N.D. Lawmakers Prepare To Rewrite School-Finance System

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Amid agreement that North Dakota's school-funding system is flawed, the state legislature is gearing up this month to consider Gov. Edward T. Schafer's plan to fix the problem. But the bipartisan proposal, supported jointly by the Republican Governor and Superintendent of Public Instruction Wayne G. Sanstead, a Democrat, still faces a rough reception.

As part of a $40 million increase in funding he has proposed for K-12 education in the 1995-97 biennium, Governor Schafer would put $25.5 million into a supplemental fund earmarked for evening out inequitable funding among school districts.

But the supplemental aid would benefit only about 151 of the 243 districts in the state, a situation that Mr. Sanstead noted is "fraught with some built-in opposition."

And some other money would be earmarked for specific education programs, leaving just $10 million to be distributed through the current basic-aid program. Critics argue that this would not even allow districts to keep pace with inflation.

There is going to be a "terrible temptation" for legislators to shunt some of the money proposed for the equity fund to basic aid, "so [the Governor's] proposal is going to be difficult to get through," said Sen. Bonnie Heinrich, a Democrat who is a member of the Senate Education Committee. "I'll be real happy if we manage to get any of it."

Governor Schafer and Mr. Sanstead agree that funding disparities among school districts require attention, but they part company over how to pay for a remedy.

Mr. Schafer has vowed not to raise taxes and contends that his budget proposals can be financed through growth in the state's economy.

Mr. Sanstead, a former legislator and lieutenant governor, said taxes are needed to make school funding equitable. He had earlier proposed an $80 million increase for K-12 education, including $40 million for the supplemental equity fund.

Some argue that more than $100 million will be needed to truly put North Dakota schools on even financial footing. Aides to the Governor acknowledged that his proposal is the beginning of what will need to be a multiyear effort.

A Judicial Warning

This month's legislative action comes almost one year after the state supreme court narrowly upheld the school-finance system. The justices held 3 to 2 that the system was unconstitutional, but were one vote short of the supermajority required to officially declare it so. (See Education Week, 02/09/94.)

Nonetheless, many across the state heeded the court's finding that the system "seriously discriminates against some students," noting that the justices might not vote the same way a second time.

The state's biennial legislative calendar delayed any action until lawmakers convened this month.

Mr. Schafer and Mr. Sanstead have worked together to craft their plan, and a committee made up of legislators has also come up with ways to address both equity and adequacy.

"We will do anything at all costs to avoid supreme-court-mandated changes," Tim Roby, Governor Schafer's policy director, said last week.

Some observers are optimistic that there now is a broad consensus that action is needed.

"I think we've seen a change in attitudes among people in policymaking" positions, said Lowell L. Jensen, the superintendent of schools in Bismarck.

The Governor's proposal would distribute extra money--beyond basic state aid--to relatively property-poor districts that have trouble raising money for schools through property taxes.

Under the proposed formula, the Bismarck district--the lead plaintiff in the 1989 lawsuit against the state--would be the biggest winner, receiving $2.3 million a year in supplemental aid.

But districts in three of the state's four most densely populated areas would get no supplemental money, and some local officials fear that they would have to raise property taxes to compensate.

That means that legislators from Fargo, Grand Forks, and Minot might decide to throw their political weight against the plan.

School administrators in Fargo and Minot said last week that they expected lawmakers would alter the proposal to help them before the scheduled end of the session in April.

Vol. 14, Issue 17

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