Clarifications on Amherst School District Spending

A few months ago, as part of my school district budget analysis, I published some numbers on Amherst’s cost per student spending.  This cost per student number is a commonly used metric to understand spending efficiency as well as to draw comparisons between districts.  As this year’s Ways and Means committee chair for the district, I sought answers to the reasons behind the significant jump in this number.  On October 8th, Ways and Means met with members of the School Board and the SAU to discuss these, and other numbers dealing with our school district spending.

I really need to applaud the transparency of the school administration here.  Significant time and effort was put into their response to the questions I posed, and they worked very hard to provide real meaningful answers, and the numbers to back them up.  To the point of contacting other districts to clarify their numbers, and sometimes being told to go away.

A few interesting things came out of the discussion.  In reviewing our numbers and comparing them with other districts, it quickly became clear that making comparisons between districts is difficult because different districts will report numbers differently to the state, and that the state’s formulas for some derived metrics (i.e. cost per student) can omit some very important considerations that aren’t immediately apparent, but have some huge implications in the numbers that are the most visible to taxpayers.

Most importantly, in the state’s calculations, bond payments are not factored into the cost per student number.  This is huge.  Some districts with newer buildings (Bedford, for example) have some very significant (millions of dollars) costs to the taxpayer in their budgets, but these costs are subtracted before computing their cost per student, making the latter not as representative for comparison as you might imagine.    In FY 2012 Amherst had about $600k in debt service payments.  Bedford had $4.6 million, and Merrimack had $1.9 million.  So it would seem that if we want to draw more meaningful comparisons in spending per student, that we should take the actual bottom line budget and divide by the total enrollment.

I’ll take a second to point out that the growth of our education taxes for all education spending in Amherst (not just Amherst School District) has increased much more slowly than our neighboring towns, which I showed before.  That is to say, yes your school tax bill has gone up, but considerably more slowly than if you were in some of our neighboring towns.

Growth in the total locally raised education spending, referenced to FY 2011 for Amherst, Bedford, and Merrimack.

Growth in the total locally raised education spending, referenced to FY 2011 for Amherst, Bedford, and Merrimack.

Before I get to our spending per student numbers, I want to quickly touch on the special education spending issue that I had raised earlier this year.  Previously I pointed out the differences in the fractions of our budgets that Amherst, Bedford, and Merrimack spend on special education.  Now you might think that by comparing line item to line item in the various district budgets, that the numbers would be directly comparable.  I certainly did.  They aren’t.  Here’s the difference.  Amherst includes benefits in their special education budget section.  Bedford and Merrimack don’t.  So when we take benefits out of our special education budget, we get the following numbers which we can compare, and they paint a very different picture than before.

District Special Education % of Budget (without benefits)
Amherst 11.2
Bedford 15.7
Merrimack 15.1

Now, to get to our spike in per-student elementary education spending back in FY 2011.  The one where we jumped to $4533 over the state average in a year.  In that year we saw our elementary school enrollment drop from 710 to 629.  That’s 81 students, or an 11.4% drop.  Inconveniently, they didn’t all fall out of the same grade, so this has made it somewhat difficult to make rapid adjustments to staffing.  But we have been making staffing adjustments.  We just can’t make them as fast as the enrollment has changed.

And yes, this will hit the middle school shortly, but we are making adjustments.  Draft 1 of next year’s budget will be presented at next month’s school board meeting and we should know more then.

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Amherst Property Taxes and Inflation

One of the questions I was asked after yesterday’s post on property tax growth was on how inflation factors into the picture.  My original intent was to measure the actual change in property tax bills, but it is instructive to add the inflation perspective.  There are a handful of inflation rate calculators available online that will let you make adjustments for constant dollars.  Since my property tax information starts in FY 2001, I’ll use constant 2001 dollars here.

