Recognizing High Cost Factors in the

Financing of Public Education

A Discussion Paper and Update

Prepared for the

New York State Board of Regents

  September 2000

Executive Summary

A July 1999 Regents item concerning "Linking Funding and Successful Strategies for High Student Achievement" outlined a number of traditional Regents State Aid policy goals. Student equity was identified as the most important of these. One major limitation on both student equity and taxpayer equity in New York State’s current State Aid distribution is the inadequate recognition of high cost factors. According to a number of legal opinions and blue-ribbon study commissions over the past several decades, inadequate recognition of cost differences in the provision of educational services has had disequalizing effects upon aid distribution. In addition, the Regents have repeatedly identified high need districts in high cost areas of the State as a major policy concern.

This Regents report analyzes geographic cost differences across New York State using a wage index created from the wages of 77 professional, non-teaching occupations. Thus, we compared professional market wages across the State in order to develop an index of regional costs in each of nine labor force regions. Based upon the results of this analysis, we make recommendations that would more appropriately recognize these high costs in current aid formulas.

Recommendation:

Evidence in Support of This Recommendation: Geographic Differences in Cost

 

Table 1: Professional Cost Index for New York State, by Labor Force Region

 

Region

Index Value

Purchasing Power of $1,000

Capital District

1.251

$799.36

Southern Tier

1.153

$867.30

Western NY

1.155

$865.80

Hudson Valley

1.476

$677.51

LI/NYC

1.516

$659.63

Finger Lakes

1.245

$803.21

Central NY

1.218

$821.02

Mohawk Valley

1.084

$922.51

North Country

1.000

$1,000.00

 

Introduction

For years, student equity, ensuring that a fair level of resources is provided to each student, has been a central goal of Regents policy. This has been evident in State Aid proposals that target greater resources to high need school districts, recognizing the greater educational challenge posed by students from disadvantaged backgrounds, and through initiatives where the Regents commitment to fairness in school funding has been apparent. The Regents have maintained this steadfast commitment to fairness, even as the definition of fairness has changed and broadened with modern understanding of what New York requires of its schools.

Fairness in school funding has been traditionally interpreted by the courts to mean equality in spending per pupil. For example, the education clauses of some states’ constitutions (i.e., California, Texas and New Jersey) contain provisions requiring that they provide an "efficient" and "thorough" or "uniform" system of education to their students. Faced with property rich districts who enjoyed far higher levels of spending per pupil than property poor districts, these spending per pupil disparities were interpreted in these states as clear violations of their efficiency clauses, and served to launch major court-driven financing reforms designed to equalize spending per pupil.

However, the traditional focus upon equality-in-funding has shifted, in New York and elsewhere, to a more adequacy-oriented view of funding, for two important reasons. First, New York’s constitution contains no "efficiency" clause. In fact, the New York State Court of Appeals’ decision in the Levittown case (1982) was that, despite major disparities in spending per pupil among districts, New York's school finance system did not violate the education clause of the State Constitution. The Court in effect ruled that the Constitution did not require equal spending among districts or equality in the quality of educational programming across districts, provided that minimal standards of educational quality and quantity were met. As the court emphasized, "No claim is advanced in this case...that the educational facilities or services provided in the [plaintiff] school districts that they represent fall below the statewide minimum standards of educational quality and quantity fixed by the Board of Regents."

A second, more compelling reason for the shift toward a more adequacy-oriented standard of fairness, is due to several shortcomings in the older equality-of-spending standard.

Regional Cost Issues in New York State: A Brief History

The public record has acknowledged for decades that educational costs vary a great deal across New York State. References to cost differentials were made as early as 1978 in Levittown v. Nyquist and more recently in the Campaign for Fiscal Equity case, as well as in the major report findings of two blue-ribbon commissions convened in the 1980s. Thus, the recognition that the costs of purchasing educational goods and services vary significantly around the State, thereby constraining the ability of high-cost districts to deliver necessary educational goods and services to their students, has a long history. That history is briefly summarized below.

