PURPOSE: On Nouember 2, 1982, Mis. souri voters approved Proposition c, an initiatiue measwe to increase the sales tar for the schools and to reduceproperty taxes. The meawre also made changes in the distribution formula for state school aid, including the addition of a new cost of education index. The lawprovides that -_ thecostindezforaschooldistrictshall be the proportional relationship between a statistically predicted average teacher salary for that district and the auerage predicted teacher salary for all school districts in the state. The law requires the Department of Elementary and Secondary Education to establish the statistical procedure for determining each district’s cost index. This rule establishes the procedure as required.

1. (1) Similar to the Consumer Price Index that varies from city to city, the cost of education index indicates the relative price a school district must pay, on the average, to hire a teacher. Average teacher salaries vary among districts not only because of economic factors but also because of local policy and practice. Thecost of educationindex has been developed so as to hold constant those factors within the control of a school district. Variations in the index are based entirely on statistically significant factors beyond the district’s control.

2. (2) Twenty-six (26) independent variable factors for each school district are used in the statistical analysis on which the cost index is based. These factors have been suggested in research elsewhere as being correlated with teacher salaries. The factors are listed in Appendix A. The value of each factor as used to determine the cost of education index for a

   MISSOURI (l/27/95) smetay Of stata

given school year will be based on data for the second preceding school year.

1. (3) In order to predict the average teacher salary for each district, a statistical procedure called stepwise multiple linear regression analysis is used. This procedure is used to determine the combination of variable factors that predicts average teacher salary most efficiently. Appendix A documents the regression model used and indicates the statistical characteristics of the variables selected. To ensure continuity in the calculation and application of the cost of education index, the most efficient model will be determined every three (3) years using the twenty-six (26) variables and the stepwise multiple linear regression analysis described in this rule.

2. (4) Each district’s predicted average salary is determined by an equation in which state average values are used for the controllable factors and actual values for each district are used for the uncontrollable factors. The prediction equation is included in Appendix A. It will be used annually to determine the cost index for each district, with updated values for each variable in the model. The average predicted teacher salary for all school districts in the state is calculated by adding each districts’s predicted salary and dividing by the number of school districts. The average salary predicted for each district is then divided by the state predicted average salary. The resulting ratio is the cost of education index for that district.

   Auth: section 163.011, RSMo (Cum. Supp. 19921.’ This rule was preuiously filed as 5 CSR 40-660.030. Original rule flt& March 2, 1983, effective Aug. 12,

   *Original authority 1963, amended J967,1973, 1977,1982,1985,1986,J988,1992. APPENDIX A DETERMINATION OF THE COST OF EDUCATION INDEX This appendix provides additional detail on

the statistical procedures used in calculating the cost of education index. It includes a listing of the twenty-six (26) variables studied in preparing the index, the statistical charao t&tics of the eight @-variable model that most efficiently accounts for the variation in teachers salaries among districts and the predicted equation used to calculate each school district’s predicted average teacher dary. 5CSR30-660 , m

Variables Studied. The following variable factors are used in the analysis to determine the cost of education index:

1. 1. Female teachers as a percentage of

total teaching staff;

1. 2. Percent ofteaching staffwith master’s

degree or above;

1. 3. Percent of nonacademic teaching time

(special education and vocational divided by total teaching minutes);

1. 4. Percent of teaching staff tenured;
2. 5. Average years teachers employed;
3. 6. Average years teachers in teaching;
4. 7. Number of students per full-time

teachers;

1. 8. Number of students per nonclassroom

professional personnel;

1. 9. District classification;
2. 10. District type (elementary and high

school);

1. 11. Equalized assessed valuation per

eligible pupil;

1. 12. Average income per state income tax

return;

1. 13. Aid to families with dependent chil-

dren (AFDC) pupils as a percentage of enrollment;

1. 14. Minority students as a percentage of

enrollment;

1. 15. Handicapped pupils as a percentage of enrollment;
2. 16. Average daily attendance as a percen-

tage of average daily membership; 1’7. Free lunch students as a percentage of fall enrollment;

1. 18. Fall enrollment;
2. 19. True market value per square mile (equalized assessed value divided by square miles in district);
3. 20. County population divided by square miles in county;
4. 21. Second preceding year’s enrollment as a percent of fifth preceding year’s enrollment;
5. 22. Student mobility (transfers in plus transfers out divided by fall enrollment);
6. 23. Student dropout rate (number of dropouts divided by fall enrollment plus transfers in minus transfers out);
7. 24. County crime rate (number of offenses reported to Department of Public Safety divided by county population);
8. 25. School district located within thirty

1. (30) miles of a state university; and

   1. 26. Average county teacher salary.

