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Promoting Excellence in Public Education Alberta School Boards Association Suite 1200, 9925 - 109 Street, Edmonton, AB T5K 2J8 Phone: 1.780.482.7311 Fax: 1.780.482.5659 www.asba.ab.ca

Missing the mark Funding shortfalls in Alberta's public education system


Ta b l e o f Co n t e n t s Purpose

2

Background

2

Data Collection

3

Alberta’s Renewed Funding Framework

4

Funding Sufficiency Measures A. Overall Financial Position Measures B. Instruction Measures C. Transportation Measures D. Plant Operations and Maintenance Measures E. Accountability Pillar Outcome and Satisfaction Measures

6 6 6 6 7 7

Presentation and Discussion of Measures A. Overall Financial Position Measures B. Instruction Measures C. Transportation Measures D. Plant Operations and Maintenance Measures E. Accountability Pillar Outcome and Satisfaction Measures

8 8 12 19 21 23

Discussion of Trend Lines

28

Recommendations

30

Conclusion

32

“I wouldn’t give a whit for simplicity this side of complexity, but I would give my right arm for simplicity the other side of complexity.” - Oliver Wendell Holmes

This report was written by Sig Schmold for the Alberta School Boards Association. For more information contact the ASBA office at 1.780.482.7311. Published May, 2006


Pu r po s e The purpose of this report is fourfold: • To broadly examine the question of funding adequacy for Alberta’s public and separate school boards • To propose some measures through which funding adequacy can be considered • To recommend solutions to gaps or imbalances in funding • To use the evidence outlined in this report as part of ASBA’s advocacy efforts

Ba c k g ro u n d The Alberta School Boards Association, in response to its concerns about the growing funding adequacy gap evident in the operating and capital needs of school boards, commissioned this study in the spring of 2006. The ASBA’s goal is to provide a report to members that provides evidence of the funding adequacy issues faced by Alberta’s school boards. This evidence, in turn, will be used by the ASBA in its advocacy efforts on behalf of boards. The question of funding adequacy is complex in that the allocation of resources is largely a political process driven by community priorities, needs and desires. In this crucible of public opinion government MLAs and school board trustees attempt to reach agreement about the sufficiency of funds to provide services to Alberta’s 590,000 students. Given the high priority placed on education by Albertans, combined with differing community characteristics and needs, it is small wonder that the question of funding sufficiency is a perennial source of debate and advocacy. Alberta has one of the best-funded and top performing education systems in the world. Alberta’s students consistently outperform their national and international counterparts on international assessments of student achievement. Alberta’s teachers, on average, are the highest paid in Canada. Despite these encouraging statistics, questions about funding sufficiency for Alberta’s school boards continue to surface. The ASBA May 2005 Metro School Boards Study, for example, made a strong case for a needed increase in funding to Alberta’s metro boards. A March 2005 ASBA study, The Funding and Costs of Plant Operations and Maintenance in Alberta’s Schools, concluded that funding for operating and maintaining Alberta schools has not kept pace with real costs. At the same time, the ASBA-sponsored Small High Schools – Programs and Funding study recommended additional resources to support approximately 30,000 students in Alberta’s 120 small high schools. At the heart of the question of funding sufficiency lies the issue of measures or indicators. What measures do we use to help us understand whether funding to Alberta’s school boards is sufficient to meet the needs of their students?

2


This report presents some broad measures and recommendations that address the issue of funding adequacy. These measures provide useful insights into the question of funding sufficiency for Alberta’s school boards. In addition, the measures used in this report will hopefully add to the dialogue that is currently occurring in Alberta about the Renewed Funding Framework.

Da t a C o l l ectio n Data collected, displayed and discussed in this report comes from a number of sources: • Provincial roll ups of school board audited financial statements (AFS) • Alberta Education website • ASBA Labour Relations Department • Prior ASBA studies, namely: Metro School Boards Study (2005), The Funding and Costs of Plant Operations and Maintenance in Alberta’s Schools (2005), A Review of School Board Operating Revenues and Expenditures – 1995/96 to 2002/03 (2002) and the ASBA directive for action 4.D.18: Small High Schools – Programs and Funding In addition, a focus group meeting of school jurisdiction secretary-treasurers was held on March 16, 2006. The focus group consisted of six participants who represented the geographic regions of the province, from Zone 1 to Zone 6, and jurisdiction size and type (metro, urban, “rurban” and rural). The focus group was used to help make meaning of the data and to assist in the formulation of recommendations. Focus group representatives were asked to speak from a purely personal perspective and not necessarily represent the positions of their jurisdictions or association. A key point made by the focus group was that care must be taken when analyzing data from the AFS because school jurisdictions follow differing reporting practices. As well, school boards make a number of management decisions that impact data reporting. As such, a simple analysis of bottom line revenue and expenditures for Operations and Maintenance does not present a true picture of provincial support or the difficulty boards are facing operating and maintaining their school facilities. Some boards, in order to meet operating expenditure pressures, are using their reserves to fund current operations or are planning surplus positions to deal with an accumulated deficit. Still others, as a matter of board priority, are choosing not to achieve provincial class size guidelines at the expense of losing specialist support positions like certified librarians and school counselors. In short, focus group participants emphasized that many times, AFS bottom line data does not tell the true story of the financial pressures and issues faced by school jurisdictions. Individual analysis of school jurisdiction issues, financial pressures and goals is required to get an accurate picture of its financial operations. 3