The Levittown Case

As noted earlier, the Levittown plaintiffs claimed that the State Aid formula failed to provide equitable support for schools, and thus violated both the State and federal constitutions. The courts did not sustain the plaintiffs’ claim regarding the federal constitution, but the district court found differences in the cost of education. These findings of fact were later accepted by the Appellate Division. In its decision, the Appellate Division recognized that both the higher costs imposed by the many fiscal responsibilities of cities (called municipal overburden) as well as the higher costs for essential goods and services that cities faced contributed to the inequity of the funding system. Justice Lazer, writing for the majority, wrote of the State Aid formula:

Another disequalizing assumption of the state-wide scheme is uniformity of the purchasing power of the education dollar. State mandated minimum education programs cost 47% more and average expenses were 29% higher in downstate and metropolitan areas than in upstate areas, matters further exacerbated by the higher cost of living in the large urban centers. The largest component of school expense – teacher salaries – were higher downstate and approximately 30% higher in urban areas than in the rest of the State .

Although the Appellate Division opinion was ultimately modified, the Court of Appeals recognized the reality of the municipal overburden claim and the higher costs of education in urban areas.

Findings of fact in the case included many other references to the disequalizing effects of the cost differentials faced by the urban and downstate districts. These references are attached as Appendix A to this report. Since the court decision was based on data originating from the 1974 -75 school year, this "disequalizing " condition has been in place for at least a quarter-century.

Blue Ribbon Panels

After the first Levittown decision, a commission, the New York State Special Task Force on Equity and Excellence in Education, was appointed to consider approaches to solve the problem of inequity in school funding. The task force, headed by Max Rubin and known as the Rubin Commission, was made up of educational leaders and senior fiscal analysts from around the State. Its report, issued in February 1982, addressed the findings of the lower court, although it also encompassed conclusions drawn by the Supreme Court. Responding to the findings in Levittown, the Rubin report focussed on the problem of cost differentials in several of its recommendations and in its letter of transmission to the Governor. The task force stated:

The Task Force …agreed with the courts’ findings and research evidence that substantial differences in the cost of providing education exist among the regions and the school districts of New York State. They further agreed that the State Aid formula should compensate for these cost differences, although they differed on the specific mechanism.

Noting "the difficulties of constructing reliable and non-inflationary indices based on education costs alone," the Rubin report recommended that:

The State should use a noneducation cost index … to adjust for regional cost differences.

In addition to this recommendation, the task force report also included a report of research on the cost problem. This research, conducted by Wayne Wendling of the Education Commission of the States, confirmed that the cost differences were real and considered means with which to tackle the problem. The report emphasized the need for a cost index that would index noneducational costs, so as not to be subject to manipulation or misunderstanding. The index described in this Regents report is in accord with this recommendation.

Despite the evidence in the Levittown case and in the supporting work for the Rubin Commission, many of the recommendations made by the Rubin Commission, including the ones on cost, were not implemented. When debate on school aid disrupted the Legislature’s budget negotiations in 1988, another commission, comprised of legislators, business leaders and educators, was appointed to address some of the issues. The Commission was headed by Frederick Salerno, CEO of the New York Telephone Company, and, under his direction, issued its report in December 1988. Once again, recognition of regional cost differences in the provision of a sound basic education were part of the Commission’s recommendations.

Gaps In the Current State Aid Financing System - Regional Cost Differences

An analysis of current aid formulas reveals at least two major gaps in the recognition of "high cost" factors for aid distribution. One of these concerns inadequate formula weightings designed to more appropriately recognize the greater challenge to school districts posed by educationally disadvantaged children from poor backgrounds. The second reflects the absence of any explicit cost adjustment in operating aids that recognize major disparities in the cost of doing business in different geographic areas of the State.

This oversight is noteworthy not only because of the extensive record of court opinions and expert committee findings in support of the concept, but especially in light of the recent legislative enactment that incorporated a cost adjustment in the Building Aid formula (representing nine percent of State Aid to districts). In addition, other formulas for which reimbursement is expenditure-based implicitly recognize the regional cost differentials, which affect those expenditures. Thus, for example, State Aid support for students with disabilities educated in public schools and BOCES, by virtue of the approved operating expenditure-driven basis for their reimbursement, also implicitly recognize cost differentials. These formulas account for 38 percent of State Aid to school districts. Since the need for cost adjustments has been either explicitly or implicitly recognized in law in other important aid formulas, this report argues for an explicit recognition of this concept in the most fundamental aid of all, Basic Operating Aid.

