Commentary: Outdated Education Funding Systems Need Work

State Capitol -- Thank you Superintendent Barresi, Board members and guests.

That there is a disconnect between public school administrators and legislators about school funding isn’t news to anyone -- but there’s hope for a solution.

The disconnect is caused by a lack of detailed information available to lawmakers during the legislative budget process each year.

I’ll share a few observations with you this morning.

1. Data

As I’ve studied mounds of school financial data, many local school officials have cautioned me that the data might not be accurate because some school districts don’t always do a consistent job when reporting data.

I have found instances of this.

2. Carryover

Questions about carry-over funds have been around for years, and have been answered by generalized explanations that fail to account for the large number of diverse school districts.

For instance, districts do not receive state aid for the first month of the fiscal year and must use carry-over to pay bills during this time. But this does not begin to explain carry-over balances currently held by schools.

I’ll use Luther and Talihina Schools for an example -- two districts with very similar student enrollment, revenue, expenses and carry-over fund balances. Districts don’t begin to receive the bulk of their local funding until January -- six months into the fiscal year. Luther receives nearly 70 percent of its revenue from local sources compared to Talihina at only 10 percent. But both districts carry-over is virtually the same when it would appear that their cash flow needs are very different.

We currently have a one-size-fits-all set of rules on carryover funds but no two school districts cash flow needs are the same.

3. Formula

Through the funding formula, I can see relatively detailed information about the revenue each district generates for operations. I'm not able to see a corresponding level of detail about how that money is spent.

For example, the formula provides a weight or multiplier of .25 for each economically-disadvantaged student to cover additional support costs. Districts cite the increased number of economically-disadvantaged students when requesting additional funds, but I can’t see what districts’ actual costs are for these students.

What is the level of disconnect between the funding formula weights for these kids and what school districts actually spend educating them?

4. Enrollment

The formula also creates a disparity between school districts with increasing and decreasing student enrollment. School districts with declining enrollment can count their highest enrollment year for full funding for two years. But increased funding lags six months or more in school districts with increasing enrollment. The formula does not shift money to meet this need in a timely manner.

House Bill 1017 is more than 20 years old. The funding formula was passed more than 30 years ago. There are scores of separate funding streams for schools. Each of these laws is based on education staffing models, student demographics and economic factors that have changed significantly in the past 20 to 30 years.

It is time to take a fresh look at these issues and to provide the legislature and the public with the information it needs and deserves. This will help ensure that students get the maximum benefit from every education dollar spent.

(Above are the prepared notes for my public comments I presented to the State Board of Education and State Supt. Janet Barresi during the October 25, 2012, State Board meeting. This statement is only an overview and does not reflect all of my research and opinions on this topic. I will have more to say about education funding and will be providing more details as I continue my investigation of education funding and finance during the next few months.)