School Enrollment and Funding

Deconstructing the myths and understanding 

the realities of state funding for Vernonia Schools

When Vernonia School Superintendent Aaron Miller recently announced that enrollment at District 47J was up at the start of the 2014-15 school year, it sounded like good news.  And, for the most part, it is. 

“This is very good news,” stated Vernonia School District Superintendent Aaron Miller, when asked about the recent, and apparently unexpected surge, in registered students in Kindergarten through grade 12 at the new Vernonia Schools. “This is a huge step in the right direction.  It’s very exciting for our district to see new students come through the front door.”

The reason this is such good news is because School Districts in Oregon receive funding from the state, through the State School Fund (SSF) grant program, based on enrollment.

Enrollment in Vernonia at the start of this school year was counted at 560 students, up from 532 at the end of the 2013-14 school year.  The actual number is 589, but kindergarten students only count as a half student each, as far as the state is concerned.  So, for funding purposes, that’s an increase of twenty-eight students, which equates to a more than 5% increase.

That may not sound like much.  But in a school district which has experienced declining enrollment since the flood of 2007, including the last two years following the opening of the newly constructed schools campus, this is extremely encouraging.

“This is the first time we’ve moved forward since the flood,” says Miller, who took over as Superintendent this summer.  “In my mind that’s a very positive thing for the district and it’s a very positive thing for the community.”  

In 2014-15 the Oregon schools across the state received $6,947 per student from the State School Fund (SSF).  An increase of twenty-eight students would therefore appear to be a significant boon to the ever tightening budget of the cash strapped Vernonia School District, which has been struggling to make ends meet due to cuts in state funding, their declining enrollment, and expenses related to the construction of the new campus.

And, it is a boon.  More students, means more money, right?

The short answer is yes. But the long answer is much more complicated.

What’s the problem?

The increase in students can be seen as both a positive and a negative.  The growth in enrollment could be a sign that things are finally turning around for the school district and for the community, and obviously means more funding.  The flip side is that extra students also put a strain on the resources the district is currently able to provide.

Comprehending the impact of the increase in enrollment is trickier than one might think.  First of all, school enrollment is an ever changing number, with families and registered students coming into, and moving out of the district constantly.  The exact number of students enrolled can change from week to week, even day to day.

Secondly, the amount the school district receives is initially based entirely on estimates, and involves a complex process of reconciliations throughout a school year to adjust the amount of payments the district receives from the state.  District officials and the district budget are constantly in flux and in the dark about the actual amount of funding they will receive from the state during any given school year; which makes planning a budget somewhat challenging.

Thirdly, what makes figuring the numbers so convoluted  is that the final numbers involve enrollment statistics and funding for parts of at least three fiscal school years; the previous year, the current year and the upcoming year.

How does the state figure funding?

The state has developed a formula they use to take the Average Daily Membership (ADMr), which is the number of students attending the school full time, and turning it into the Extended ADM (ADMw), the figure the state uses to calculate the amount each school district will receive from the SSF. Without getting into all the nitty gritty details, here is a brief summation of how the state and the district figure out school district funding.

They start with school district local revenue, which is an estimate of all the money the school district will receive from local property taxes, the Common School fund, the county school fund, and state managed timber.   For the 2014-15 school year Vernonia estimated Local Revenue at $2,900,161.

Next they figure the district’s Extended ADM.  Taking the initial ADM, (the number of students the school district estimates they will have enrolled for the school year) they multiply by a number of factors that increase costs to the district to provide services, to calculate the final Extended ADM. Among the weighted factors are: students in an English as a Second Language (ESL) program, students in Pregnant and Parenting Programs, students in Special Education programs, and students in poverty and foster care programs.  Vernonia also receives extra factors for the students enrolled at the remote Mist School and extra factors for being a small high school.

As an example, students in an ESL program count as an additional factor of .5, students in poverty count as an extra .25 and a percentage of high school students count as an extra 1.0.  Those extra factors give the district additional funding and resources to help compensate for these special issues and student needs they must meet.

Remember, these are all estimates that needed to be included in and are part of the school district 2014-15 budget process, which took place in the spring of 2014.  With all the weighted factors, Vernonia’s ADM went from an estimated 550 students for the 2014-15 school year to an Extended ADM for 2014-15 of 756.24.

The state then takes that Extended ADM and multiplies it by their basic  grant funds and several other ratios and then adds in some additional costs (remember, we’re trying to make this easy to understand) to come up with a total formula amount.  For 2014-15 that number for Vernonia was $5,773,657, which includes an additional call-out Transportation Grant of $520,000. They then subtract the Local Revenue ($2,900,161 from above) to get a final SSF estimate of $2,873,495.

This is the amount that should be paid to the District in monthly installments.  The state begins making those payments in July and they are paid through May.

Because these Local Revenue and ADM amounts are estimates, the state has built into the process several opportunities to adjust numbers.   The district has a chance to revise their number in the fall based on changes that have occurred, like the unexpected increase in enrollment they experienced this year.  There is also an opportunity to make changes in December. A final reconciliation for estimated payments versus actual data happens in May.

Does this system really work?

For the most part, the system does work.   But there are several holes in the system, some of them more gaping than others.

