Last updated on 2016-02-12
Update 2016.02.12 12:39 CST: Following strong reader interest and critique, I have built on the following calculations to include the small-school adjustment and English language learning factors in the funding formula for a more accurate analysis and have expanded that analysis to figure potential salary and teacher workforce impacts for every school district in South Dakota. Click here to read that updated analysis!
Original Post: Senate Bill 131 is the key policy portion of Governor Dennis Daugaard’s teacher pay raise legislative package. One central provision—Section 4, amending SDCL 13-13-10.1(2–5)—changes the formula for state aid to K-12 education from a per-student allocation to what looks like a per-teacher allocation. However, the new formula never actually counts teachers; it still counts students, then does some math based on how many teachers the Governor thinks schools ought to have. Let’s work a couple of examples (and we’ll keep this simple by looking just at the figures that come from student and teacher numbers, not including formulas adjustments for the limited English proficiency factor the state uses to bump up funding for schools with high immigrant populations).
As we proceed, remember these constants for all schools:
- Current per-student allocation: $4,876.76
- Target teacher salary: $48,500
Now, let’s start with Henry:
- According to DOE, Henry’s K-12 fall enrollment is 166.
- The current formula multiplies fall enrollment by per-student allocation and says Henry needs $809,542.16 to run its school.
- SB 131 sets the target student-teacher ratio for Henry at 12.5 students per teacher.
- Divide the fall enrollment by that ratio, and the formula expects Henry to have 13.28 teachers.
- The new formula multiplies that calculated, expected number of teachers by the target salary of $48,500 and figures Henry needs $644,080.00 to pay that ideal staff the target salary.
- The new formula also figures that benefits will cost 29% of teacher salary; that adds another $186,783.20 to Henry’s funding need.
- The new formula figures overhead will be 31% of the total teacher compensation (salary plus benefits). At Henry, that’s another $257,567.59.
- Henry’s total haul under the new formula is $1,088,430.79.
- That amount translates to a per-ideal-teacher allocation (PITA, anyone?) of $81,960.15, a little more than the $75,580 per teacher that I calculated back in November from the original Blue Ribbon plan.
- Translated to per-student terms, the new formula spends $6,556.81 to educate each child.
- Without factoring in other adjustments, this formula represents a 34.45% increase in calculated local need for Henry.
- However, last year, Henry had 15.2 instructional staff, just about two more than the ideal staff number set by the Governor’s formula.
- Therefore, unwinding the numbers, this new funding amount makes possible an average teacher salary at Henry of $42,373.68, 12.6% less than the target salary of $48,500.
Now that we see the steps, let’s put Henry in a table with Ipswich and Aberdeen and see how things compare:
| Henry | Ipswich | Aberdeen | |
| Fall Enrollment (Sep 2015) | 166 | 380 | 4455 |
| PSA | $4,876.76 | $4,876.76 | $4,876.76 |
| Local Need | $809,542.16 | $1,853,168.80 | $21,725,965.80 |
| Target teacher ratio factor | 12.5 | 13.625 | 15 |
| Target # of teachers | 13.28 | 27.89 | 297.00 |
| Target teacher salary | $48,500.00 | $48,500.00 | $48,500.00 |
| Total need for target salary | $644,080.00 | $1,352,660.55 | $14,404,500.00 |
| Total need for benefits | $186,783.20 | $392,271.56 | $4,177,305.00 |
| Total need for overhead | $257,567.59 | $540,928.95 | $5,760,359.55 |
| Total need | $1,088,430.79 | $2,285,861.06 | $24,342,164.55 |
| per-ideal-teacher allocation | $81,960.15 | $81,960.15 | $81,960.15 |
| per-student equivalent | $6,556.81 | $6,015.42 | $5,464.01 |
| funding increase per student | 34.45% | 23.35% | 12.04% |
| Actual instructional staff (AY2015) | 15.2 | 32.0 | 272.5 |
| Achievable average salary | $42,373.68 | $42,270.64 | $52,860.55 |
| Differnece between target salary and achievable salary | -12.63% | -12.84% | 8.99% |
34% more funding for Henry, 23% more for Ipswich, 12% more for Aberdeen—those are some generous increases, although remember that we’d be a couple thousand dollars above that Aberdeen per-student allocation if Rounds and Daugaard hadn’t slaughtered K-12 funding.
I’ll need to spend some time crunching these numbers for other districts, but this quick sample of one small, one medium, and one large school up in northeastern South Dakota suggests larger schools may have an easier time reaching the target salary than smaller schools. This result supports what Elisa Sand found in her analysis of the teacher pay plan last month and what the Governor himself said last week: for all schools to reach the target average salary that we need to compete with Minnesota, North Dakota, and the rest of our region to keep teaching talent, we’re going to have let some of that talent go.