Given the advice provided by the focus group, the emphasis of this report is on trend line data rather than on a particular number in a particular year. Trend lines, in turn, provide the rationale and background for the recommendations contained in this report.

A l b er t a’s Rene we d Fund ing Fram e wo rk Alberta Education, after significant provincial dialogue and discussion, introduced the Renewed Funding Framework allocation model, effective the beginning of the 2004/05 school year. The Renewed Funding Framework is based on eight principles and three pillars: flexibility, accountability and funding formulas. The flexibility pillar is intended to provide school jurisdictions with “the flexibility to allocate funds to programs as they choose, in order to meet the educational needs of their students and address local priorities” (Alberta Education Funding Manual, 2005). While there continue to be some limitations to this flexibility, such as the cap on expenditures for system administration and board governance, the net effect of the new allocation model is increased flexibility and decision making for boards. The accountability pillar “places increased emphasis on achievement of outcomes, reporting of results and targets, and using results for informed decision making…with a focus on improvement” (Alberta Education Funding Manual, 2005). The funding formula pillar provides funding to school boards through a combination of per student base funding, which is equal across the province, and equity funding distributed differentially through allowance for student demographics and characteristics. Specific student populations include: • Children and students with a severe disability • English as a Second Language/Francisation students • First Nations, Métis and Inuit students • Early Childhood Services children with mild or moderate disabilities and those who are gifted and talented • The percentage of the student population of a school jurisdiction experiencing low socio-economics The distribution model also addresses variable jurisdiction cost factors such as: • Small schools by necessity • Year-to-year enrolment fluctuations • The enrolment size of school jurisdictions • Schools located in the north • The cost differences among local school jurisdictions for purchasing goods and services

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• Resources for daily physical activity in Grade 1-9 schools • Support for Hutterite colony schools • Support for Francophone students In addition to base per student funding and differentiated funding factors, the Renewed Funding Framework also provides financial support for provincial priority initiatives, namely: the Alberta Initiative for School Improvement, student health initiative, high speed networking, class size initiative and children and youth with complex needs. The ASBA Metro School Boards Study supports the essential principles of the Renewed Funding Framework as sound but recommends that the framework be amended to incorporate additional allocation factors, appropriate dollar amounts and student weightings supporting some factors, and the deletion of some differentiated factors that do not necessarily support the principles of the Renewed Funding Framework. The Small High Schools Study also generally supports the principles and factors of the Renewed Funding Framework but recommends adjusting the “small schools by necessity” factor with the goal of ensuring access by all of the province’s students to a basic university entrance program. The March 2005 Plant Operations and Maintenance Study recommends both a change to the existing funding formula and a substantial increase in operations and maintenance funding to school jurisdictions. The intent of this report is not to repeat the points and recommendations of these prior studies but rather, to use the reports as a supporting rationale for the recommendations made in this report. It must also be noted that the Renewed Funding Framework, in addition to changes in funding allocation, has spawned changes to how financial information is reported in the audited financial statements (AFS) by boards and by the province. This is particularly evident in the various schedules to the AFS. The AFS, beginning with the 2004/05 fiscal year, contains significantly less detail regarding specific “sub” program spending. Prior to the 2004/05 fiscal year, for example, the AFS provided both revenue and expense detail regarding funding for sub programs such as Severely Disabled, English as a Second Language and Native Education projects. Beginning with the 2004/05 fiscal year, this level of program revenue is rolled up under the general heading of Differentiated Cost Funding. This roll up of information was a conscious choice made by Alberta Education, on the advice of the Association of School Business Officials of Alberta (ASBOA), to discourage direct comparisons between sub program revenues and related program expenses. The rationale for this decision is based on the flexibility pillar of the Renewed Funding Framework. The key principle of this pillar is that the framework is an allocation model only and, as such, does not require that funds received through the differentiated factors of the framework be expensed against specific students or student programs.

