These numbers do not take into account two important factors: enrollment decline and inflation. The chart below factors out both these elements by showing Formula vs. state level expenditures per pupil in inflation-adjusted dollars:⁴

These numbers include all local fund expenditures and all pupils in DCPS enrollment, including those in non-public special education placements. The chart shows that in constant dollars, expenditures for state level functions rose from $375 per pupil in 1991 to over $2,500 per pupil in 2002 – a six-fold increase, almost all of which has occurred since 1997. Meanwhile, spending for Formula-funded functions dropped by almost $2,000 per pupil between 1991 and 1997, and is now only at the 1991 level. The new funding since 1997 has been absorbed by (1) inflation (including pay increases for staff, who went without raises for several years), (2) special education tuition and transportation, and (3) restoration of earlier cuts.

B. DCPS Per Pupil Funding Compared With That of Surrounding Suburbs

Total Operating Funding. Despite the greater needs of its student enrollment and even with the inclusion of federal grant funds, the District spends less per pupil than two of its five neighbors and only marginally more than two more. The chart below depicts the FY 2003 per pupil budgets of DCPS and its surrounding school districts. The suburban numbers are calculated annually by the Metropolitan Boards of Education (MABE) by a standardized methodology, which we have applied to the DCPS budget and enrollment. The MABE methodology excludes summer school, special education tuition and other expenditures of the kind in DCPS’ "state-level" budget, but includes most federal grant funds.

DCPS’ per pupil spending under this methodology is a little over $10,000 per pupil.⁵ Under the MABE methodology, DCPS is spending almost $2,600 less per pupil than Arlington County, almost $1,800 less than Alexandria City, much more than Prince George’s County, and a few hundred dollars more than Montgomery and Fairfax Counties.⁶

Higher per pupil spending under the MABE methodology is due to higher federal funding per pupil in the District. Federal funding is granted largely for special programs, especially those for low-income, low-achieving pupils, and is restricted to uses prescribed by the granting legislation and agency. As set forth above, enrollment in Fairfax and Montgomery Counties is about 20% low-income, compared to the District’s 67%, and the District enrolls a higher percentage of special education students than either (16.9% in D.C. versus 13.4% in Fairfax and 11.3% in Montgomery).

Federal grants do not cover all the extra services needed for economically disadvantaged students; they cover only a fraction of the costs of federally mandated special education and ESL services. In the District, federal funds cover about 15% of special education and 11% of ESL/language minority spending. Federal funding is about 15% of DCPS’ total operating budget, and a lesser percentage of suburban budgets.

State/Local Funding. We have also completed a more detailed study benchmarking state/local spending per pupil, by function, in the District with that in four high-performing neighboring districts. Overall, it demonstrates that without federal funding, spending per pupil in the District is less than in any of its neighbors except Prince George’s County, slightly less than in Montgomery and Fairfax Counties and much less than in Arlington and Alexandria: $8,536 per pupil in the District compared to $8,638 in Montgomery, $8,768 in Fairfax County, $11,454 in Alexandria, and $11,769 per pupil in Arlington.⁷

C. DCPS Budget Allocations Compared to Suburban Benchmarks

The chart above and table below show the results by major functional areas. (Full detail appears in an appendix, which shows the specific functions that make up each major area.) DCPS spends less per pupil on central offices and services than any of the other three districts. The difference from Fairfax and Montgomery is very slight, but those districts, at over twice the size of DCPS, have advantages of scale. Arlington, a smaller district, spends almost twice as much per pupil.

Within the central offices and services area, DCPS falls in between its larger and smaller neighbors in administration, but is very low in central instructional support and roughly comparable in central non-instructional services.

In the schools, which account for roughly 90% of expenditures, DCPS spends less on instructional and student services than the suburbs – almost $500 a pupil less than Fairfax and Montgomery, about $2,000 less than Alexandria, and about $3,000 a pupil less than Arlington. DCPS spends more on non-instructional services than Fairfax and Montgomery, the differences lying in much higher per pupil costs for utilities and security.

We have tried to identify per pupil spending by specific function, and have also pulled out spending in five areas of concern (technology, facilities, security, special education and language minority education) where central and school-level spending are hard to separate. These data are presented in the Appendix. Based on this analysis, we have identified the following spending categories in which DCPS is spending more, less and comparable amounts per pupil to the amounts spent in neighboring school districts.

Where DCPS Spends Less Per Pupil

Improving the quality of teaching. DCPS spends relatively little per pupil on teacher and other employee training, curriculum, instructional supervision and related areas.

