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Education Financing – An Overview BCSTA Trustee Academy February 26, 2009 Joan Axford / Education Financing – An Overview BCSTA Trustee Academy February 26, 2009 Joan Axford / Frank Regehr 2/26/2009

Agenda / Overview l Ministry of Education and Provincial Budget Process l History of Agenda / Overview l Ministry of Education and Provincial Budget Process l History of Block Funding and Allocation System l Review of Allocation System l Funding Predictability l Effect of Enrolment Decline l The Saanich Story 2/26/2009 JA/FR

Predictability l Just about the time you think or believe you have mastered the Predictability l 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 l Always begin every statement about funding and budgets with a disclaimer: “based on the most recent information” 2/26/2009 JA 3

Ministry of Education Budget 2/26/2009 JA 4 Ministry of Education Budget 2/26/2009 JA 4

Ministry Budget in Provincial Context l In 2001/02 the Ministry of Education Budget was Ministry Budget in Provincial Context l In 2001/02 the Ministry of Education Budget was $4. 861 billion or 19. 3% of the total Provincial Budget l In 2008/09 the Ministry of Education Budget is $5. 675 billion or 15. 05% of the total Provincial Budget 2/26/2009 JA 5

l Cabinet and Treasury Board l l Ministry of Education l l establish budgets l Cabinet and Treasury Board l l Ministry of Education l l establish budgets and sets spending priorities School Boards l l allocates dollars to school boards School Boards l l sets priorities within the set overall amount Ministry of Education l l establish the overall budget and Individual Ministry Amounts allocate funding to schools and programs Schools l 2/26/2009 allocate funding to classrooms/programs JA 6

l Provincial Government l l l Establishes the total funding for Public Education; Allocates l Provincial Government l l l 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 l l 2/26/2009 Determine local revenues; Prioritize expenditures; Allocate budgets to programs/services; Prepare budget documents and approve budget. JA 7

History of Block Funding was introduced in 1990 in response to the 1988 Royal History of Block Funding was introduced in 1990 in response to the 1988 Royal Commission for Public Education l It was recommended as a way to determine the amount of provincial funding needed for educational services l It was recommended that the distribution of the funding be done by a stable, predictable, supportable allocation system l 2/26/2009 JA 8

History of Block Funding The Royal Commission recommendation was that the block be increased 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 l The allocation system of the day, a resource cost model, was supported by the system and recommended for retention l The resource cost model was very detailed and provided a service level for each specific function such l as class size, library and counseling services, etc. 2/26/2009 JA 9

History of Block Funding No government has been able to increase the block by 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 l The resource cost model lost favour in the 1990’s because the per pupil amounts allocated to districts differed and were not understandable l 2/26/2009 JA 10

History of the Allocation System In 1995/06 the allocation system was re-stated in a 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 l 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 l Specific grants allocated amounts for operations and maintenance, transportation, special education, ESL l 2/26/2009 JA

History of Allocation System The allocation system today was introduced in 2002/03. It was 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. l The new, simplified funding formula now comprises a student base allocation plus supplementary grants. There are 5 broad categories for supplementary grants: l Unique student needs, including special needs, English as a Second Language, Aboriginal Education, and Adult Education programs; l Enrolment Decline, where enrolments decrease by more than one per cent in a year; l Salary Differentials, for districts with higher average teacher salaries; l Transportation and Housing; and l Unique Geographic Factors. l l 2/26/2009 JA

Recent Changes to the Block l Block 2001 to 2004 $3. 794 billion l Recent Changes to the Block l Block 2001 to 2004 $3. 794 billion l Salary Increases $432 million l Literacy, arts, special ed $202 million l Distributed Learning $7. 7 million l GAAP $35. 0 million l Reduction in 2001/02 ($3. 5 million) l Total Increase $673 million l Block 2008/09 $4. 467 billion 2/26/2009 JA 13

Effect of Enrolment Decline on Per Pupil Block 2/26/2009 JA 14 Effect of Enrolment Decline on Per Pupil Block 2/26/2009 JA 14

Provincial Funding Shortfall l The Provincial Block has increased by $673 million since 2001/02 Provincial Funding Shortfall l The Provincial Block has increased by $673 million since 2001/02 l 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: 2/26/2009 JA

Provincial Funding Shortfall We know that in our district we can save about $2, 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. l 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. l 2/26/2009 JA

