Stephen Kletter Testimony – DCPS Budget Hearing – Nov 16 2022

Good evening. My name is Stephen Kletter and I am a practicing economist who has lived and worked in the District for over 25 years. I have two children that attend Jackson-Reed High School.

Over the past few years I have spent an enormous amount of my own time deciphering the old and new DCPS school funding budget models. Using my training in economics, I have identified significant problems with both models and I have shared my results with senior DCPS staff on multiple occasions and have testified before the city council.

A serious problem with the old CSM budget model was that it dramatically underfunded large schools, even after accounting for differences in student needs. For example, this flaw in the CMS budget model underfunded Alice Deal Middle School by over $2 million per year and the Alice Deal LSAT called upon DCPS to fix this chronic problem. To its credit, DCPS itself explicitly recognized this problem in its Summer 2020 budget presentations. However—and this is really disappointing—when the new DCPS budget model was unveiled for FY23, this fundamental problem was left completely unaddressed. As a result, many students in our city—including those that attend Alice Deal, CHEC, and Jackson-Reed—will continue to receive inadequate general educational funding simply because they attend a large school. It is long past time for DCPS to fix this mistake.

Remarkably, the new DCPS budget model is even worse than its predecessor. The new model cuts baseline General Education funding for many elementary schools across the city and a few middle schools such as Alice Deal and Hardy. The funding cuts per student are by far the largest in the Jackson-Reed feeder system.

Many LSATs may be unaware the new model has cut their baseline funding. That’s because DCPS supplemented their total FY23 funding amounts with what DCPS refers to as “One-time Stability Funds.” If your school received One-Time Stability Funds for FY23, it means—and this is important—that the new DCPS budget model has determined that the school’s baseline funding should be cut dramatically. These stability funds appear intended to temporarily mask—in an election year—the inevitable baseline funding cuts for these schools that are scheduled to kick-in in FY24 and continue going forward for the foreseeable future.

To calculate your school’s new baseline funding under the new budget model, simply subtract your school’s total funding amount by the amount of One-Time Funds you received. For example, doing this simple math for Alice Deal reveals that its baseline funding will be cut $750,000 relative to FY22.1 And when you properly account for lost purchasing power due to

Kletter – Public Statement for DCPS Budget Hearing – 11.16.2022

inflation, the true drop in baseline funding at Alice Deal is over $1 million.2 The pain, however, will not be felt until FY24 when the One-Time Funds disappear. Alice Deal received $1.8 million in One-Time funds, so next year it faces a fiscal cliff that could result in the elimination of a whopping 16 fulltime teaching positions.3 This is simply unacceptable and the new budget model must be fixed.4

Similarly, the elementary and middle schools that feed to Jackson-Reed High School collectively will lose $8.8 million in annual funding when One-Time Stability Funds are eliminated in FY24. This fiscal cliff represents a whopping 10% funding cut for the feeder system and will necessitate the elimination of nearly 80 fulltime teaching positions. Again, this is simply unacceptable and must be fixed.

I have attached a presentation that outlines this funding problem in detail. Thank you for your time and hard work.
Stephen Kletter

1 Alice Deal received $16.7 million in total FY23 funding but $1.8 million of that amount was in One-Time Stability Funds. Excluding the One-Time Funds, Alice Deal’s true baseline funding under the new model is $14.9 million. That represents a drop of $750,000 as compared to FY22 where Alice Deal received $15.7 million.

2 Remarkably, total General Education funding (i.e., non-needs based) at Alice Deal has fallen by nearly $1.2 million ($1.9 million when inflation adjusted) relative to FY20. On an inflation-adjusted basis, this represents a drop of nearly $600 per student. These reported funding cut amounts are very conservative (due to FY23 submitted budgets underreporting ELL and SPED funding) and thus the true total cut to General Education funding at Alice Deal over this period is likely closer to $2.4 million on an inflation-adjusted basis.

3 The new budget model continues to penalize Deal for being a large school. Deal receives the lowest General Education funds per student of any school in DCPS (tied with Lafayette).

4 As mentioned above, Alice Deal had been chronically underfunded under the old budget model, so it was already starting in a funding hole.

See appendix below…

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