The State Journal ran an editorial today—“Great News for Madison Schools – that criticized School Board members for bemoaning the impact of Governor Walker’s cuts in school funding when in fact it looks like the Madison School District will unexpectedly receive about 25% more in state aid for the 2012-13 school year – about $53 million, up from this year’s $42 million.
It’s true that MMSD stands to get a bigger dollar increase in state aid next year than any other school district in the state. How in the world did this happen? Overcome by a newly-found spirit of bipartisanship, did Governor Walker just decide to shower the extra millions on the Madison schools as a goodwill gesture?
Uh, no. When it comes to general state aid to schools, the governor and legislature decide how big the overall funding pie is going to be. The long-standing school funding formula set out in state law determines how large a slice of that pie each school district is to receive.
There is no mystery about the size of the overall pie. The last budget under Governor Doyle appropriated $5,025,190,300 for elementary and secondary school aids for 2009-10 and $5,271,555,900 for 2010-11. Under Governor Walker’s budget, this total was cut to $4,845,083,000 for 2011-12 and $4,913,986,100 for 2012-13. So Governor Walker slashed general state aid to schools by about $538 million over the biennium. This is hardly cause for celebration.
How next year’s $4.9 billion in general state aid is split up among the state’s 424 school districts is determined by the school funding formula. I describe how the formula works here. This year, to just about everyone’s surprise, the formula has turned out to be Madison’s friend.
Last year, application of the school funding formula resulted in MMSD qualifying for about $15 million in general state aid. This amount was increased to about $43 million by virtue of the hold-harmless provision of the law that capped each school district’s reduction in state aid at 10% of the previous year’s total.
How could it be that the same formula that calculated that MMSD was entitled to $15 million in state aid in 2011-12 would determine that the district was in line for $53 million for 2012-13?
The formula is a funny thing. For Madison at least, the formula critically depends on student enrollment in the district and operates in a highly-leveraged fashion. Madison’s enrollment has been around 25,000 for several years. Many thousands of those students have very little impact on the amount of state aid the district receives. I don’t know precisely where the break-even point is, but it could be that the first, say, 20,000 students enrolled in the district have minimal impact on the state aid calculation. If 20,000 is the actual break-even point, then at that level of enrollment, negative tertiary aid for Madison would just cancel out the secondary aid to which the district is entitled. This would leave the district with only primary aid, which is some amount less than $1,000 in state aid for each student.
Once the cut-off point is exceeded, though, that increased enrollment starts to pay off in a big way. This is illustrated by the 2012-13 calculations. For purposes of the formula, the significant difference for Madison is that our student enrollment increased by 1,492 students this year, as student count is calculated for purposes of the formula.
The bulk of this increase is attributable to the first year of the district’s four-year-old kindergarten program. Assuming appropriate programming is provided, four-year-old kindergarten students count as .6 students each for purposes of the school funding formula. So, if MMSD enrolled about 1800 four-year-old kindergarteners, its student count would increase by more than 1000.
Summer school expansion also played a role in our enrollment bump, although it had a much smaller impact than 4K. Students enrolled in summer school are counted as .4 students for funding formula purposes. We expanded our summer school program last summer and increased our student count by about 100 students as a result (representing about 250 additional summer school students).
This increase in student count explains our increase in state aid. DPI prepared a spreadsheet for Madison, as it does for every school district, that explains how the $54 million in state aid for Madison was calculated. I still have to refer back to my earlier blog post to keep straight how the formula works, but if you have a handle on the steps you can actually follow along on the spreadsheet. Here is the sheet:
I re-ran the numbers to see what the state aid figure would be if our student count had remained the same – if it had been last year’s 25,714 total rather than this year’s 27,206 total. I found the result jaw-dropping.
If our student count had remained constant from last year to this year, Madison would have qualified for about $30 million in general state aid. Instead, with our 1,492 additional students, we qualify for about $53 million in state aid. While overall Madison still receives less than $2,000 per student in general state aid, each of our additional students this year generates about $15,000 in additional state money.
This highlights the significance of student count to the school funding formula. The amount of state aid a district receives is the total of the calculations for the district of primary, secondary, and negative tertiary aid. The underlying calculations for each level of aid takes into account the district’s student count, often in several ways.
For example, secondary state aid is calculated by starting with a dollar figure that is fixed for most districts ($8,222) and multiplying that by a school district’s student count, and then multiplying that total again by a percentage that is calculated on the basis of a school district’s total property value per student. So both of the variables in the formula increase secondary aid as student count goes up.
Indeed, for Madison, every $10,723 decrease in the District’s property value per student figure (currently $815,138) translates into an additional $2.24 million in secondary state aid. Due to our increased enrollment and stagnant property values, the school district’s property value per student figure decreased from $869,006 to $815,138 this year, and, not coincidentally, our secondary aid went up from $22.4 million to $53.7 million.
The impact of student enrollment on Madison’s state aid has a couple of obvious implications.
First, in addition to all its other benefits, four-year-old kindergarten is a money-maker for the District. At the time the School Board approved the start of 4-year-old kindergarten, we projected that the program would have a net cost for the District of about $8 million per year. My understanding is that we had in the neighborhood of 1800 students enrolled in the program this year. Counting each of the four-year-olds as .6 students, this increased our student count by 1080. At about $15,000 per student, the institution of 4-year-old kindergarten generated about $16 million in additional state aid, roughly double its cost.
Second, summer school remains an underutilized opportunity for MMSD. Each qualified summer school student increases our student count by .4. At least this year, an additional .4 student generated about $6,000 in additional state aid. Assume that a student takes two two-hour classes during his or her summer school day. If each class has 20 students, the two classes would each generate about $60,000 in additional state aid. An individual summer school class does not cost the District anywhere near $60,000. Summer school thus seems to hold the potential to be another money-maker for the District.
This revives my interest in an idea I have had for several years. We should expand summer school beyond the credit-recovery programs that are its current focus, important as those programs are. We should invite our teachers to submit proposals for summer school classes they would be excited to teach. We should select the most promising proposals and offer those classes, paying the teachers a much healthier stipend than we currently offer summer school teachers.
Capitalizing on the wonderful skills and talents of our teachers, we could offer some great summer school classes, offer our students enhanced learning opportunities, make our school district more attractive to families, provide an opportunity for some of our best teachers to be paid something closer to what they’re worth, and qualify for more in additional state aid than we’d incur in expenses. Seems like a no-brainer to me.
And references to no-brainers brings us back full circle to the “Great News for Madison Schools” editorial. Next year’s increase in state aid for Madison is certainly welcome. But a little perspective is in order.
For the 2008-2009 school year, Madison received $60.7 million in general school aid. We’re now celebrating the fact that for 2012-13 we’re in line for only about 11 percent less in state aid than MMSD received four years ago.
From some viewpoints, and particularly from the perspective of this year’s state funding total, this can be considered great news, I guess. But perhaps next year’s bump in state aid just tends to show that over time the quirks in the state funding formula tend to even out a bit. The broader message is that from a statewide perspective, the overall trend in support for public education is heading nowhere but down. That’s neither great nor news.