States Wrangle Over K-12 Funding Formulas
Because education funding can account for up to half of states' budgets, the debate over how much schools get tends to dominate legislative sessions, which are now in full swing.
The debate is especially heated in states looking to overhaul their education funding formulas, some in response to court rulings. And in some states, the picture is complicated by budget shortfalls that threaten deep cuts for K-12 education. Among the states to keep an eye on this year as they look to make fundamental changes to their funding formula are:
Amid a $1.7 billion budget deficit and after a damning district court ruling deemed the state's funding formula inequitable and inadequate, Gov. Dannel Malloy, a Democrat, this year proposed cutting overall education spending and shifting more money to the state's impoverished districts. Last week, dozens of school leaders from poor and wealthier districts protested the changes, and lawmakers were scrambling to come up with a budget the entire state can agree on.
The state has one of the nation's oldest—and by many measures, most complicated—K-12 funding formulas. Instead of distributing its money per pupil, it distributes it per teacher. Similarly, the formula is one of the few that do not provide more money to schools for educating impoverished students and those with disabilities. The state is also one of a few that have never been sued over school funding. This year, the state legislature is considering whether to provide more funding to districts that serve students with disabilities in K-3. But the state is facing an estimated $350 million budget deficit, and many supporters of the overhaul bill worry that it won't pass.
A state supreme court decision March 2 increases the likelihood that Kansas politicians will revert to an old funding formula and contribute millions more dollars to its public schools. The court decided in its Gannon v. Kansas decision that the state has failed to pay enough money for the state’s black, Hispanic, and poor students to meet its own learning standards. The court order could annually cost the state more than $400 million. Moderate Republicans along with their Democratic counterparts have urged Gov. Sam Brownback, a Republican, to increase income taxes. A bill that would have raised income taxes by $1 billion over the next two years was vetoed by Brownback earlier this year before the supreme court decision. Brownback has instead pushed legislators to increase liquor and sales tax revenue and expand school choice.
For the past two years, Illinois has dealt with a budget impasse that's left its higher education system and some civic services without any state aid. Gov. Bruce Rauner, a Republican, and the state's Democratic-controlled legislature have reached a stalemate over how to distribute the state's shrinking pot of tax money. A bipartisan task force last month recommended ways to overhaul the K-12 funding formula. Republicans want to lower taxes. Democrats want to raise them. And competing advocates in Chicago, its suburbs, and downstate Illinois are all fighting one another for a bigger part of the funding pie. Last week, the Illinois state school board settled a nine-year school funding lawsuit filed by Chicago's Urban League by agreeing to cap cuts to its spending and come up with a different funding formula if some districts don't get an "adequate" amount.
The legislature last year commissioned a study on redesigning the education spending formula. At an average $8,263 per student, Mississippi has one of the lowest per-pupil spending levels in the country, and local superintendents have long complained that funding has a direct correlation to student outcomes. The commissioned study, conducted by EdBuild, a school finance consulting firm, proposes, among other things, to increase funding for districts with a disproportionate number of impoverished students and decrease funding for wealthy suburban districts. Lawmakers are at odds over what the local share should be, what the state share should be, and what the state can afford. GOP Gov. Phil Bryant said he will call a special session if lawmakers come to an agreement on how to change the funding formula this year. A special session will allow the public more time to vet any plan the legislature comes up with, he said.
Last year, Gov. Chris Christie, a Republican, proposed replacing the state's K-12 funding formula by more equally distributing state aid among the state's wealthy, rural, and urban school districts. His proposal would have cost urban districts a large share of education aid and almost doubled the amount of state aid suburban districts get. But New Jersey's high court ruled that the governor's proposal violated the long-standing Abbott v. Burke decision, which dictates how (and how much) the state spends on its public schools. That'll make any dramatic changes this year difficult for the governor.
Similar to their counterparts in Kansas, Washington state legislators this year have to come up with an answer to a state supreme court ruling. Republicans have pushed back against raising taxes to satisfy the 2012 McCleary v. State of Washington ruling that the state pick up a greater share of education costs. Since that ruling, the state has altogether increased its education funding by $2 billion but has yet to address the most expensive part of the ruling, which is to increase teacher pay. Some officials estimate the teacher-pay portion would cost $2.75 billion over the next three years. In the meantime, the court is fining the legislature $100,000 for every day lawmakers are in session and don't come up with a new funding formula. That amounts to about $36.5 million per session. The court set a deadline of September 2018.
GOP Gov. Scott Walker proposed in his budget this year to both increase the amount of money schools get and flatten that state's funding formula so that property-rich districts get the same amount from the state as property-poor districts. Proponents say that would simplify a very complicated formula. But opponents say the state doesn't have money to increase state aid and it would leave districts struggling to support poor students and those who don't speak English as their native language. How to change the funding formula has become a central issue in the state superintendent's race between incumbent Tony Evers and Lowell Holtz.
A budget crisis resulting from the fall in coal and oil prices is so severe that legislators late last year told school officials that the state would have to consider rewriting its funding formula. Budget officials predict the school system could lose $400 million annually in the coming years. The state Senate last month proposed a bill that would gradually cut school funding by 5 percent by 2020. But a long-standing court ruling requires that education remain the state's top spending priority. The Senate has proposed legislation to block the court from dictating school finance.
Vol. 36, Issue 23, Page 18Published in Print: March 1, 2017, as Funding Formulas: States Wrangle Over K-12 Aid