FY2014 Budget Development

(For budget information prior to FY2014, visit our budget archives.)

For the third year in a row, BPS staff are presenting the School Committee with a preliminary budget that is fully balanced. We want to know what you think! Send us your questions or comments at bpsbudget@bostonpublicschools.org.

The FY2014 Budget:

Sustains extended days in Turnaround Schools
Prioritizes partnerships, extended learning time, academic coaches, socio-emotional supports and academic support for our Turnaround and High-Support Schools
Sends $30 million new dollars directly to schools through Weighted Student Funding
Strengthens support for and development of great teachers and school leaders
Improves school facilities and invests in new technology
Converting two schools to become full inclusion schools
Prepares for new Dual-Language, Innovation and In-District Charter Schools, as well as for a school to serve downtown families
Invests $2.6 million in schools with high concentrations of poverty
Continues priority funding for safety and security upgrades in schools
Supports a new transportation contract that will improve services while managing costs effectively
Welcomes nearly 1,200 new students to BPS -- the highest enrollment since 2005. Nearly half of these students have high-severity disabilities, reflecting a national trend

This budget reflects the ongoing transparency and equity that our shift toward weighted student funding has made possible. It also reflects difficult decisions that must be made as a result of the deep and ongoing cuts we anticipate in federal grant funding and the expected reduction in state funding as well.

A significant increase in the city’s target appropriation for next year has allowed us to absorb a $12.7 million loss in state and federal funding and $63.2 million expected increase in the cost of doing business while actually increasing our direct appropriation to schools by more than $30 million. Yet again, the city has made a major new investment in education while state and federal agencies have pulled back. Mayor Menino has announced a $30 million investment in Quality Improvement Funds, which will align with our anticipated student assignment changes and will support our work around extended learning opportunities, school partnerships, teaching and leadership development and technology and facilities upgrades. We are prioritizing these funds for our Turnaround and High Support Schools to ensure students in these schools have the best opportunity to succeed.

The proposed Fiscal Year 2014 (FY14) general fund budget totals $934,360,000, representing a 6.9% increase from the FY13 appropriation of $873,693,227.

This level of increase is extraordinary given national financial uncertainty and it demonstrates our city’s sustained commitment to investing in equity and quality schools. By continuing to aggressively identify new sources of grant funding and making strategic reductions and service delivery changes, we were able to close our remaining gap while continuing to invest in schools, build our capacity to support teachers and develop great school leaders, extend learning time for students, serve more students in inclusive settings, and sustain the successful work underway around improving school quality.

This proposed FY14 Budget provides the financial blueprint for carrying out the Acceleration Agenda for the Boston Public Schools, which is designed to close access and achievement gaps and raise academic performance in every classroom of every school. We look forward to discussing it with the community.

Budget hearings

Thursday, February 28, 6pm -- Harbor School, Dorchester
Monday, March 18, 6pm – Location TBA
Wednesday March 27, 5pm – 26 Court Street, Boston

Education reform legislation secured in 2010 gave BPS the tools, flexibilities and funds to raise school quality. With this new authority BPS successfully launched Turnaround Schools, Innovation Schools and In-District Charter Schools. These schools all have longer days and the ability to hire and develop the best teachers and school leaders. Today, students in our Turnaround Schools are showing higher academic growth than the district average, and 44 percent more families are selecting them as a top choice. Today the BPS graduation rate is at the highest level it has ever been, with our English Language Learners showing the greatest and most rapid progress to date.

While our turnaround schools are improving, the federal funds to support their development are running out. Thanks to a higher target appropriation from Mayor Menino, as well as his new Quality Improvement Fund, this budget enables BPS to continue to fund these needed school quality efforts and direct them toward other schools as well. With this budget, we replicate proven strategies for additional schools and for many more students – while also continuing to invest in the schools that still need our help.

This budget allows BPS to prioritize students in our Turnaround and High Support Schools to receive in- and out-of-school supports, including literacy and math coaches, partnerships, extended learning time, vacation-week Acceleration Academies and summer learning. We believe these students have the greatest potential to show dramatic progress when offered the right supports, combined with great teachers and strong school leaders.