Inflation essentially measures the change in buying power of a currency over time.  That is, if something cost $1 in 2001, because of inflation it will cost a few cents more in 2002, and so on.  You’re probably already made the observation that things cost more at the store, this is generally due to inflation.  How it impacts you depends on whether your income has kept pace with inflation or not.  The easiest way to look at this is to put together a table of multipliers for each year, referenced to 2001 (graphed below).  This will allow us to recalculate the tax data from yesterday in terms of constant 2001 dollars.

Inflation multipliers to determine constant 2001 dollars in US currency.

Inflation multipliers to determine constant 2001 dollars in US currency.

The overall effect of taking inflation into account, particularly when it is increasing as we see above, is to shrink the value of the dollars being spent in time.  What it allows us to see is whether the changes in the numbers come from changes in the value of the dollar, or whether actual spending has changed.  Given what we know about health insurance costs in our school district, we should not be surprised to see that actual spending increases here.

Last time I broke out the education dollars for the towns that were raised by local property taxes and we looked at how they changed over time.  Below is that information replotted in constant 2001 dollars.  Amherst has a growth factor of about 1.7, Bedford hits 2.4, and Merrimack 2.2.

Locally raised education spending by town in constant 2001 dollars.

Locally raised education spending by town in constant 2001 dollars.

Likewise, here is the total property tax growth of the towns in constant 2001 dollars.  Again, very similar to yesterday’s plot.  Amherst comes in at a real growth factor of just under 1.4, Bedford at 1.7, and Merrimack at just over 1.4.

Changes in the total property tax burdens of Amherst, Bedford, and Merrimack in constant 2001 dollars.

Changes in the total property tax burdens of Amherst, Bedford, and Merrimack in constant 2001 dollars.

Amherst Property Tax Review

One of the issues that I hear often in talking with people in town is about how much our taxes in Amherst have gone up in recent years.  So it made sense to me to dig deeper into this issue to better understand what has been taking place and put some numbers on it.

Lucky enough, the information that we’re after is collected by the state and made available online.  The tax rate graph for Amherst below shows that the largest property tax impact in our town budget comes from the cost of operating our schools.  This is not uncommon in New Hampshire where we’re largely on the hook for costs of what we do in our towns.  Since they are the biggest piece of the tax pie and since I’m chairing the Ways and Means committee for the Amherst School District this year, let’s start with education taxes.

Amherst tax rates by fiscal year.

Amherst tax rates by fiscal year.

Before we get too far into what these numbers mean, I think it makes sense to put our numbers in perspective, so I gathered information for Bedford and Merrimack as well as for Amherst.  Interestingly, the state does not split the Amherst School District and Amherst’s share of the Souhegan Cooperative School District apart, so the Amherst numbers that we will go over here are our complete numbers for the town’s education costs.

So let’s start by looking at local education property tax rates.  Below are the mil rates (tax rate per $1000 of property valuation) for education in the three towns since fiscal year 2001.  Note that the rates jump all over the place, particularly for Amherst.  This requires some explanation.

LocalTaxRates

Local tax rates for Amherst, Bedford, and Merrimack.

There’s a very good, but slightly odd, reason for these jumpy numbers.  This tax rate is calculated by first determining the amount of money that needs to be raised from the budget and then dividing that number into the total value of taxable property in town.  Take away a factor of 1000 and you get your mil rate.  Now every few years the town pays for an assessment of property in the town.  Either the people who do the assessments have some interesting formulas or the towns do a very poor job of estimating property values between valuations, because we see some pretty big jumps in the total value of taxable property in town.  Whenever you see a big change in valuation, the tax rate changes in the opposite direction (that is, when they consider that your house is much more valuable than it was the year before, your tax rate goes down, and vice versa).

The graph below shows the total assessed value of taxable property in each town by fiscal year.   I find it somewhat odd that property has increased in assessed value in spite of the real estate market downturn, but this doesn’t really affect your taxes, only the tax rate you pay, which as you saw above, is constantly adjusted to raise exactly the budgeted funds.

NAV

Total property assessment by year for Amherst, Bedford, and Merrimack.

