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School Finance: Five Things to Watch for in This Year’s State Legislative Sessions

By Daarel Burnette II — February 03, 2020 5 min read

State coffers are, by and large, flush with cash again this year. The country is more than a decade out of the recession, and property, sales, and income tax revenues are finally starting to rebound. This doesn’t mean, though, that districts’ coffers will be flush with cash in the 2020-21 school year. States still deliver to school districts billions of dollars in aid in a byzantine and insufficient manner which has allowed for some districts to thrive and many others to struggle.

Because so many districts right now are experiencing dramatic fluctuations in student enrollment, on which revenue is heavily dependent, superintendents and district business managers continue to lay off staff and increase class sizes in order to fill budget deficits. In addition, there’s been a significant increase in many districts of English-language learners and students with special needs, two categories of student aid that are woefully underfunded at the local, state, and federal levels.

All that’s led to the rolling teacher activism and school funding all of a sudden taking on an outsized role in this year’s presidential race.

Here are some things that Education Week will be watching during this year’s state legislative sessions.

1. To save or to spend? States are still traumatized by the last recession, when they had to send waves of budget cuts down to local government bodies. Many governors have pledged this year, as they did last year, to build up their reserves so that, in the case of another recession, government employees can survive the storm. This has frustrated many school district lobbyists, who argue that with the recent lag in statewide and national test scores, and a spotty, but widespread teacher shortage, states need to act now and assist their most academically struggling school districts and boost teacher pay. Read our previous coverage here.

2. Will teachers receive a pay raise?: Teacher activism has not died down. Already this year, there have been several capitol protests in Indianapolis, Richmond, and Raleigh. Last year, 22 states attempted to provide some sort of raise to teachers, either through raising the minimum teacher salary, providing teachers with a one-time bonus, or sending out to districts extra cash in hopes that districts would provide during negotiation their teachers a raise. Most of those efforts did not pacify teachers, who have rightly complained that, compared to other government workers, their pay has not kept pace with cost-of-living increases. The pay bumps have also made district negotiations in recent years especially contentious, as superintendents and CFOs have told teachers they’d rather use the extra state money to reduce class sizes, increase the minimum wage for classified staff, or increase starting salaries for teachers. Read our previous coverage here.

3. Will districts’ classified employees see a pay raise?: The “Fight for $15" movement, which pushes for fast food and service workers to make at least $15 an hour, has had an outsized impact on school districts’ budgets. More than a quarter of districts’ staff are classified employees and, if they don’t make $15 an hour, they usually make just above that amount. As more and more states require government bodies to pay at least $15 an hour, districts are being forced to overhaul their entire pay scale for janitors, office secretaries, teacher aides, and recess monitors. Governors and legislatures have not provided school districts more money in order to comply with these new requirements, a far less politically savvy move than, say, providing teachers with a pay raise. School districts’ lobbyists, such as in New Jersey, have come out against new minimum wage requirements. Other districts have said they will have to lay off instructional aides if new minimum wage requirements kick in too soon. Read our previous coverage here.

4. Will funding formulas finally be overhauled?: There seems to be widespread, bipartisan agreement in most states that funding formulas, which are, on average, more than 20 years old, need to be replaced. But nobody seems to agree on what to replace it with. At issue is how much legislatures think it should cost to educate a student versus how much districts think it should cost and then which districts should get the bulk of the new state aid. An unspoken but politically potent force is the threat that wealthy suburban districts could lose money and will have to layoff staff. This happened in New Jersey and Washington last legislative session and led to parent protests and weeks-long teacher strikes in wealthy, politically powerful sububurban school districts. Maryland, Idaho and Ohio are all states to watch this year. Massachusetts, one of the nation’s highest performing states, made early in this year’s legislative session a historic overhaul of its system, providing schools with more than an annual amount of $1.5 billion over the next seven years, with much of that money going to its most academically struggling schools. Read our previous coverage here.

5. Will states hold districts accountable for wayward spending patterns?: As states continue to roll out school-by-school spending data as required under the Every Student Succeeds Act, advocates are pointing out that much of the federal and state aid intended for low-income and ELL students is not getting to the schools that serve the majority of those students. This has alarmed state officials, who have been hungry to crack down on inequitable district spending strategies. Many now want to more heavily dictate to school districts exactly how to spend their money. Local school districts have pushed back, arguing that they know what’s best for their students and that the new spending numbers only tell part of the story. In Kansas, district officials have been put on the defensive after a study was released before this year’s legislative session that showed that much of the $400 million in new aid districts received after a long-fought court battle has not been getting to the students most in need. And in West Virginia, the state’s auditor is pushing for school districts to release to the public how each and every K-12 penny is spent. Read our previous coverage here.

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