Understanding District Characteristic Adjustments in Education Funding
Various types of formula adjustments are used to address the diverse costs of education among schools and districts, including district size adjustments, necessarily small schools adjustments, density adjustments, regional cost adjustments, and transportation funding approaches. These adjustments aim to cater to characteristics such as size, economies of scale, remoteness, goods costs, and transportation needs. Different states have varying approaches to these adjustments, with some focusing on district size, small schools, density, and regional cost differences.
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Review of Adjustments for District Characteristics 1
Types of District Characteristic Adjustments There are several types of formula adjustments intended to address the differing costs of education associated with schools and districts: District size adjustments Necessarily small schools (or geographically isolated schools) adjustments Density adjustments Regional cost adjustments States often have separate transportation funding approaches to recognize how transportation costs vary between districts Often, these adjustments are addressing a similar set of district characteristic needs in different ways Size/economies of scale, salary and goods costs, remoteness, and transportation 2
Overlapping District Characteristic Adjustments District Size - Economies of Scale (school and district-level) - Remoteness - Cost of goods Necessarily Small Schools - Economies of scale, school-level - Remoteness Regional Cost - Salaries - Cost of goods Density - Economies of scale (school and district-level) - Remoteness - Costs of transportation Transportation - Costs of transportation - Remoteness 3
District Characteristic Adjustments in Other States District Size Adjustment 20 states adjust for district size Necessarily Small Schools 13 states adjust for schools that are small, primarily due to geographic isolation Density Adjustments 11 states adjust for density, usually based upon students per square mile Density adjustments usually in place of a district or school size adjustment, or a requirement to receive size funding Some provide additional funding if both small and sparse Regional Cost Adjustments 12 states adjust for regional cost differences 4
District Characteristic Adjustments in Other States, continued Most states have 1-2 district characteristic adjustments 11 states have no district characteristic adjustments 2 states have 3 adjustments New York and Texas (RCA, District Size, Density) Wyoming (RCA, District Size, Necessarily Small Schools) Eight states also provide differentiated transportation funding (not as a a formula adjustment) specifically due to density Some other states, including Wyoming, provide transportation funding based upon actual district expenses, which would account for increased costs based upon density 5
District Characteristic Adjustments in Western States Necessarily Small Schools Density-based Transportation RCA District Size x x Density x Arizona Colorado Idaho Montana New Mexico Utah x x x x x x x (reimbursement of costs) Wyoming x x x 6
Review of Nevada District Characteristic Adjustments Nevada Cost of Education Index (NCEI) Necessarily Small Schools District Size Adjustment Base Cost Transportation (separate from formula, amount determined by legislature to be sufficient for each district) 7
Development of NV District Characteristic Adjustments District size Results of adequacy work in Nevada (2006, 2015, and 2018 data) Compared against adjustments in other states, prior AIR study and Nevada Plan Necessarily Small Schools Identified the approach in other states that provided the highest level of resources in small settings Modified after reviewing Nevada school enrollment data and stakeholder feedback to be tiered and increase school enrollment size 8
Development of NV District Characteristic Adjustments, continued Nevada Cost of Education Index (NCEI) Developed specific to Nevada and refined with stakeholder feedback Wage portion of NCEI using Comparable Wage Index (CWI) Individual level data (occupation, salary, experience, hours and demographics) from the Census Bureau s American Community Survey (2017) Raw data is then made comparable through a regression analysis to control for differences in the above factors; results different than comparing average wages between communities Non-wage portion uses the goods component of Regional Price Parity (RPP) data from the Bureau of Economic Analysis 9
How NV Adjustments are Intended to Address District Needs Necessarily small schools Separate Transportation Funding Issues Intended to Address District Size NCEI Small, remote schools x Economies of scale - School-level x x - District-level x Transportation costs x Costs of goods x x x Salary costs x 10
Commission Considerations Have a robust set of district characteristic adjustments that address many issues faced by districts Would not recommend a separate adjustment for density Recommend continuing to explore applying the district size adjustment by attendance area as part of optimal funding discussion and modify or combine adjustments (if necessary) Would require more data on attendance areas to understand if there are additional density issues not addressed by size, regional or transportation differences; if separate attendance areas are justified Need to see comparisons between Nevada Plan approaches and impact of overlapping adjustments in new model 11