5


The result of this change in AFS reporting is that sub program revenue and expense tracking, as occurred in the November 2002 ASBA commissioned report titled, A Review of School Board Operating Revenue and Expenses – 1995/96 to 2002/03, is no longer possible using information that is publicly available. While this change in practice supports the flexibility pillar of the Renewed Funding Framework, it essentially closes a data trail that some school boards found useful for their decision-making purposes.

Fu n d in g Su fficie ncy Me as ure s Given the difficulty tracking sub program revenue and expenses because of the changes made in AFS reporting requirements, the following broad measures would provide useful trend lines to inform a discussion about funding sufficiency to Alberta’s school boards. A. Overall Financial Position Measures 1. The number and percentage of Alberta’s public and separate school boards posting a deficit, by year, for the past five years. 2. The number of school boards, by year, over the past five years, in an accumulated deficit position. 3. Accumulated operating surplus expressed as days of operation. 4. Total metro board funding as a ratio to total provincial public board funding, compared to the ratio of metro school board student count to total public school student count. B. Instruction Measures 5. The per cent of provincial annual funding increases compared to average teacher salary settlements since 1995. 6. Annual average year-to-year consumer price index (CPI), for the past five years, compared to average teacher compensation increases and base funding increases. 7. Provincial class size averages. 8. Total instruction resource fees, by year, for the past five years. 9. Total school generated funds, by year, for the past five years. 10. A comparison of revenue and expenses for severe special needs students, by year, for the past five years. 11. Special education expenditures for programs for the mild to moderate, by year, for the past five years. C. Transportation Measures 12. Total transportation surplus/deficit, by year, for the past five years. 13. Total transportation fees, by year, for the past five years.

6


D. Plant Operations and Maintenance Measures 14. Operations and maintenance surplus/deficit, by year, for the last five years. 15. Total O&M revenue and expenses per square meter of school facility space for the last three years. E. Accountability Pillar Outcome and Satisfaction Measures 16. Provincial results and trends on accountability survey questions that fall short of the 80 per cent standard. • Percentage of students, parents, teachers, school board members and the public satisfied with the overall quality of basic education. • Percentage of students, parents, teachers and school board members satisfied with the opportunity of students to receive a broad program of studies. • Public satisfaction that high school graduates are well prepared for citizenship. • Percentage of parents, teachers and school board members indicating that the Alberta K-12 education system has improved or stayed the same in the last three years. • High school completion rates/annual dropout rates of students aged 14 – 18. • Parent, teacher, stakeholder and school board member satisfaction that the leadership at the provincial level effectively supports and facilitates teaching and learning.

7


Pres en t a t i o n and Dis cus s io n o f Me as ure s A. Overall Financial Position Measures

Measure 1 Data Chart: Figure 1 Number of School Boards Posting a Deficit or Surplus - 2001 to 2005 60

50 Number of School Boards

The number and percentage of Alberta’s public, separate and Francophone school boards posting a deficit, by year, for the past five years.

40

30

20

10

0 2001

2002

2003

2004

2005

Year Deficit

Surplus

Discussion: Alberta has 62 operating public, separate and Francophone school boards. During the 2004/05 school year, 28 of 62 (43.5 per cent) of these boards posted a deficit. The number of boards posting a deficit ranged from a low of seven boards in 2001 (11 per cent) to a high of 35 boards (56 per cent) in 2003. In 2004, 30 boards (48 per cent) incurred a deficit. There appears to be no particular pattern amongst the boards that ran deficits with regards to jurisdiction type although the percentage for metro boards of 50 to 75 per cent is higher than for non-metro boards. Of the 28 boards that ran a deficit in the year ending August 2005, three were metro, five were urban, one was Francophone, four were rural Catholic, one was suburban and 14 were rural. The trend line since 2001, illustrated in Figure 1, provides evidence that too many of Alberta’s school boards are having difficulty balancing service delivery requirements against available funding. While one could not reasonably expect that all boards could run a balanced budget every year, the standard established in 2001 of approximately 10 per cent of boards posting a deficit presents a reasonable and achievable target.

8


Measure 2 Data Chart: Figure 2

The number of school boards, by year, over the past five years, in an accumulated deficit position.

Number of School Boards in an Accumulated Deficit Position - 2001 to 2005 4.5

4

Number of School Boards

3.5

3

2.5

2

1.5

1

0.5

0 2001

2002

2003

2004

2005

Year

Discussion: Figure 2 presents the trend line with regard to the number of school boards in an accumulated deficit position. While the number of boards in an accumulated deficit position is not large (four in 2005), the trend line is worrisome, particularly given the reality that school boards are required to operate with balanced budgets.

9


Measure 3 Accumulated operating surplus expressed as days of operation.