Determining the Best Model-Statistical Characteristics. To determine the variables to include in the regression model, a technique is used known as Maximum R improvement (MAXR) from the Statistical Analysis System (SAS), a computer m 5 CSR 30-660-ELEM. & SEC. EDUCATION

program proprietary to SAS Institute, Inc. of Raleigh, North Carolina. The MAXR method first finds the one (1) variable that produces the highest correlation (r) and then adds to the model the next variable that would yield the greatest increase in the multiple correlation coefficient (R). The program then compares each of the two @)-selected variables to each variable not in the model, compares possible switches and selects the three (3) variables that yield the greatest increase in R and so forth. The program continues until the increase in R is less than a predetermined value. The present best model contains eight (8) variables and has a square multiple correlation coefficient (R*) of 0.8520. This means that the eight @-variable model for the prediction of a district’s average salary accounts for eightyfive and two-tenths percent (85.2%) of the variation in average salaries among Missouri school districts. The best model will be determined every three (3) years from all of the variable factors identified for the cost index study. The F-ratios in the second table indicate the relative power of each variable in this regression model to predict average teacher salaries. The two (2) variables which are the best predictors are the district’s enrollment and the average number of years teachers have been employed in the district. The county population density is the weakest predictor in the eight (8)wriable model.

CODEOFSTATEREGU!ATlONS (l/27/95) MISSOURI secmry Of state

Total Multiple-R2 =- 0.3520

Variable Controllable

Controllable

Controllable

Controllable

Noncontrollable

Noncontrollable

Noncontrollable

Noncontrollable

MISSOURI (l/27/95) semtalq 0, state Finance

TABLE I-Analysis

53:

TABLE II-Statistical

Name of Variable Xl-Percent of Female Teachers

X2-Percent of Teachers With Master’s Degree or Above

X3-Average Years Teachers Employed in District

X4-Type of District

X5-Average Personal Income Within District

X6-Log of County Population Density

XII-Log of District Enrollment

X8-Average Teacher Salary in county Equation Constant of Variance for the Eight-Variable Regression Model

Sum of Squares 3,526,421,724 612,738,697 4,139,160,421

Prediction Equation Coefficient

t263.73

-1,312.32

-224.03

t831.03

-4,811.54

Meall Square 440,802,717 1,136,806

Characteristics of Variables

-2.41

t2.95

to.09

to.48 F Ratio 387.76

F Ratio

25.03

46.93

152.03

57.19

24.73

5.73

173.33

73.90 5 CSR 30-660 , m

Level of Significance 0.0001

Level of Significance

0.0001

0.0001

0.0001

0.0001

0.0001

0.0170

0.0001

m 5CSR30-660-ELEM.&SEC.EDUCATlON

The effect of the four (4) controllable variables on the predicted salary of each district is made uniform by using the state average value instead of district values for each of these variables when calculating the predicted salary for individual school districts. Holdingthesevariablesconstanthas theeffect of changing the value of the constant portion of the equation and reducing the actual number of variables used to predict the average salary of teachers in a district. This is done to reduce the effect of local policy decisions which account for part of the actual differences in teacher salaries among districts. Logarithmic values for county population density and district enrollment are used in this study because previous studies have indicated a curvilinear relationship between these variables and district average teacher salaries across the state.

The Prediction Equation. The coefficients for the prediction equation that resulted from the eight @)-variable regression model are shown here. Using these coefficients. the orediction eauation may be written as ~0llowH: Yp = 4811.54 - 2.41X, t 2.95x* t 263.73X, - 1,312.32X, t 0.09Xs - 224.03$ t 831.03X7 t 0.48X, The predicted average salary (Y ) for a given district may be obtained by su&tituting the state average value for each controllable variable and the district’s unique value for each noncontrollable variable into the prediction equation in place of each variable’s symbol. The algebraic sum of all resulting products is the predicted average salary.

5 i CSR 30-660.040 Minimum Salaries

PURPOSE: This rule provides guidelines for the administration of the minimum salary for public school teachers (section 163.172, RSMo).

