School Finance Partnership: 9/27/2011
LEARNING TOPIC: WEIGHTS AND ADJUSTMENTS
The per-pupil funding allocated to Colorado school districts begins with a base which is
determined on an annual basis by the State legislature and is governed by certain State
Constitutional requirements. In order to address the variation in costs between districts driven
by factors outside of a district’s control, adjustments or “weights” are added to the base
funding formula to ensure better equity across schools and districts.
Currently, Colorado has three weights that serve as adjustments to the base per-pupil spending
(the 2010-2011 base in Colorado is $5,635): cost of living, district size, and at-risk. The funding
for these factors has decreased in recent years as Amendment 23 has ensured the safety of the
base level of funding and forcing cuts to occur in the adjustment portion of per pupil funding.
The chart below displays the effect of these cuts (labeled as negative factor) on total program
funding through the 2011-2012 school year:
Source: Joint Budget Committee Staff
Background: What Colorado Currently Does

Cost of Living: This weight is a factor assigned to every district according to the cost of
living compared to other districts statewide. The cost of living factor is meant to address
the wide variation in purchasing power for necessities such as food and housing across
districts statewide. Because this adjustment is meant to address issues associated with
attracting and retaining high quality personnel (which can represent up to 90 percent of
a district’s expenditures), it is only applied to the percent of a district’s expenditures
represented by personnel costs (known as the district “personnel factor”). Colorado’s
cost of living adjustment uses a “market basket of goods” approach and so the
mountain resort districts have the largest cost of living adjustment whereas districts on
the Eastern plains and in the San Luis Valley have the lowest cost of living adjustment.
See the appendix for a map of the distribution of cost of living funding statewide.
The Cost of Living factor ranges from 1 percent to 65 percent. The total amount of
funding distributed by the cost of living factor in Fiscal Year 2011-12 was $406 million, or
7 percent of total K-12 funding after cuts.1

Size Factor: This weight currently provides additional funding to schools, based on their
size. The size factor is meant to address diseconomies of scale; especially in school
districts with very small enrollment numbers (although there is some additional benefit
the factor gives to very large districts). For this reason districts with the largest size
adjustment tend to be in low population density areas of the state, like on the Eastern
plains and in small mountain communities. Currently, all districts in Colorado receive a
size adjustment. See the appendix for a map of the distribution of district size
adjustments statewide.
The total amount of funding distributed by the size factor in Fiscal Year 2011-12 was
$123 million, or 2 percent of total K-12 funding after cuts.2

1
2
At-Risk: Currently, this weight provides additional funds for school districts serving
students who are at-risk. Colorado defines at-risk students as economically
disadvantaged by qualifying for the federal free lunch program (students qualifying for
reduced lunch are not included in this weight), along with a limited group of English
Language Learners (ELL). Because many high schools and charter schools do not offer
free lunch, this adjustment allows districts to multiply the proportion of K-8 students
receiving free lunch by the district’s enrollment to increase funding. See the chart below
for the current numbers of students receiving free or reduced lunch in Colorado:
(Joint Budget Committee staff)
(Joint Budget Committee staff)
(Source: Colorado School Finance Project)
ELL students may be counted as at-risk if they took the CSAP in a language other than
English in the preceding year, but they may only be counted once. For example, if a
student falls under both the ELL and low-income category, they are only counted once.
The current weight for at-risk in Colorado is 12 percent, which increases for districts
with a higher percent of at-risk students than the state average (the current state
average is 35 percent). The additional funding available for at-risk populations is capped
at a 30 percent adjustment. Please refer to the map in the appendix which presents the
distribution of the at-risk adjustment in Colorado districts.
The total amount of funding distributed by the at-risk factor in Fiscal Year 2011-12 was
$129 million, or 2 percent of total K-12 funding after cuts.3
Weighted Adjustments Nationally: Some Issues and Examples
There are two levels of equity relevant to school funding formulas—horizontal equity and
vertical equity. Horizontal equity requires that similar students receive the same or similar
funding. The base funding amount addresses horizontal equity, to the extent that it is the same
for all students statewide. Vertical equity in school finance, on the other hand, requires that
3
(Joint Budget Committee staff)
different students and districts receive different funding levels based on the different costs of
education for those students or districts.