• The general instructional program per student delivered in schools.
• Special education services for students enrolled within the system (in contrast to tuition payments, which are enormously higher than in the suburbs). When central and school special education costs are combined, DCPS spends about $8,850 on special education services per special education student within the system, compared with about $10,000 in Montgomery, $10,250 in Arlington and $11,650 in Fairfax.
• Technology, both instructional and management, as compared with Arlington and Fairfax. Spending is comparable (this year at least) with Montgomery County.
• Student services and athletics.

Where DCPS per pupil spending is comparable

• Central offices and services generally
• English as a Second Language and other language minority services are funded at about suburban levels per ESL pupil.
• Facilities maintenance and custodians. However, suburban schools are often crowded and buildings are newer, while students in DCPS have more square feet per student and older, poorly maintained buildings. Spreading these services much thinner in older buildings means they are inadequate.

Where DCPS per pupil spending is higher

• Security. DCPS spends $243 per pupil compared to $33 in Arlington, $63 in Montgomery, and $18 in Fairfax.
• Utilities. DCPS spends $443 per pupil compared to $177 in Montgomery and $233 in Fairfax. Higher costs result from old, poorly maintained, energy-inefficient buildings and having more square footage per student. These costs are offset by low spending per square foot on maintenance and custodians.

III. Proposed DCPS Budget Increase for FY 2004

The proposed $107.4 million increase in the FY 2004 DCPS budget can be broken down roughly into four categories: (1) a 9% increase in teacher salaries; (2) school building repairs and asbestos abatement; (3) other mandatory increases; and (4) instruction and management improvements.

Increase in Teachers’ Salaries. As a result of the collective bargaining agreement reached between DCPS and the AFT/WTU, the proposed budget increase necessarily includes the money required to cover a 9% increase in the salaries of DCPS teachers in FY 2004. This proposed line item amounts to $31.7 million, constituting approximately 30% of the proposed increase. Mayor Williams announced and endorsed this increase, and it has already been approved by the D.C. Council. D.C. Council Res. 14-432 (May 7, 2002). The rationale behind this increase was to reduce the significant flight of teachers from DCPS to its neighboring suburban school districts because of the lack of salary parity between the DCPS and those districts. Although this increase narrows the gap between DCPS and suburban school district teachers’ salaries, DCPS will continue to lag behind the average suburban salary for experienced teachers in 2004. The 9% increase is an obligation to which DCPS is currently bound under the collective bargaining agreement that has been approved by the Council.

School Building Repairs and Asbestos Abatement. Approximately $24.3 million, or 23% of the proposed budgetary increase, is earmarked for needed repairs to school buildings, as well as asbestos abatement during such repairs. DCPS has recently classified 70% of its schools as being in poor physical condition, while classifying only 5% of its schools as being in good condition. See D.C. Board of Educ., District of Columbia, The Citizen’s Budget, FY 2004: Reaching for Academic Excellence, p. 40. As recently as 1998, there were more than 20,000 open work orders, which were primarily the result of chronic under-funding. Id. These repairs are needed not only to create school environments more conducive to learning, but also to ensure that DCPS is in compliance with local building, fire and health laws. See, e.g., D.C. Code §§ 6-701.1, 6-701.03-.10, 6-711.01, 6-751.01-.09 (fire safety); D.C. Code §§ 6-801-804 (unsafe structures); D.C. Code §§ 6-901, 904, 907 (insanitary buildings).

Other Mandatory Cost Increases. Another $31.1 million, or 29% of the proposed budgetary increase, is earmarked for expenditures attributable to unavoidable cost increases and legal mandates. These include increases in principals’ and other employees’ salaries, compliance with both D.C. and federal law, and anticipated inflation. These increases are detailed below:

The significant increase in teachers’ salaries, the long deferred (and, to a large extent, legally mandated) expenditures toward school building repair, and expenditures earmarked to fulfill DCPS’ other legal, contractual and otherwise mandatory cost obligations comprise approximately 81% of the proposed budgetary increase. In other words, almost 81% of the proposed increase in funding is committed to expenditures that DCPS will have to make.

Instruction and Management Improvements. The remaining 19% of the proposed budgetary increase (approximately $20.3 million) is earmarked for new academic initiatives aimed at improving educational services. Comprising the bulk of this last category are: advanced courses and other curricular initiatives for high school seniors ($1,554,868), summer school and after school expansion ($6,200,000), teacher and principal training ($2,205,000), accountability and diagnostic assessment ($1,549,000) and the opening of McKinley Technological High School ($3,454,000).⁸

In sum, of the approximately $107 million proposed budgetary increase, less than 19% is attributable to spending that is squarely within the discretion of the Superintendent and Board of Education. While we have not studied these specific proposals in sufficient detail to judge their merits, they cannot be characterized as "frills."

