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Task Force on School Cost Reduction

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Task Force on School Cost Reduction PASBO Annual Conference Thursday, March 6, 2008 Task Force Background Established by Special Session Act 1 of 2006 to: Examine ... – PowerPoint PPT presentation

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Title: Task Force on School Cost Reduction


1
Task Force on School Cost Reduction
  • PASBO Annual Conference
  • Thursday, March 6, 2008

2
Task Force Background
  • Established by Special Session Act 1 of 2006 to
  • Examine spending trends
  • Evaluate budgetary pressures driven by external
    mandates and cost factors
  • Identify options and recommend change
  • Composed of
  • School Board leaders
  • Teachers union leaders
  • School Business officials
  • Other experts and professionals
  • Appointed by Governor and General Assembly

3
School Costs
  • School spending during 2004-05 reached 20.8
    billion

4
Cost Drivers
  • Costs have outpaced the CPI across all major
    categories

5
Cost Drivers
  • Instructional Expenditures responsible for 54
    of total cost growth since 1995-96
  • Special and Gifted education 97 increase
  • Regular education 35 increase
  • Employee Benefits 132 increase
  • Charter Schools - 364 million statewide annually

6
Cost Drivers
  • Support Services responsible for 30 of total
    cost growth since 1995-96
  • Student Transportation 58 increase
  • Administrative Services 42 increase
  • Tax Collection - 78.8 million statewide
  • Facilities and Financing responsible for 14 of
    total cost growth since 1995-96
  • Debt Services - 90 increase
  • Non-instructional Services responsible for 2
    of total cost growth since 1995-96
  • Increased by 48 increase
  • Largely driven by student activities
  • Federal and State Mandates
  • NCLB
  • IDEA

7
Task Force Focus
  • Tax Collection
  • Health Care
  • School Construction and Green Building
  • Special Education
  • Transportation
  • Charter and Cyber Charter Schools
  • Shared Services
  • Mandate Waivers

8
Tax Collection
  • Currently...
  • 560 tax collectors
  • DCED estimates 237 million earned income taxes
    never collected 127 million would be available
    for schools

9
Tax Collection Recommendations
  • Consolidate collection of Earned Income Tax,
    employing fewer tax collectors and clarifying
    withholding rules for employers
  • Consolidate to 66 countywide tax collectors
  • Uniform rules, regulations, forms and codes
  • All EIT would be withheld by the employer
  • Businesses would only need to remit to the county
    in which their payroll operation is located
  • Estimated Impact - 127 million

10
Health Care
  • PASBO estimated that health care premiums rose by
    24 between 2003 and 2005
  • PEBTF premium increases averaged 5.6 between
    2003 and 2006

11
Health Care Recommendations
  • Establish a statewide system for all school
    districts to jointly purchase health care
    benefits
  • When school districts maximize their purchasing
    power, the commonwealth will use tax dollars more
    efficiently while protecting the health care
    benefits that teachers and other school district
    employees receive
  • Estimated Savings believed to reach hundreds of
    millions of dollars according to some analysts

12
School Construction
  • In 2006 53 school construction projects
  • Approx. 80 alterations and additions

13
School Construction
  • PDE provides reimbursement through the Plan Con
    process
  • Act 34 of 1973
  • 20-year rule
  • Contracting Thresholds
  • Prevailing Wage
  • Multiple Prime Contracting

14
School Construction Recommendations
  • Increase and index limiting thresholds for
    construction-related expenses in line with
    original intent
  • Work done by school personnel from 5,000 to
    25,000
  • Projects not done by school personnel and costing
    between 10,000 and 25,000 would require three
    quotes (n0w ,000-10,000)
  • Projects of 25,000 or more require schools to
    advertise and solicit bids (now 10,000)
  • Provide school districts with flexibility related
    to prime contracting

15
School Construction Recommendations
  • Increase assistance to school districts to more
    strongly encourage green building
  • Increase PDE technical assistance to districts
    throughout the many phases of the construction
    process, including releasing information on
    actual school construction costs

16
Special Education
  • Represents 15 of the 1.8 million children
    enrolled
  • 4 classified as gifted
  • Spending has grown by 83.4 since 1996-97

17
Special Education
  • State Special Education Funding
  • Base Supplement
  • Inflation Index Supplement
  • Minimum 2 increase
  • Additional Funding
  • Contingency Funds
  • Core Services
  • Institutionalized Childrens Program