Adding weights to base-level funding (sometimes referred to as foundation funding) is designed
to increase levels of vertical equity because it is meant to account for cost differentials. School
funding formulas can also address vertical equity through categorical programs. However,
providing funding through per pupil adjustments increases flexibility for schools to allocate
funds where they are needed, rather than be tied to categorical or restricted funds which
constrain flexibility.4
There are three basic types of weight adjustments seen in education funding formulas
nationally: weights for district characteristics, weights for student characteristics, and weights
for programs.
Weights for District Characteristics
Location: Typically this adjustment is based on district enrollment and it is the most common
district characteristic reflected in school finance weights. Including Colorado, approximately 29
states provide a weight in their school finance formula for district enrollment size.5
Adjustments based solely on district enrollment may provide disincentives for district
consolidation. Colorado has attempted to mitigate the disincentive to consolidate by phasing in
the lower size factor for districts that consolidate over a span of six years.6 Other states have
used multiple measures based on district size, population density or geographic barriers as a
part of a district location/enrollment weight.
Regional Cost Adjustment: Another district characteristic that is sometimes included in state
funding formulas is associated with the differential cost across districts of recruiting and
retaining quality personnel. According to one recent study 15 states provide a weight in their
school finance formula for regional cost adjustments.7
In addition to the Cost of Living factor that Colorado uses, the use of a Competitive Wage Index
or a Hedonic Index are other options for addressing regional costs. As mentioned above,
Colorado’s Cost of Living factor uses a method based on a market basket of goods and services
4
(Adams, 2008)
(Hightower, A., Mitani, H., and Swanson C., 2010)
6
(Colorado Legislative Council Staff, 2011)
7
(Hightower, A., Mitani, H., and Swanson C., 2010)
5
approach. Colorado, Florida, and Virginia, currently use a Cost of Living factor to address
regional costs.8
A Competitive Wage Index is used by some states including Massachusetts, New York, and
Ohio. The use of this method utilizes wage variation information in private-sector salaries in
each district. These variations are then used to estimate the variation between school district
personnel salaries between districts.
A Hedonic Index, which goes the farthest in non-cost-based factors in regional personnel costs,
is currently only used in Texas, and is in the process of being implemented in Wyoming.9 A
Hedonic Index takes in factors which are both in and out of the control of districts (for example,
cost of living, labor market conditions, local amenities, working conditions, etc.) in order to
determine the costs of attracting high-quality personnel to schools. Because a Hedonic Wage
index calculates the cost associated with such things as local amenities and student
populations, it provides the largest weight to districts that are the most disadvantaged in these
areas and so will deliver marginal dollars in a very different pattern than a Cost of Living index.10
Grade-level: The cost of educating students is not the same at every grade level. State or
district policies to limit class size for early grades can increase the costs of those years and
expanded curriculum offerings and facilities functions can drive costs in secondary schools.
Therefore, weights are often implemented to tie more funding to students at grade levels that
are more expensive. Currently, 21 states which use foundation or modified foundation formulas
include adjustments for grade level.11 Please refer to Chart 1 in the Appendix for states that
include adjustments for grade level in their funding formulas.
Other: Some adjustments seen in other states that reflect school district characteristics include
adjustments made for teacher experience (8 states) or district academic performance (4 states).
In the case of teacher experience, that adjustment is used to provide additional resources to
districts with higher average teacher experience levels based on the idea of an experiencedbased salary adjustment for those teachers.
On the other hand, states that provide additional funds for academic performance direct that
adjustment at districts with lower academic performance, based on the additional resources
necessary to bring students up to standards. This adjustment is similar in purpose to a studentbased adjustment for students that are academically behind (see below).
8
(Duncombe, W., Yinger, J., 2010)
(Bordchardt, 2011)
10
(Duncombe, W., Yinger, J., 2010)
11
(Education Commission of the States, 2005)
9
High-truancy schools in Houston have an attendance weight, which allows them to receive
additional funding to account for the difference between daily attendance (the basis for the
state’s student count) and enrollment with the addition of (75 percent of full funding for the
difference between the two counts).12
New York has a Summer School weight, providing a small addition of funds for those students
who must attend summer school.13
Weights for Student Characteristics
Students with a Disability: The costs associated with educating students with disabilities are
highly variable. Costs vary according to disability type, which range between cognitive, physical
and behavioral. In addition, disabilities also vary in severity within these levels, making costs
even more complicated. As special education continues to increase as a percent of total pupil
spending nationally, states have struggled with how to effectively fund these students. While
many states including Colorado distribute special education funding through a categorical
program, other states include a weight for special education in their per pupil formula.
