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Idaho online class funding would vary widely

BOISE - A quirk of Idaho’s new “Students Come First” school reform law means that online course providers will get far more state money for providing classes to students in some Idaho school districts than in others.

For example, an online provider sending a class to a high school student in Boise could tap roughly $210 for a one-semester online class from the Boise district’s state funding stream, according to state estimates, while a provider sending the same online class to a student in Midvale could collect roughly $733 from that smaller district’s state funding.

“So I think if I were a provider, I would first concentrate on these districts where this credit is worth a lot more money,” Rep. Wendy Jaquet, D-Ketchum, who serves on the “Students Come First” technology task force charged with implementing the new laws, told state schools Superintendent Tom Luna during a task force meeting this week. “I wonder if you’ve explored the idea of a cap.”

The reform laws that Luna championed this year include a new focus on online learning; shifting funds from teacher and administrator salaries to technology boosts and merit-pay bonuses; and phasing in purchases of a laptop computer or other computing device for every Idaho high school student and teacher. A 2012 referendum will ask Idaho voters if they want to reject the new laws.

Luna said he didn’t think the funding-formula issue warranted changing the law. “We’ll learn a lot once these laws are in place, and I think that’s what we want to do, is learn from actual application of the laws, not make changes based on what we think may happen,” he said. “I don’t think we’ve seen a perfect law yet.”

However, Luna agreed to bring the issue back for the task force to discuss further at its next meeting in November.

The reform law allows students or their parents to enroll a secondary school student in any approved online class, with or without their school district’s permission, starting in the fall of 2012. Then, the provider of the online class is entitled to two-thirds of that district’s state funding for the student for that class, while the district keeps one-third, to cover its costs for providing a classroom, a proctor, or other fixed costs for the student, who likely would take the online class on campus during the school day.

The state sends funds to school districts based on “average daily attendance,” or ADA; the new formula is dubbed “fractional ADA.” It would apply unless the school district has a contract with the online provider setting a different payment amount.

But there are many factors that cause ADA amounts to vary widely from one school district to the next. Those include the size of a school district, to reflect economies of scale in larger districts and fixed costs in smaller districts; the distribution of students across different age categories from kindergarten to high school; and the experience level of the district’s teachers and administrators, which also triggers differences in state funding.

Tim Hill, the state Department of Education’s finance chief, said, “All of the things in our funding formula are not accidental - they have very good logic as to why they are what they are. There could be some unintended consequences by standardizing things.”

The result: For high-school age students, state funding per ADA varies from a low of $4,334 per student per year at the Idaho Virtual Academy, closely followed by the next-lowest Caldwell School District, at $4,757 per student, Vallivue at $4,780 and Kuna at $4,789; to a high of $17,595 per Midvale high school student. The South Lemhi school district gets $17,470 per high school student; Culdesac gets $16,897.

Hill calculated these figures for the 2009-2010 school year, but says they’re a good basis for comparison.

The state’s largest school districts are on the low end for ADA. The Meridian School District gets just $4,843 per high-school student; Boise gets $5,047; and Coeur d’Alene, Lakeland and Post Falls school districts all come in just under $5,000. West Bonner and Lake Pend Oreille schools get $5,770 and $5,338, respectively.

When task force members questioned why those differences should be applied to payments to online course providers, Luna aide Jason Hancock told them, “That’s how the legislation reads. It’s just built around essentially what an ADA is worth … and it is different from district to district.” He said that’s why a subcommittee of the task force is looking into statewide contracts with online course providers, to secure lower rates for smaller districts that are more comparable to what larger districts would pay.

If parents choose an online class that costs more than the formula allocates for their school district, they’d have to make up the difference.

Hill said most students are likely to take online classes for which their districts sign contracts, but the law does allow families to choose other courses. “None of us know how many families are going to say, ‘I understand what you’re offering, district, I’m just not interested. I demand for my child to go take these other classes.’”

Hancock said that provision was included in the “Students Come First” law as “another example of providing parents with more choices.” He said, “Parents know best what is best for their children.”

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