"Estimating the Cost of an Adequate Education in South Dakota"

January 2006

For the Professional Judgment methodology, adequacy was defined as meeting both input and output requirements. Input requirements were state requirements for curriculum, planning time and professional development, high school graduation requirements, class sizes, and special education and other student services. Output requirements were defined according to state and federal student test-score goals in reading and math, including compliance with the state accountability system and NCLB, which requires 100 percent proficiency by 2014. Despite this definition, the study backed off a little from 100 percent proficiency by instructing the panelists to understand “100 percent” as “as close as possible to all students but not necessarily every single student.” Proficiency targets included specific STEP scores for grades 3-8 and 11.

For the Successful School Districts methodology, the consultants used no specific definition of adequacy. The method was intended to identify the costs at schools that are currently high-performing, not to determine the cost of bringing all schools up to “adequate” performance.

Professional Judgment
Base cost per student:

Very small schools: $10,662
Small schools: $8,107
Medium schools: $7,596
Large schools: $6,362

Special-needs additional weightings (fraction of base costs):

“At-risk” students (eligible for free or reduced price lunch): a range from 0.24 to 0.72, based on district size (see Additional Findings below)
English Language Learners: a range from 0.39 to 1.18, based on district size
Special Education: a range from 0.66 to 4.33, based on district size and level of special education needs

Successful School Districts
Base cost per student, excluding the cost of special education and weightings for at-risk or ELL students:

Very small schools: $7,904
Small schools: $6,010
Medium schools: $5,632
Large schools: $4,717
Note: The SSD methodology provided the consultants a single figure for base per-pupil cost. The figure was then adjusted for different size districts based on the ratios established in the Professional Judgment study.

Note: The consultants’ results list school districts in nine different size categories. For simplicity, this fact sheet lists results for districts of only four different size groups. The consultants note that for extremely small school districts – those with under 100 total students – their figures may be inappropriate, as required overhead costs increase the per-pupil expenditures at such small schools.

Professional Judgment: $482 million to reach target goals by 2014 (including $78 million for special education), an approximately 56 percent increase.

Editorial comment: We doubt that the dollar amounts recommended in this study represent the full costs of reaching 100 percent proficiency, as required by NCLB. Achieving 100 percent proficiency is unprecedented and, experts argue, unattainable. That the consultants instructed panelists to determine the resources necessary for proficient scores by “as close as possible to all students but not necessarily every single student,” shows their acknowledgement of this difficulty to some extent.

Successful School Districts: $125.6 million to reach adequacy “starting point,” i.e. to spend the average per-pupil amount for non-special-needs students at successful schools, an approximately 15 percent increase over 2003-2004 levels. The consultants also recommend an additional $28 million in special education funding, bringing the total SSD recommendation to approximately $154 million (an 18 percent increase).

The cost study does not provide specific recommendations on how to raise or distribute the money for the funding increases and special-needs weighting it identifies.
The study cautions that if South Dakota does not significantly increase teacher salaries, it will face recruitment and retention problems. The consultants note that panelists expressed concerns that this was already occurring, saying that salaries for teachers have not kept pace with salaries for private sector jobs.

With the current distribution of funding, some districts receive more than adequate funding, while many receive less than adequate funding. One hundred sixty-one of 170 districts were below the target funding identified by the Professional Judgment study, and 142 districts were below the recommended funding levels identified by the Successful School Districts study. In both cases, the vast majority of districts with adequate funding were in the “small” or “very small” categories.
Weightings for special-needs students increased with district size. For example, a student requiring moderate special education in a very small school district has a weighting of 1.25 and a student with the same needs in a large district has a weighting of 2.26. Similarly, the weighting of each “at-risk” (eligible for free or reduced-price lunch) and ELL student increases with district size.
Personnel costs make up the vast majority of school district expenditures, and the consultants compared the number of required personnel identified by the panelists to studies APA has done in other states. The number of personnel recommended by the professional judgment panels was significantly lower than most other APA studies, even those performed before NCLB was passed.

Professional Judgment Approach:
The study used seven panels. Three “school-level” panels addressed the needs of schools. Three “district-level” panels reexamined the work of the school-level panels and added non-school-based district expenses. An overview panel reviewed the work of the other panels, resolved inconsistencies, and examined preliminary costs. The panels together comprised 51 professionals.
Panelists were presented with hypothetical schools of various sizes and demographics and were told to identify resources deemed necessary for a specific list of inputs and outcomes (provided in Appendix B of the study). The consultants later calculated the costs of the designated resources. Resources that panelists identified included: Personnel, professional development, instructional supplies, non-traditional programs (such as before-school, after-school, pre-school, and summer-school), technology, and various other operational costs, excluding the costs listed below.

Successful School Districts Approach:
Successful School Districts were defined as those districts fulfilling at least one of three criteria: (1) meeting the 2007-2008 AYP Proficiency level on state assessment exams in the 2003-2004 school year; (2) having test scores significantly above a scaled state mean; (3) a 5 percent increase in passing scores from 2002-03 to 2003-04. Forty-one out of 170 districts met at least one of these criteria.
Costs for this part of the study were based on actual base costs, defined as the cost of educating a student with no special needs (special-education, “at-risk,” ELL). This cost was estimated by examining the funding for non-special-education students and adjusting it by counting each ELL and at-risk student as 1.25 students (a figure chosen based on previous APA studies), thus inflating the effective “enrollment” and decreasing the per-pupil expenditure.
The base per-pupil funding was calculated by averaging the base per-pupil costs of successful school districts, weighting for district size.
For the calculated base and additional costs (listed above), the weightings for special-needs students from the Professional Judgment portion of the study were applied back to the Successful School District base costs.

This study did not consider capital, transportation, food service, adult education, or community service costs, which are ordinarily excluded from adequacy studies.
The professional judgment component of the study did consider costs of preschool and programs for low-income and ELL students.
In South Dakota, special education funding is determined separately from general education funding, allowing the consultants to more easily separate out special education costs from school budgets.
Studies comparing costs of nearby states found that South Dakota lags significantly in teacher compensation. In the costing-out stage, the consultants adjusted the average teacher salary in the state with a 15.1 percent increase and adjusted the salaries of other personnel with an 11.6 percent increase.

None.

None.

South Dakota Alliance for Education