SED staff have built upon this earlier work by analyzing Occupational Employment Survey wage data in New York State for 77 professional job titles (further details reported below). The results of these preliminary analyses reveal, for example, that the professional service costs of doing business in the New York City area run about 50 percent higher than equivalent professional service wage costs in the North Country. Despite this large cost difference in labor market wages, there is no accounting for these wage differences in the State Aid formula.

The single most important aid formula, Basic Operating Aid, illustrates the problem nicely. Like most other aid formulas (with the most notable exception of the Building Aid formula as noted), it contains no adjustments to reflect differential professional personnel costs in different areas. As a result, a hypothetical school district of precisely average wealth in the North Country (enjoying a 41 percent State sharing in the Basic Operating Aid grant of $3,900 per pupil), receives $1,599 per pupil in State Aid ($3,900 x .41), as does a school district of identical wealth in a much higher cost area of the State, for example, the Hudson Valley Region. However, the $1,599 grant buys $1,599 worth of educational goods and services in a North Country school district, but buys only about $1,083 worth of such services in a Hudson Valley school district.

In short, since current aid formulas are wealth equalized, both districts receive precisely the same aid per pupil due to their identical fiscal capacity (i.e., $1,599 per pupil). However, due solely to geographic differences in the cost of doing business, the Hudson Valley school district in this illustration actually receives $516 per pupil less in dollars of equivalent purchasing power than does its North Country counterpart. The same education dollar awarded in one area buys a different amount of educational inputs than the same dollar buys elsewhere. In effect, the equalization formulas designed to promote fairness by incorporating school district wealth differences into the aid equation are rendered less effective when they fail to account adequately for markedly different professional labor costs across the labor force regions of the State.

The Regional Cost Index

The results from the calculation of the Regional Cost Index appear in the table below. These values represent the difference in median wages for professional jobs in the service sector which require a bachelor’s degree at entry. They are a comparison of median wage levels (and thus, labor market purchasing power) around the State. As the index values and the accompanying index of purchasing power show, the wide variation in costs claimed decades ago in Levittown still remain strong. In fact, they have grown slightly wider as uneven economic growth has been a problem for the State. In some areas, wages and prices have grown higher as the economy expands, in others, wages and prices have been less mobile as the economy has stagnated.

Region

Index Value

Purchasing Power of $1,000

Capital District

1.251

$ 799.36

Southern Tier

1.153

867.30

Western NY

1.155

865.80

Hudson Valley

1.476

677.51

LI/NYC

1.516

659.63

Finger Lakes

1.245

803.21

Central NY

1.218

821.02

Mohawk Valley

1.084

922.51

North Country

1.000

1,000.00

The reader may recall that the opinion of Justice Lazer in the Levittown case, based on 1974-75 school year data, stated that "State mandated minimum education programs cost 47 percent more and average expenses were 29 percent higher in downstate and metropolitan areas than in upstate areas."

These results are quite consistent with his finding. When we compare professional wages in the North Country to those in the Hudson Valley region, we see a 47.6 percent difference, indicating that median wages in a group of 77 professional jobs, not related to education, are 47.6 percent higher in the Hudson Valley region. Since school districts in the Hudson Valley region must hire teachers in this highly priced labor market, they must offer wages high enough to compete with other employers in order to hire teachers of average quality.

The table indicates that the difference is even more pronounced in the Long Island/New York City region. Here, the professional labor force market is characterized by wages 51.6 percent above North Country levels. Thus, to hire teachers with the same credentials as in the North Country, assuming similar working conditions, New York City will have to pay approximately 52 percent more. In the event that districts are unable to offer a salary of equal market value, they will not be able to hire equally qualified teachers. In fact, this may partially explain the fact that 15 percent of New York City’s teachers are uncertified. Without an adjustment for higher costs, New York City is unable to compete in the professional labor market as effectively as other areas of the State, so it is forced to compromise teacher quality. Student achievement suffers as a result.

Cost Index Variation by District Type and Need

In addition to comparing the index values for different labor force regions across the State, several analyses were conducted designed to highlight the relation between district type and need status and the cost index value. These results are shown in Charts A, B, and C. The first chart examines geographic differences in median regional labor costs.

As illustrated in Chart A, there is a large difference between costs in the New York City metropolitan area and rest of the State. As noted in the Levittown opinion, and continues to be the case, upstate small cities, upstate suburbs, rural areas and the Big 4 enjoy substantially lower labor costs than the downstate areas. Among downstate small cities, for example, the cost index of 1.476 suggests that as a group these school districts experience labor costs which are about 21.7 percent higher than their upstate counterparts (where the RCI was only 1.155). Stated differently, the purchasing power of these downstate small city districts is only 78.3 percent of that of their upstate city counterparts.

