Education Finance <ul><li>Elements and </li></ul><ul><li>Key Concepts </li></ul>
The Ed Finance Paradox Everyone thinks it’s important, but few people understand it! <ul><li>Education Finance  SCARES  pe...
Why Is Money Important? <ul><li>Because a lot of money is spent on education </li></ul><ul><li>Because the level of resour...
How Much Is “A Lot”? <ul><li>In 2001, governments as a whole in Canada spent 15% of their total expenditure on education c...
HOW MUCH in 2001-2002??? <ul><li>In case you didn’t notice, that was: </li></ul><ul><li>$68,600,000,000.00 </li></ul>
Educational “Effort” in Canada
HOW MUCH in 2001-2002??? <ul><li>Saskatchewan spent: </li></ul><ul><li>$2,555,000,000.00 </li></ul>
K –12 Education: 2001-02 Canada  $41,008,000,000  of  $68,607,000,000 Saskatchewan  $1,442,000,000  of  $2,555,000,000
Expenditures K to 12 & Total $41,008,000,000 $68,607,000,000 $1,442,000,000 $2,555,000,000
School Board Expenditures
Where Does K - 12 Education Funding Come From? <ul><li>Federal Government </li></ul><ul><li>Provincial Government </li></u...
Expenditure on K-12 Education 1989 - 2000 Canada and Saskatchewan (x 1000)
Provincial Spending Per K – 12 Pupil, 1999 – 2000 $7,293 $7,758
Per Pupil Spending 1985, 1990, 1995, 2001
Education Finance <ul><li>All of our children have  equality of educational opportunity , and everyone pays their  fair  s...
How Do We Measure Equality of Educational Opportunity <ul><li>Equality of Access </li></ul><ul><li>Equality of Treatment <...
Horizontal  Equity <ul><li>Equal Treatment of Presumed Equals </li></ul>= =
Vertical Equity Unequal Treatment of Presumed Unequals  ≠ ≠
Provincial Budget <ul><li>Taxes (Income, Sales, etc.) </li></ul>Provincial Pot Profits (Crown Corps., LBS, etc.) Transfers...
Provincial Budgeting <ul><li>Assess revenues </li></ul><ul><li>Determine policy priorities </li></ul><ul><li>Decide on siz...
How the “Pot” is Divided In 2001 – 2002, the Saskatchewan Provincial Government spent 17.8% of it’s budget on “education.”...
Saskatchewan’s 01-02 “Pot Pie” Chart
Local Property Tax <ul><li>School Boards in Saskatchewan raise revenue locally by levying a tax on all eligible property i...
Horizontal Equity: Recognized Enrolment-based Expenditure <ul><li>The Provincial Government insures that  every school div...
Adding an Element of Vertical Equity to the Foundation Grant (2003-04) <ul><li>Other </li></ul><ul><li>Type of  School </l...
Vertical Equity: Saskatchewan’s Response to Inequalities <ul><li>Special Needs Grants, e.g., </li></ul><ul><ul><li>High-co...
Horizontal v. Vertical Equity <ul><li>It is important to understand that horizontal and vertical equity are mutually exclu...
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5 310 072 4a Finance