Data Chart: Figure 3 Accumulated Operating Surplus Expressed as Days of Operation 12

Days of Operation (reserve funds)

10

8

6

4

2

0 2001

2002

2003

2004

2005

Year

Discussion: Figure 3 shows the number of days Alberta’s school boards could operate based on their accumulated operating surplus (unrestricted net assets and operating reserves). The trend line indicates a decrease in the ability to operate on reserves from approximately 10 days in 2001 to 7.5 days in 2005.

10


Measure 4 Total metro board funding as a ratio to total provincial public board funding, compared to the ratio of metro school board student count to total public school student count.

Data Table: Figure 4 Ratio of Metro Board Revenue to Total Public School Board Revenue

Year

Total provincial revenue

Metro revenue

Per cent metro revenue to total provincial

Ratio of metro to provincial enrolment (%)

2005

4,463,242,665

1,967,071,103

44.07%

46.25%

2004

4,187,785,303

1,845,114,380

44.05%

47.6%

2003

4,072,526,002

1,790,479,305

43.96%

46.4%

2002

3,815,053,280

1,672,637,428

43.84%

46.5%

Discussion: Figure 4 supports the position taken by the May 2005 Metro School Boards Study. In this study, metro boards expressed the opinion that the Renewed Funding Framework has not treated them as favorably as other provincial school boards and that the framework failed to recognize those factors “inherent in large metro school boards serving the needs of a large and diverse community.� Figure 4 demonstrates that metro board funding, as a ratio to non-metro boards, is trending upward slightly but not to the extent of the ratio of the metro student count to the non-metro student count. For example, in 2002, metro boards received 43.84 per cent of provincial revenue with 46.25 per cent of the provincial student population. In 2005, metro boards received 44.07 per cent of provincial revenue with 46.5 per cent of the provincial student population.

11


B. Instruction Measures

Measure 5 Data Chart: Figure 5 Funding Levels Compared to Salary Increases 45 40 35 30 Percent

The per cent of provincial base funding increases compared to average teacher salary settlements since 1995.

25 20 15 10 5 0 /96

95

19

/97

96

19

19

/98

97

/99

98

19

/00

99

19

/01

00

20

/02

01

20

/03

02

20

20

/04

03

/05

04

20

/06

05

20

7

6/0

0 20

tal To

Year Funding

Salary

Source: ASBA Labour Relations Presentation to Trustees, March 9, 2006. The 2005/06 and 2006/07 data assumes provincial funding of 2.5 per cent and a continuation of current salary settlements of 3.06 per cent and 3.04 per cent.

Discussion: Teacher compensation costs represent approximately 72 per cent of total instruction expenses. As such, teacher compensation and its relationship to base per student funding represents the largest instruction variable that school boards deal with. The teacher compensation settlement trends, outlined in Figure 5, reflect a consistent provincial pattern of teacher salary settlements exceeding base school board funding. In addition, teacher benefit costs are growing annually, particularly with the recent introduction of Health Care Spending Accounts. In the 2004/05 school year, for example, nine boards had Health Care Spending Accounts as part of the negotiated benefit package for teachers. With 39 contracts settled for the 2006/07 school year, this number has already grown to 25. Given that salary settlements have exceeded base level funding and are predicted to continue to do so, and given the rapidly increasing costs related to Health Care Spending Accounts, the ASBA is predicting that approximately 700 teachers will need to be reduced in the 2006/07 school year to cover the cost of salary and benefit settlements, unless provincial funding matches this increased expense.

12


Measure 6 Data Chart: Figure 6 Percentage increases in: CPI, Base Funding, Teacher Compensation 12

10

8 Percent

Annual average year-to-year consumer price index (CPI), for the past five years, compared to average teacher salary increases and base funding increases, expressed as percentage increases.

6

4

2

0 2003

2002

2004

2005

2006

Year CPI

Base Funding

Teacher Compensation

Discussion: Figure 6 supports the trends illustrated in Figure 5. It demonstrates that teacher salary increases have consistently exceeded base grant increases, that base funding has fallen short of CPI increases in two of the last five years, and that salary increases have exceeded grant increases. It should be noted that the 2002 salary settlements reflect the arbitration award following a number of teacher strikes.

Measure 7 Data Chart: Figure 7 Average Class Size for Core Subjects 30

25

Students per Class

Provincial class size averages.

20

15

10

5

0 2004/05

2005/06 Year K–3

4–6

7–9

10–12

Source: Alberta Education website

13


Measure 7 Provincial class size averages.