18
Special Education Recommendations
  • Alter the state special education formula to
    provide funding on a tiered system based on the
    services a student receives
  • Provide increased state funding for high quality
    early childhood education in the elementary
    grades
  • Develop best practices in transitioning students
    from special education programs
  • Redo the charter school special education formula
    to enable the resident school district to better
    align funding with charter school special
    education costs

19
Transportation
  • Approximately 1 billion annually (5 of the
    total statewide expenditures)
  • Increased by 58

Average Transportation Expenditures Per Student Transported Average Transportation Expenditures Per Student Transported Average Transportation Expenditures Per Student Transported Average Transportation Expenditures Per Student Transported Average Transportation Expenditures Per Student Transported
Year Public Transportation Non-Public Transportation Average Per Student Non-Public as of Average
1995-96 485.21 566.56 495.64 117
1996-97 501.20 535.13 505.58 107
1997-98 516.52 533.69 518.72 103
1998-99 533.72 523.66 532.44 98
1999-00 548.16 549.03 548.27 100
2000-01 578.50 566.70 576.99 98
2001-02 625.84 612.65 624.16 98
2002-03 653.74 647.37 652.95 99
2003-04 688.25 827.02 704.85 120
2004-05 728.01 971.49 756.04 133
20
Transportation Recommendations
  • Eliminate the requirement to bus students outside
    district boundaries and only require districts to
    transport on days when public school is in
    session
  • Optimize fuel cost management to slow long term
    growth costs
  • Encourage district to adopt transportation best
    practices

21
Charter and Cyber Charter
  • Now 117 charter and cyber charter schools in PA
  • 364 million in 2004-05

22
Charter and Cyber Charter
  • Traditional student tuition for charter and cyber
    charter students
  • Special Education student tuition for charter and
    cyber charter students

23
Charter and Cyber Charter
  • Additional concerns
  • Truancy
  • Competitive Grants

24
Charter and Cyber Charter Recommendations
  • Primarily Brick and Mortar
  • Change charter school law to include grants in
    the list of items exempt in calculations of
    charter school tuition rate
  • Permit school districts to weigh fiscal impact as
    a criterion when considering new and expanded
    charter schools
  • Align the budgeting process of school districts
    with enrollment planning for charter schools

25
Charter and Cyber Charter Recommendations
  • Primarily Brick and Mortar
  • Provide best practices and guidance to school
    districts that will support them in creating
    effective truancy monitoring partnerships with
    their charter schools
  • Increase guidance to school districts throughout
    the charter drafting process to ensure a
    high-quality charter agreement

26
Charter and Cyber Charter Recommendations
  • Cyber Charter
  • Establish a single, statewide tuition rate to be
    applied to all cyber charter schools.
  • Continue to collect and analyze data on the cost
    of cyber education

27
Shared Services
  • Approximately 314 per student on administrative
    costs
  • 50 increase
  • 210 million statewide on central services

28
Shared Services Recommendations
  • Expand the approach of shared services to include
    a variety of entities including districts,
    intermediate units, counties and other local
    governments
  • Draft a report of best practices that shows
    districts how cost savings can occur through
    consortia

29
Mandate Waivers
  • Education Empowerment Act, Act 16 of 2000
  • Effective for three years
  • Districts must submit an evaluation
  • Annual report from PDE to the chairmen and
    minority chairmen of the House and Senate
    Education Committees

30
Mandate Waivers
  • Decreasing number of requests
  • Construction changes

31
Mandate Waiver Recommendation
  • Increase the quality of PDE communication
    regarding Mandate Waivers
  • Include more strategic information about the
    experiences of school districts in achieving cost
    savings

32
For More Information
  • www.pde.state.pa.us
  • Pre K 12
  • Finances
  • Task Force on School Cost Reduction

33
The Rendell Administrations Strategy for Driving
Down the Local Burden
  • A new school funding formula that will invest
    2.6 billion over the next six years to help
    school districts move towards their adequate
    funding targets.
  • All homeowners will receive property tax relief
    in July an average of 185 for every household
    and total property tax relief will reach 854
    million in 2008-09. Older Pennsylvanians have
    already received nearly 115 million in the
    programs first year, and first-ever controls on
    local tax increases are keeping school property
    taxes in check.
  • Legislation to create a statewide school health
    benefits system will bring down the cost of
    health care for school districts addressing a
    leading cost driver while preserving the quality
    of benefits for educators.
  • The state is encouraging voluntary consolidation
    of school districts that choose to combine their
    efforts to boost achievement and save taxpayers
    money.
  • Common Cents makes it easier for school
    districts to share services to improve efficiency
    and avoid costly duplication of back-office,
    instructional, transportation and other expenses.
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