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2012 REGIONAL FORECAST
Presented to the Hampton Roads Planning District
CommissionAgenda Item #5
James Clary
Senior Economist
November 19, 2015
Education Funding inHampton Roads
Education and the Economy
• Higher education is important
– Faster growth
– Greater income
– Impacts everyone
• K-12 education also matters
– Housing values
– Geographic mobility
– Socioeconomic mobility
– Unemployment rate
2
Money and Education
3
$12,731
0%
1%
2%
3%
4%
5%
6%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000 Sch
oo
l Sp
en
din
g a
s a P
erce
nta
ge
of G
DP
Pe
r P
up
il S
pe
nd
ing
in
US
Do
lla
rs
Per Pupil Primary and Secondary Spending, 2011
Per Pupil Spending Education as Percentage of GDP
OECD Average: $9,280, 3.6% of GDP
Source: OECD, HRPDC
More Expensive Education
4
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
U.S
. Pe
r P
up
il S
pe
nd
ing
(20
14
Do
lla
rs)
Total Expenditures
Source: National Center for Education Statistics, HRPDC
Education Outcomes Between States
5Source: Urban Institute, Institute of Educational Sciences, HRPDC
-15
-10
-5
0
5
10
15
Mo
nth
s o
f L
ea
rnin
g D
iffe
ren
ceV
s N
ati
on
al
Av
era
ge
Adjusted Data
Raw Data
Per Pupil Spending in the States
6
10,960
-10
-8
-6
-4
-2
0
2
4
6
8
10
0
5,000
10,000
15,000
20,000
25,000
Ad
juste
d Ed
ucatio
nal P
rogre
ssP
er
Pu
pil
Spe
nd
ing
2013 Spending and Outcomes
Per Pupil Spending
Educational Progress
Source: Urban Institute, U.S. Census Bureau, HRPDC
Per Pupil Spending Over Time
7
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
20
14
Do
llars
Pe
r P
up
il
Hampton Roads Virginia
Source: Virginia Department of Education, BEA, HRPDC
Hampton Roads School Funding FY14
8
Local42%
Retail Sales & Use Tax
9%
State40%
Federal9%
Source: Virginia Department of Education, HRPDC
Source of Hampton Roads Funding
9
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Infl
ati
on
-Ad
just
ed
So
urc
e o
f E
du
cati
on
Fu
nd
s(B
illi
on
s o
f F
Y2
01
4 D
oll
ars
)
Federal Retail
State Local
Source: Virginia Department of Education, BEA, HRPDC
Per Pupil Local Funds Over Time
10
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
Ha
mp
ton
Ro
ad
s L
oca
l F
un
din
g P
er
Pu
pil
(FY
20
14
Do
lla
rs)
23%
Source: Virginia Department of Education, BEA, HRPDC
Per Pupil Federal Funds Over Time
11
0
200
400
600
800
1,000
1,200
1,400
1,600
Fe
de
ral
Fu
nd
ing
Pe
r P
up
il(F
Y2
01
4 D
oll
ars
)
Source: Virginia Department of Education, BEA, HRPDC
Federal Funding- Six Main Channels• Elementary & Secondary Education Act (“No
Child Left Behind”)
• Individuals with Disabilities Education Act
• Carl Perkins Act
• Adult Ed. & Family Literacy Act
• School Nutrition Act (USDA)
• Impact Aid
12
State Funding- Regional Experience
13
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Infl
ati
on
-Ad
just
ed
Pe
r P
up
il F
un
din
g
Gloucester Isle Of Wight Southampton Surry
York Hampton Newport News Norfolk
Portsmouth Suffolk Virginia Beach Williamsburg/James City
Franklin Chesapeake Poquoson
Source: Virginia Department of Education, BEA, HRPDC
Per Pupil State Funds Over Time
14
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Sta
te S
pe
nd
ing
Pe
r P
up
il
Nominal State Funding
Inflation-Adjusted
-19%
Source: Virginia Department of Education, BEA, HRPDC
State Funding in Hampton Roads• State education funding fell by 23% per pupil in
Hampton Roads between FY09 and FY14
– Overall, state education funding fell by 19% per pupil
• Driven both by a decline in total state funds for education, as well as updates to the Local Composite Index
15
State Funds for Education
• Primarily Standards of Quality (SOQ)
– 81% to 85% of all state funds for education flow through Standards of Quality
• Incentive Accounts are another 3.3%
• 8.8% to 10.3% from lottery funds
16
Conclusions• Spending on Education has declined
• Economically and Socially, education is important to each locality in this region, to Hampton Roads, and to the State
• This presentation discussed spending trends at the regional level. If your staff would like assistance for analysis at the local level, the HRPDC will provide support.
17
Types of Federal Aid
18
Title I24%
IDEA22%
Child Nutrition
22%
Other through
State12%
Impact Aid13%
Other Federal Direct
7%
Federal Aid in Hampton Roads, 2013
Source: U.S. Census Bureau, HRPDC
Students Educated
• Between FY10 and FY15
– Hampton Roads number of Economically Disadvantaged Students has grown 38%, versus 25% in the Commonwealth
• Regionally, these students are 46% of enrollment, versus 40% in the Commonwealth
– Hampton Roads has seen the number of Limited English Proficiency Students grow by 39%, versus 25% for the Commonwealth
• Regionally these students were 2% of student population, but are 10% of the Commonwealth’s student population
19
What is Driving the Cost of Education
• Over the past 20 years, U.S. Per Pupil
– Salaries have increased by 14%
– Benefits have increased by 65%
– Purchased services have increased by 63%
– Capital expenditures by 22%
– Interest on debt by 101%
• Size matters
– Salaries have contributed 8% to the growth in costs, while benefits added 10%, and interest less than 2%
20
Composite Index Formula
21
ADM Component =
Local Adjusted
Local True Values Gross Income Local Taxable Retail Sales
Local ADM Local ADM Local ADM
.5 ----------- + .4 ----------- + .1 -----------
Statewide Total of Total State Adjusted Total Taxable Retail Sales
Local True Values Gross Income Total State ADM
Total State ADM Total State ADM
Population Component =
Local Adjusted
Local True Values Gross Income Local Taxable Retail Sales
Local Population Local Population Local Population
.5 ----------- + .4 ----------- + .1 -----------
Total Local True Values Total State Adjusted Total Taxable Retail Sales
State Population Gross Income State Population
State Population
Local Composite Index =
((.667 x ADM Component) + (.333 x Population Component)) X 0.45 (average local share)
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