 

 

The trend is similar in the comparison of upstate suburban and downstate suburban districts. In the latter case, for example, the downstate suburban districts experienced a regional cost estimated to have a purchasing power of only 80.3 percent of their upstate suburban colleagues. In effect, every dollar spent to purchase goods and services in upstate suburban districts purchases only 80 cents worth of these services in the downstate suburban areas.

An important implication of this geographic trend – in particular, the marked upstate -downstate cost differences noted here – is the fact that these higher downstate labor costs also tend to be associated with higher wealth districts in the State, wealth differences which are clearly recognized in the wealth equalization principles of many State Aid formulas. In Chart B, we illustrate this relationship.

This chart (decile table) demonstrates that the relationship between a district’s need/fiscal capacity and the regional cost index is complex. In the lowest need districts (i.e., districts whose fiscal capacity is strong and whose student bodies have small proportions of students from disadvantaged backgrounds), the regional cost values are highest. And, generally, as need/resource status worsens, regional labor costs appear to diminish somewhat.

The paradox, of course, is New York City – since both New York City (situated in the 9th Need Resource decile) as well as the lowest need group (dominated by wealthier downstate suburban districts) share the same high regional labor costs. In effect, it may be precisely those districts of moderately high pupil needs – whose wealth capacity is adequate – but which are disadvantaged by high regional costs of doing business that pose a serious concern for State Aid planners. For them, regional labor cost recognition alone may not be enough to ensure that adequacy and equity concerns are fully addressed.

In order to examine this notion further, an additional analysis was conducted which examines regional cost by district need/resource capacity. When we perform the analysis comparing median regional cost index values by nominal district need category (as in Chart C), more subtle differences appear.

While traditionally high wealth-low need districts share the high regional costs of the New York City school district, and while rural high need districts clearly benefit from the relatively low costs of professional labor in their communities, this chart reveals that urban/suburban high need districts face relatively high costs. Since these districts operate in the same high cost labor market as their neighbors with more resources, and their State Aid is not cost-adjusted, they are unable to pay market rates. As a result, they face difficulties in hiring and retaining qualified faculty and administrators, despite the fact that with their high-risk student populations they need the most qualified staff possible to help their students achieve the standards.

The pronounced variation in cost indices among different types of districts has shown that, at least when we consider regions with high cost-index values, one cannot jump to the conclusion that high costs are only a problem in high wealth areas. While the lowest cost areas of the State tend to be rural, where not just salaries but the overall cost of living is lower, higher cost areas are much more diverse. We have found that some of the wealthiest districts in the State are in high cost regions, yet some of the poorest districts face very high costs as well.

Application of the Cost Index

Since equality of opportunity is a central goal for the Regents, this is an opportune time to review the implications of these findings for school aid and the potential effect of a cost index on school funding formulas. Assuming the simplest formulation of the index, we can envision a case where the index would serve as a multiplier on State Aid. It could be used in the formulas for such aids as operating and extraordinary needs aid. While some might be concerned that the benefit of this multiplier would accrue to low need districts located in high cost areas, current formulas are already wealth-equalized, that is, they are designed to allocate either flat grant or low aid amounts to wealthy districts. Multiplying the small grant amounts per pupil for which these districts are eligible by their regional cost index would raise their calculated aid by only small amounts. Moreover, even in these instances, these high wealth districts located in high cost areas who currently benefit from save harmless would probably not realize any additional benefits as a result of the cost index. The real benefit would come to the high need districts in these high cost areas. Multiplying their need-based grants by this cost index will channel money efficiently to districts that are faced with the most difficult challenges: high-risk students, poor tax base, and location in the midst of an extremely high cost labor market in which they cannot hope to compete.

Conclusion and Summary

This report has argued that, given the Regents emphasis on pupil and taxpayer equity, it is timely to modify school-funding formulas in order to account for both the additional costs associated with serving high need pupils and regional differences in cost. A long history of blue ribbon reports and official statements document that these differences in costs are a source of inequality in the funding of New York’s schools, and that this has been the case for many years. Recently, though, some progress has been made in recognizing high cost factors. For example, the recent change in the operating aid formula to base aid more strongly on district need shows an understanding that needy students require more resources to achieve the same levels of achievement. In addition, the 1997-98 change to the Building Aid formula was a direct acknowledgment of the vast differences in costs of essential goods and services around the State. This paper has sought to move school funding even further in the direction of promoting equality of opportunity in the schools of New York State.

