Attachment A

Funding For Achievement: A Formula to Target Public Resources on Educational Priorities

This is a comprehensive operating formula. It accounts for all aid formulas except building aid. It replaces all general purpose aid, including categorical aids such as BOCES, Transportation, Textbook and entitlements such as IDEA and NCLB, and general purpose legislative grants included in the Special Aid fund. Only Building Aid, Prekindergarten funds, 4408, and truly competitive grants would be outside of this formula. The Association recognizes that there is also a need to reform building aid and provide some immediate emergency assistance to targeted districts that would need additional classrooms in order to utilize new operating funds. This might be achieved under the oversight of the dormitory authority.

Formula:

Target Expense = Base Cost * Performance Target * Total Weighted Enrollment

State Aid = Target Expense * State Share (even if negative)

State Share = 1 - (.4828 * CWR)

CWR = (local Property / Wtd. Pupil / State Average + local Income / Wtd. Pupil / State

Average)/2

Recapture = The sum of negative aid.

Save-Harmless = The total amount of aid paid to prevent an aid loss in any district.

Efficiency = 1- (Total Aid Paid Above The Amount Needed To Reach Performance Targets /

Total Aid Paid)

Adequacy = Current Aid / (Current Aid + Amount Needed To Reach Target)

Definitions:

Base Cost (BC): The Base Cost is the 2001-2002 actual average cost of raising student performance by one level, in regionally adjusted dollars, for districts testing at least 100 students on ELA 4^th and 8^th and Math 4^th and 8^thgrade exams. This was calculated at $4,007 per pupil. This number may be updated after several years based upon actual test results and spending, but must be increased annually based on school cost inflation.

Performance Target (PT): The Performance Target is set at the actual average performance level of these districts: level 2.8 (or 1.8 levels above level one). This is the rough equivalent of the state’s SASS score of 165. Unlike the SED system, this measurement counts every level above level 1 equally (see Appendix B). This achievement target could be set either higher or lower. However, the state’s minimum level of performance for an individual school to avoid sanctions (currently 150) is far too low a target to set for achievement statewide.

Aid Ceiling: This is the product of the base cost and the performance target, ($4,007 X 1.8 or $7,211.70).

Adjusted Enrollment: This is the districts BEDS enrollment less .5 of any half-day kindergarten students. This formula is based on enrollment. Basing the aid formula on attendance rather than enrollment would also require both a higher base and a higher poverty weight.

Poverty Weight: This is the 2001-2002 statistical relationship between the cost per level achieved above level 1 and the district’s K-6 free and reduced price eligibility percent. This was calculated at 1.0905. As with the aid ceiling, this number could be reviewed periodically and altered if the relationship between cost and poverty had changed substantially. It is important in response to the CFE decision that the aid ceiling and the poverty weight not be calculated to fit state budgetary constraints or to produce regional balance, as has often been done in the past. The local share variable, below, is the appropriate vehicle for balancing the state’s finances, while still impacting individual districts equitably.

Regional Cost Weight: The NCES regional cost factor based on 1.00 for the lowest cost region. By subtracting 1.00, the added weight is derived. Other regional cost factors could be developed, but it is important for credibility that this statistic be developed by disinterested parties.

Sparsity Weight: For districts with fewer than 25 students per square mile, this is set at .5 times the positive difference, if any, between 1,500 students and the district’s actual enrollment, divided by 1,500.

Limited English Weight: This was set at current law, or .199.

Total Weighted Enrollment (TWE): This is the sum of the base enrollment plus the base enrollment multiplied by each of the weights for each of the districts.

Target Expense (TE): This is the product of the aid ceiling times the total weighted enrollment for each district. This represents the resources necessary to reach the achievement target considering the cost factors represented by the pupil weights. At this point, the formula has approximated the amount of resources that should be available to children in each district, but has not calculated the share of these resources to be provided locally or through state and federal funds.

Total Weighted Enrollment for Property Wealth: This would be the same as the above, but adjusted downward for non-resident students and upward for resident students educated in other settings at district expense. (This adjustment has not been made in the current model, thus results for districts with a significant imbalance between students tuitioned in and out are not accurate).

Total Weighted Enrollment for Income Wealth: This is the same as for property wealth, except the enrollment in nonpublic schools is also added.

State Average Wealth (SA): These are calculated for the entire state based on the same weighted pupils in the individual districts.

Combined Wealth Ratio (CWR): This is the average of the local property wealth ratio to the state and the local income wealth ratio to the state. This is the same as current law except that the pupil weightings are now data-based.

Local Share (LS): This has been set experimentally to derive the same statewide average tax rate as existed in the 2001-2002 data. In this run the local share is set at 48.28% of the target expense. This means that a district of average wealth would be responsible for raising 48.28% of the target expense through taxes or other local revenues. Wealthier districts raise more funds locally, and poorer districts proportionately less.

Calculated State Share (SS): This is the product of the local share and the combined wealth ratio subtracted from 1. 1-(.4828*CWR). With this local share, a district’s state aid ratio falls below zero when the district’s wealth exceeds 2.071 times the state average wealth, indicating a district that would be subject to recapture. In this way the cost to the public of rejecting recapture proposals, such as consolidations, tax base sharing or county wide tax rates, can be calculated.

State Aid: This is the product of the state share, even if negative, and the target expense.

Recapture: This is the amount of money that a high wealth district may be capable of raising, in addition to its own cost of education, by exerting a normal tax effort.

Save-Harmless: This is the amount of money that a district would receive, not because of need, but only to maintain the amount of aid received prior to reform. It includes the recapture amount.