ways and means 3 16-11 lw

Investing in Learning. Rethinking the Way We Budget for Education.

Ways and Means Sub-Committee on EducationPresentation by Education Investment Team Budget

Work Group

Outline

IntroductionWhy Change? Why Now? Proposed ApproachRoles and ResponsibilitiesDiscussion of next steps

Introduction

Design a unified, performance based 0-20 budget model for consideration by the 2012 legislative session.

Governor’s Charge to Education Investment Team

Transform Oregon's approach to education from silos into an integrated and meaningful pathway to success for Oregonians of all ages.

40/40/20 Vision

• 40 percent of Oregon adults should have a bachelor’s degree or higher.

• 40 percent should have at least an associate’s degree or other technical credential.

• 20 percent should have a high school diploma that represents a high level of academic and work readiness skills.

Governor’s Charge to Education Investment Team

We seek your help

We would like feedback.

In turn, we hope that we can provide information and insights that will help you make decisions this session.

The case for the new budget framework

Why change, why now?

The Assignment

How to best allocate resources to achieve outcomes for learners, communities and the general public?

$7.4 billionGeneral/Lottery

Fund

Type of Budgeting

PK-12 CCWD OUSOHS

UOSA

CTSP

C

State Agency Line Item Budget

ODE CCWDChancellor’

s OfficeOHSU OSAC TSPC

State Agency Line Item Budget

Early Childhood, Special Ed

Grants

Universities SWPs

State School FundK-12 Schools &

ESDs

College Support Fund

Community

Colleges

Grant in Aid OHSU

Budget Request Approved by

State Board of Ed

State Board of

Ed

State Board of

Higher Ed

OHSU Board

OSAC TSPC

Budgeting methods vary widely by area…

In making a budget request, state rules allow some agencies to take enrollment into account. Others cannot.

Rules also differ with respect to how agencies factor in expected changes in staff compensation.

…and rules direct agencies to build education budgets differently.

Program

Budget Development

Considers Expected

Enrollment Growth?

Budget Development Incorporates Education-

Sector Inflation Index?

Oregon Pre-K No No

ECSE/EI Yes No

K-12 Yes Yes

Community Colleges

No No

OUS No No

OHSU No No

Revenue Source

2009-11 LAB All

Education

General Fund $6,819,998,207

Lottery Funds $536,375,882

Other Funds $4,729,433,138

Federal Funds $1,755,698,966

Total $13,841,506,193

• Incomplete accounting of revenues available to education institutions.

•Level of program aggregation that obscures sizable programs with distinct goals.

•Lack of human scale or reference to number of students served or staff employed.

•Based on history and formulas, not on outcomes.

The traditional way of presenting the budget omits important information and trends.

Average Annual Growth in General Fund, 2000-11

Absent structure or fiscal goals, education funding eroded in the last decade

Perverse incentives pervade existing funding formula

Accelerated learning = early graduation =

less money

Shorter school year = less student contact =

no change in money

More students identified with special needs

= more money

Longer participation in ESL =

more money

More efficient transportation operations = less money

Chronic absenteeism = smaller class sizes = no change in money

“If there is one lesson of the past decades of reform efforts, it is that funds sent to districts without regard to performance do not have, on average, a powerful impact on student learning.”

- Eric Hanushek (2007)

1 Agree on the outcomes.

2 Understand who the learners are and where the money is going, and what are we getting for it.

3 Determine what evidence says would improve outcomes with the money we have.

Proposed Approach - So what is a better framework?

Agree on the outcomes

Current Reform Strategies to Advance Student Success Along the Continuum:•Rigorous Curriculum•Data System providing regular and timely feedback•Unified Budget allocated to achieve outcomes

40% post-secondary40% post-secondary

40% college

graduates

40% college

graduates

Economic VitalityPer Capita Income

GrowthActive Civic Life

Economic VitalityPer Capita Income

GrowthActive Civic Life

20% at least high

school diploma

20% at least high

school diploma

Goals

% children ready-to-learn

% meeting 3rd grade benchmar

ks % meeting 5th grade benchmar

ks

% meeting 8th grade

benchmarks % 18 year-

olds college & work ready

% adults with

Associates% adults

with completed Bachelor’s

% adults with

advanced degreeOutcomes

Children have

access to quality Pre-

K experience

Students engage in a

rigorous curriculum

Every student “on

track” to graduation

Students complete secondary

with meaningful

skills

Oregonians Pursue

Ongoing Post-

Secondary Education

Output

OR per capita income

% voter turnout

% who volunteer

Benchmarks

To get to the outcomes: Build A Continuum Framework1Create a unified education delivery system with curriculum alignment so that exit standards from one sector equal entrance standards to the next.

2Implement a unified data system so that student and institutional data track across the continuum.

