Sublette County School District #1 12LSO-0141.C1 and the Regional - - PowerPoint PPT Presentation

12LSO-0141.C1 and the Regional Cost Adjustment

Sublette County School District #1

Purpose of the Regional Cost Adjustment

 The Regional Cost Adjustment (RCA) is designed to

provide additional resources to the salary portion

• f the Wyoming Block Grant Funding Model for

school districts with higher labor costs resulting from a higher cost of living.

 Sublette County school districts must pay a

premium to attract the same high quality teachers that are available to other districts at a lower cost due to the cost of living in Sublette County.

Purpose of the Regional Cost Adjustment

 The emphasis of the Wyoming Constitution and the

Wyoming Supreme Court decisions regarding school finance is on the quality of education.

 The funding of a quality education must be cost-

based.

 The Regional Cost Adjustment (RCA) is used to

adjust the distribution of funding for regional differences and provide additional resources to school districts with higher labor costs.

Current RCA Model

 The current RCA model. School districts are

allowed to choose one of the following:

 Wyoming Cost of Living Index  2005 Wyoming Hedonic Wage Index  Base 100 (for those school districts that would receive

a negative adjustment).

 This model is equitable and effective. It does

not need to be revised.

 The State of Wyoming is a vast region that has

considerable variance in the population, labor costs, costs of living. Many of the factors that drive these costs are specific to Wyoming.

Current RCA Model

 The WCLI accurately reflects the cost of living in

• Wyoming. The WCLI is Wyoming specific data updated

quarterly and adjusted in the RCA annually. It has been vetted and endorsed as a cost-based index.

 WCLI is constructed as a weighted average of the

prices for food, utilities, housing, apparel, transportation, medical services, and personal care.

 The Campbell II court decision upholds the validity of

the WCLI, “...because the WCLI has been developed for the purpose of administering the State’s property tax system, it cannot be subject to any suspicion that its use for purposes of education equalization is biased.”

The Proposed Hedonic Wage Index (HWI)

 The legislature is proposing that the 2005 HWI be

revised adopted as the sole calculation for the RCA.

 The HWI proposed by the legislative consultant

from Texas relies on variables that are based on researcher judgment. Research conducted by Teton CSD #1 shows that only Texas uses the HWI as the sole calculation for RCA.

 Neighboring states like Colorado use a cost of living

index.

The Proposed Hedonic Wage Index (HWI)

 A Hedonic Wage Index attempts to quantify the

variables in working conditions that affect wages. It argues that teachers will take a lower salary for a job that is in a location that has a lot of amenities. In essence, the “amenities” are a part of the compensation package.

 The Texas consultant stated that the WCLI

• verstates the cost of living in places like Jackson

and Pinedale because the “attractive amenities that are related to being adjacent to Yellowstone.”

 What is defined as an amenity is at the discretion of

the researcher (from Texas).

The Proposed Hedonic Wage Index (HWI)

 The Texas consultant states that the cost of living

• verstates the cost of hiring “in locations that have

both a high cost of living and attractive amenities that make it a desirable place to live and work.”

 She states, “there is reason to believe that the WCLI

• verstates the cost of living in Wyoming counties

with relatively high housing costs.”

The Proposed Hedonic Wage Index (HWI)

 We all know that the cost of living in Sublette

County is significantly higher than living elsewhere. Without adequate salaries, our teachers could not afford the high cost of living in Sublette County and

• ur ability to recruit and retain high quality

teachers would be significantly reduced.

 Average Wage Per Job 2008

 #1 Sublette $58,614  #2 Campbell $53,833  #3 Sweetwater $52,428  #4 Natrona $44,625  #23 Goshen $29,010

The Proposed Hedonic Wage Index (HWI)

Wyoming Average Housing Rental Rate -

$915.00

Teton County - $1701 Sublette County - $1323 Campbell County - $1202 State employees who live in these counties

receive an additional housing allowance using the WCLI calculation.

The Proposed Hedonic Wage Index (HWI)

 Both the existing Campbell II and Campbell IV

Supreme Court cases refute this idea stating that:

 A Districts “amenity value” cannot be accurately

quantified and that housing costs are a significant component of the cost of living.

