% funding allocation = 5,851 per student If enrolment declines 200 students = $1,170,200
Teachers for 200 FTE @ 20:1 @ $86,000 = $860,000Clerical support + supplies, est. @ 30,000
_______Funding reduction (after year 1) $280,200
2/26/2009 JA
The Saanich Story
7,167.6250 FTE as of September, 2008 22 School Sites:
3 Secondary schools, grades 9 – 12 3 Middle schools, grades 6 – 8 9 Elementary schools, grades K – 5
The district also has a Distance Education School, the Children’s Development Centre and two Learning Centre Schools
The school district has closed six elementary schools and opened one new elementary school in September 2008
Operating Budget of $70.4 million
2/26/2009 JA
Saanich-Reductions Since 1995/96
The district has reduced $13.34 million (or 18.9% of our budget) in services since 1995/96 from all functional areas of our system. Only 3% of the budget is spent on district administration with the balance supporting students and schools.
Instructional Services $3,580,469 26.83% School Budgets $2,754,167 20.63% Plant Maintenance, Transportation and Custodial Budgets $2,329,466 17.45% Board Office and Curriculum Staff Budgets $2,108,394 15.80%
SIDES, Reduce Admin. Costs of Benefits, One-Time Costs & Funding $1,602,367 12.00% Increase Revenues $972,772 7.29% Total Reductions $13,347,635 100.00%
2/26/2009 JA
Saanich-2008/09 Final Budget
Preliminary Budget Shortfall ($2,844,705) Reduced Revenues ( 69,905) Increased Expenditures ( 160,002)
Shortfall Funded by Reserves ($3,074,612)
Today’s Expenditures exceed today’s revenues
2/26/2009 JA
Saanich-Reserve Balances
The District creates reserves after consultation with community to sustain educational services for as long as possible
Savings from School Closures: $462,000 for 2005/06 and 2006/07 $ 924,000 Unspent 2005/06 funding: $871,043 for 2005/06 and 2006/07 $1,742,086 Investment and Building Lease Revenue $ 386,863 International Program Expansion $ 332,837 Total Reserve $3,385,788 Surplus 2007/08 $ 103,391 Spent on Services in 2008/09 (3,074,612) Net Balance Available for 2009/10 $ 414,567
2/26/2009 JA
Saanich-2009/10 Structural Shortfall
For 2009/10 structural shortfall is caused by: Cost Pressures ($2.935 million) $2.223 million Savings from School Closure $0.712 million Shortfall from Enrolment Decline ($2.705 million) Unspent 2005/06 Funding $0.871 million Structural Shortfall ($4.058 million) Fully Utilize Savings Reserves $0.414 million Net 2009/10 Shortfall ($3.644 million)
Shortfall caused by overall size of the block
Shortfall caused by allocation of the block
2/26/2009 JA/FR 58
Discussion/Questions
2/26/2009 JA/FR
Joan AxfordSecretary-TreasurerSchool District No. 63 (Saanich)[email protected]
Frank RegehrSecretary-TreasurerSchool District No. 67 (Okanagan Skaha)[email protected]