ESSA, School Choice Firing Up State Legislatures

Rep. Dan Huberty, the Republican chairman of the education committee in the Texas House of Representatives, leans back at his desk on the house floor in Austin. The Texas House passed a bill that would overhaul that state’s K-12 funding formula, a hot topic in many state legislatures in their 2017 sessions.
Rep. Dan Huberty, the Republican chairman of the education committee in the Texas House of Representatives, leans back at his desk on the house floor in Austin. The Texas House passed a bill that would overhaul that state’s K-12 funding formula, a hot topic in many state legislatures in their 2017 sessions.
—Eric Gay/AP
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Spurred on by new flexibility under the Every Student Succeeds Act and revenue shortfalls, and amid one-party control in most states, legislators this year tackled longstanding questions over who should be in charge of education policy, how to better spend K-12 dollars, and what school success should look like.

In state after state, lawmakers sought to overhaul school funding formulas, rearrange accountability systems, and expand school choice options like vouchers, education savings accounts, and the charter school sector.

All 50 states held legislative sessions this year, and 15 of those states already had wrapped up business as of late last week, with more expected to adjourn by mid-May.

Republicans sought to turn their political dominance—they control both legislative chambers in 32 states, as well as 31 governors' seats—into policy action, with varied results.

After a historic sweep last year that gave them control of Kentucky's legislature and governorship, that state's Republicans upended its entire school governance model and accountability system, and then made Kentucky the 44th state to allow for charter schools. And, in a dramatic expansion, Arizona opened its education savings accounts, or ESA, program to all students in the state.

But in West Virginia, North Dakota, and Oklahoma, legislators facing severe revenue shortfalls are being forced to weigh tough decisions over their school spending habits.

And spats this year broke out in the GOP-controlled legislatures in North Carolina, Wisconsin, and Indiana over the powers of state superintendents and state school board members and who would have the upper hand on education policy.

Many lawmakers entered the 2017 legislative session bent on making wholesale changes to their state's education landscape. That momentum was buoyed in states like Michigan and Wisconsin that last fall held town hall-style meetings under ESSA's stakeholder engagement process, where officials heard complaints from parents and teachers about the quality of their local schools.

"Legislators are asking, 'How do we completely rethink our education system?" said Michelle Exstrom, the education program director for the National Conference of State Legislators. "The budget situation in a number of states has really forced conversations around how education is funded and what impacts that has on the structure of education."

Feeling Squeezed

States are at least eight years out of the Great Recession, and unemployment is at historic lows nationally. So, last year, when passing their budgets, legislators had "rosy outlooks" on fiscal conditions, estimating that they'd be able to boost spending back to prerecession levels, said John Hicks, the executive director of the National Association of School Business Officers.

But income- and sales-tax revenue—two areas on which states and their public school systems are heavily dependent—flattened and, in some instances, dipped, causing 29 states to miss their revenue forecasts. That prompted midyear K-12 cuts in some states and forced many others to re-examine their education spending.

"We've got revenue growth on the order of 2 percent at best," said Hicks, pointing out that many states for their 2018 fiscal year are either spending much more conservatively or looking for new revenue sources.

Based on governors' budget proposals, however, Hicks expects that education spending in most states will escape cuts, with the vast majority of states, such as New York and Georgia, contributing toward their K-12 budgets at least the minimum amount required by their state law.

In some instances, revenue dips were more dramatic and school spending, inevitably, was hit. Connecticut faces a $1.4 billion deficit this year, and Democratic Gov. Dannel Malloy proposed several cuts to the state's wealthiest school districts. Delaware faced a $395 million budget deficit, which dampened hopes for an update to that state's funding formula, which many have described as insufficient to help the state's neediest students.

States heavily dependent on energy and commodity prices had to make particularly dramatic cuts to their budgets. Alaska's Senate, for example, has proposed reducing that state's education spending by 5.7 percent, which would lead to increased class sizes and teacher layoffs. West Virginia, North Dakota, and Oklahoma—all of them dealing with the oil and coal revenue squeeze—are also eyeing cuts climbing to hundreds of millions of dollars unless they institute new taxes.