Provincial Education Funding - Operating 2008 -09 funding = $4. 467 billion l Same Provincial Education Funding - Operating 2008 -09 funding = $4. 467 billion l Same formula for all districts l Per pupil block value – operating 2008 -09 l Coquitlam $ 7, 471 l Central Okanagan $ 7, 493 l Central Coast $20, 476 l Stikine $22, 968 l Tries to be equitable - definitely not equal l 2/26/2009 FR

Equal Funding – 2008 -09 – All Districts l $5, 851/school age student = Equal Funding – 2008 -09 – All Districts l $5, 851/school age student = $3, 150 million l $4, 000/adult student (approx) = $ 32 million l Home school and course challenges = $ 0. 5 million 2/26/2009 FR

Equal Funding – 2008 -09 – All Districts l Unique students Level 1 l Equal Funding – 2008 -09 – All Districts l Unique students Level 1 l Level 2 l Level 3 l l Unique 2/26/2009 $308 million = $120 million $32, 000 $16, 000 $ 8, 000 students ESL l Aboriginal l = $1, 174 $1, 014 FR

Equal Funding – 2008 -09 – All Districts l TOTAL unique student funding – Equal Funding – 2008 -09 – All Districts l TOTAL unique student funding – addition to per pupil block (not including adult) Stikine l Vancouver Island West l Prince Rupert l Central Okanagan l Revelstoke l Arrow Lakes l 2/26/2009 FR $2, 328 $1, 783 $1, 692 $ 568 $ 511 $ 491

2008 -09 Supplements for Enrolment and Funding Decline l School Age Decline >1% up 2008 -09 Supplements for Enrolment and Funding Decline l School Age Decline >1% up to 4% $2, 926 per student = $9 million l School Age Decline >4% $4, 388 per student = $1 million o Cumulative decline @$2, 926 = $2 million l Funding protection - $$$ not less than previous year = $7 million 2/26/2009 FR

2008 -09 Supplements for Enrolment and Funding Decline l Addition to per pupil block 2008 -09 Supplements for Enrolment and Funding Decline l Addition to per pupil block 18 districts l Boundary l Fort Nelson l Gold Trail l 2/26/2009 $ Nil $ 943 $ 995 $1, 321 FR

2008 -09 Supplement for Teacher Salary Differential l Additional funding to districts with higher 2008 -09 Supplement for Teacher Salary Differential l Additional funding to districts with higher average salary l Based on formula to calculate number of teachers funded l Intended to fund actual cost difference between districts l Does not fund teacher allowances, principal salaries, teachers of adult students 2/26/2009 FR

2008 -09 Supplement for Teacher Salary Differential l 2008 -09 Total Funding l Addition 2008 -09 Supplement for Teacher Salary Differential l 2008 -09 Total Funding l Addition to per pupil block Vancouver Island West l Gold Trail l Kootenay-Columbia l Stikine l 2/26/2009 FR $96 million $ Nil $ 43 $362 $473

Supplement for Labour Settlement Costs Funding for teacher, support staff, and admin staff labour Supplement for Labour Settlement Costs Funding for teacher, support staff, and admin staff labour cost increases since 2006 l Ministry formula started in 2006 recognizes l l l 2/26/2009 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 FR

Supplement for Labour Settlement Costs l 2008 -09 Total Funding l Addition to per Supplement for Labour Settlement Costs l 2008 -09 Total Funding l Addition to per pupil block Abbotsford l Burnaby l Campbell River l Stikine $ 750 $ 812 $1, 103 $2, 328 l 2/26/2009 FR $458 million

Supplement for Unique Geographic Factors l Small Communities – Elementary Up to $126, 000 Supplement for Unique Geographic Factors l Small Communities – Elementary Up to $126, 000 / > 5 km / < 250 FTE l Small Communities – Secondary Up to $374, 500 / > 25 km / < 635 FTE l $29 million $19 million Small Communities – Grade 11 and 12 Up to $150, 000 / < 215 FTE 2/26/2009 FR $ 8 million

Supplement for Unique Geographic Factors l Low enrolment $47 million Up to $1. 25 Supplement for Unique Geographic Factors l Low enrolment $47 million Up to $1. 25 million / sch. dist. l Maximum funding at 2, 500 FTE l Phased to $0 at 15, 000 FTE l l Rural l 2/26/2009 factor $21 million Distance to Vancouver/regional centre FR

Supplement for Unique Geographic Factors l Climate l Heating and cooling using district’s degree Supplement for Unique Geographic Factors l Climate l Heating and cooling using district’s degree day temperatures l Sparseness l 2/26/2009 $ 9 million factor $12 million Dispersion within district FR