Now “budgeted funds” is the key term here, and combining the information in two graphs above lets us come up with the total amount of property tax money each town raises to cover their local education budgets.  And this is the information that we need to understand how people’s actual local tax bills are changing over time.   Remember that the amount raised by property taxes is the number that is left over after subtracting any state and/or federal money from the school budgets that we vote on in March.  I have graphed these numbers below for clarity.  When it comes to Bedford’s numbers, it can be useful to recall that they opened their new high school in 2007.

LocalEducationRevenues

Taxpayer raised local education dollars for Amherst, Bedford, and Merrimack.

With all this in mind, we now can calculate, on average, how much our education property taxes have gone up with respect to FY 2001 numbers.  For Amherst, the answer is they have increased, on average, by a factor of 2.2 (as of FY 2012), and we are the lowest of the three towns.  The graph below has the details.

ActualTaxRateGrowth

Growth in the total locally raised education spending, referenced to FY 2011 for Amherst, Bedford, and Milford.

While this shows the bulk of the spending in each town, it doesn’t tell the whole tax burden story.  What about everything else included in property taxes?  It is easiest to just look at the total tax burden.  We don’t really need to look at the rates, since a decrease in the rate doesn’t necessarily mean a decrease in spending.  So below is the total property tax burden for each town, which includes the local education numbers from above, but also the state property taxes, and other town and county spending for Amherst, Bedford, and Merrimack.

TotalTaxLiability

Total tax liability for Amherst, Bedford, and Merrimack.

To put numbers on growth, we can normalize these to 2001 as we did before with the education budgets.  It is interesting to see that Merrimack’s growth is reasonably close to ours, with a few years of exceptions.  Compared to the other towns, Amherst looks fiscally responsible.

TotalTaxGrowth

Growth in the total tax liability for Amherst, Bedford, and Merrimack.

So now we have the answer that we set out to find.  Although our actual school tax rates have more than doubled, our total tax burden in Amherst has, on average, increased by a slightly smaller factor of about 1.8 since FY2001.  Note that this is averaged over the whole town and how this impacts your household tax bill has much to do with how your property’s valuation has changed compared to the rest of the town.

Budget Review Slides Submitted to Administration and School Board

With all the work I’ve done to better understand how and where we spend money in Amherst School District, it was time to do something with it and press for some changes.  My intention is to refocus the budgeting process before it happens, rather than respond to it once it comes out.  I’m hoping the proactive approach is the more effective one. That in mind, I summarized my budget evaluation (which I’ve done in bits and pieces here) and questions/recommendations in some slides and met on Wednesday (7/17/13) with the Superintendent (Peter Warburton), the Business Administrator (Betty Shankel), and the ASD School Board Chair (Peg Bennett) to review them.

It was a good meeting, the contents were well received, and once they have fully digested them, we will meet again with a larger group to review them and their responses to the questions and recommendations. I think I got my point across that I was there for a cooperative meeting and that I wanted to drive the discussion on where W&M sees issues that need to be addressed earlier in the process than has been typical.  We are supposed to be the check/balance in this process and the points made were, I think, well received (we were encouraged to push them on spending issues).  I openly invited them to suggest other metrics to judge value if they feel I have selected incorrect ones (mostly because last year’s W&M committee meetings did not produce any metrics I was looking for).  And in general, that if they feel that the numbers for certain spending areas are justified (special education and teaching coaches come to mind)  in how they deviate from state averages or other town numbers, that the case needs to be made for them.

These are the slides.  I talked over them quite a bit in the meeting, but hopefully the messages are clear.

Amherst School District – Per-Student Spending and Special Education Budget Comparison

Recently I was preparing some charts to go over at the beginning of this year’s Amherst School District Ways and Means budget meetings.  I’ve gone through our budgets quite extensively trying to understand what our costs are and how we can control them.  One thing I look at is per-student spending, which we’ve gone over before.  What I really wanted to understand is how we compare with some of our neighboring towns.

