Education Funding

Cross-Currents Roil School Finance Debate

By Linda Jacobson — November 30, 2007 6 min read

What one education advocate describes as a “perfect storm” over school finance is brewing in Georgia, as a top lawmaker pushes to replace local property taxes for education with a statewide sales tax, even as the state gears up to fight a lawsuit from school districts over the current funding formula.

Under Speaker of the House Glenn Richardson’s proposed constitutional amendment, property taxes that now support schools would be eliminated, and instead, a sales tax of 4 percent would be collected on all services and retail purchases. The state would then distribute revenue back to local school districts, though the detailed formula has not yet been made clear.

But Joseph G. Martin, the executive director of the Consortium for Adequate School Funding in Georgia— a group of 51 low-wealth districts suing the state—says the plan represents a power grab by legislative leaders.

“We know there are problems in property taxes, but we can’t bring ourselves to support it,” Mr. Martin said of the proposal. “Not only would it be a financial disaster, but it would be a huge shift of power.”

Taxes Rising

Nevertheless, the Republican speaker’s plan is bound to get attention when the legislature’s 2008 session opens in January, as will any proposals for school funding reform yet to be recommended by a task force formed by Gov. Sonny Perdue, also a Republican.

Property taxes in Georgia, Speaker Richardson said in a Nov. 7 press conference, increased by $1.5 billion between 2005 and 2006, bringing them to almost $10 billion. “The rising amount of property tax is something our citizens cannot afford to pay,” he said.

Georgia is hardly alone in feeling the squeeze. Escalating property taxes are a nationwide concern, said Michael P. Griffith, a school-finance-policy analyst at the Denver-based Education Commission of the States.

“Sometimes you get the property- tax situation forcing a change in education funding,” he said, and sometimes it’s the other way around. Property taxes and school finance are “two sides of the same coin,” he said.

In New Jersey, for example, uncertainty continues over the details of Gov. Jon S. Corzine’s yet-to-be-unveiled school finance formula—a concern especially among school officials in the so-called Abbott districts, where spending has been mandated by the state supreme court in the education adequacy case Abbott v. Burke.

But Mr. Corzine, a Democrat, also signed legislation last year providing rebates and tax caps for New Jersey homeowners, who pay some of the highest property taxes in the country.

“The issue [in New Jersey] has always been that when the legislature decided to step back in and rewrite the formula, how would they do that in a way that sustains adequacy?” said David G. Sciarra, the executive director of the Education Law Center, in Newark, N.J., which brought the lawsuit against the state. “How can you do this without substantial revenue?”

In Georgia, the split between state and local responsibility for school funding has stayed at around 60 percent state and federal, and 40 percent local, on average. But those figures vary widely by district, said Laura Reilly, a spokeswoman for the Georgia School Boards Association.

“At the local level, you’ll hear that [local percentages] are going up, and districts are responsible for more of the funding,” she said.

Even so, the association isn’t in favor of Speaker Richardson’s proposal. If approved by at least two-thirds of the Republican-controlled House and Senate during next year’s session, it would go before the voters next November as a proposed constitutional amendment.

“We have always felt that the property tax is more stable than a sales tax,” Ms. Reilly said. “It’s not up to the whims of the economy.”

That’s what lawmakers in Michigan discovered after eliminating all property taxes in 1993 and increasing a variety of other taxes. A year later, they reinstituted some property taxes after the state ended up losing about $2 billion in revenue as a result of the change, according to a report by three Michigan education groups.

Mr. Griffith of the ECS added that he will be surprised if Mr. Richardson’s plan wins approval.

“It’s very difficult to get the political will you will need to make this kind of huge change,” he said, especially since “we’re heading into a really unsure economy.”

Many of Mr. Richardson’s Republican colleagues in Georgia—including Gov. Perdue—aren’t backing the plan. But neither are they convinced that a lawsuit is the best way to revamp the school finance formula.

The consortium of districts that sued the state in 2004 argues that the current funding model doesn’t cover what it costs to provide students an adequate education.

All local systems use local money to make up the difference, but some are not able to raise as much tax money as others, leaving them with less for expenses such as materials and staff. The districts want the legislature— or the courts—to revamp the tax code and the finance formula to address the inequities.