Data Chart: Figure 8 Metro Average Class Size - Core Subjects 30

Number of Students

25

20

15

10

5

0 2005

2006 Year K–3

4–6

7–9

10–12

Source: Alberta Education website

Discussion: Beginning with the 2004/05 school year, Alberta Education provided targeted funding for Alberta school jurisdictions to reduce average class sizes to meet Learning Commission guidelines. These guidelines are: K – 3 = 17 4 – 6 = 23 7 – 9 = 25 10 – 12 = 27 While progress has been made towards achieving the commission guidelines, particularly in Grades 4 to 12, additional and continued funding is required to achieve commission class size targets and sustain them. The other trend evident in Figure 8 is that metro jurisdiction class sizes are larger than non-metro jurisdiction class sizes. The trend illustrated in Figures 7 and 8 supports the claim made in the Metro School Boards Study that the Renewed Funding Framework has not resourced metro boards equitably.

14


Measure 8 Data Chart: Figure 9 Instruction Resource Fees 45

40

35

30 Fees ($ millions)

Total School Instruction Resource Fees, by year, for the past five years.

25

20

15

10

5

0 2000

2001

2002

2003

2004

2005

Year

Discussion: Instruction resource fee revenue remained fairly stable between 2000 and 2003 at approximately $31 million. Instruction fees have been trending upward since 2003 and now represent approximately $40 million of instruction revenue.

15


Measure 9 Data Chart: Figure 10 School Generated Funds 160

School Generated Funds ($ millions)

Total school generated funds, by year, for the past five years.

120

80

40

0 2001

2002

2003

2004

2005

Year

Discussion: School generated revenue has been trending upward since 2001 and now represents a total of approximately $142 million. On a per student basis, this represents approximately $258 raised per student in 2005 as compared to $213 per student in 2002, an increase of approximately 17 per cent per student over three years.

16


Measure 10 Data Chart: Figure 11 Severe Special Needs - Revenue and Expenses 250

200 Revenue/Expenses ($ millions)

Revenue and expenses for severe special needs students, by year, for the past five years.

150

100

50

0 2001

2002

2003

2004

2005

Year Expense

Revenue

Discussion: Figure 11 illustrates the fairly steep upward trend line for both revenues and expenses for programs for severe special needs students. Revenue figures were not available for 2005 as the AFS, modified to reflect the Renewed Funding Framework, no longer reports specific revenue for differentiated funding factors. Expenses for 2005 indicate a 60 per cent increase in program expenses for severe special needs students since 2001. Figure 11 also illustrates the gap between program revenue and expenses since 2001.

17


Measure 11 Special education expenditures for mild and moderate programs since 2001.

Data Chart: Figure 12 Total School Board Spending on Mild and Moderate Special Education Programs 2001 - 2005 200

School Board Expenditures ($ millions)

195 190 185 180 175 170 165 160 155 150 2001

2002

2003

2004

2005

Year

Discussion: Revenue for mild and moderate special education programs is part of the base per student grant. As such, it is not possible to track both revenue and expenditures for programs for mild and moderate special education students. Figure 15 illustrates the steep upward trend line in program expenses since 2001.

18


C. Transportation Measures

Measure 12 Data Chart: Figure 13 Transportation Surplus/Deficit - 2001 – 2005 8

Transportation Surplus/Deficit ($ millions)

Total transportation surplus/deficit, by year, for the past five years.

6

4

2

0

-2

-4

-6 2001

2002

2003

2004

2005

Year

Discussion: Figure 13 illustrates the steep reversal of fortune for the transportation expenses of Alberta’s school boards. In 2001, school boards had an excess of revenue over expenses of approximately eight million dollars. Since 2001, the trend line shows a closing of the gap between revenues and expenses and, in the past two school years, illustrates the overall deficit position of school boards with regard to their transportation operations.

19


Measure 13 Transportation fees, by year.

Data Chart: Figure 14 Transportation Fees 20

Transportation Fees ($ millions)

16

12

8

4

0 2000

2001

2002

2003

2004

2005

Year

Discussion: Transportation fees were generally stable between 2000 and 2003, accounting for approximately 6 per cent of total transportation revenues. Transportation fees have risen sharply since 2003 and now account for approximately 8 per cent of total transportation revenue. The shortfalls in revenue illustrated in Figure 13 appear to be recovered through an increase in transportation fees. The example of Calgary Catholic illustrates the upward trend line of transportation fees. In the 2004/05 school year, students in Grades 7 to 12 paid $21 for a subsidized $40 bus pass. In the 2005/06 school year, students paid $32 for a subsidized $47 bus pass. In Kindergarten to Grade 6, transportation fees to an alternative program or program of choice have grown from 0 in 2003/04 to $85 in the 2004/05 year to $135 in the 2005/06 year. Transportation fees for regular Kindergarten to Grade 6 passengers and special education (all grades) has jumped from no fee in 2004/05 to $135 in the current school year. Even with these dramatic increases in transportation user fees, Calgary Catholic is projecting a million dollar deficit in its transportation services. Focus group representatives provided numerous examples of growing parental demands for improved service standards for transportation. Parents want shorter bus ride times and door pick up and delivery. In addition, the issue of escalating wage rates across the province has created significant upward pressure for bus driver wages. Many jurisdictions are having significant difficulty finding and keeping bus drivers at current wage rates. Improving service standards and providing competitive wages for bus drivers will add substantially to existing transportation costs.

