Education Finance

Introduction

The government of Dalton McGuinty was elected on a promise to rebuild publicly funded education.  To meet this commitment, the government is focussing on smaller class sizes for primary students, improved literacy and numeracy instruction, providing more resources for schools, expanding ESL support, and paying attention to school infrastructure.

ETFO is still concerned about two major aspects of education funding in

• The total funding available for elementary and secondary education; and
• The gap in funding between elementary and secondary students.

Total Education Funding

The provincial government of the day introduced the student-focused funding formula for the 1998-1999 school year. The government wanted to reduce funding for public education.  This was the first year the government controlled all aspects of education funding. 

While some education funding still is generated through property taxes, the government sets the rate of taxation. In addition, the government determines the distribution of both local taxation and provincial revenues. 

When both inflation and enrolment were taken into account, overall operating funding for elementary and secondary education decreased in 1998-99. 

From 1998-99 to 2006-07, using the same base for funding levels and enrolment, most school boards have seen an increase in operating funding. Overall, total operating funding for all school boards increased by 11 percent during this period. 

Public Boards Gain Least

Looking only at the public school boards, the total increase over the past eight years has been less than the increase for all district school boards – just under eight percent, again taking enrolment and inflation into account. 

The first three years of the new funding formula were particularly challenging for public school boards, with real decreases in funding of 2.6 percent in 1999-2000, 2.2 percent the next year, and a 1.8 percent decrease in 2001-02.  It was only after public pressure mounted that funding was increased.

Some of the increase in the last few years has been for targeted programs that require substantial resources.  The primary class size initiative is a prime example.  Removing that funding from the equation shows that real funding for public schools (both elementary and secondary) has only increased by six percent from 1998 to 2006.

While that is still a real increase overall, the experience of public school boards has varied quite significantly. In fact, removing the impact of primary class reduction funding leaves two public school boards, representing one-third of enrolment in all Ontario public elementary and secondary schools, with less funding now that eight years ago, taking enrolment and inflation into account. Another public school board with five percent of public board enrolments has seen only a very minimal increase in funding of just one percent, again removing the effect of the class size reduction funding, enrolment changes, and inflation.

While it is beyond the scope of this analysis, it would be important to determine why, after eight years, some boards are still experiencing real decreases in funding, especially when it affects a third of public school students.

The Gap in Equity

From the beginning, the student-focused funding formula placed a higher value on secondary students than on elementary students, creating a major barrier to providing elementary students with the high quality, well-rounded education they need.

Funding for elementary and secondary students differs in a number of the grants:

• The foundation grant accounts for 49 percent of the operational funding provided for all school boards. 
• In addition to the foundation grants, additional funding is provided to support elementary programs in other areas, primarily for primary class size and special education. 
• In spite of these additional investments in elementary education, there is a gap between the overall funding support for elementary and secondary students.

School Foundation Grant

Secondary students are funded at $4,875 per student. Elementary students are funded at $3,744 per student – a difference of $1,131. 

Most of the differences in the foundation grant are inexplicable, particularly since they are on a per pupil basis. For example, elementary students have less money for textbooks and learning materials, classroom supplies, consultants, computers, and staff development.   These items alone in the foundation grant account for $153 of the gap in funding between elementary and secondary students. 

If the lines in the Foundation Grant were calculated in the same way for both elementary and secondary students, an additional $195 million would be available to support elementary education.

Primary Class Size Reduction Grant

Beginning in 2004-05, the government added the Primary Class Size Reduction Amount. The grant is based on the number of pupils in kindergarten through grade 3, with the goal of limiting classes in these grades to 20 students.

For 2006-07, funding is provided at $531 per average daily enrolment of pupils in kindergarten to grade 3.

Special Education Grant

The Special Education Grant provides 44 percent of the total special education funding on a per pupil basis.  More money is provided for elementary students than for secondary students - $623 for kindergarten to grade 3, $470 for grades 4 to 8, and $303 for secondary students.

Local Priorities

Before this funding formula was introduced, school boards were able to increase property taxes to support education.  While some boards were in better positions to do this than others, local communities could determine priorities based on their needs.

A local priorities amount in foundation grant was eliminated in 2006-2007. 

Local priorities funding should be re-established to ensure schools can respond to local needs. 

Conclusion

The goal of higher student achievement in literacy and numeracy requires that the funding provided to school boards be predictable, stable, and adequate to support the learning needs of all students.

The current gap in funding between an elementary student and a secondary student does a disservice to Ontario’s elementary students.