Supplement for Unique Geographic Factors l Addition to per pupil block Vancouver l Surrey Supplement for Unique Geographic Factors l Addition to per pupil block Vancouver l Surrey l Conseil Scolaire l Central Coast l Stikine $ Nil $ 4 $ 2, 554 $10, 220 $11, 161 l 2/26/2009 FR

Supplement for Transportation and Housing Formula based on bus routes mileage and costs approved Supplement for Transportation and Housing Formula based on bus routes mileage and costs approved for 2001 -02 l 2008 -09 funding for each district remains at 2001 -02 level l Subsequent issues affecting transportation costs include: l l 2/26/2009 enrolment decline school closures changes to costs or bus routes FR

Supplement for Transportation and Housing l Addition to per pupil block New Westminster l Supplement for Transportation and Housing l Addition to per pupil block New Westminster l Prince George l Cariboo-Chilcotin l Stikine $ 3 $ 290 $ 932 $1, 376 l l 2008 -09 2/26/2009 Funding $86 million FR

Supplement for Summer Learning l Addition to per pupil block 23 school districts l Supplement for Summer Learning l Addition to per pupil block 23 school districts l Richmond l Vancouver l Nisga’a $ Nil $ 66 $ 70 $ 73 l 2/26/2009 FR

Supplement for Summer Learning l Funding first established in 2007 l In 2008, funded Supplement for Summer Learning l Funding first established in 2007 l In 2008, funded $400 per full credit courses and $200 for any other course $ 13 million 2/26/2009 FR

Holdback Supplement – 2008 -09 Funding is calculated 4 times per year: 1) March 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

Holdback Supplement – 2008 -09 Ministry funding holdback for Nov/Feb/May count l November 2008 Holdback Supplement – 2008 -09 Ministry funding holdback for Nov/Feb/May count l November 2008 allocation l Funds available for Feb/May l Ministry commits to allocation of all funds l 2/26/2009 FR $84. 5 million $47. 5 million $37. 0 million

2008 -09 Fall Recalc = $4, 467 Million 2/26/2009 FR 2008 -09 Fall Recalc = $4, 467 Million 2/26/2009 FR

Ministry Education – Autumn 2008 -09 2/26/2009 JA Ministry Education – Autumn 2008 -09 2/26/2009 JA

Per Pupil Block Amount 2/26/2009 FR Per Pupil Block Amount 2/26/2009 FR

2/26/2009 FR 2/26/2009 FR

Provincial Education Funding - Operating 2008 -09 funding = $4. 467 billion l Same Provincial Education Funding - Operating 2008 -09 funding = $4. 467 billion l Same formula for all districts l Per pupil block value – operating 2008 -09 l Coquitlam $ 7, 471 l Central Okanagan $ 7, 493 l Central Coast $20, 476 l Stikine $22, 968 l Tries to be equitable - definitely not equal l 2/26/2009 FR

Diverse Province l District differences include: Compact or dispersed l Large or small l Diverse Province l District differences include: Compact or dispersed l Large or small l Metro or remote l Student diversity – incidence of unique students l l Understandable 2/26/2009 formula? FR

Provincial Funding/Student 2005 -06 Block funding – operating 2006 -07 2007 -08 2008 -09 Provincial Funding/Student 2005 -06 Block funding – operating 2006 -07 2007 -08 2008 -09 At Nov. 2008 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 Provincial Education Funding $ per student w/o labour settlement & unique student increases 2005 -06 2006 -07 2007 -08 2008 -09 At Nov. 2008 Block funding – operating Unique student funds (not including adult) 4, 027, 603, 717 4, 243, 496, 038 4, 345, 211, 469 4, 426, 685, 547 390, 289, 475 399, 204, 975 414, 879, 981 428, 173, 434 196, 372, 946 320, 913, 967 457, 568, 050 Labour settlement funding New program – summer learning Remaining block funding 12, 776, 550 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 Budgets l Provincial Total $219 million Provincial SD’s – Additional Revenue Reported 2008 -09 Budgets l Provincial Total $219 million Provincial avg/student $ 402 l Port Alberni $ 68 l Vernon $ 812 l West Vancouver $1, 829 l Nisga’a $2, 438 l l 2/26/2009 E. g. international prog. , rentals, interest FR

Predictability of Funding - Enrolment 2005 -06 2006 -07 2007 -08 2008 -09 Actual Predictability of Funding - 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, 509 314 (3, 183) 8, 471 2, 761 Increase (decrease) 2/26/2009 FR