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5 310 072 4a Finance

  1. 1. Education Finance <ul><li>Elements and </li></ul><ul><li>Key Concepts </li></ul>
  2. 2. The Ed Finance Paradox Everyone thinks it’s important, but few people understand it! <ul><li>Education Finance SCARES people because of its reputation for being technical and complex </li></ul>$ $ Money Is Important (almost everyone agrees)
  3. 3. Why Is Money Important? <ul><li>Because a lot of money is spent on education </li></ul><ul><li>Because the level of resources made available to education has a lot of practical implications </li></ul><ul><li>Because “dollars” are an easily understood “proxy” for abstract concepts like “educational effort” and “educational equity” </li></ul>$ $
  4. 4. How Much Is “A Lot”? <ul><li>In 2001, governments as a whole in Canada spent 15% of their total expenditure on education compared to 17% for health. Between 1997-1998 and 2001-2002, public expenditure on education grew 2% at the elementary-secondary level and 9% at the postsecondary level. </li></ul>
  5. 5. HOW MUCH in 2001-2002??? <ul><li>In case you didn’t notice, that was: </li></ul><ul><li>$68,600,000,000.00 </li></ul>
  6. 6. Educational “Effort” in Canada
  7. 7. HOW MUCH in 2001-2002??? <ul><li>Saskatchewan spent: </li></ul><ul><li>$2,555,000,000.00 </li></ul>
  8. 8. K –12 Education: 2001-02 Canada $41,008,000,000 of $68,607,000,000 Saskatchewan $1,442,000,000 of $2,555,000,000
  9. 9. Expenditures K to 12 & Total $41,008,000,000 $68,607,000,000 $1,442,000,000 $2,555,000,000
  10. 10. School Board Expenditures
  11. 11. Where Does K - 12 Education Funding Come From? <ul><li>Federal Government </li></ul><ul><li>Provincial Government </li></ul><ul><li>Local Government </li></ul><ul><li>Private Sources </li></ul>$1,115,500,000 $385,100,000 $600,200,000 $263,600,000 Saskatchewan: 2000 - 2001 $2,364,300,000
  12. 12. Expenditure on K-12 Education 1989 - 2000 Canada and Saskatchewan (x 1000)
  13. 13. Provincial Spending Per K – 12 Pupil, 1999 – 2000 $7,293 $7,758
  14. 14. Per Pupil Spending 1985, 1990, 1995, 2001
  15. 15. Education Finance <ul><li>All of our children have equality of educational opportunity , and everyone pays their fair share of the costs of education. </li></ul>So, is there a problem?
  16. 16. How Do We Measure Equality of Educational Opportunity <ul><li>Equality of Access </li></ul><ul><li>Equality of Treatment </li></ul><ul><li>Equality of Outcome </li></ul>
  17. 17. Horizontal Equity <ul><li>Equal Treatment of Presumed Equals </li></ul>= =
  18. 18. Vertical Equity Unequal Treatment of Presumed Unequals ≠ ≠
  19. 19. Provincial Budget <ul><li>Taxes (Income, Sales, etc.) </li></ul>Provincial Pot Profits (Crown Corps., LBS, etc.) Transfers from Feds Borrowing B U DG E T Costs and Programs of the Department of Education Costs and Programs of All Other Government Departments $ Education
  20. 20. Provincial Budgeting <ul><li>Assess revenues </li></ul><ul><li>Determine policy priorities </li></ul><ul><li>Decide on size of the provincial expenditure </li></ul><ul><li>Allocate resources among competing priorities, most of which are not related to education. </li></ul>
  21. 21. How the “Pot” is Divided In 2001 – 2002, the Saskatchewan Provincial Government spent 17.8% of it’s budget on “education.” 9.8% was spent on K to 12 education.
  22. 22. Saskatchewan’s 01-02 “Pot Pie” Chart
  23. 23. Local Property Tax <ul><li>School Boards in Saskatchewan raise revenue locally by levying a tax on all eligible property in the school district’s jurisdiction </li></ul>Residential Commercial Farm Grants in lieu Not Church Property
  24. 24. Horizontal Equity: Recognized Enrolment-based Expenditure <ul><li>The Provincial Government insures that every school division has at least a set minimum number of dollars to spend for each pupil enrolled in its schools. Thus every pupil in the province is being treated “equally.” </li></ul><ul><li>This minimum is called the “Recognized Enrolment-based Expenditure.” </li></ul>$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
  25. 25. Adding an Element of Vertical Equity to the Foundation Grant (2003-04) <ul><li>Other </li></ul><ul><li>Type of School </li></ul><ul><li>Pupil Regina, Saskatoon Divisions </li></ul><ul><li>Kindergarten $2,196 $2,305 </li></ul><ul><li>Elementary 4,280 4,473 </li></ul><ul><li>Middle Level 4,514 4,723 </li></ul><ul><li>Secondary 5,045 5,271 </li></ul>Note that, in 2003-2004, we actually spent more like $7,000 per full-time-equivalent student in Saskatchewan! Now how did that happen?
  26. 26. Vertical Equity: Saskatchewan’s Response to Inequalities <ul><li>Special Needs Grants, e.g., </li></ul><ul><ul><li>High-cost disabled pupils </li></ul></ul><ul><ul><li>Comprehensive schools factor </li></ul></ul><ul><ul><li>Northern/Northern Communities factor </li></ul></ul><ul><ul><li>Special needs programs </li></ul></ul><ul><ul><li>Transportation </li></ul></ul><ul><ul><li>Room and board </li></ul></ul><ul><ul><li>Second language programs </li></ul></ul><ul><ul><li>Small schools factor </li></ul></ul><ul><ul><li>Sparsity factor </li></ul></ul><ul><ul><li>etc. </li></ul></ul><ul><li>Capital Grants, e.g., </li></ul><ul><ul><li>Building </li></ul></ul><ul><ul><li>Technical aids, equipment </li></ul></ul>
  27. 27. Horizontal v. Vertical Equity <ul><li>It is important to understand that horizontal and vertical equity are mutually exclusive; i.e., you can’t have more of one without having less of the other. </li></ul>$ $ Treat Individuals the Same Treat Individuals Differently $ $

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