3Produce a unified, transparent budget for the continuum.

In a unified education system:

• Rigorous, relevant curriculum links to standards across the PreK-20 continuum.

• Students’ assessment scores will inform their instructional plans.

• Students will be able to move at a pace dictated by their rate of achievement.

• Multiple delivery mechanisms and choices available to students, who may be enrolled in more than one institution at a time depending on their needs.

Goal for unified education system:

• Cut at least one year on average for time to degree.

• Increase substantially the minimum standards in reading, writing, mathematics for H.S., AA and BA degrees.

• Increase numbers attaining degrees to meet 40-40-20.

To get to the outcomes: Transform the Delivery System

• Accelerating learning.• Reducing remediation.• Applying new learning tools such as

online learning. • Other efficiencies.

To get to the outcomes: Create more value for the dollars available

In a unified education data system:

• Student transcripts, scores and plans will track across the continuum.

• Assessment tools will measure students’ proficiencies at every stage.

• Credits and advancement depend on successful achievement to standards.

• Institutional financial and performance data will be available to system managers and the public.

To get to the outcomes: Transform the Data System

Questions that can be Answered by a Transparent, Outcome-Based Budget1 What are we trying to accomplish for each

level of education and how are we performing?

2 How much variation in performance is there across the state? How does Oregon compare with national and international benchmarks?

3 If we are not producing the expected results, do we need changes in policy, practices, or investment levels? Are there best practices that can be adopted?

FROM

Based on education sectors

Argument about a single number

Budgeting on the margins

Debate: Level of funding

Funding agencies

TO

Based on groups of students

Discussion about investments and

outcomes

Budget the use of all education resources

Debate: How to get better results

Investing in educational outcomes for students

A New Budget Will Change Policy Discussions

40/40/20 Vision

40 percent of Oregon adults should have a bachelor’s degree or higher,

another 40 percent should have at least an associate’s degree or other

technical credential, and the remaining 20 percent should have a high school diploma that represents a high level of

academic and work readiness skills.

Governor Kitzhaber Charge

Understand who the learners are and where the money is going, and what are we getting for it.

Percentage of 55- to 64-Year-Olds with an Associate Degree or Higher, 2007

Percentage of 25- to 34-Year-Olds with an Associate Degree or Higher, 2007

$3.7 billion/yrGeneral/Lottery Fund

Annual Education Expenditures, 2011

$7.8 billion/yrGF/LF, property taxes, federal, and tuitions

State, Local, Federal, Tuition and Fees

Spending per student, 2008-09

State, Local, Federal, Tuition and Fees

Spending per student, 2008-09

State, Local, Federal, Tuition and Fees

Spending per student, 2008-09

State, Local, Federal, Tuition and Fees

Spending per student, 2008-09

$6.7$8.7

Number of Students, 2008-09

Total Spending, 2008-09

State & LocalFederalTuition and Fees, Other

What does evidence say would improve outcomes with the money we have?

Oregon’s Goals For Education Attainment

Dramatic Increases in:• High school graduation rates

• Students meeting rigorous academic standards

• Oregonians enrolling, persisting, and graduating in the postsecondary system

• Oregonians with strong apprenticeships or technical training

• Opportunities for lifelong learning

Questions to Ask?• Who are the learners?• What are the outcomes we want to achieve? • How much is available to invest in the education

continuum? How can we best allocate those resources to achieve our desired outcomes?

• How can we align incentives and use evidence-based practices to get the results we want?

• What parts of the system are ripe for redesign?• What investments are necessary to make the

changes that will allow us to achieve our outcomes?

Roles and responsibilities

Role of the Education Investment Board

1 Recasts the state’s role in PreK-20 as a procurer of educational outcomes.

2 Unbundle distinct services and organize the budget around students rather than systems or institutions.

3 Establishes performance contracts with schools that provide services to students. Contracts include expectations for learning outcomes.

4 Establishes priorities and funding levels among services.

5 Manages reserve funds to ensure minimum funding level per-student is carried for ALL Oregon students throughout economic cycles.

State government procures education outcomes on behalf of learners and the general public.

School districts (including charter schools), community college districts, and public universities provide the services.

Proposed Division of Responsibility

State government steers, through its investments and oversight.

Schools row, providing quality services to learners.

Proposed Division of Responsibility

Key roles of schools

To provide quality education to students.

To continuously improve practices to get ever greater value of the dollars invested.

Role of state in accountability

Review progress, create incentives for continuous improve.

Identify and bust barriers getting in the way of student outcomes.

What are the next steps?

To be continued on Monday’s agenda…

•What additional information do you need to make wise budget decisions this session?•Where are the highest leveraged opportunities for redesign now and in the future?•What else can we do to be helpful?