20


D. Plant Operations and Maintenance Measures

Measure 14 Data Chart: Figure 15 Surplus/Deficit for Operations and Maintenance 20

15 O & M Surplus/Deficit ($ millions)

Operations and maintenance surplus/deficit, by year, for the past five years.

10

5

0

-5

-10

-15 2001

2002

2003

2004

2005

Year

Discussion: As Figure 15 illustrates, school boards have been incurring deficits in their O&M operations for the past four years. A variety of factors, including spiking utility and heating costs combined with low utilization in some areas of the province, undoubtedly account for the financial squeeze faced by board O&M departments.

21


Measure 15 Total Operations and Maintenance revenue and expenses per square meter of school facility space for the last three years.

Data Table: Figure 16 Operations and Maintenance Revenues and Expenses per Square Meter from Schedule A and F to the AFS 2003

2004

2005

7,599,901

7,070,876

7,108,869

Revenues per m 2

$77

$83

$83

Expenses per m 2

$79

$85

$86

School Buildings (m 2)

Discussion: The data in Figure 16 supports the trend line in Figure 15. It translates the annual O&M deficit to a per square meter shortfall of revenue to expenses. Figure 16 illustrates that in the last two years, school building space has been reduced by school boards by approximately half a million square meters (491,032). In addition to the 7.1 million square meters of school space boards are required to operate and maintain, school boards also maintain 336,546 square meters of non-school buildings with no provincial funding provided. At the rate of $86 per square meter, as illustrated in Figure 16, school boards spend approximately $29 million for non-instructional buildings for which they get no financial support. This money must be squeezed from other areas of board operations. Figures 15 and 16 also provide evidence in support of the key findings of the March 2005 ASBA study regarding the gap in funding for plant operations and maintenance. These findings were: • Funding for operating and maintaining Alberta schools has not kept pace with real costs. • In the 2004/05 year, school boards faced a $21.3 million shortfall on their electricity and gas bills. • Municipalities are starting to charge school boards directly for services previously covered by property taxes (i.e. land drainage, local improvements) • Alberta’s $9.6 billion investment in school buildings is at risk, as school boards shift dollars from ongoing maintenance to pay the light and heat bills and keep schools clean

22


The points raised in the 2005 ASBA study have become a matter of media attention. On March 17, 2006, the President of the ASBA was on a provincial CBC radio program discussing the deteriorating quality of Alberta’s school buildings. The program was sparked by a highly visible evacuation of a Calgary school due to concerns about the structural integrity of the school’s roof. The ASBA President also referenced a rural Alberta school that needed its roof supported with beams to avoid an imminent collapse. Examples like this present a graphic picture of the clear gap between O&M funding and O&M expenses and the resultant risk to the province’s schools that this gap represents. E. Accountability Pillar Outcome and Satisfaction Measures The new Funding Framework is part of an Alberta government accountability initiative that includes measuring performance on a number of outcome and satisfaction measures. Performance results on these measures are influenced by a number of factors including funding levels to school boards. The link between performance and funding is made in the 2004/05 Ministry of Education Annual Report. Alberta Education writes that “rather than relating only to funding for the 2004/05 fiscal year, achievement of results on the seven performance measures reflects the cumulative impact of years of provincial funding and effort on the part of students, parents, teachers, and administrators as well as the Ministry” (p. 16, 2004/05 Ministry of Education Annual Report). Given the direct link between funding and performance, performance on all provincial accountability measures is impacted positively or negatively by the issue of sufficiency of funds. The literature on leadership and student performance speaks to the importance of setting high expectations and standards for students, schools and school jurisdictions. Simply put, if we want honours standard performance, we must expect and target honours performance. As a world leading education system, it is not unreasonable to expect that at least 80 per cent of education stakeholders in the province should express satisfaction with the various factors measured by the accountability pillar. If one looks at current accountability pillar survey satisfaction levels, one concludes that a number fall far short of the 80 per cent or honours standing. Bold strategies with supporting resources need to be implemented to begin moving the satisfaction and performance bar upward towards the 80 per cent standard. The following measures, extracted from the 2004/05 Alberta Education Annual Report, illustrate the measures that fall short of the honours or gold standard.

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Measure 16

Percentage of students, parents, teachers and school board members satisfied with the opportunity of students to receive a broad program of studies.