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CONCLUSION

The proposed increases in the DCPS budget come at a time when District revenues are stagnating and when at least some conventional wisdom suggests that DCPS is already well-funded and has tended to spend extraordinary amounts on central bureaucracy. With this as our backdrop, this Report has focused on essentially two issues: the current level of DCPS spending per pupil in relation to neighboring school systems, and the causes underlying the DCPS request for significant additional funding in FY 2004.

With respect to the first issue, we have found that the District provides less local funding per pupil than all four high-performing neighboring school districts, such as Fairfax and Montgomery Counties. Moreover, the District spends comparable amounts on central office functions as do these two districts and less than neighboring school systems, Arlington County and Alexandria City. Further, in inflation-adjusted dollars, local funding per DCPS and public charter school pupil today is about equal to FY 1991 funding levels

With respect to the second issue, the $107 million increase requested by DCPS is plainly substantial, and we have not had the time to review the details of every last dollar associated with the proposed increase. However, it appears that over 80% of the requested additional funds are for much needed pay increases for teachers, other mandatory increases in union contracts, legal mandates, emergency and urgent school building repairs and asbestos abatement. We cannot expect schools to function properly without effective classroom instruction and strong administrative leadership, and the District cannot hope to hire and retain high quality personnel without paying salaries and benefits competitive with the amounts paid by neighboring school districts. Nor can we expect our young people to learn in dilapidated and deteriorating, much less unsafe, schools.

As we stated in the Introduction, we have no illusion that this Report will end the debate over the DCPS budget proposal. Unfortunately, given current economic conditions, even a conclusion that all of the proposed increase proposed by DCPS is justified leads only to painful choices among spending proposals for public education, public safety, public health and welfare, economic development and a host of other important government functions. While again, we have not studied the trade-offs inherent in these choices, we close with two observations.

First, adequately investing in our public school system is consistent with District’s long-term economic welfare. A high-quality school system in the District of Columbia will ultimately improve the higher education and employment prospects of our children and attract more families to live here, thereby strengthening the District’s tax base. Moreover, improving the quality of the school system will undoubtedly translate into savings in the future for law enforcement, housing, health care, and other forms of government assistance needed to address problems associated, at least in part, with educational failure. Adequately funding public education in the short-term could even decrease public education costs in the long-term, if fewer students require remedial education, special education services, and other services that address students' educational deficiencies. In sum, an adequately funded public school system is a necessary investment in our economic future.

Finally, any debate about public school funding in the District must recognize the value of a strong public school system and what Mayor Williams recently characterized as our "moral obligation to all of our children, wherever they attend school." Our Nation’s strong tradition of public education has contributed greatly to America’s intellectual and economic development. And public schools continue to hold great promise in these respects. They can teach our young people the knowledge and analytical skills necessary to function in a constantly changing, information-driven economy. They can prepare our young people to become valued participants in a democratic and diverse society. They can arm our young people with the most vital tools for functioning as free-thinking and conscientious members of their communities. Unfortunately, public schools have yet to fulfill this promise to the young people of the District, where, as this Nation’s capital, we should be leading by example. The debate over the proposed budget should be informed by a commitment to carry out this promise. In the words of Mayor Williams, "[o]ur future demands no less."

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APPENDIX A

Following are DCPS local budget per pupil spending figures for FY 2003 for general, ESL and special education as funded by the D.C. Government and as allocated by the Superintendent and Board of Education. Per pupil funding, excluding "state" functions is about $8,600 per student this year in D.C. Public Schools, and is similar in the Public Charter Schools.

The District’s Uniform Per Student Funding Formula. The D.C. government funds operating costs of DCPS and public charter school on the same per student basis each year by a per pupil formula. Formula funding does not include tuition for non-public special education students, special education transportation, or other "state-level" costs that flow to children in non-DCPS schools.

FY 2003 average per pupil local funding for:

DCPS Local Funds Budget as Allocated Among General, ESL and Special Education. Our analysis finds that DCPS allocates its Formula funding largely, but not entirely as the city’s formula provides it, averaging $8,768 per student.⁹

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APPENDIX B

The per pupil numbers for specific functions above should be viewed as suggestive rather than definitive, since differing organization and budget practice sometimes lump expenditures for specific functions into larger groupings, making it impossible to separate them, or requiring estimates based on staff job titles and estimated average salaries. Such functions are almost always within the same major functional areas, making them much less susceptible to such problems.

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APPENDIX C

Methodology of Suburban Comparison Study

We examined the published budgets of DCPS and each suburban district line by line, and classified each budget item functional areas used by DCPS in recent years. (These are similar to those used in school budgets elsewhere.) Where available we used the FY 2003 budget numbers from each district’s FY 2004 proposed budget. Where the FY 2004 proposed budget was not yet available, we used the approved FY 2003 budgets. (Differences between the two are generally minimal.)