The formulas for special education vary greatly across states. For example, New Hampshire
provides a flat weight for all special education, meaning that each student receives the same
amount of additional funding, regardless of the level of severity of their disability.14 Most often,
weights will correspond with the varying levels of severity of a type of disability. For example,
South Carolina has eight distinguishable weights according to the severity and type of disability
a student has. Texas has ten different weights. Please refer to Chart 2 in the Appendix for a
listing of the specific weights pertaining to special education in South Carolina and Texas.
At-Risk: This adjustment is meant to capture the additional costs associated with programs and
interventions to aid students who are at-risk of failing or dropping out. Since this is not an easy
student feature to isolate, states have made use of various proxies to identify “at-risk”
students. In general, since research has shown the strongest correlation between poverty and
risk of academic failure, most states include a poverty proxy to identify at-risk students. In
addition to Colorado, 30 states provide a weight in their school finance formula for at-risk
students measured by high poverty.15
12
(Ouchi, 2003)
(New York State Education Department, 2009)
14
(Education Commission of the States, 2003)
15
(Hightower, A., Mitani, H., and Swanson C., 2010)
13
As mentioned above, Colorado uses eligibility for the federal free lunch program as the poverty
indicator for its at-risk calculation. According to one study, 10 states use free lunch eligibility as
a poverty indicator for school funding; 20 use eligibility for free OR reduced lunch.16 Other
states use census-based poverty measures (e.g. children living in poverty) or eligibility for
Federal poverty programs (TANF or food stamps).17
Another measure intended to identify students as at-risk of academic failure is mobility, as high
mobility is correlated with low student achievement as well as low income. Some states have a
stand-alone mobility weight, while others include it as part of their “at-risk” calculation.
Finally, as states have all adopted standards and test-based accountability systems, some states
have included students who are academically behind in the at-risk count. Currently, a few
states do this, including Georgia, Kansas, Virginia, Alabama, and Ohio, along with Washington
D.C. New York provides an additional weight for students who are below proficiency on
standardized tests in 3rd and 6th grade.18
Limited English Proficiency: Closely related to at-risk measures, many states provide additional
funding for students with limited English proficiency (also called English Language Learners
(ELL)). Approximately 32 other states provide an additional weight in their school funding
formula for these students.19 Although the research has shown a strong correlation between
ELL students and students in poverty20, many states provide separate funding for both
characteristics as the interventions required are not the same.21 Colorado only provides a
weight for a very limited number of ELL students that are not also eligible for free lunch.
Weights for Programs
Gifted and Talented: This category may also be considered a student characteristic rather than
a program. What may make it different from the other student characteristics listed above is
the lack of an objective measure for determining eligibility such that all and only gifted and
talented students would be identified. Therefore, identification of gifted and talented students
differs between districts and schools.
16
(Carey, K. 2002)
Ibid.
18
(Education Commission of the States, 2002)
19
(Hightower, A., Mitani, H., and Swanson C., 2010)
20
(Duncome, W., and Yinger, J., 2004)
21
The research supports the idea that there are resource needs for ELL students that are different, or in addition
to, those for high poverty students. (Rumberger, R. and Gandara, P., 2008)
17
Career and Technical Education: Currently, seven states provide an adjustment for career and
technical education, which often involves higher costs due to equipment and facility expenses.
In most cases, the weight is limited to special cases; for example, Pennsylvania, Delaware, and
Ohio allot additional funding to students who spend more than a certain amount of time taking
these types of courses, while Arizona has two separate weights for satellite-based programs
and stand-alone schools in career and technical education. In addition to formula weights,
several states provide additional funding for career and technical education through
competitive grants.22
22
(Education Commission of the States, 2008)
Resources
Andrews, M., Duncombe, W., and Yinger, J. (2002) “Revisiting economies of size in American education: Are we
any closer to a consensus?” Economics of Education Review, 21, 245-262.
Baker, B. (2008) Wage Adjustments in State School Finance Policy: Do they improve or erode equity?
Boston Public Schools. (2011, March 23). FY2012 Budget.
Carey, K., (2002) State poverty based education funding: a survey of current programs and options for
improvement. Center on Budget and Policy Priorities.
Colorado Legislative Council Staff (2000) Study of At Risk Funding in the School Finance Formula. Report to the
Colorado General Assembly.
Colorado Legislative Council Staff (2010) 2009 School district cost of living study. Report to the Colorado General
Assembly.
Duncome, W., and Yinger, J. (2004) “How much more does a disadvantaged student cost,” Economics of Education
Review, 24, 513-532.
