By: Dr. G. Victor Hellman, Jr.
In November 2015, Berkley’s Jeffrey Vincent and Liz Jain released the study, Going it Alone: Can California’s K-12 School Districts Adequately and Equitably Fund School Facilities? In their research they conducted an analysis of spending on K-12 public school facilities within the state of California utilizing metrics that compare to industry standards. Overall, they find substantial rates of underinvestment. While these findings have important implications for California policy, I also believe the authors have provided a practical framework for analysis that can be used by other states to examine the equity and adequacy of their facility financing. In this blog, we will first establish some operational definitions, and then review Vincent and Jain’s analytic framework. Finally we will examine their findings and review their policy recommendations.
Two concepts that are essential to Vincent and Jain’s analysis are equitable and adequate. Adequate funding implies that the funding is sufficient to meet the needs or bring about the desired results for that which is funded. For example, adequate funds must be budgeted to meet the school division’s operational and capital needs. Now let’s examine the concept of equitable. On a simplistic level, it is tempting to think of equitable and equal as synonymous. This is not the case. Equality implies that all parties are treated equally. Using per pupil funding under the concept of equality would imply each school division within a state or each school within a division receives the same dollar amount per student. While this method achieves equality of funding, it is not necessarily an equitable process. Simply put, the concept of equity implies funding at a different level depending upon the needs. At the core of equity is the fact that needs differ and spending must too. A community with a high percentage of low socioeconomic students may need to spend more per pupil to level the playing field. Some communities have higher real estate assessments (AV) on a per capita basis than others. These communities are able to generate revenue easier than their lower socio-economic neighbors. Only by funding equitably can equality be achieved.
In their analysis, Vincent and Jain identify some best practices for Maintenance and Operations (M&O) spending for school facilities. For facility operations they utilize 1% of the current replacement value (CRV) on an annual basis as a minimum investment. For routine maintenance they utilize 1.5 to 2% CRV as a minimum annual investment. The division’s operating budget typically funds these expenditures. Capital renewal or modernizations are typically funded by a division’s capital budget. Projects that fall into this category deal with major repair, alterations and replacement of building systems (e.g. HVAC, roofs, windows). Best practice annual investment is identified at 1.5 to 2% of CRV. The authors postulate that by spending 3% CRV for M&O (from the operating budget) and 2% for capital renewal (from the capital budget), school facilities will be clean, safe and functional. This assumption is noted as accurate provided there is no deferred maintenance for the facility.
For the analysis, Vincent and Jain first looked at the characteristics of California school districts spending above and below the 3% CRV for annual combined M&O. Their findings show that only 38% of the districts spend at the best practice level of 3% of CRV or more while 62% of the districts spend less than the 3%. From an equity perspective, the 38% of the districts spending 3% or more have an average assessed value of real property (AV) per student of $3,032,912 while the AV per student of the 62% of the divisions that do not meet the 3% spending is $1,030,594 or roughly 66% less than those districts that meet best practice. When performing a similar analysis on capital renewal they find that 43% of the districts meet or exceed the 2% of CRV and 57% do not. As in the previous analysis, the average AV per student for those districts that meet the best practice is $2,610,402 and for those districts that do not meet the benchmark, their average AV per student is $1,153,000 or more than 50% less. AV is important to these comparisons inasmuch as it is a proxy for the districts’ ability to generate revenue. Vincent and Jain found 38% of the districts failed to meet either benchmark. The average AV per student of these districts was $878,202 compared to $2,346,441 AV for the 62% of the districts that met at least one of the two benchmarks.
From their analysis, Vincent and Jain put forth three findings:
- The majority of school districts in California do not spend adequately on school facilities. Nearly 80% of the districts fail to meet minimum industry standard benchmark spending for M&O, capital renewal or both.
- Districts that have more wealth spend more on their facilities, especially on capital renewal.
- Districts that serve low income students spend proportionally more on M&O from their operating budgets thereby reducing available funds for instructional spending.
Vincent and Jain make four policy recommendations for the state of California based on their findings:
- Establish stable, dedicated state funds for K-12 school facilities.
- Distribute K-12 school facility funds equitably, adjusting for local wealth.
- Improve standards for school facility planning and budgeting.
- Establish a California School Facility Database to guide spending.
While the results of Vincent and Jain’s analysis should not shock or surprise anyone involved in school finance or facilities, the analysis does document and validate there are inequitable spending patterns on public K-12 facilities within the state of California. More importantly, their analysis provides a conceptual framework that can be utilized by other states to examine their spending patterns on educational facilities.
A copy of the complete study can be found at http://www.efc.gwu.edu//library/reports/going-it-alone-can-californias-k-12-school-districts-adequately-and-equitably-fund-school-facilities/
Dr. G. Victor Hellman, Jr., serves as the Research Project Director for the Education Facilities Clearinghouse (EFC). Victor has more than 31 years of work experience in public schools in Virginia. Prior to joining the EFC, he served as Deputy Superintendent of Operations and Support for a mid-urban school district. In that role, he was responsible for finance, facilities, transportation, student services, and food services.
The Center for Cities + Schools (CC+S) at the University of California, Berkeley harnesses the potential of urban planning to close the opportunity gap and improve education.
