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January 23, 2014
State Board of Education Updates Poverty Calculation
New calculation aligns funding with current poverty around the state
(Salem, Ore.) – Today in a unanimous vote, the State Board of Education adopted a new method for calculating poverty for use in the State School Funding formula. This vote replaces the prior method of calculating poverty with an updated method using more current and accurate data. The 2013 Legislature gave the State Board the authority to make this change in HB 2098.
“We have a funding formula that is structured around equity,” said State Board of Education Chair Samuel Henry. “However, the poverty data our system was using was out of date. This change will ensure that the districts with the highest numbers of students in poverty are receiving some additional resources to help meet those students’ educational needs.”
Updating the Poverty Calculation
In the past, the state was required to use Decennial Census data to calculate poverty for the vast majority of districts. However, the Decennial Census stopped collecting poverty information after 2000. Per statute, the state has used this 2000 census data as the basis for determining a district’s poverty funding for the past 13 years. The Oregon Department of Education requested a change in the law to give rule making authority to the State Board in order to allow for a much needed update and ensure poverty funding accurately aligns to current poverty rates and distribution in our state.
The new system is based on the U.S. Census Bureau’s Small Area Income Poverty Estimate (SAIPE). This is a statistical model that estimates poverty for small population sizes, like Oregon school districts. The model is based on a number of data sets including the Decennial Census, Supplemental Nutritional Aid Program data, several yearly surveys by the U.S. Census, and some IRS data. The model provides information on the number of students aged 5 to 17 in each district as well as the number of students in poverty. Additional calculations identify the proportion of those students enrolled in public schools.
How Funding Works in Oregon
In Oregon, school districts receive state funding based on a system of weights designed to deliver equity. The system provides extra funding for students in specific categories to offset the additional costs often associated with providing these students with the supports and resources they need to be successful. For example, districts receive additional funding for students learning English or those in special education. Another one of these categories is the number of students in poverty in a given district.
In simplified terms, a district receives one funding weight for a student who is in their schools for the year and then additional weights or portions of weights if that student falls into one or more of the specific categories. Districts receive an additional quarter weight for students in poverty. Today’s change does not alter this system of weights; it simply updates the process by which the number of students in poverty is determined. However, this results in a shifting of resources away from districts with less poverty than in 2000 and toward districts with more students currently in poverty. In addition, since there are more students in poverty today than there were in 2000, the amount districts receive for each weight has reduced slightly which also impacts district funding.
“We know that changes to the funding formula can be challenging, especially for districts who may be receiving fewer resources next year than they had been anticipating,” said Deputy Superintendent Rob Saxton. “But we also know that many districts in our state have not been receiving the resources they need to serve their students in poverty. This may be a painful readjustment for some districts, but it is a necessary step to ensure that we are getting funding out to the areas of greatest need and using the most current and accurate data available on student poverty.”
The new poverty calculation goes into effect in the 2014-15 school year. Districts will receive formal funding estimates in March; however, preliminary information is currently available on how this change will impact district’s funding next school year.
Eighty districts will receive additional funding due to an increase in the number of students in poverty. The remaining 117 districts will receive less funding for a variety of reasons including fewer students in poverty, declining enrollment overall, or as a result of the reduction in funding for each weight. Click here to access funding information by district.
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