Resources:

The fiscal environment

Boston is leading the nation in economic development and our community has demonstrated a clear and sustained commitment to public education. Even so, our financial picture is tied directly to the national fiscal outlook, which is still suffering from the effects of the deepest financial collapse in generations. Political uncertainty in Washington complicates matters even further. The outlook for education funding remains negative as federal agencies scale back on grant funding and aid to the states. In addition, state aid as a share of the overall BPS budget continues to decline and is now at its lowest level – less than half what it was fifteen years ago. The picture will get significantly worse if federal sequestration legislation is allowed to take effect. Here are the major reductions in external grants we anticipate:

School Improvement Grants: Federal grants that support ten of our Turnaround Schools are currently in their third and final year. These resources have been used to extend the school day, build partnerships, use data to drive instruction and invest in other student support tools. The Mayor’s Quality Improvement Fund will help these schools continue this important work.
Title I (Improving the Academic Achievement of the Disadvantaged): This is the third consecutive year of ten-percent reductions to this federal grant. We anticipate a $3.6 million decline for FY14, which brings the total three-year decline to $11 million. Title I provides direct funding to schools with higher levels of poverty. In addition, Title I supports much of our Family and Student Engagement work, as well as some out-of-school and in-school learning opportunities for students. Our FY14 proposed budget relies on the increased city target appropriation to absorb these decreases.
We expect to experience decreased revenue from the State Circuit breaker, which partially reimburses school districts for extraordinary costs in serving students with disabilities. Our projections assume that it will be reduced from 70% to 65%, which translates to revenue loss of more than $1 million for BPS.
Race to the Top: This competitive four-year federal grant allows BPS to invest $32 million in teacher and leader quality and the use of data to drive instruction. FY14 will be the fourth and final year of this grant, and the spending level will be $6 million lower next year than in FY13. Funds for the next school year will allow us to continue our curriculum development, invest in online professional development and support partnerships in some Turnaround schools.

In addition to these reductions, we are also faced with rising costs. Among them:

Enrollment increase: We project SY 14-15 enrollment to be approximately 58,271 students, an increase of more than a thousand students from the current 57,087. This would be the highest enrollment in BPS since March, 2005. We welcome these new students and families and are pleased they have chosen the Boston Public Schools. A greater-than-average proportion of these new students arrive with complex educational needs that are not fully reimbursed by external funds. Much of the increase is driven by the ongoing increase in demand for special education services, particularly in early childhood and for diagnoses within the autism spectrum.
Special education: The FY14 budget increases the overall allocation for special education services by approximately $30 million. This allows us to serve an increasing number of students with disabilities in early grades while expanding high-quality programs in other grades – including two new inclusion schools and the planned future creation of an inclusion high school to create a K-12 pathway. We continue to closely examine our core spending obligations to better direct resources to serve students.
Salary increases: Salaries represent 63 percent of our budget and are increasing. Approximately 9 in 10 BPS employees are represented by a bargaining unit. In FY14, we project an $11 million increase in employee step increases.
Transportation: A majority of our students rely on bus transportation to get to school every day. BPS also provides – and pays for – bus transportation for charter school, private school and parochial students who are not enrolled in the Boston Public Schools. We expect transportation costs to rise in FY14 due to the expiration of our ten-year contract with First Student and the need to enter into a new contract. Our team has worked over the last year to structure a competitive bid that would allow for an affordable successor contract that also increases the level of service we provide. We have recently informed a vendor of a preliminary contract award, which we believe fits well within our planned budget while also strengthening our transportation services.
Charter schools: The enrollment cap is gradually increasing and more students are expected to move into public charter schools, which means additional costs for BPS (such as transportation) even as money is diverted from our system. This requires BPS to become more competitive even as our relative resources decline. Although we are experiencing an enrollment increase in early grades we continue to see enrollment declines in grades 5, 6 and 7 as charter schools expand in these grades.