Luckily, the state Department of Education puts their numbers online.  The state does the calculation somewhat different than you might expect as they remove certain budget areas like transportation and food service from the calculation.  With that in mind, these are the state’s cost per student numbers for elementary school education in Amherst, Bedford, Merrimack, and the state average as reported by the NH DOE from 2001-2012.

Per Student Costs by Fiscal Year For Amherst, Bedford, Merrimack, and the State Averages, by Fiscal Year.

Per Student Costs for Elementary Education by Fiscal Year For Amherst, Bedford, Merrimack, and the State Averages.

So according to the state, in FY 2012 we outspent the state average by $4533/student, Bedford by $6378/student, and Merrimack by $4745 in elementary school education.  Go back and read that again.  I found this to be remarkable.  And a little surprising.  We need to understand why Amherst’s numbers are so very different from our neighboring towns.  Those other New Hampshire towns have the same health insurance and NH Teachers Retirement fund constraints that we do, so those probably aren’t the drivers.

For the record, here are the middle school numbers.  We’re high there too.

Per Student Costs (Middle School) by Fiscal Year For Amherst, Bedford, Merrimack, and the State Averages, by Fiscal Year.

Per Student Costs for Middle School by Fiscal Year For Amherst, Bedford, Merrimack, and the State Averages, by Fiscal Year.

The table below has these cost/student numbers for just FY2012, and includes the numbers for the total district.  Keep in mind that Bedford and Merrimack don’t have multiple districts in their towns like we do, so their district numbers include high school (for the record, our Souhegan HS district comes in at $18,456.28/student in FY2012 according to the state).

Elementary Middle School District
Amherst $17,946.34 $15,536.66 $16,569.40
Bedford $11,567.85 $11,855.69 $11,385.20
Merrimack $13,201.02 $13,521.11 $13,157.54
State Average $13,413.70 $12,605.50 $13,159.15

I was pleasantly surprised to find that both Bedford and Merrimack school districts have their FY14 school budgets available online.  I have not yet done a thorough analysis to see how they compare with things we’ve already looked at, like health insurance.  But to try to understand how they spend so much less per student than we do, I took a quick look at their education spending and found something remarkable.  Amherst School District’s budget is heavily weighted in Special Education.  Considerably more than neighboring towns.  Here are the numbers, including the percentage of the budget spent on Special Education.

School FY14 Total Budget FY14 Special Education Budget % Special Education
Amherst $24,278,572.00 $5,073,488.00 20.9%
Bedford $62,660,875.00 $9,882,992 15.7%
Merrimack $67,291,503.00 $10,171,841.00 15.1%

Now these are telling numbers.  In Amherst we are spending between 4 and 5 percentage points more of our budget on Special Education than our neighboring towns. This is a lot of money.  Why these numbers are so different needs to be understood.

Now what would our budget and cost/student look like if we had the the Special Education budget percentages of Merrimack or Bedford this upcoming school year?  I ran the numbers using Merrimack’s spending:

  SPED @ 20.9% SPED @ 15.1%  
Special Education: $5,073,488.00 $3,415,745.21  
Total Budget: $24,278,572.00 $22,620,829.21  
Cost/student: $17,984.13 $16,756.17  

That is to say, if our special education spending was in line with neighboring towns, we would shave about $1.5 million off of our bottom line budget and reducing our spending/student by around $1200.  What I take from this is that we are extravagant in several areas in Amherst School District, Special Education being only one of them.

Amherst School District – Value and Trends in Standardized Testing (Part 2)

Value is a word that we should probably use more when it comes to the school district.  We talked before about the black box approach to understanding complicated things.  We take something complex, like an electronic circuit or a whole school district, and put it into a big black box and simply look at what goes into it and what comes out of it, and use those to learn what it does without having to be too concerned with the details of how it all actually happens (for now, at least).  This is a great way of getting an overall look at how something behaves, and we can use it to look at its effectiveness, or value.