In order to do so, we considered several means of indexing labor costs around the State. Of these, the method developed by Rothstein and Smith in an Oregon school financing case was considered the most appropriate for New York. It combines clarity of method with available and reliable data and also prevents the index from being subject to the tastes or manipulation of school districts, since it is based on noneducational wage data. The resulting index provides a calculus by which to compare relative wage rates across the State. When we performed this study, large differences in wage rates were revealed. That is, large differences were found in the wage rates necessary to achieve parity in purchasing power across the State.

Where districts are able to provide market level wages for teachers, or perhaps invest even more in an effort to hire especially high quality teachers, the findings of this index should be reflected in their teacher wage rates relative to the rest of the State’s teachers. They should be able to hire teachers of average, or above average, quality to teach their students. The real subject of concern should be those school districts in high cost areas that are not able to compete with the labor market wage rates described in this report. Since teachers and other school employees respond to the market incentives offered them, high quality teachers are less likely to teach in districts that offer below market wages. The case of New York City, with thousands of uncertified teachers and high teacher turnover, demonstrates this point. The sad result is that in these high need, high cost districts, teacher quality will be lower than average, precisely in schools serving the highest need students who need the best teachers to succeed. This is inequitable and must change if all the students in New York are to achieve at the level of the Regents standards.

Findings of Fact in the Levittown Case

The aid statute overstate s the cities’ actual capacity to finance their schools from local revenues in disregarding the reduced purchasing power of the urban education dollar.

The purchasing power of the education dollar is sharply reduced in metropolitan areas and particularly downstate.

The average expenditure per pupil for the minimum education program of a typical school district downstate is $1652, while the upstate cost is $1123, a difference of 47 percent.

The average expense for a suburban-urban typical metropolitan area district is $1484, while rural school districts spend $1147, a difference of 29 percent.

Large urban centers generally have higher living costs than non-metropolitan areas.

A typical market basket of goods – as defined by the Bureau of Labor Statistics of the Department of Labor – costs far more in the metropolitan area than it does in the non-metropolitan areas.

Next to Boston, the New York City metropolitan area has the highest living cost in the entire nation.

New York City’s private sector wages are higher than wages elsewhere in the State.

Salaries for teachers, the largest component of school costs, are higher downstate and in the metropolitan areas.

The average 1974-75 salary for classroom teachers in the New York City metropolitan area was $16,498 while the average salary upstate was $12,737, a difference of 30 percent.

Median salaries for teachers by degree and experience level show that downstate districts must pay more than upstate to purchase the same educational resource.

The higher teacher costs and school expenditures downstate and in metropolitan areas are the product of many factors including, (a) the "opportunity cost" of becoming a teacher – wage rates in alternative occupations; and (b) the greater concentration of school districts, which increases competition for teachers, and has driven [driving] up wages.

Based upon the foregoing findings, it is found that the aid formula defeats the statute’s underlying purpose in (1) its disregard of the reduced tax revenues available in the cities for the schools because of their severe municipal overburdens; (2) its disregard of the reduced education purchasing power of their school dollars, because of higher urban costs…

The inequity of the aid formula inflicts upon the four intervenor districts a deprivation of State Aid.

In yielding reduced education assistance to the city districts, the State Aid formula essentially disregards their multiple educational overburdens, leaving them unable to remedy the high levels of absolute learning failure and of severe underachievement among their students. (In capitals in original)

Cost Adjustment Methods around the Nation

Alaska: Alaska’s index is called the Area Cost Differential (ACD). Studies find that there is marked similarity in teacher salaries in Alaska, but district administrative and non-personnel costs show a great deal of variation. As a result, the ACD is only applied to administrative and non-personnel costs. "Total actual district-level costs are divided by the total number of actual students. The result is a per student district level cost. This district level cost is then compared to the statewide per student cost. This ratio becomes the district level ACD…Each district’s actual student count is multiplied by the ACD to produce an adjusted student count. " When this calculation has been performed for all districts, each individual district’s proportion of the total adjusted student count becomes its proportion of the district level (non-personnel) State Aid allocation.