Few of these challenges are new ones but they have a significant cumulative impact as more and more costs shift to local resources - as federal and state agencies pick up less and less of the cost of education. We are proud that BPS has been able to successfully navigate these pressures and come out stronger despite them.

Last month, Mayor Thomas M. Menino pledged $30 million in new Quality Improvement Funds aimed at supporting excellence in education. These funds will be used to support extended learning opportunities, build school partnerships, improve teacher training and school leadership, and upgrade our facilities – especially in schools that need them the most, such as our Turnaround and High Support Schools. We wish to thank the Mayor for offering us the resources us to invest in these critical priorities that will benefit student learning.

This year, our graduation rate increased for the fifth year in a row and today is the highest it has ever been. Thanks to our great teachers and school leaders, our students’ gains in mathematics are among the largest seen by any jurisdiction – state or local – in the 30-years of the National Assessment of Educational Progress. As the Council of the Great City Schools noted in an op-ed this fall, “Boston is the only big-city school district to have caught up with the nation in any grade or subject after having started significantly below it.”

The achievement gap is narrowing. A strengthened teachers’ contract now offers our school leaders more authority to ensure the right teacher is in every classroom, and more powerful evaluations linked to targeted professional development are already showing tremendous progress. We have proven that the flexibilities and resources granted to us in 2010 reform legislation are effective. With them, we are successfully turning around underperforming schools and are driving student achievement to the very highest levels. Now, we are asking to expand what is working and replicate success in every school.

We must protect this progress and continue the improvements outlined in the Acceleration Agenda. This year, we face new challenges and opportunities as the financial landscape shifts again.

The work continues

In 2010 BPS launched an ongoing effort to enhance our services to students by restructuring the District. We are pleased that of the five major goals outlined at the time, we have successfully implemented three of them with the two – streamlining central services and an effort to improve our school choice system – well underway.

FY14 will be the second year of expansion under our ‘Access to Excellence’ plan, which created additional capacity at many of our highest-performing schools and opened new, innovative schools. These expansions were made possible in part by the difficult decision to close underperforming schools two years ago. Thanks to on-time delivery of all planned construction and renovation projects, this year these schools successfully welcomed an additional 581 students, and are on-track for the full expansion of approximately 1,544 seats when all strands in all schools are complete.

We are also implementing a cost-neutral reorganization of the central office structure, designed in partnership with school leaders to increase the District’s responsiveness to school and student needs and create a stronger system of mutual accountability.

FY14 will be the third year of our weighted student funding formula, which means the planned two-year phased rollout of the new WSF environment is now complete. This system funds students rather than buildings or schools. In two years it has raised equity, built transparency and helped families better understand how their school budgets are set – which has empowered them to join the conversation in meaningful new ways. In addition, the WSF system has encouraged school leaders and school communities to think deeply about the blend of academic experiences they offer and has encouraged schools to welcome and educate more students across many levels of need.

We are also continuing to implement the many reforms achieved with the Boston Teachers Union through our new teachers’ contract. Among other things, the new contract ensures more effective teacher performance evaluations that are linked to strengthened professional development; greater abilities for school leaders to choose their teams; and increased investments in school nurses and socio-emotional support specialists, who help ensure our students are ready to learn every day.

Taken together these reforms are helping us protect and extend our academic progress during economically challenging times.

FY2014 budget details: Enhancing choice, community and more equitable access to quality schools

New school options

BPS anticipates identifying between six and eight additional Innovation and In-District Charter school opportunities, particularly in Roxbury, Dorchester, Mattapan and Hyde Park – communities where creating additional high-quality schools must be a top priority.
BPS will open the UP Academy Charter School of Dorchester as an in-district charter school, which will open at the Marshall Elementary building, pending state approval of their charter on February 26. All current Marshall students have been offered a seat in the new school. BPS welcomes the UP Academy partnership based on the team’s success at the former Gavin Middle School, where today, students are showing some of the highest academic growth in the state.
The Office of English Language Learners will issue an RFP for new dual-language schools, which we anticipate opening for the 2014-15 school year and beyond. This would allow existing school teams to build their own high-quality dual-language programs in partnership with OELL and the community.
Two more schools will become Inclusion schools for the 2013-2014 school year.
We are working to identify space for a Harbor High School and a school to serve downtown families. These will primarily be capital budget issues in FY14. A 10th grade full-inclusion program will be added at the Harbor School this fall.