A useful way to think about value is to look at input/output ratios.  You do this all the time, even if you don’t realize it.  Into your car you put gas, out of your car comes miles of travel, divide the two and you get your miles/gallon ratio.  In this case, a higher number means greater value – more miles out of a gallon of gas is greater output for every unit of input and therefore more value.  We can use this same approach with our black box model of the school district.  Into our school district go money, students, and staff, and out come educated students.  The measure of the amount of education the students have is currently done, for better or for worse, with standardized tests, which is a reasonably good way to look at groups as a whole.

Previously we looked at NECAP test scores over time.  But the word value often refers to comparisons made with money – how much of something do we get for our dollar spent.  So lets look at one of the measurements of education that we can make, average NECAP scores and proficiency numbers, and compare them with the dollars it took to get those scores.  In order to do this we have to get rid of the silly NECAP convention of adding the grade level in the hundreds place of the scaled score, and just use the actual test score numbers which go from 0-80.  I don’t have budget numbers for all of the years that I have NECAP scores, so there are a few less years on these graphs than there were on the ones you saw with just NECAP results before.  And because we usually like to look at large numbers instead of lots of decimal points and zeroes all over the place, we will flip the ratio so that the output is on the bottom of the fraction.  This means that instead of points/dollar, we’re looking at dollars/point, and value goes up as the numbers go down.  With all of that in mind, here are the dollars per student-NECAP score numbers for Amherst School District from grades 3-8 for 2008-2012 in reading and math.  We get these by taking the $/student numbers and dividing them by the mean scores for each year.

Amherst School District spending per student  per NECAP test score for reading and math for grades 3-8.

Amherst School District spending per student per NECAP test score for reading and math for grades 3-8.

2009 was the year we had a one-time $2 million bump in the budget.  What we see here is that over time, in general, more dollars are required for every point scored in math and reading.  In other words, value is going down as the years go by.

We can look at these in a slightly different way.  Rather than the cost/point each year, we can look at the test scores and how much we spent per student in the teaching year.  It is the same idea as above, but now we don’t necessarily care which year it is, only what the spending per student number was that year.  Per-student total spending was gone over in a previous post if you want to look at those numbers and how we get them.

This look gives us a sort of price elasticity curve, if you’re familiar with economics.  That is, looking at the numbers this way we see how the amount of education changes as the cost of educating a student changes.  First the NECAP average scaled scores, grades 3-8, math and reading.

ASD NECAP Math and Reading score as a function of per student spending.

ASD NECAP Math and Reading score as a function of per student spending.

NECAP reading and math scores don’t seem to be very elastic. That is, they don’t change much regardless of how much money we spend.  What about the percentage of students who test proficient or above?

ASD NECAP student proficiency as a function of per student total spending.

ASD NECAP student proficiency as a function of per student total spending.

No matter how we look at the numbers, it is clear that the increases in spending haven’t given us any increase in educational value.

The key to understanding why this is so is to look at how the money was spent.  So we have to dig a little bit into the budget.

There is a good reason why the extra spending we do each year doesn’t give us a bump in education – it isn’t spent on education.  Since  2008, the average annual budget increase is $417k.  The average increase on insurance and NH Retirement is $395k.  That is, the spending increases each year go overwhelmingly into health insurance premiums and the NH Teachers Retirement fund.

Insurance and retirement costs for Amherst School District.  The major drivers here are health insurance and the contributions to the New Hampshire Retirement System for teachers.

Insurance and retirement costs for Amherst School District.

What this means to me is that the top priority this year is to get control over these costs.  I am certain that the school board and the administration have plenty of programs they would like to implement, but can’t because of budget constraints.  I know from talking with people in town that they want tax relief.  Making this happen will take creativity and leadership.  I have high hopes that we are up to the challenge.

Amherst School District – Value and Trends in Standardized Testing (Part 1)

Before I changed my college major to Physics, I studied Electrical Engineering.  One of the ways electrical engineers look at complex circuits is to replace them with imaginary black boxes.  They can then measure what goes into the black box (inputs), and also what comes out of it (outputs), and from those measurements they can learn how the black box behaves without knowing too much about the details of what goes on inside of it.  This sort of approach can be useful in understanding the behavior of other complicated systems, school districts included.