Colorado: "Cost of Living Factor" -- the cost of living factor reflects the differences in the costs of housing, goods, and services among each of the 176 school districts in the State. Cost differences are reviewed every two years to allow for timely recognition of economic changes. This factor is index-based, with a range from 1.008 to 1.638 in budget year 2000-01.

Personnel Costs Factor -- the personnel costs factor varies by school district based on enrollment. For all districts, employee salaries and benefits represent the largest single expense. As such, the formula directs funding based on these costs, using historical information and incorporating the above cost of living factor. This factor is projected to range from 79.92 percent to 90.50 percent in budget year 2000-01."

Factor

Low Cost District

High Cost District

Base Funding (BF)

$4002

$4002

Cost of Living (CL)

1.160

1.210

Personnel Costs (PL)

88.42%

80.07%

Size (SZ)

1.0194

2.3100

Total Per Pupil Funding

SZ*[(BF*CL*PL)+(BF*(1-PL))]

$4656

$10,798

[We are awaiting a response from Colorado’s Public School Finance Unit on the specific methods used to calculate the Cost of Living figure.]

Florida: The State of Florida has a two-step method of calculating the District Cost Differential (DCD). The first step is the calculation of the Florida Price Level Index (FPLI). The FPLI is a county level index, with State average at 100, based on the prices of a typical consumer basket of goods. Values ranged from a low of 87.02 (Jackson County) to a high of 107.78 (Monroe County). Once the FPLI is set, the DCD is "calculated by adding each district's price level index as published in the FPLI… for the most recent 3 years and dividing the resulting sum by 3. The result for each district shall be multiplied by 0.008 and to the resulting product shall be added 0.200; the sum thus obtained shall be the cost differential for that district for that year." This results in the following formula for Per-pupil State Aid: Amount Per Student = Basic Funding Per Student* District Cost Differential + Sparsity supplement + declining enrollment supplement + quality assurance guarantee - local effort

Ohio: Ohio uses an index called the cost-of-doing-business factor. This is an index of all hourly wages for the county in which a district is located and its contiguous counties (considered the district’s effective labor market). The index is not simply applied, however. The range of index values is constrained by law, creating an adjusted cost-of-doing-business factor. The range has been widened each year since 1998, and in 2004 will reach its maximum of 18 percent. The aid formula, then, is: the formula amount (basic school aid) * the cost of doing business factor * the greater of formula ADM (average daily membership) or three-year average formula ADM.

Tennessee: [The Tennessee State Education Department has informed staff that there is an index called the County Cost Differential Factor (CDF), but calculation of the index is contracted out to researchers at University of Tennessee – Knoxville. These researchers have not yet responded to requests for information.]

Texas: Texas uses the Cost of Education Index to "adjust for cost variations beyond the control of school districts." The index takes into account district size and type, county population, percentage low-income students and teacher salaries. It establishes increments (or decrements) based on certain conditions. For example, a district with 200-499 pupils receives no increment to the basic formula, but a district with 500-999 would receive a one percent increase to its basic aid figures. Similar increases occur with poverty counts, etc. The increment for teachers’ salaries is perhaps the closest to a cost of living index. In this case, the beginning teachers’ salaries for "all the districts in counties contiguous to the district’s county and the other districts in the district’s county." Based on the average salary that results, an increment is added to the basic multiplier for each step upward in salary. Texas, then, uses teacher salaries as part of its index, but limits districts’ ability to influence the values by using teachers’ salaries in other districts.

The range of the multiplier (the Cost of Education Index) is limited. It can run from -.99 to 1.21 (where a district meets the worst-case condition for all criteria). The range on teacher cost alone is from 1.00 to 1.09. In other words, there is no negative impact on areas that pay their teachers very little, and the State will only return a limited amount to high-cost regions.

The resulting basic formula is: Adjusted Basic Allotment- Basic Allotment*(((Cost of Education Index – 1) * .71) + 1)

Virginia: Virginia uses a cost of competing factor as an add-on for aid to high-cost districts in Northern Virginia. As stated in a report on school funding authored by the Virginia Department of Education, "A 9.83 percent add-on is provided for instructional salaries and a 19.07 percent add-on for support salaries to total SOQ (Standards of Quality--the minimum requirements for a high-quality education in Virginia) cost in nine northern Virginia school divisions. This amount is then divided by the number of pupils in these districts to reflect the add-on in the per pupil amount." The Virginia formula is: Per pupil amount * ADM, where the cost of competing factor is added to the calculation of costs for required numbers of staff in the per pupil amount.