Tackling the Formulas

Responding to the revenue shortfalls and other factors, an unusually high number of state legislatures this year attempted dramatic changes to their school funding formulas.

The Texas House of Representatives passed a major overhaul of its funding formula that would give more money to schools serving poor students and dismantle its so-called "Robin Hood" formula by allowing wealthy districts to keep a larger portion of their locally generated revenue. The Senate is considering a similar bill.

Other states' legislatures were under court order to revise their funding formulas.

Years of threats from state supreme courts in Kansas and Washington have brought those states' perennial school funding battles to a head this year.

Washington's high court in 2012 ruled the state's funding formula unconstitutional for relying too heavily on local tax dollars to pay for public schools. The legislature responded by increasing funding for all-day kindergarten, smaller class sizes, and transportation. But it has yet to come up with a way to boost teacher salaries, estimated to cost the state $3.5 billion every two years.

Kansas' problems are a little more complicated. Because the state has operated on a block grant funding formula that's set to expire this year, legislators must come up with an entirely new funding formula.

That state's supreme court said earlier this year that the funding formula is inadequate, but acknowledged that how the legislature distributes any new funding matters as much as the amount they distribute. That set off a debate over how the state wants to bring more than a quarter of Kansas' students up to basic learning standards.

President Donald Trump's rhetorical embrace of school choice options, along with the appointment of U.S. Secretary of Education Betsy DeVos, a long-time school choice advocate, have brought plenty of national attention to the debate over vouchers, ESAs, and charter schools. There's been an uptick this year in ESA legislation, in particular, said Josh Cunningham, an education manager for NCSL. (ESAs set aside money for parents to spend on private schools, special education services, and other approved services). There has been a decline, however, in efforts to dramatically expand or start brand new voucher or charter school programs.

"I think a lot of the states that have the right political conditions to pass these bills have already passed them," Cunningham said of the voucher and charter school bills. "States that are still lingering are the states you saw really grappling this year with what their choice legislation should look like."

Texas' House members, for example, have so far blocked an attempt from that state's Senate to allow for the use of vouchers this year.

Virginia's Gov. Terry McAuliffe, a Democrat, vetoed a bill that would have provided public school students with a voucher to be spent on private school tuition.

The New Hampshire and Missouri Senates have both passed bills that would expand ESAs to the entire state. Neither of the House chambers in those states had approved the bills as of deadline.

Gearing for ESSA

Legislators in numerous states reasserted their authority over key education policy decisions. In the wake of the battles in recent years over the Common Core State Standards, legislatures made attempts to dictate what goes into their state ESSA plans, which state education departments must submit to the federal government.

Indiana passed a law that makes its state superintendent appointed by the governor rather than elected. The North Carolina House, after attempting to strip its state board of many of its powers (the board sued in response), passed a bill that bans its education department from turning in an ESSA plan until September. It awaits Senate action.

And Wisconsin's Republican legislature threatened to sue its state's left-leaning superintendent for not including their input in a draft of the state's ESSA plan.

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In Maryland, lawmakers passed a bill that limited testing and dictated elements of the state's accountability system. Maryland's Republican Gov. Larry Hogan vetoed it, but the Democratically-controlled legislature overrode the veto.

"Accountability and assessments is a huge issue this year, and that's more than likely being driven by new approaches allowed under ESSA," said Exstrom of NCSL.

Only 15 states and the District of Columbia had turned in their ESSA plans as of last week; the rest will turn in their plans this September.

"States are figuring out that this is hard work, and they're getting a lot of input and feedback from stakeholders, and they want to synthesize all that feedback into their plan," said Exstrom.

Vol. 36, Issue 30, Pages 1, 23

Published in Print: May 10, 2017, as Legislatures Tackle ESSA, Fiscal Issues
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