Public Satisfaction with the Overall Quality of Basic Education 74 72 70 68 Per Cent

Percentages of students, parents, teachers, school board members and the public satisfied with the overall quality of basic education. (New measure starting in 2005/06 – chart measures “public satisfaction”)

Data Chart: Figure 17

66 64 62 60 58 2001

2002

2003

2004

2005

Year

Discussion: While the trend line indicates improving public satisfaction with the overall quality of basic education, it raises the question of an appropriate target. A target of 80 per cent is achievable and reasonable and should be the Alberta Education goal. Data Chart: Figure 18 Satisfaction with the Opportunity of Students to Receive a Broad Program of Studies 90 80 70 60 Per Cent

Note: These provincial results and trends on accountability survey questions fall short of the gold standard.

50 40 30 20 10 0 Students

Parents

Teachers

Trustees

Stakeholder Per Cent Satisfaction 2003/04

2004/05

Discussion: For the 2004/05 school year, parent, teacher and trustee satisfaction regarding this important measure has trended downward. As equitable access to educational opportunities is a key goal of the Alberta Education Business Plan, this slippage presents a concern that needs to be addressed. 24


Data Chart: Figure 19 Public Satisfaction that High School Graduates are Well Prepared for Citizenship 70

60

50

Per Cent

Public satisfaction that high school graduates are well prepared for citizenship.

40

30

20

10

0 2000/01

2001/02

2002/03

2003/04

2004/05

Year

Discussion: ASBA has long advocated for the importance of citizenship education. A public satisfaction rate of 60 per cent for this important measure is simply unacceptable. Active citizenship is a cornerstone of our democracy. Our students need access to an education that helps them become productive citizens and our public needs to see and believe the results of this education. A target of 80 per cent is achievable over time.

25


Data Chart: Figure 20 2004/05 Satisfaction Results 90 80 70 60 Per Cent

Percentage of parents, teachers and school board members indicating that the Alberta K-12 education system has improved or stayed the same in the last three years.

50 40 30 20 10 0 Teachers

Parents

Trustees

Overall

Respondents

Discussion: An overall satisfaction level of 66 per cent on this measure is low. Again, education stakeholders need to believe that the education system is improving year by year.

High School Completion Rates.

Data Chart: Figure 21 Five Year High School Completion Rates 78

77

Per Cent

76

75

74

73

72

71 1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

Year

Discussion: Results for this important measure are trending upward but are short of the gold standard. 26


Data Chart: Figure 22 2005/06 Satisfaction Results 90 80 70 60 Per Cent

Parent, teacher, stakeholder and school board member satisfaction that the leadership at the provincial level effectively supports and facilitates teaching and learning.

50 40 30 20 10 0 Stakeholders

Parents

Teachers

Trustees

Overall

Respondents

Discussion: The disturbing result illustrated by Figure 22 is that those closest to the classroom (teachers) have the lowest satisfaction.

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Dis c u s s io n o f Tre nd Line s Discussion of the evidence regarding the question of funding sufficiency Evidence from three ASBA-sponsored studies completed in 2005, namely: • Metro School Boards Study, May 2005 • The Funding and Costs of Plant Operations and Maintenance in Alberta’s Schools, March 2005 • Small High Schools – Programs and Funding, March 2005 combined with trend line data contained in this report supports the contention that school boards in Alberta are facing a significant funding sufficiency shortfall. The ASBA-commissioned reports provide evidence that Alberta’s metro boards have not benefited equitably from the implementation of the new Funding Framework. The Plant Operations and Maintenance Study paints a bleak picture of Alberta’s $9.6 billion investment in school facilities being at risk unless building preservation funding increases to approximately 2 per cent of the value of building assets. The Small High Schools Study makes a strong case, based on the principle of student access, for an increase in the “small schools by necessity factor” for small high schools. Trend line data in this report indicate that the financial position of school boards is deteriorating, that expenses for teacher compensation increases have consistently exceeded base grant level increases, that user fees in instruction and transportation are growing rapidly in an effort to fill the funding gap, that student transportation services in the province have operated at a deficit for the past two years and O&M for the past four years, and that a number of outcome and satisfaction measures of the accountability pillar show mediocre results at best. The March 16, 2006 focus group participants were asked to identify their jurisdiction’s top needs with regard to funding. The six participants were unanimous in identifying the following: • Flexibility in order to address local community demographics, needs and priorities. Focus group participants noted that loss of access to the local tax base has significantly reduced the ability of their school jurisdictions to deal with local needs and priorities. They noted that although the Renewed Funding Framework attempts to provide flexibility, it is a hollow concept unless accompanied by funding adequacy. • Teacher Salary Pressures. Focus group participants were very concerned about the costs of teacher compensation packages outstripping base level grant increases and that this trend, more than any other, is putting severe limitations on their ability to deliver instructional programs to a student population that presents with increasingly diverse and complex needs.

