Idaho Lawmakers Back Restructured Finance System

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Moving to resolve the questions at the heart of pending lawsuits, the Idaho legislature passed a bill altering the state's school-finance system in the final days of its 1994 session.

The House passed the bill last month on a 50-to-20 vote. It had been approved earlier in the month by the Senate. (See Education Week, March 20, 1994)

More than 40 of Idaho's 113 districts have filed suit against the state, claiming that the finance system is unconstitutional because the state has failed to support a "uniform and thorough'' system of public education as stipulated in its constitution. One group of plaintiffs argues that the state does not provide enough total resources to schools; another group has focused on disparities between districts.

Fourth District Judge Gerald Schroeder had delayed a trial until the fall to allow the legislature time to resolve the dispute.

The bill, an amended version of a proposal developed by superintendents of districts that are plaintiffs in the finance-equity lawsuits, would modify the state's aid-distribution formula.

The formula is based on "support units''--student counts that are weighted by grade level and to account for special needs. It also would reduce state aid by the amount each district would raise under a theoretical statewide property-tax rate.

The bill adds a new provision, under which state officials would apply a formula to each district's total support units to determine its staffing needs. The formula uses a base starting salary of $19,328 for teachers, then factors in the experience and credentials of a district's actual teaching staff to calculate the aid each district would receive.

If a district opted to employ fewer teachers than the formula allotted, state aid would be reduced accordingly. Otherwise, districts with lower salaries and staffing levels would generally have more money to work with than districts of a similar size that had more teachers and paid higher salaries.

About 90 percent of Idaho superintendents backed the plan, said one of its authors, Superintendent Bob Haley of the Meridian schools.

Although the superintendents' original plan also sought to alter the way the state reimburses districts for transportation costs, this section was dropped for fear that it would hinder passage of the plan.

"I liked what came through,'' said Sen. John Hansen, the chairman of the Senate education committee. "It was not perfect, but it was a pretty good compromise, a good mix of injecting more equity into the formula and addressing the question of thoroughness.''

Property-Tax Phaseout Vetoed

In a separate action, the Republican-controlled legislature approved a bill that would have eliminated local property taxes as a source of school funding over a two-year period, but Gov. Cecil B. Andrus, a Democrat, vetoed it last week.

The bill did not specify if and how the funds would be replaced. Property taxes currently generate about $127 million in school funding each year.

Meanwhile, it is unclear whether the legislature's actions will resolve the finance suits. Mr. Haley of the Meridian district said he and the superintendents of 14 property-poor districts expect to withdraw their group's suit because the legislature "had addressed as much of the equity issue as can be addressed at this point in time.''

But he said the group of districts concerned with the "thoroughness'' question--the total amount of state funding--"may end up going ahead with this.''

And if the bill eliminating property taxes is revived, he said, "we might keep [our] lawsuit open."

Vol. 13, Issue 29, Page 16

Published in Print: April 13, 1994, as Idaho Lawmakers Back Restructured Finance System
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