The main divisional functions are central offices and services, schools and other direct services to children, and state-level and other functions not comparable across all districts. In identifying non-comparable items, we were guided both by the criteria used by the Metropolitan Boards of Education in preparing their annual comparative cost data, and by the division in District funding between Formula funds that flow to DCPS and the public charter schools and "state-level" funds that flow only to DCPS for functions not performed by public charter schools.

• Central offices and services include all administration, instructional support, business services and management of instruction and non-instructional services, for example
  • Administration: Superintendent’s office, associate and assistant superintendents, communications, legal, payroll, accounting, budget, procurement, personnel, information systems
  • Instructional support: curriculum, professional development, educational accountability, central direction of all instructional programs and student services, including special education, bilingual education, vocational education, attendance services, drug and violence prevention, health programs
  • Non-instructional: warehouse, mail, print shop, technology, equipment maintenance, management of all operations, including facilities and security
• Schools/Direct services to children expenditures are divided among:
  • Instructional and student support services: teachers and aides, including special education and ESL teachers and aides, librarians, counselors, principals, clerical and custodians, school supplies, equipment and contract services, textbooks, athletics, school computers, substitute teachers
  • Schools—non-instructional: security guards, telecommunications, gas, oil, electric, building repairs, networks

In identifying the functions we read the accompanying budget explanations and where necessary, consulted school district websites for additional clarification.

Adjustments: In some instances we broke functions out from larger units by identifying the positions and non-personnel lines particular to those functions and multiplying the positions by the estimated average salary for the appropriate pay plans and grades. We followed the same process where necessary in separating central from school-based activities.

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FOOTNOTES

1. Third quarter, 2002. Reproduced in infoplease.com, and on-line almanac.

2. Jay G. Chambers, Thomas B. Parrish & Jenifer J. Harr, What Are We Spending on Special Education Services in the United States, 1999-2000, Special Education Expenditure Project, Center for Special Education Finance, American Institute for Research, September 2002, p. vi.

3. As explained in more detail in the Appendix, the District government funds both DCPS and public charter schools through a "uniform per student" formula, under which the average per student funding for DCPS is $8,652 per pupil. The difference between this figure and that used in the suburban comparison is the elimination of several non-comparable items. These figures do not include special education tuition and transportation and several other functions not performed by public charter schools and not comparable with suburban budgets.

4. Per pupil figures from FY 1991 to FY 2001 are actual expenditures; FY 2002 figures are the final revised budget; FY 2003 figures are approved budget; and FY 2004 figures are the Board of Education’s proposed budget.

5. About $8,600 comes from D.C. local funds and about $1,400 comes from federal funding. D.C. local funding is the equivalent of state plus local funding elsewhere.

6. The United States Department of Education collects, standardizes and publishes expenditure data nationwide. These include revenue from federal grants and other sources in addition to state/local funding. However, the process takes several years, so current data are not available from this source. The most recent fiscal year for which USDE figures are published by state is SY 1999-2000, issued in April 2002, showing the District spending $10,107 per pupil from all revenue sources for current expenditures, compared to a national average of $6,911. The highest spending state was New Jersey at $10,337 per pupil, followed by New York State at $9,846 and Connecticut at $9,753. District level data for the 100 largest districts, issued in August 2002, are from SY 1998-99, and show the District spending $9,645 per pupil, compared to a national average of $6,278; the highest spending of the 100 districts were Boston at $11,040 per pupil, Buffalo $9,681, and Minneapolis $9,625. These figures include federal grant funds, tuition for children in nonpublic special education placements, and state level functions. They are not adjusted for geographic cost differences and do not consider differing needs based on numbers of special education, ESL or low-income pupils.

7. The District per pupil number in this comparison is slightly less than the revenue and budget figures given above because of elimination of expenditures from state and local funding that cannot be compared across all four school districts. We did not include Prince George’s County in this benchmarking exercise because we limited the comparison to high-performing districts, but it is clear that per pupil spending there would be significantly lower than in the District even without considering federal funds. We did not include federal funds because suburban budgets generally provide little detail on how they are spent and because they are restricted to special purposes.

8. Even within this category, several of the proposed expenditures stem from federal legal mandates, such as gender parity requirements in DCPS’ athletic program under Title IX, see Title IX of the Education Amendments of 1972, Pub. L. No 92-318, 86 Stat. 235, 373, codified at 20 U.S.C. §§ 1681 et seq. (1994), and annual English language testing of Limited English Proficient and Non-English Proficient students, see Leave No Child Behind Act, 20 U.S.C. § 6301 et seq. (2002).

9. The Home Rule Charter makes allocation the responsibility of the Superintendent and Board of Education, who are much more familiar with actual instruction and operations. Thus revenues need not be spent as they are allocated by the District Government Formula, which is based on general assumptions made well in advance of the fiscal year without information on current details of DCPS program.