Supporting schools to improve quality, safety and community engagement

The Mayor’s Quality Improvement Funds will be prioritized to support our Turnaround and High Support Schools for extended learning, partnership opportunities, teacher and leader development, technology and upgrades.
We have developed tailored plans for each of our 21 High Support Schools, which are generally Level 3 schools that are showing lower growth and overall performance. Each school is assigned a data coach to work with directly with the principal, and a dedicated central office team works in partnership with school leaders and teachers to improve the quality of instruction and get the most out of student learning time. Literacy and math coaches, prioritized performance evaluation and professional development support, vacation-week Acceleration Academies and out-of-school partnerships are also offered in these schools, and teachers receive extra stipends for targeted training. Eight social workers hired this school year are primarily assigned to these schools.
Mayor Menino has filed legislation that would expand the successful school reform tools and resources we secured in 2010 to Level 3 schools. This would allow us to extend the school day, invest in teacher training and development, and open additional In-District Charter Schools to continue to build school quality.
EdVestors is supporting three schools for intensive improving schools initiative with a three-year, $3 million commitment for the Condon, Russell and Mendell.
Mattahunt Elementary is expected to quality for federal School Improvement Grants in FY14 as it becomes a Turnaround School.
This fall we have prioritized $1 million of our facilities budget to better secure school buildings and improve communications between school safety agencies, including Boston School Police and the Boston Police Department. We expect to make additional capital requests this year to support this ongoing work.
The FY14 budget includes resources for OIIT to continue the rollout of the next-generation Student Information System, which will provide families with a multilingual tool to access student information, choose and register for schools

Expanding enrollment in early grades

BPS expects enrollment will increase by nearly 1,200 students. The FY14 budget reflects $2.4 million in startup costs for new classrooms, of which $1.35 million will support 12 new early childhood special education classrooms.

Expanding learning time

This budget allows Turnaround Schools to continue their successful extended school day models and supports ELT programs in other schools, particularly High Support Schools.
The FY14 budget continues our highly successful vacation-week Acceleration Academies, designed to connect students with great teachers in intensive academic programs.
This budget maintains our commitment to summer learning, which has nearly doubled in the last three years to 11,000 students.
BPS has secured a Supplemental Education Services waiver, which allows us to support extended learning time despite federal and state reductions.

FY2014 budget details: Investments in teacher and school leader effectiveness

BPS is developing a comprehensive leadership pipeline strategy to ensure that every school has exceptional leaders. This strategy, supported by multiple non-profit partners, will encompass a training program for teacher leaders to earn licensure as a principal / assistant principal, current licensed administrators who desire to serve as principals, a mentoring and coaching program for school leaders in their first three years and unique professional development for existing principals / headmasters to strengthen their knowledge and skills.

In addition, teacher performance evaluations have gone extraordinarily well for this first year of implementation. Currently more than 23,000 artifacts have been collected to demonstrate educators’ proficiency and more than 6,000 observations of classroom practice with feedback have been provided to our educators. This demonstrates a significant positive change from our past practice. Our next step is to use all the information gathered in performance evaluations to design comprehensive supports for all educators.

Teacher and school leader evaluations

Stronger evaluation systems have successfully rolled out to all schools during the 2012-2013 school year. The Office of Educator Effectiveness is supporting all schools, with a particular focus on Turnaround and High Support Schools to ensure quality teachers in every classroom.
Professional development opportunities are linked to the results of each evaluation, connecting skills development directly to areas of necessary teacher support.
$500,000 of the Mayor’s Quality Improvement Funds is dedicated toward leadership development in FY14.