After reading this, the following came to mind: “It became necessary to destroy the town to save it.” Yeahp, I’ve been around too long.
Thanks for doing the math. I’m a nerd for these kinds of numbers and comparisons.
I’d be interested in other school districts numbers too.
Bill B, I’m interested, too. When I get a moment, I’ll work up a Google sheet with more district numbers based on the sources I used above.
Surprise, surprise – in 2 of the 3 examples you have to either bite the bullet and decrease the number of teachers and/or lower the amount of money to the teachers. Um…any bets that it doesn’t pass anyway? Between Rounds and Daugaard, education cannot win.
This unfortunately is a step backwards for schools and their students. You are not simply letting talent go, instead you are going to be looking to eliminate electives from education. I will say it again, that you can not let the core subjects instructors go its impossible. Those folks are safe and will benefit from this. I have been through the reduction in force process before and it is not pretty.
It is the people who teach your electives that are going to be the talent that is let go. Your school has a fine music program, well it had a fine music program because we just reduced the music instructor to half time and cut band. Your school enjoys a strong Ag program, congratulations you can get your Ag education elsewhere, or not at all. It’s not like this state depends on Ag. You want to take higher level sciences like physics, will gosh darn it, we have this thing called the Vtel system, or courses online that can do that for you, no need to hire that pesky high school teacher when a small school can use those hours to have them teach junior high/middle school instead.
This is not what is best for education, it is the result of a sickness that is so old and terrible that were willing to substitute for a plan like this and label it a good thing. Any decrease of opportunities that our students have in the state is not what’s best for business.
At the end of the day is that plan any better then the property tax plan that Janklow presented. I wasn’t of voting age back then, but everyone spoke so highly of that plan and how school’s would benefit greatly from it. It was true short term, but in long term it has been a disaster.
Unfortunately I can’t side with the plan that has been written as I feel that this isn’t solving anything but rather shifting the problem to someone else down the road. As I said I have seen what a reduction in force does to a school district and it was a tremendous impact to the staff, students and opportunities they had.
Cory, I would temper your analysis with a few items:
1) The “other need” element in the formula can be also used also contribute to teacher salaries if the local board makes that choice and puts other “overhead” spending at a lower priority or finds efficiencies (such as cost sharing with other districts for services).
2) There is flexibility for capital outlay funds to be brought over to support salaries if a local decides to retain current staffing numbers and reach the salary goal.
3) Some of the current teachers, especially ones in smaller schools, are in placements out of their preferred content areas; some are even assigned extra classes to cover student needs. Reducing teaching loads before some of these teachers burn out might be a good idea.
4) Part of the proposal (a vision from Sen. Soholt during the BRTF) is to have distance learning opportunities for those schools to utilize. That would create a shift in staffing from traditional classrooms to broadcasting centers (like the NSU program). That is far more cost effective for small schools.
5) All this also assumes there is no reserve for a local to spend down to help in salary costs.
My point is that within “local control” is the opportunity to staff classes and provide raises. Certainly some districts will have tougher choices to make in those balances, but there is wiggle room. Some may well decide (when negotiating with their collective bargaining unit) that class size reduction is worth trading for some salary considerations.
Paul, when you say “lower the amount of money to teachers,” isn’t that “lower” still an increase from where they are now? Even looking at Cory’s numbers on face, wouldn’t bringing Henry’s average salary to $42,373 or Ipswich to $42,270 be better for them than taking no action? Isn’t even this imperfect action in their better interests?
Also note that another reader points out that I haven’t factored the small-school factor into the above comparison. As I said, I need to crunch more numbers!
Plug in the surplus “reserve” revenue these schools already have sitting in bank accounts. We are already over-taxed. Giving the money to the schools to jack up all teacher salaries by a percentage will do little to make opening salaries more attractive to new teachers. The structure for school funds is a cobbled up mess and until it is made sensible, there should not be a single dime added from sales tax to the schools. More transparency and more teeth are needed. We should not have to find a dozen or so links to determine what is actually happening with SD funds and federal impact funds.
Douglas these reserves you are speaking of are balances published at the end of the calendar year. These school have just received a flux of money from property taxes and must make it to next payment from the state. The numbers you are looking at our closer to high water marks in their accounts and not “saving accounts”. You want real reserve numbers then you need to make that request prior to them receiving the state aid.
This is the scope of thinking that has resulted in this school system being in the state it is.
What is the logic in cutting teachers during a teacher shortage?