We spend a lot of time evaluating things like budgets, staffing, and enrollment for the district – these are all inputs.  We can analyze spending areas and benefit costs over time, but these are just detailed views of some parts of these inputs.  What we haven’t looked at yet are outputs, and they are overdue for some attention.

So what are the outputs of a school district?  Different people will have different answers to this question.  For me, I’m going to say “educated students” as that is the reason the district was created – to educate the children of Amherst.  Measuring the level of education is an important, but complicated task.  Few professional educators I know can agree on a satisfactory way to measure it, and there are plenty of disagreements on what the measurements that are made actually mean.

But we shouldn’t let the lack of a perfect measurement stop us from making any measurements at all, and we should look very closely at the ones that we can make, or in this case, already have been making.  At the beginning of each school year, the New England Common Assessment Program, or NECAP, tests are given to children in grades 3-8 for reading and for math.  There are some other subject tests given, but not to all grades each year. The results of these tests for Amherst School District are posted on the New Hampshire Department of Education website (see the NECAP Longitudinal Reports section toward the bottom of the page).  There you will find the percentage of students that score proficient or above in each subject, and also the average scaled scores, both of these for each grade level tested.  Now if you’ve been following along with anything else on this website, you know that I’m about to show them to you.

Below are the individual grade level NECAP testing results for math and reading for teaching years 2006 through 2012.  Plotted first are the percentage of students scoring proficient or above for grades 3-8.  (Note:  The NECAP test for teaching year 2006 is given in the Fall of 2007, etc.)

Amherst School District NECAP data for math and reading.  Scores are reported for teaching year.

Amherst School District NECAP proficiency data for math and reading. Scores are reported for teaching year by grade.

Apart from the steady decline in the percentage of 7th graders testing proficient in math, nothing really jumps out here.  That is the problem.  Can you pick out the year we hired the literacy coaches from the reading results?  How about year we started with math coaches? I’ll admit that I’m having trouble figuring those out myself.

Perhaps we will have better luck looking at the average test score numbers.  So here they are broken down by grade, same style as above.  NECAP has an odd scoring system.  The scores are created by adding the grade level in the hundreds place, plus a numeric score that ranges from 0 to 80.  This strikes me as a very poor way to represent test scores, but here they are on comparable scales.

NECAP average scores for Amherst School District.  These are the mean scaled scores each year by grade.

Amherst School District NECAP average scaled scores for math and reading. Scores are reported for teaching year by grade.

Similar to the proficiency percentages we looked at before, there are a few years with some modest gains, but there are some modest losses as well.  What is quite clear is that since teaching year 2006 we have seen no significant improvement in reading or math standardized test scores, or the proficiency percentage of students tested.  Now would you be surprised to find out that we’ve added about $4 million to the Amherst School District annual budget in this amount of time (i.e. going from about 20 up to 24 million)?  This is where the question of value comes in.

There may or may not be better ways than NECAP to measure individual student performance, but that is an issue for a different time.  Standardized tests are generally accepted to be a reasonable way to make year-to-year comparisons for establishing progress on a broader scale.  And I think the numbers speak for themselves that we have room for improvement in the district.  It is reasonable to guess that this was the goal behind starting our teaching coaches program.  Now I don’t want to sound like I’m picking on teaching coaches, but it is not clear that this experiment has paid off.  Rather, it looks to me quite the opposite.

I should point out that last year during the Ways and Means budget meetings, I asked the director of curriculum development about metrics demonstrating the effectiveness of the coaching program.  I was told they did not have them, but that they had a plan to get them (though the time scale was not clear).  Now consider that in the school year starting this Fall we will spend $435,000 (salaries + benefits, etc.) on teaching coaches in Amherst School District alone.  Literally millions of Amherst taxpayer dollars have been spent on the coaches program since it was started, and without any discernible impact on measured education levels in either math or reading.  That is enough to make me question the value the teaching coaches program has brought to the students or to the taxpayers of Amherst.