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• Plant Operations and Maintenance. Focus group participants noted the increasing difficulty in keeping up with school facility and maintenance costs, the hidden costs of community usage, and the difficulty in maintaining necessary non-instructional facility space without corresponding funding. • Long Term Capital Plans. Focus group participants made a strong plea for provincial consideration of their long-term capital plans. Rapidly expanding cities require new schools and all jurisdictions require funding to upgrade existing ones. • Transportation. Focus group participants were concerned about the shortfalls in revenue occurring in their transportation services and the growing need to rely on user fees to meet this shortfall. Metro and urban representatives reiterated the need to completely revamp the metro and urban transportation funding formulas. • Service and Legal Pressures. Focus group participants noted the growing demands for improved service for transportation to a school of choice, improved transportation standards such as ride times and pick-up and drop-off times, program expectations for special education, ESL and Aboriginal students and the increasingly litigious nature of staff and parent relationships. • Unfunded Mandates. Focus group members noted that school jurisdictions must deal with a growing number of unfunded mandates. Examples given of unfunded mandates were: - The expectation that all parents have access to programs or schools of choice - Implementation of curriculum and program changes - Health and social services provided to students - Meeting legislated changes related to implementing new Occupational Health and Safety (OH&S) and “working alone” requirements - The need to keep pace with rapidly expanding technology and information systems

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Rec o m m en d atio ns Given the trends illustrated by the measures used in this report, the conclusions reached by recent ASBA studies and the needs identified by focus group participants, this report recommends the following to help address the issue of funding sufficiency: 1. That, as a long-term measure, Alberta Education, in consultation with stakeholders, develops and keeps current an Education Price Index similar in nature to the consumer price index. This index would have an overall Alberta index and specific regional indexes. The Education Price Index would be used to establish annual base level grant increases to school boards. The Education Price Index would more directly link cost of service with the revenue to provide the service. 2. That some ability to access the school jurisdiction tax base be restored to school jurisdictions to provide the needed ability to respond to the needs of communities as diverse as Fort McMurray in the north and Lethbridge in the south. This has been an ASBA policy position for a number of years. 3. That base per student grant increases be sufficient to cover the cost of teacher compensation packages. ASBA labour relations estimates that base funding is short of compensation increases by: 2004/05 = $18.624 million 2005/06 = $15.973 million 2006/07 = $13.507 million Total = $48.104 million (funding to support approximately 700 teachers) 4. That the new Funding Framework includes a factor that addresses funding for Alberta’s mild to moderate special needs students. Severe special needs students are currently funded on the basis of a jurisdiction profile. A similar approach could be used for mild and moderate special needs students. 5. That the new Funding Framework revise the student factors for ESL and Aboriginal students to more accurately reflect program costs, and that the small schools by necessity factor be enhanced to provide additional support for small high schools pursuant to the recommendations of the Metro School Boards Study and the Small High Schools Study. 6. That funding for Plant Operations and Maintenance be extended to include needed non-instructional space such as administration buildings, transportation buildings and maintenance buildings. During the 2004/05 school year, school boards maintained 336,546 square meters of non-instructional space with no funding support.

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7. That funding for Plant Operations and Maintenance for school space be linked to private industry standards for operating, maintaining and preserving facilities. An example of this standard, referenced in the provincial government’s 1999 Report on a New Facilities Capital Plan is that school facility preservation should be funded at two per cent of building replacement cost. 8. That transportation funding be driven by current cost models that reflect the unique circumstances and service standards of Alberta’s metro, urban and rural environments. 9. That Alberta Education study the cost to school boards of the unfunded mandates that currently exist, such as the provision of choice and compliance with Occupational Health and Safety standards, and reflect the cost of delivering these mandates in the base funding for school boards. 10. That Alberta Education commit to funding the new facility capital requests outlined in school jurisdiction three-year capital plans.

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C o n c l u s io n Alberta has a sound educational system that produces some excellent student results. The new Funding Framework, introduced in September 2004, has the support, in principle, of the ASBA. With the implementation of some needed revisions, the formula should serve Alberta’s students well for years to come. While the new Funding Framework is an allocation model, its principles are hollow without overall funding sufficiency for Alberta’s school boards. Prior ASBA - commissioned reports and the trend lines contained in this report provide evidence of the lack of current funding sufficiency. The result, as assessed in part by the accountability pillar outcome and satisfaction measures, is mediocre performance on some key indicators of student performance. School boards, given overall adequate funding and the flexibility to respond to local priorities, will be able to move performance level results, in the words of Jim Collins, “from good to great.”

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Missing the mark