Philadelphia Findings May 2015

© Education Resource Strategies, Inc., 2014

SDP Expenditure TrendsMay 2015

2

Executive Summary1. After passthroughs and non-operating expenses, SDP spent $1.75B, or $12,724 per pupil,

educating PreK-12 students in FY14

2. SDP’s per-pupil spending has declined more quickly than the decline in enrollment

3. SDP expenditures are 19% below ERS peer district median and 17% lower than its expenditures in FY11, after adjusting for inflation

4. SDP’s staff benefits costs are high and rising. Benefits represent 36% of teacher compensation costs, 1/5 th of which is reimbursed by PA SDP’s share of benefits costs is up 32%, or nearly $8,000 per teacher, since FY11

5. In the face of reduced revenues, growing benefits cost has led to radical cuts in virtually all functions, including critical supports for teachers and school leader School leader roles are more complex with fewer resources and less central office support

NOTE: As the information utilized in this analysis includes Pre-K expenditures and crosses multiple funds, – operating, categorical, and enterprise – it should not be used in a comparative analysis with charter school per pupil rate.

3

Our starting point: SDP spent $1.75B in 2013-14 to educate its students

$2,964

$1,749

$1,147

$748

$142 $271$37 $16 $602

$2,074

$ millions

Amounts for accounting purposes, such as transfers and payroll clearance, are excluded from this chart.* Includes passthroughs to private, parochial and other “non-public” schools as well as Special Ed passthroughs** Includes claims and settlements, adult ed, carryovers and other line items totaling less than $1MSource: SDP FY14 Expenditures, ERS analysis; ERS benchmark database

Passthroughs $890M

SDP non-operating expense$324M

4

SDP’s PreK-12 operating budget has declined faster than enrollment, leading to a drop in per-pupil funding

Optg Budget (in mil)

$2,241$2,428

$1,749

PreK-12 Operating Budget ($ millions)

Enrollment

167,460157,991

137,475

PreK-12 Enrollment

FY 0708 FY 1011 FY 1314

$pp

$13,384

$15,369

$12,724

Dollars per pupil

Source: SDP FY11 and FY14 Expenditures, ERS analysis; ERS benchmark database

Since 08 -22% -18% -5%Since 11 -28% -13% -17%

5

Aldine Charlotte Prince George's Philadelphia FY14

Baltimore Cleveland DC Newark

$7,886 $8,488

$11,036$12,724

$15,624 $15,875$17,031

$20,824Cross District Comparison of Average PreK-12 Operating

Geographically Adjusted $pp (fully allocated)*

SDP is currently funded below the median of its ERS peer districts on a dollars-per-pupil basis

Comp District Median = $15,624 pp

* Dollars represent PreK-12 operating budget/expenditure for year studied. Dollars adjusted for geography using the National Center for Education Statistics 2005 School District Comparative Wage Index. Dollars adjusted to 2013-14 (inflation adjusted) using the Bureau of Labor Statistics CPI calculator Source: SDP FY14 Expenditures, ERS analysis; ERS benchmark database

Unadj $pp $7,781 $8,201 $12,494 $12,724 $14,073 $14,371 $18,889 $21,136

CWI 1.35 1.31 1.55 1.33 1.32 1.23 1.56 1.47

Analysis Yr 12-13 13-14 12-13 13-14 09-10 12-13 11-12 10-11

6

FY 11 FY 14$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$71,516 $71,622

$14,096 $17,728

$9,439$11,420$3,857$7,830

Average teacher compensation, FY11 to FY14

A - Retirement-State

B - Retirement-Local

C - Other Benefits*

D - Health

E - Salary

Increase in teacher compensation is driven by benefits costs, with SDP’s per-teacher share up 32% since FY11

Change FY11-FY14$/teacher Pct

$ 5,066 +183%

2,371 +160%

1,981 +21%

3,631 +26%

106 +0.1%

Total comp increase $ 13,158 +13%

Benefits increase (A,B,C,D) $ 13,052 +47%

SDP comp increase (B,C,D,E)SDP benefits increase (B,C,D)

$ 8,090$ 7,984

+9%+32%

$112,687

$99,300

*Other benefits includes 70% state contribution to FICA for teachers on operating budget, or ~$3,000 per teacher or ~$25M. The cost of this benefit is unchanged from FY11 to FY14.Source: SDP FY11 and FY14 Expenditures, ERS analysis; ERS benchmark database

7

Since FY08, SDP has reduced costs in virtually all functions to pay teachers’ salary and benefits

UseFY08

$MFY 11

$MPct chg

FY08-FY11FY14

$MPct chg

FY11-FY14Pct chg

FY08-FY14

Instruction $1,157 $1,383 +19% $1,065 -23% -8% Teacher compensation* 987 1,137 +15% 951 -16% -4%

Aides compensation 54 80 +47% 79 -1% +46%

Other Instructional functions** 115 166 +44% 35 -79% -70%

Operations & Maintenance 542 524 -3% 405 -23% -25%

Pupil Services & Enrichment 179 187 -4% 113 -40% -37%

Leadership 142 176 +23% 86 -51% -40%

Business Services 67 69 -3% 48 -29% -27%

Inst Support & PD 101 90 -11% 32 -64% -68%

Total Operating $M 2,190 2,428 +11% 1,749 -28% -20%

Enrollment (000s) 163 152 -3% 135 -13% -16%

Total PreK-12 Expenditures

Increase 0-25% decrease25+% decrease

*SDP is reimbursed for ~70% of FICA and Retirement expenses on operating budget, approximately $95M in FY14.**Includes subs, librarians, materials, extended timeNote: FY 0708 Operating Budget excludes PreK expensesSource: SDP FY11 and FY14 Expenditures, ERS analysis; ERS benchmark database

8

School Supervision

School Administration

Curriculum Development

Human Resources

Professional Development

- 47%

- 80%

- 37%

- 45%

- 68%

Percent decline in preK-12 operating expense, FY11-FY14 – select Uses/Functions

As the job of an instructional leader has become more complex, SDP has reduced critical supports

Source: SDP FY11 and FY14 Expenditures, ERS analysis

Instructional Support & Prof Dev

Leadership

New evaluation expectations

More rigorous standards & testing

9

Principals and teachers are experiencing less direct support both within schools and from the district office

Guid Couns

Instr Coach

Nurse Sec/Clerk/Admin

Ass't Principal

1.8

1.0 1.1

2.2

0.80.9

0.1

0.81.0

0.3

School-based FTE per principal

FY11 per principal FY14 per principal

Source: SDP FY11 and FY14 Expenditures, ERS analysis

SDP FY14

Clevela

ndFult

onAus

tin

Charlo

tteAldin

eDen

ver

New Hav

en

Baltim

ore PGNew

ark DC

28.3 27.826.3

23.4

19.1 19.0 18.417.0

13.0 12.1 11.610.2

Principals per area superintendent

Key in-school positions have been reduced by 20-90% since FY11

With high case loads, area superintendents largely focus on compliance

Median = 18.4 principals per area

superintendent