Testimony of Qubilah Huddleston at the Public Hearing on “Schools First In Budgeting Amendment Act of 2021”

Chairperson Mendelson and members of the Committee, thank you for the opportunity to testify. My name is Qubilah Huddleston, and I am a Policy Analyst at the DC Fiscal Policy Institute (DCFPI). DCFPI is a nonprofit organization that promotes policy and budget choices to reduce economic and racial inequality in the District of Columbia through independent research and thoughtful policy recommendations.

My testimony mainly focuses on the “Schools First In Budgeting Amendment Act of 2021” (Schools First). Some of my statements and recommendations, however, also apply to the “Schools Full Budgeting Amendment Act of 2021.”

DCFPI appreciates Chairperson Mendelson for introducing legislation to “end the annual school budget crisis” of unstable and unpredictable initial school budgets that DC Public Schools (DCPS) releases each winter. We have long advocated for the city to adopt more common-sense budgeting practices as a tool to promote educational equity in the District. However, neither bill adequately addresses existing funding inequities or reins in DCPS’s illegal practice of supplanting school budgets with “at-risk” funding. DCPS hurts schools educating high percentages of low-income students—the majority of whom are Black and Latinx—the most with this practice.

Furthermore, the bills, as written, raise more questions than they answer. DCFPI recommends that the Committee of the Whole:

  • Not move either bill forward until school communities and the Council have had the opportunity to understand the harms or benefits that DCPS’s new funding model will have on school budgets in fiscal year (FY) 2023. The Committee should then have another hearing or roundtable on the initial FY 2023 budgets to hear directly from schools.
  • Ensure that the DC Code 38-2907.01 maintains the requirement that DCPS allocate 90 percent of “at-risk” funds directly and in proportion to school budgets. Any amendments should also still require DCPS to supplement, not supplant school budgets with “at-risk” funds.
  • Consider the potential equity implications of requiring DCPS to budget schools with actual salaries versus the average teacher cost.
  • Prioritize both overall funding adequacy for DCPS and better fiscal management within DCPS.

Different Budgeting Models in FY 2023 and FY 2024 Will Create Less, Not More, Stability and Predictability

DCFPI recommends that the Council wait to vote on the proposed bills until school communities and the Council have a sense of how DCPS’s new school budget model will help or harm school budgets.

DCPS will soon issue school budgets for FY 2023 under a new student-based budgeting model that departs from the Comprehensive Staffing Model. However, DCPS has not been transparent about the potential harms or benefits the new model could pose to schools, despite the public and the DC Council asking for more information, such as mock budgets. Even as a member of the DCPS Budget Policy Committee tasked with influencing the design of the new model, I cannot say how schools are likely to fare under the new model due to DCPS primarily making decisions behind closed doors.

It is DCFPI’s understanding that if passed, the Schools First bill would first apply in the FY 2024 budget cycle. This timeline is troubling considering DCPS will have just introduced schools to a new funding model in FY 2023. If the Committee’s goal is to ensure more stability in both the school budget process and funding, we do not believe that passing a law that would create another new way for DCPS to allocate funding to schools just one year after principals and local school advisory teams had to adapt to a new model would achieve that goal. Many principals, educators, and concerned DC residents have already expressed deep concern about what is to come from DCPS’ new school budget model. Adding another layer of concern would only sow further confusion and frustration, which would undermine schools’, students’, and families’ ability to recover from the pandemic.

DCFPI is also concerned about the potential FY 2024 application of the Schools First bill given DCPS would be required to use schools’ FY 2023 budgets as the starting point for building FY 2024 budgets. Until the Committee and schools know more about the effects of the new model, the Committee should delay any amendments to the bill and its passage.

The spirt of the Schools First bill is laudable. However, we are concerned about the unintended consequences of the Council moving forward with major policy changes ahead or irrespective of the major policy changes that DCPS is in the process of implementing. Top education officials, the Mayor, and the Council need to work together to stabilize and improve school funding. The present and future of DC’s children depend on such coordination.