Duncombe, W. and Yinger, J. “Measurement of Cost Differentials,” in Ladd, H. and Fiske, B. Handbook of Research
in Education Finance and Policy (2008), 238-256.
Education Commission of the States, (2002) "Funding Systems of At-Risk Programs in Randomly Selected States".
Fowler, W., (1998) “Geographic variation in public schools’ cost,” National Center for Education Statistics, Working
Paper Series.
Griffith, M. and Burnett, P. (2005). State funding issues for small and isolated schools and districts, Education
Commission of the States.
Griffith, M. (2005). State education funding formulas and grade weighting, Education Commission of the States.
Hightower, A., Mitani, H., and Swanson C. (2010) State policies that pay: a survey of school finance policies and
outcomes, Editorial Projects in Education.
Legislative Council Staff. (2011). School Finance in Colorado. Denver: Colorado General Assembly.
New York State Education Department. (2009, October). 2009-2010 State Aid.
Parents Reaching Out. (n.d.). Unlocking the mystery of school funding in New Mexico.
Rumberger, R. and Gandara, P. (2008) “Research needs for educating linguistic minority students,” in Ladd, H. and
Fiske, E. Handbook of Research in Education Finance and Policy.
Taylor, L. and Fowler, W. (2006) A comparative wage approach to geographic cost adjustment. U.S. Department of
Education.
U.S. Department of Education, National Center for Education Statistics, A Primer for Making Cost Adjustments in
Education, NCES 2001–323, by William J. Fowler, Jr. and David H. Monk, Washington, DC: 2001.
Appendix
Maps of Weight Distribution
(Source: Colorado Joint Budget Committee)
Chart 1: Grade-Level Weights
State
Grades
K
1-7
8-12
Weight
.579
1.158
1.268
K
1-12
.50
1.00
Delaware
K
1-12
.50
1.00
District of Columbia
K-5
6-8
9-12
1.05
1.00
1.20
Florida
K-3
4-8
5-12
1.007
1.000
1.113
Georgia
K
1-3
1.6226
1.2686
Arizona
Colorado
State
New Jersey
Grades
K
1-5
6-8
9-12
Weight
.50
1.00
1.12
1.20
New Mexico
K
1
2-3
4-6
7-12
1.44
1.20
1.18
1.045
1.25
New York
K-6
7-12
1.00
1.25
North Dakota
K
1-6
7-8
9-12
.5832
.9490 - 1.3121
.9807
1.0362 - 1.4712
K
.50
Ohio
State
Grades
4-5
6-8
9-12
Weight
1.0258
1.0102
1.0000
Kansas
K
1-12
.50
1.00
Kentucky
K
1-12
.50
1.00
K
1-3
4-6
7-12
.557
1.115
1.060
1.300
K
1-12
Minnesota
Montana
Nevada
New Hampshire
State
Grades
1-12
Weight
1.00
Oklahoma
K
1-2
3
4-6
7-12
1.30
1.351
1.051
1.00
1.20
Oregon
K
1-12
.50
1.00
South Carolina
K
1-3
4-8
9-12
1.30
1.24
1.00
1.25
.50
1.00
Utah
K
1-12
.55
1.00
K
1-12
.60
1.00
Vermont
K-6
7-12
1.00
1.25
K
1-8
9-12
.60
1.00
1.20
(Source: Education Commission of the States)
Chart 2: South Carolina/Texas Approach to Special Education Weights
South Carolina
South Carolina has eight different weights for special education students in its financing formula. In the formula, a
student’s weight is multiplied by the base student cost. Financing formula weights are as follows:
·
Educational Mentally Handicapped
1.74
·
Learning Disabled
1.74
·
Speech Handicapped
1.90
·
Emotionally handicapped
2.04
·
Orthopedically Handicapped
2.04
·
Homebound
2.10
·
Trainable Mentally Handicapped
2.04
·
Visually Handicapped
2.57
·
Hearing Handicapped
2.57
Texas
The state of Texas uses 10 different weights in its financing formula for special education students.
·
Mainstream
1.1
·
Homebound
5.0
·
Hospital Class
3.0
·
Speech Therapy
5.0
·
Resource Room
3.0
·
Self-contained, mild and moderate, regular campus
3.0
·
Self-contained, severe, regular campus
3.0
·
Off home campus
2.7
·
Nonpublic day school
1.7
·
Vocational adjustment class
2.3
Source: Education Commission of the States, 2003