One hole is that it is all guess work.  A school district’s SSF payments for the next year could be impacted if they over or under estimated enrollment or local revenue.  This is what happened at the Vernonia School District during the last several fiscal cycles.  According to Superintendent Miller, district officials expected to see an upswing in enrollment when the new school campus opened in 2012 and made modest increases in their estimates.  When those increases in enrollment failed to materialize, the district found themselves in the position of owing back to the state some of the funds they had already budgeted and even spent, which impacted future payments.  In the 2013-14 budget cycle, the District estimated for 540 students and ended with a reconciled number of 532.

The reverse is true this year, at least so far.  For 2014-15 the district estimated 550 students and currently have 560 enrolled; which means the district has not yet received funding for students they have to provide resources for and teach.  The five K-2 blended classrooms were expected to have twenty-three students in each class when the idea was proposed and implemented this past summer; because of the influx of young families into the district over the summer, those classes have twenty-seven and twenty-eight students each.  Without funding in the budget to hire additional teachers, class sizes have turned out to be larger than anticipated throughout the school system.

“As we see needs, we can move forward and address those issues in some cases with extra  employee hours,” explains Miller.  “And we did that this past summer when we saw a need in the size of the incoming kindergarten class; we hired an additional teacher in anticipation of this issue.”  But the budget has already been figured and is already tight, so they can’t just continue to add more teachers if enrollment increases.

Which leads us to another gap in the system for Vernonia; the fact is that the district has instituted full day kindergarten, yet the state only factors kindergarten students as .5 of a student, which produces another gap in the Vernonia district budget. It is anticipated that the state will fund kindergarten students full time in the next budget, but that is not yet a done deal.  If it does happen, Vernonia, with fifty-two currently registered kindergarten students, could receive significantly more full student funding for an additional twenty-six students.  Keep in mind, the funding all comes from the same pool of state money, so by adding full time kindergarten funding and not increasing the overall pool, the state may just reduce the amount they give districts for each student.  If full day kindergarten funding doesn’t happen at the state level Vernonia may continue to have this gap in their funding.

Another large hole in the system is the way the state funds districts for special education students.  Each student identified as needing an Individual Education Plan (IEP) receives an additional factor of 1.0, meaning the district receives twice as much funding for each of those students.  “Those students may need services from being pulled out for an extra class, to needing a one-on-one assistant, to having a student that requires transportation to another  program outside our district because we are unable to meet their needs here,” says Miller.

The extra resources from the state help offset those extra costs for the district.  Unfortunately the state caps that extra factor at 11% of the student population.  In 2014-15 the Vernonia district estimated they would have ninety-seven students identified as IEP, yet they only receive funding for 60.5  students because of the 11% cap.  The state does have a small fund which provides additional funding for districts over the 11% cap, but for Vernonia it only provides an additional 10.9 factor, meaning the district only receives extra funding to meet the needs for  71.4 IEP students.  And, the reality is that, at the start of the school year, Vernonia actually had 117 students, or 17.5% of their student population,  identified as IEP.  “We have forty plus students that we don’t receive extra money for, yet we have to meet their needs with services,” says Miller.  “The bottom line is the state does not fully fund us for our special education students.  And that comes out of the bottom line of the rest of the budget.” Miller went on to say that he believes this is a problem for districts throughout the state, not just Vernonia. “We are not the only ones,” says Miller. “I would guess there are very few districts in the state that have 11% of their population who are in special education.”

What does the future look like?

Vernonia is currently dealing with gaps in funding for several of their programs, along with issues that involve the everyday operation of their facility.

Overall, Miller is looking on the bright side.  He says he views the increase in students as good for the district and, as Miller likes to point out, also good for the Vernonia community overall.

“The kids that come into our school enhance our bottom line, which helps us start to make progress towards getting healthy after the downturn we’ve experienced,” says Miller.  “But it’s also significant to note that those families who move in are paying rent, they’re buying groceries, they’re  paying water and electric bills-all those things really make it an exponential growth for the community as a whole.  When we’re healthier the community is healthier,  and when the community is healthy, we’re healthy.”

But that additional funding may not lead directly to new teachers or new programs says Miller.  Because of prior state funding cuts, flood impacts and budgetary issues the district has previously made cuts across the board.  “We need more teachers,” says Miller.  “We need to add days back into our schedule.  With our increased special education population, we have increased costs.  We have the need to increase custodial services.  We need additional instructional assistants.  We are meeting the needs of our kids.  But that extra money is not going to go very far among all those priorities.”

There is one other factor that could potentially impact the district budget that Miller failed to mention, maybe because it’s such a large elephant in the room that it’s almost impossible to miss.  The district has almost $5 million in debt from the construction of the new school campus.  They continue to work diligently to fundraise and try to retire that debt, but if that fundraising money ever dries up, the district general fund could be affected.

Miller pointed out that student enrichment remains the priority for the District. “What shouldn’t get lost in the discussion about finances is the fact that our focus is actually on the well being of our students, their growth and achievement, and not on just getting more dollars from more students,” says Miller.

Miller is hopeful that the upswing in enrollment this year is a trend and not an anomaly.  “Hopefully  funding continues to increase and we continue to see our enrollment grow,” says Miller.  “Then we can add a few more things to our priority list.  Even with more funding, it’s not going to be a one year fix.  It’s going to take a number of years for us to recover. We’ve been in this downturn for too many years; it’s going to a take a while to make that up.”