DCPS Should Still Be Required to Direct Nearly All of its “At-Risk” Funds to Schools

DCFPI recommends that the Committee maintain current subsections within DC Code 38–2907.01 that require DCPS to give almost all of its “at-risk” funds directly to schools and supplement, not supplant, school budgets with the funds.

The proposed language in the Schools First bill would amend DC Code 38–2907.01, which governs the DCPS operating budget. The code currently includes a subsection that requires DCPS to give 90 percent of its Uniform Per Student Funding Formula (UPSFF)-generated “at-risk” funds directly to schools and in proportion to schools’ projected “at-risk” student enrollment. It also includes the subsection that requires DCPS to add “at-risk” funds on top of schools’ base budgets.

It is unclear whether the Schools First bill would preserve these subsections as the bill does not speak to DCPS “at-risk” funding. We urge the Committee to maintain these subsections to ensure that DCPS directs these dollars to students who need them the most. As previously stated, DCPS is already failing to adhere to the “supplement, vs supplant” provision in the DC Code. Mary Levy, school budget watchdog, has shown that DCPS has regularly diverted 40 percent or more of its “at-risk” funds to cover basic educational costs.[1]  The DC Auditor has also found that DCPS tends to supplant high poverty schools’ budgets with “at-risk” funds the most, shortchanging primarily Black and brown children living in families with low incomes.[2]

We urge the Committee to continue holding DCPS to the purpose and vision of “at-risk” funding in the city by maintaining the “at-risk” spending provisions in the code. Not doing so may encourage DCPS to further misuse these dollars.

The District Should Consider the Equity Implications of DCPS Switching to Actual Salaries

DCFPI recommends that the Committee consider how requiring DCPS to use actual salaries may help or harm low-income students, Black and brown students, and other students furthest from opportunity in the District.

DCPS currently uses average school salaries when allocating funds to schools. DCPS is not alone in this budgeting practice, as many districts around the country use this practice to simplify budgeting and ensure that principals are able to hire quality teachers without having to be concerned about how much teachers actually earn.[3] The Schools First bill would change this practice and require DCPS to adjust schools’ personnel budgets to reflect staff’s actual salaries.

National data show that teachers in high poverty schools tend to be early in their careers, therefore earning lower salaries, and that these schools also often serve majority Black and brown student populations.[4] If it is the case that DC’s high poverty schools have lower salaries due to early career teachers, then this change could lock in fewer resources for high poverty schools that have already undergone years of budget cuts due to enrollment declines. It also may make it harder for these schools to attract more experienced teachers with higher salaries. That would leave Black, brown, and low-income children further from opportunity.

As the Committee considers this change, it should consider the following questions:

  1. How are novice, early career, and more experienced teachers distributed across schools in DCPS?
  2. What is the size of the gap between the average teacher cost in DCPS vs actual salaries, on average?
  3. How many winners and losers would the proposed change create? Would winners be concentrated in wealthier, whiter schools and losers concentrated in low-income, majority Black and brown schools?

The District and DCPS Need to Follow Best Budgeting Practices to Improve School Funding

DCFPI recommends that the committee prioritize both overall funding adequacy for DCPS and better fiscal management within DCPS to stabilize school budgets.  