Race to the Top

The state’s receipt of this federal grant designated $32 million over four years to BPS, allowing us to dramatically increase support for teacher professional development and for principal and headmaster leadership. This is the fourth and final year of RTT funding. This year, BPS will continue to enhance teacher and school leader professional evaluations and support, including online professional development, as we shift toward a sustainable self-funding structure for FY15 and beyond.

Strengthening core instruction

Alignment to Common Core framework continues through Race to the Top.
Rollout of Academic Achievement Framework to all schools is complete. Now, the District’s focus is institutionalizing the capacity of schools to fully utilize the AAF structure.

FY2014 budget details: Addressing the challenge

The FY14 budget development process began with a $75.9 million funding challenge due mainly to a significant drop in federal and state grant funding and expected increases in salaries, benefits and transportation costs as we transition to a new provider. The increase in the city’s target appropriation has given us an opportunity to continue to invest in what’s working while ensuring our efforts to reduce costs and gain operational efficiencies are effective. Our proposal to close the remaining $17.7 million challenge includes four major strategies:

Intentional realignment of resources ($7.4 million)

Strategic reduction in vacant positions
Redirection of resources within Special Education to fund increased demand for direct service to students

Operational efficiencies ($4.8 million)

BPS created a more competitive environment for transportation services, which is expected to yield savings from initial projections when bid is awarded
Strategic coordination of school start times (requiring adjustments of less than 15 minutes from existing bell times) will yield additional transportation savings
Leveraging network capabilities to reduce proliferation of printers and fax machines

Strategic use of external funds to ensure continuity, focus and alignment ($3.8 million)

Prior year carry-forward allows us to convert underused FY13 grants for FY14 purposes

Model efficiencies ($1.7 million)

Virtual schools and blended learning
Maximizing meal reimbursements

FY2014 budget details: Weighted student funding

Consistent with the Acceleration Agenda plan to ensure resource equity for all students no matter what school they attend, we use a weighted student funding allocation process. This will be our third year using weighted student funding to support school budgets and planning. Under the previous system, BPS allocated budgets based on the number of programs and students in each school but didn’t necessarily make decisions based on specific student needs. This used to work well, but became less effective as BPS was forced to make difficult choices, layering cuts on top of cuts for several years in a row because of significant budget shortfalls.

Weighted student funding is more equitable, transparent and predictable, enabling schools to make greater academic progress regardless of the economy. Under a weighted student funding formula, dollars follow students. This means that BPS anticipates what each student needs each year and then delivers the appropriate funds to the school that student attends. Dollars no longer follow programs, buildings or schools. Instead, we allocate budgets solidly based on student need.

Weighted student funding is about spending limited dollars much more wisely.

Our health care, salary and transportation costs are rising rapidly and are taking resources out of our classrooms. The shift to weighted student funding allows BPS to more efficiently direct dollars to where our students need them most; but it does not replace the need to make tough decisions about the way we spend money now. Weighted student funding allows us to focus on investing in programs that work, protect the progress we have made and put the interests of students first in every decision we make.
Schools receive funding based on their students, and then decide how best to spend it. Schools’ budgets are based on who they are educating -- not the flat number of students or staff they usually have in the building. For example, schools with a higher percentage of students whose family income is at the poverty level would need more resources to educate students, or a student with language challenges might require more highly specialized staff. In these cases, the school would receive a higher per-pupil amount. This per-pupil amount would follow the student to whichever school he or she chose.

Under a weighted student funding model, BPS calculates per-student funding by assigning a value to the various factors that go into meeting a student’s academic needs, and then adding them up. Every student has a different one, which is based on his or her grade level, educational needs, and learning challenges or ability. A school’s budget is calculated by adding the individual funding estimates for every student projected to attend that school in the fall.