The only logic there, Mark, is to never miss an opportunity to get what you really want.
Madman: That is the excuse that school administrators have fed to legislators for years. Those reserves are more or less in that area year around. Some legislators have finally caught on that they are being snowed.
@Douglas: You have this knowledge firsthand. Your making a bold accusation and from the school budgets I have seen I have not seen this. Can you point me to schools that have these secret millions in the month of September?
@Douglas: Here are some figures for you.
Currently Henry a school that Cory uses in the article is sitting on average of $450,000 average in 2015.
A school near by whom Henry coops with in sports is Florence. Florence in 2011 was sitting on cash reserves on average of $400,000. Florence in 2015 was sitting on cash reserves of $440,000 on average. Yes those schools are just rolling in the reserves.
On average those schools pay $60,000 in instructional staff and $24,000 in support staff. This excludes custodial and kitchen staff wages. On average 85% of those general fund dollars go to support salaries. That leaves only 15% for programs and their supplies. Count in that you have to keep 18% of that general fund in actual reserves on hand to cover the year in case of unexpected increase of students who require additional staff but don’t give a big bump in students (an example of why to have general funds).
If schools had these millions just sitting there, why have 101 school districts successfully opted out? Why is Henry currently looking at an opt out? It has money in the bank, but if it needs to higher two additional staff because of influx of ten students moving into the district causing two elementary grades to split, it can pay those teachers.
I guess if the thought is that we need to get rid of this idea and short change certified, licensed and educated teachers, then perhaps you should look at how state’s that pay less manage to retain teachers. Wait you can’t because there isn’t a single state or the district of columbia that pays worse.
It intrigues me that there’s an established ratio for support staff – 31% overhead. Since the Governor’s 2012 state of the state address revealed just how much the support staff has increased as a ratio to teachers and pupils, I wonder if this is a closeted way to get schools to cut support staff too (mind you I’m not complaining – I’m baffled how much administration has grown, and how they’re getting a much nicer slice of the pie).
That’s a very good question, Wayne, which I’m not equipped to answer. I’d love to pore over the data that allowed them to come to the conclusion that benefits should be 29% of salary and overhead should be 31% of total compensation, whether that’s just an average over all exiting practices, and just how much those ratios vary from school to school and what conditions influence that variance.
The governor uses statistics from 1971 and equates them to 2011. The support staff of a school as defined by our governor is everyone from the superintendent, janitors, cooks, paras, librarians, bus drivers, coaches, etc. It’s basically anyone who receives a paycheck from the school that doesn’t have a classroom teacher contract. In contrast the support staff of 1971 did not have the same definition as many positions did not exist in that time. It was a different time in education.
Over the course of the last 30 years we have went from no computers in school to having an entire department in charge of technology. Many of these support systems that have caused increases did not exist in 1971. Have we hired 3600 new tech specialists, no. Have we hired a minimum of one per district and have on contract an additional part time person.
Where does the governor get the 31% number is interesting and probably has a touch of Reaganomics in it.
Interestingly enough if you look at the data from 1937-99 you can see a very clear trend.
Every 5-10 years South Dakota has made a push to catch up to the national average in teacher pay. It was reached that goal. In 1971 South Dakota was through increases at the average teacher pay of 1965. In 1999 the average pay was 28,552 while the national average was 40,580. Historically prior to 1989 we were only five years behind the national average and working hard to get caught up. What happened in 1989-90 to cause education to be completely thrown out of whack.
Also interestingly in 2012 the governor defends his position that we need better teachers but we don’t need to pay anymore for education. He argues we spend to much money on education because in the 1960’s we spent less. Once again he doesn’t equate the time to present day and you can’t. 1960’s in South Dakota was the end of the one room school and a time of huge consolidation. Talk about cherry picking your numbers and not throwing in the average cost of living in 1960 and comparing it to 2012.
Madman, where do you get that we weren’t counting heads right in 1971? The governor’s speech clearly identified teachers and all other staff. If they were drawing a paycheck from a school district, they were counted.
So we grew 65% in other staff and 10% in teachers despite our student population decreasing 28%. Moreover, we know that performance metrics for students have largely been unchanged during that timeframe. We also know administrative support staff average salary is closer to the national average (aka it’s not dead last like teacher pay).
Yeah. I get it. It’s not the 1960s and 1970s. Times have changed. But aren’t computers supposed to be force multipliers? Why is it we need so many more people to educate significantly fewer students?
Madman, where did you get the numbers for Florence? Check the board minutes. One of them shows fund balances. Total is more like $1 million than your number.
http://www.florence.k12.sd.us/