Under the proposed changes in the Schools First bill, DCPS would be instructed to find the money within its existing budget to increase personnel services (PS) and non-personnel services (NPS). DCFPI agrees with the Chairperson’s attempt to promote better fiscal management within DCPS to ensure that schools’ budgets keep up with rising costs. However, the Committee should also acknowledge the Mayor and Council need to adequately fund DCPS based on the system’s real costs. If the rate at which DCPS is required to increase PS under contractual increases outpaces the rate at which the Mayor increases the UPSFF, the system could experience a deficit as seen at the end of FY 2019.[5]

DCPS students and families have firsthand experience of what happens when the Mayor fails to increase the UPSFF enough to keep up with rising educator costs. In FY 2020, the Mayor proposed a 2.2 percent increase to the formula—this kept up with inflation but did not keep up with rising average teacher expenses in DCPS (Figure 1). While the Council subsequently added additional funding to reverse large budget cuts concentrated in schools in Wards 7 and 8, the approved UPSFF still fell below rising teacher costs in DCPS

The city must adopt best budgeting practices if the District is to right the ship of school funding issues. Currently, the Chief Financial Officer does not prepare a Current Services Funding Level (CSFL) for DCPS or public charter schools. The CFSL is a neutral benchmark that measures the fiscal impact of a budget proposal or policy change relative to the status quo. It also includes inflationary adjustments to account for projected costs increases in the new fiscal year.[6]Failing to develop a CSFL for DCPS and public charter schools is a departure from historical practice and best practices. In 2009, DC’s leaders eliminated a requirement for inflation adjustments to the UPSFF. In addition, the Mayor and Deputy Mayor for Education have seemed to use revenue availability and other budget priorities as their starting point for determining a proposed UPSFF increase versus what is actually needed to adequately fund schools.[7]

Relatedly, DCFPI is concerned about the Committee’s assumption that DCPS can merely shift dollars from one operating bucket to the next to find the funds to meet the inflationary adjustments for PS and NPS proposed in the Schools First. The bill would reduce the amount that DCPS can budget for central office to three percent of the gross budget from five percent. Before FY 2022, DCPS was already only allocating three percent of its gross budget to central office, while directly allocating nearly 80 percent or more to schools and between 15 and 18 percent to school support (Figure 2). DCPS also allocates funds to a fourth category, school-wide departments, but the budget data we have do not break out those costs. The share of the gross budget supporting central office increased in FY 2022 due to one-time federal funding enhancements to help address the harm of the pandemic.

Not every dollar that DCPS currently allocates toward central office and school supports can be easily transferred to or administered by schools. This includes federal title program dollars, such as Title I that provides state and local education agencies dollars to support programs that serve children from low-income families, Medicaid reimbursements, and other federal grants. And, while the Schools First bill would require DCPS to increase schools’ PS or NPS budgets to adequately fund “the cost of any additional costs the Chancellor may require the school to carry,” there are a number of centrally-funded school supports, such as food services or rent and utilities, that should not be and likely cannot be easily managed by the schools directly.

DCFPI believes the issue of school budget instability and unpredictability will not be solved by DCPS alone. The city’s failure to accurately account for the true costs of operating the system is a problem that the Committee should not ignore. The lack of common-sense budgeting practices and transparency at both the District and agency level harm children from low-income families and Black and brown children the most. These two issues together reflect the size and scope of the policy and budget solutions that the Mayor, Council, and Chancellor need to enact to achieve more stable and predictable school budgets.

Thank you for the opportunity to testify. I am happy to answer any questions.

[1] Qubilah Huddleston, “Study of School Funding Formula Presents Opportunity to Involve the Community,” DC Fiscal Policy Institute, September 24, 2019.

[2] Erin Roth and Will Perkins, “D.C. Schools Shortchange At-Risk Students,” Office of the DC Auditor, June 25, 2019.

[3] Allovue, “Achieving Equity Using Average Salary.”

[4] The Education Trust, “Fact Sheet – Teacher Equity.”

[5] Perry Stein, “The District’s public school system faces $23 million deficit, drawing criticism,” The Washington Post, July 14, 2019.

[6] Qubilah Huddleston, “Raising the  Bar:  Budgeting  for  a  Strong  Public Education  System,” DC Fiscal Policy Institute, December 17, 2019.

[7] Deputy Mayor Paul Kihn, “DME FY22 UPSFF Foundation Level Response,” December 21, 2020.