Predictability of Funding - Enrolment l For l two years – 2006 -07 to Predictability of Funding - Enrolment l For l two years – 2006 -07 to 2008 -09 Enrolment l l up in 8 districts down in 52 districts down > 5% in 27 districts l Each student decline – ($5, 851) l Funding protection may delay impact l > 200 in SD 67 2/26/2009 FR

Predictability of Funding - Formula Since 2006 -07, new funding count February and May Predictability of Funding - Formula Since 2006 -07, new funding count February and May – Distance Learning l Since 2006 -07, Labour Settlement $$$ now fund employees serving adult students and employees funded from SD businesses and other revenues l October 2007, Grades 10 to 12 FTE count l In 2008 -09, Summer Learning - $13 million l 2/26/2009 FR

Predictability of Funding l Ministry announced funding – March 2008 l l 2007 -08 Predictability of Funding l Ministry announced funding – March 2008 l l 2007 -08 2008 -09 2009 -10 $4. 345 billion = + $116 million $4. 467 billion = + $122 million $4. 543 billion = + $ 76 million Labour settlements costs l l l 2/26/2009 2007 -08 2008 -09 2009 -10 $125 million $137 million ? ? ? FR

Predictability - Holdback l Predictable for Ministry l Less predicable for districts 2003 -04 Predictability - Holdback l Predictable for Ministry l Less predicable for districts 2003 -04 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 millions millions Estimate e. 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

Need for Predictability l Ability to forecast funding March/April is critical l 2/26/2009 In Need for Predictability l Ability to forecast funding March/April is critical l 2/26/2009 In my district if too cautious = layoffs/programs reductions if too optimistic = potential for deficit FR

Budget Decision Making – SD 67 Funding allocation l 70% funding allocation = 5, Budget Decision Making – SD 67 Funding allocation l 70% funding allocation = 5, 851 per student l If enrolment declines 200 students = $1, 170, 200 l Teachers for 200 FTE @ 20: 1 @ $86, 000 = $860, 000 Clerical support + supplies, est. @ 30, 000 _______ Funding reduction (after year 1) $280, 200 2/26/2009 FR

The Saanich Story l l 7, 167. 6250 FTE as of September, 2008 22 The Saanich Story l l 7, 167. 6250 FTE as of September, 2008 22 School Sites: l l l 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 l The school district has closed six elementary schools and opened one new elementary school in September 2008 l Operating Budget of $70. 4 million l 2/26/2009 JA

Saanich-Reductions Since 1995/96 l The district has reduced $13. 34 million (or 18. 9% Saanich-Reductions Since 1995/96 l 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. 2/26/2009 JA

Saanich-2008/09 Final Budget Preliminary Budget Shortfall l Reduced Revenues l Increased Expenditures l ($2, Saanich-2008/09 Final Budget Preliminary Budget Shortfall l Reduced Revenues l Increased Expenditures l ($2, 844, 705) ( 69, 905) ( 160, 002) l Shortfall Funded by Reserves l Today’s Expenditures exceed today’s revenues 2/26/2009 JA ($3, 074, 612)

Saanich-Reserve Balances l The District creates reserves after consultation with community to sustain educational Saanich-Reserve Balances l The District creates reserves after consultation with community to sustain educational services for as long as possible l l l l l Savings from School Closures: $462, 000 for 2005/06 and 2006/07 Unspent 2005/06 funding: $871, 043 for 2005/06 and 2006/07 Investment and Building Lease Revenue International Program Expansion Total Reserve Surplus 2007/08 Spent on Services in 2008/09 Net Balance Available for 2009/10 2/26/2009 JA $ 924, 000 $1, 742, 086 $ 386, 863 $ 332, 837 $3, 385, 788 $ 103, 391 (3, 074, 612) $ 414, 567

Saanich-2009/10 Structural Shortfall 2/26/2009 JA Saanich-2009/10 Structural Shortfall 2/26/2009 JA

Discussion/Questions 2/26/2009 JA/FR Discussion/Questions 2/26/2009 JA/FR

Joan Axford Secretary-Treasurer School District No. 63 (Saanich) 250 -652 -7326 joan_axford@sd 63. bc. Joan Axford Secretary-Treasurer School District No. 63 (Saanich) 250 -652 -7326 [email protected] 63. bc. ca Frank Regehr Secretary-Treasurer School District No. 67 (Okanagan Skaha) 250 -7706 [email protected] com 2/26/2009 JA/FR