Here is how we calculate an individual pupil weight:

Grade-level

These weights are a function of class size. The weights are heavier in early grades because the student/teacher ratio is smaller. Our contracted class size maximum is not changing and the weights are set at target class sizes. In addition, incoming 9th grade students defined in our Leading and Lagging Indicators as “high-risk” or “off-track” receive an additional weight. This extra funding allows high schools to provide targeted resources to at-risk students.

Poverty

Students who come from a challenging home environment sometimes need extra support in the classroom. This is why we set higher weights for students who qualify for a free or reduced lunch program. In addition, schools that educate students living in poverty at a higher level than 60 percent will receive extra funding on top of this increased allocation. Schools with high concentrations of students living in poverty may also receive federal Title I funds, which are in addition to the general fund school allocation that flows through a weighted student formula.

English Language Learners

Based on feedback from schools and an analysis of resource data, we are recommending a change to the weighted student funding structure for English Language Learners this year. Previously, we provided common weights for all English Language Learners and distinguished only by grade level. The FY134 budget recommendation includes weights that change based on ELD levels to provide a more equitable distribution of resources across levels of need, which are determined programmatically and not at the school level.

Students with Disabilities

These weights are calculated based on optimal staffing levels for varying degrees of need as recommended by our Office of Special Education and Student Services. Our new Highly Specialized Setting programs are designed to replace existing Substantially Separate classes. We have based weights on class size targets set at one or two students lower than necessary staffing levels to allow schools flexibility to purchase additional resources if needed.
The FY14 budget includes two important corrections. First, the FY13 budget significantly overestimated the number of students receiving ‘developmental delay’ services, at a per pupil rate of $22,000, due to an error in the description of the program. The FY13 budget categorized 122 students as requiring these services in a total of 16 schools. Instead, 21 students actually require these services as defined, and only in one school. The other 101 students were already receiving appropriate services already funded elsewhere. The FY14 budget corrects this issue. Second, the FY13 budget improperly funded speech therapy services directly to schools through low-severity resource room weighted student funding weights, when the budget also funded these services centrally through OSESS. These services are actually provided centrally and not through schools, which means these services were double-funded in FY13. The FY14 budget corrects the error by continuing to fund these services centrally and not through schools.

Emotional Impairment

The FY14 budget includes a weight for emotional impairment, which will help schools ensure appropriate supports can be in place for these students at all levels.

Vocational Students

This measure continues the FY13 increase in pupil funding by 50% for students in designated Vocational programs. This weight was developed based on the standards the state gives us in their funding formula.

School Foundation

All schools, no matter what size, receive $200,000 to support a core administrative function. Typically, this will include a principal or headmaster, an administrative support position, and additional funding for overall school support. Principals and headmasters may create other positions based on funding levels determined through class size management and the weighted student funding model.

Quality Improvement Funds

An essential part of Mayor Menino’s effort to improve the school choice process for parents is to give them better choices – schools of higher quality. Mayor Menino and Superintendent Johnson have led the effort to increase quality in Boston Public Schools.

Today, graduation rates are the highest they have ever been; test scores are up; enrollment is up; ELL, arts, and other program investments are up; and dozens more schools are schools of choice for parents.

Still, work remains, and as a more predictable school choice system comes into place, we must also improve equity and overall access to quality schools.

Mayor Menino is proposing $30 million in Quality Improvement Funds to support investments at schools that have yet to become quality schools of choice.

We know from efforts in recent years, including at many Turnaround schools, what kinds of investments work to help students and to improve schools.

Quality Improvement Funds would support these investments that we know work:

Extra Time (e.g. summer learning, extended day, vacation academies)
School Partnerships (e.g. enrichment and support from outside partners, novel school formats like Innovation Schools and In-District Charter Schools)
Teaching and Leadership (e.g. additional reading and/or math coaches, principal development)
Upgraded Facilities (e.g. labs and technology and schools that need them, new seats in high demand locations)

$30 million would be invested over three years, before, during, and after the transition to the new school choice process.

Funding would come from investment of city reserves for non-permanent programs, city capital funds, and BPS savings in other areas.