1. (1) For the purpose of this rule unless the context clearly requires otherwise, the following terms shall mean:
2. (A) Eligible teacher-A certificated teacher, counselor or librarian with a salary less than the minimum salary who is employed by a public school district for not more than one (1) full-time equivalency (FTE) and assigned to teach fifty percent (50%) or more of the time in the classroom, in the capacity of a counselor or librarian, or both, shall be considered an eligible teacher for the purpose of this rule. A teaching assignment for adult or postsecondary students including assignments in the librarian/counselor capacities shall not be considered time in the classroom for the purpose of this rule;
3. (B) Salary-Compensation for regular duties during the school term not to include supplemental pay for extra duties or extended contracts;
4. (C) Eligibledistrict-A public school district which has ado&d a salarv schedule that is available to thk public in the administrative office of the hoard of education and to the Department of Elementary and Secondary Education on request which complies with the provisions of this rule as it relates to equitable distribution of other funds for salary purposes;

5. (D) Minimum salary-Fifteen thousand dollars ($15,000) for the 1986-87 school year; sixteen thousand dollars ($16,000) for the 1987.88 school year; seventeen thousand dollars ($17,000) for the 1988.89 school year; eighteen thousand dollars ($18,000) for the 1989.90 school year; and subsequent years as established by the general assembly. The minimum salary for a fully c&i&d teacher employed on aless than full-time basis shall be prorated to reflect the amounts stated pre viously; and

   1. (E) Department-Department of Elementary and Secondary Education.
6. (2) Each eligible district shall identify each eligible teacher employed by the district on the forms designated by the department.
7. (3) Participating districts shall continue to provide to all eligible teachers appropriate annual district salary increases from increased revenues received from all other sources other than the minimum salary program.
8. (4) For a district to meet the requirements of section 163.172, RSMo to maintain a regular salary schedule funded by revenues other than those provided through the minimum salary provisions, the district must provide previously eligible teachers whose salaries during the prior year were below the current minimum salary a percentage increase which is at least eighty-eight percent (88%) as large as returning teachers received.

9. (5) To determine whether a district meets the requirements of section (4), the department shall compute from the data reported in the Core Data Collecti& System-October cycle the average percentage increase of all teachers employed the previous year and compare that percentage increase with the average increase provided to eligible teachers. If the average percentage increase for previously eligible teachers is at least eighty-eight percent (88%) as large as the average percentageincreasefor all returning teachers, and if the percentage

   CODEOFSTATE REGULATIONS

increase for the base salary for beginning teachers is at least fifty-seven percent (57%) as large as the increase for all returning teachers, and if no full-time teacher is paid less than the base salary, and if no part-time teacher is paid less than the full-time equivalency portion of the required salary, the district will have complied with section (4).

1. (6) Section (5) requirements are waived for a district when less than twenty percent (20%) of its full-time teachers are eligible for state-paid minimum salary supplements and when the district’s minimum salary entitlement is less than one percent (1%) of its prior year’s expenditure for certificated salaries.
2. (7) Upon receipt of the data reported in the Core Data Collection System-October cycle and determination of the district’s eligibility, the department will compute the district’s entitlement under section 163.172, RSMo by summing the differences between the district salaries of eligible teachers and the minimum SSlSry.
3. (8) The department will send to each district a list of eligible teachers determined from the Core Data Collection System along with the computation for the minimum salary supplement. The district will verify the list of eligible teachers and certify its accuracy to the commissioner of education within ten (10) days of receipt of the list.
4. (9) Upon receipt ofthe certifiedlist for districts new to the program and districts with a previous year allocation of ten thousand dollars ($10,000) or less, the department will divide the district’s entitlement by twelve (12) and pay the district the portion equal to the number of months lapsed in the fiscal year and pay the remainder in equal monthly payments according to the number of months remaining in the fiscal year. If the previous year’s allocation was greater than ten thousand dollars ($lO,OOO), unless otherwise advised in writing by the district, the minimum salary supplement shall continue to be paid monthly to the district based on the previous year’s allocation with adjustments made on the current year’s payment subsequent to the district’s certification to the commissioner.

5. (10) Eligible districts receiving a minimum salary supplement monthly shall pay each teacher an amount which when added to the teacher’s salary will provide apro rata amount of the minimum salary. If staffing changes occur subsequent to the certification of minimum salary supplement entitlement which cause the district to receive more or fewer funds necessary to implement the provisions of section 163.172, RSMo, the

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Chapter660-School Finance

department shall be notified when the district certifies its minimum salary for the succeeding year and adjustments will be made. (11) Iti the event a district does not show appropriate increases in teachers’ salaries or does not pay the minimum as prescribed by law, that district shall not receive any revenues for minimum salary supplement sources until failures have been corrected.

Auth: section X3.172.3., RSMo (Cum. Supp. 1990).’ This rule was preuiously filed as 5 CSR 40-660.040. Original rule filed Nou. 25, 1985, effective Feb. 24, 1986. Amended: Filed Dec. 30, 1987, effective April 28,1988. Amended: Filed Nou. l&1990, effectiue June 10,1991. *Originalauthority1985,amended1986,1990.