 

Selected References

Board of Education, Levittown Union Free School District v Nyquist (57 NY2d 27).

Clune, W.H. (1994). The shift from equity to adequacy in school finance. Educational Policy, 8 (4), 376-395.

Duncombe, W.D. & Yinger, J.M. (1999) Performance Standards and Educational Cost Indexes: You Can’t Have One Without the Other. In H.F. Ladd, R. Chalk, & J.S. Hansen (Eds.), Equity and Adequacy in Education Finance: Issues and Perspectives (pp. 260-297). Washington, DC: National Academy Press.

Guthrie, J.W. & Rothstein, R. (1999) Enabling "Adequacy" to Achieve Reality: Translating Adequacy into State School Finance Distribution Arrangements. In H.F. Ladd, R. Chalk, & J.S. Hansen (Eds.), Equity and Adequacy in Education Finance: Issues and Perspectives (pp. 209-259). Washington, DC: National Academy Press.

New York City Public Schools Website. (March 15, 2000) Chancellor’s 60 Day Report. New York, NY: Author. Retrieved August 16, 2000 from the World Wide Web:

http://www.nycenet.edu/chancrpt/sixtyday.ppt.

New York State Department of Labor. (December 22, 1999). Technical Notes for 1998 Estimates. Albany, NY: Author. Retrieved August 7, 2000 from the World Wide Web: http://www.stats.bls.gov/oes/oes_tec.htm.

New York State Office of Real Property Services. (July 29, 1999) Residential Median Sale Price Information by County. Albany, NY: Author. Retrieved July 20, 2000 from the World Wide Web: http://www.orps.state.ny.us/sales/star/med1998.htm.

Parrish, T.B., Matsumoto, C.S., and Fowler, Jr., W. (1995). Disparities in Public School District Spending, 1989-90: A Multivariate, Student Weighted Analysis, Adjusted for Differences in Geographic Cost of Living and Student Need. Washington, D.C.: U.S. Department of Education, National Center for Education Statistics (NCES Report No. 95-300).

Paternick, L., Smerdon, B.A., Fowler, W., & Monk, D. (1997), Using Cost and Need Adjustments to Improve the Measurement of School Finance Equity. In W. J. Fowler (ed.), Developments in School Finance (NCES Report 1997, pp. 151-168). Washington, DC: National Center for Education Statistics.

Reschovsky, A. & Imazeki, J. (1997) The Development of School Finance Formulas to Guarantee the Provision of Adequate Education to Low-Income Students. In Developments in School Finance, 1997. W.J. Fowler (ed.) (NCES Report 98212, pp. 121-148) Washington, DC: National Center for Education Statistics.

Rothstein, R., Guthrie, J.W. & Smith, J.R. (1998). Wyoming Education Finance Issues Report: Reconsideration of Wage Rate Cost Adjustments. Sacramento, CA: Management Analysis & Planning Associates, L.L.C.

Rothstein, R., & Smith, J.R. (1997). Adjusting Oregon Education Expenditures for Regional Cost Differences: A Feasibility Study. Sacramento, CA: Management Analysis & Planning Associates, L.L.C

State of New York. Funding for Fairness: A Report of the New York State Temporary State Commission on the Distribution of State Aid to Local School Districts. ("Salerno Commission"). Volume 1. December, 1988.

State of New York. Report and Recommendations of the New York State Special Task Force on Equity and Excellence in Education. ("Rubin Commission"). Volumes 1-3. February, 1982.

Taylor, C. (1997) Does Money Matter? An Empirical Study Introducing Resource Costs and Student Needs to Educational Production Function Analysis. In Developments in School Finance, 1997. W.J. Fowler (ed.) (NCES Report 98212, pp. 75-98) Washington, DC: National Center for Education Statistics.

U.S. Department of Labor. (1997). "Interarea Comparison of Compensation and Prices," Report on the American Workforce, p. 69-97.

U.S General Accounting Office. (1998). School Finance: State and Federal Efforts to Target Poor Students (GAO/HEHS Publication No. 98-36). Washington, DC: Author.