 “...because the WCLI has been developed for the

purpose of administering the State’s property tax system, it cannot be subject to any suspicion that its use for purposes of education equalization is biased.”

 The State of Wyoming currently recognizes the

effect of housing costs and pays a monthly stipend to it’s employees that live in Teton, Sublette and Campbell counties (in direct contradiction to the proposed HWI).

The Proposed Hedonic Wage Index (HWI)

 Geographic Isolation is another factor that is

calculated in the HWI. Schools that are considered geographically isolated would receive an increased regional cost adjustment.

 The distance to a city of 15,000 and 50,000 is

calculated.

 There is no indication of consideration for distances

to medical care, shopping, etc.

 Similar communities like Cody and Afton received

increased funding, while Teton and Sublette County schools are decreased.

Effects of Using the HWI as the Sole Calculation

 This proposal creates winners and losers among

Wyoming school districts.

 16 school districts will see reduced funding.  A loss of over $1.1M to Sublette County schools.

 Sublette 1 - $656,112  Sublette 9 - $468,045

 A loss of jobs and programs at Sublette County

schools.

 The Cheyenne and Casper school districts would

gain over $4.5M.

Effects of Using the HWI as the Sole Calculation

 Programs at Sublette 1 that are funded “outside the

model” that would be considered for reduction to meet the $656,112 reduction in funding:

 Pinedale Elementary School:

 Elementary Science  Gifted and Talented

 Pinedale Middle School

 Gifted and Talented  Sports/Extracurricular Activities

 Pinedale High School

 Specialist Teachers/Programs (Ag, Art, Vocational, Music,

PE, ELL, Technology).

 Sports/Extracurricular Activities

The Formula Dilemma

 Prior to the 2007-2008 school year, Wyoming teacher salaries

ranked 42nd nationally. To their credit, the legislators decided to do something about it.

 They significantly increased funding to schools and directed

schools to address salaries. As a result many school districts have done that. Especially those in remote locations or with high housing costs.

 Wyoming is now in the top five in the nation depending on which

index is used, meeting the goal set by the legislature.

 Many of the districts who made the salary adjustments currently

do not meet FTE staffing expectations in the model because their salaries are above the state average, i.e. you can only staff 0.75 of a position using our salary schedule that could be staffed at 1.0 using the state average.

 We all know that the cost of living in Sublette County is

significantly higher than living elsewhere. Without those salaries,

• ur teachers could not afford the high cost of living in Sublette

County and our ability to recruit and retain high quality teachers would be significantly reduced.

Legislative Talking Points

 The current Regional Cost Adjustment (RCA) model is

equitable and effective. There has been no outcry from the public, teachers, school administrators, or school

• boards. Why are we trying to address this now? The

model is not broken.

 The WCLI accurately reflects the higher cost of living in

• Wyoming. The WCLI is updated quarterly and adjusted

in the RCA annually. It has been vetted and endorsed as a cost-based index.

Legislative Talking Points

 Why are we hiring a consultant from Texas to define

costs in Wyoming? The University of Wyoming has PhD economists capable of doing this work who are more familiar with Wyoming.

 The HWI proposed by the legislative consultant from

Texas is dependent upon researcher selected variables and it significantly reduces the weight of housing in the calculation.

Legislative Talking Points

 The State of Wyoming already recognizes the importance of

housing costs as a tool to recruit and retain employees and provides a stipend to employees living and working in Teton and Sublette counties.

 This proposal creates winners and losers among Wyoming

school districts. Using the HWI as the sole indicator will reduce funding to Sublette County Schools by over $1.1M. This will result in lost jobs and program cuts. The Cheyenne and Casper school districts would gain over $4.5M.

 This change will significantly reduce the ability of schools in

high cost areas to recruit and retain quality teachers and administrators.

Legislative Talking Points

 Both the existing Campbell II and Campbell IV Supreme

Court cases refute this idea stating that:

 A Districts “amenity value” cannot be accurately quantified

and that housing costs are a significant component of the cost of living.

 “...because the WCLI has been developed for the purpose of

administering the State’s property tax system, it cannot be subject to any suspicion that its use for purposes of education equalization is biased.”

 There is a high degree of probability that this legislation

will result in a legal challenge based on equity, resulting in unnecessary legal fees for both Wyoming School districts and the State.