Court Battle Looms

Even though the two sides have repeatedly met in the hope of reaching a settlement, the state is prepared to fight, as shown by its hiring of Sutherland, Asbill, & Brennan, a major law firm in Atlanta, and the same one that has represented New York, Florida, and other states in school finance litigation.

The plaintiff districts are being represented by lawyers from another Atlanta firm, Rogers & Hardin.

The process of collecting depositions in the case, Consortium for Adequate School Funding in Georgia v. The State of Georgia, is now almost complete. A trial is set to begin next fall in Fulton County Superior Court, although it could start earlier if the state doesn’t ask for summary judgment, meaning that the new judge assigned to the case would issue a ruling without a full trial.

Investing in Excellence

In the midst of trial preparation, Gov. Perdue’s Education Finance Task Force, which began meeting about the same time the lawsuit was filed, is wrapping up its work and is expected to make recommendations soon.

The group is working to replace the state’s 22-year-old Quality Basic Education formula with a new model—something Mr. Perdue is calling Investing in Educational Excellence.

According to Dean Alford, the chairman of the task force, who runs a service company in the utility industry, much of the committee’s work has focused on redefining the relationship between the state and its school districts. He said that instead of state rules on how money should be spent and accounted for, the task force is moving toward “contracts”— a term now used in New York state—meaning that districts would receive more flexibility in spending and curriculum decisions in exchange for improved student performance.

Rather than falling back on phrases familiar in school finance circles, such as “categorical funding,” or “student weights,” Mr. Alford came up with the term “strategic multiples,” to refer to the additional needs some students have that require more funding, such as a disability, living in poverty, or being gifted.

The task force members, he said, are still “tweaking” the cost model, which Mr. Alford describes as “the amount needed in the classroom to get the job done.”

He added that Mr. Richardson’s plan has generated conversation among the members, but it hasn’t affected the task force’s work. The plan, he said, merely “changes the mechanism of how local dollars are collected.”

The speaker’s proposal, the impending court case, and the governor’s task force are all adding up to what Mr. Martin of the consortium of plaintiff districts called “a perfect storm” over school finance in the state.

“You’ve got these separate things all going on simultaneously,” he said, but added that the task force’s work makes the lawsuit even more necessary. “What is recommended will not be meaningful if it isn’t backed up by adequate funding.”

Related Tags:

A version of this article appeared in the December 05, 2007 edition of Education Week as Cross-Currents Roil School Finance Debate

Events

Jobs The EdWeek Top School Jobs Virtual Career Fair
Find teaching jobs and other jobs in K-12 education at the EdWeek Top School Jobs virtual career fair.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Mathematics Webinar
Engaging Young Students to Accelerate Math Learning
Join learning scientists and inspiring district leaders, for a timely panel discussion addressing a school district’s approach to doubling and tripling Math gains during Covid. What started as a goal to address learning gaps in
Content provided by Age of Learning & Digital Promise, Harlingen CISD
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Curriculum Webinar
How to Power Your Curriculum With Digital Books
Register for this can’t miss session looking at best practices for utilizing digital books to support their curriculum.
Content provided by OverDrive

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding Some in Congress Fear State Budget Decisions May Undercut COVID-19 Education Relief
A dispute in Wisconsin over coronavirus relief underscores how technical issues and politics are affecting education spending decisions.
4 min read
Image shows an illustration of money providing relief against coronavirus.
DigitalVision Vectors/iStock/Getty
Education Funding There Are Big Funding Gaps Affecting High-Poverty Schools. Can Biden Close Them?
Hurdles lie ahead for a $20 billion bid to create "Title I equity grants" to address long-standing funding inequities.
9 min read
President Joe Biden talks about the May jobs report from the Rehoboth Beach Convention Center in Rehoboth Beach, Del., Friday, June 4, 2021.
President Joe Biden made boosting Title I for disadvantaged students a key part of his education platform on the campaign trail.
Susan Walsh/AP
Education Funding Education Department Issues Directive on Shielding Students in Poverty From Funding Cuts
The agency released the "maintenance of equity" guidance on COVID-19 relief as part of a public-relations blitz on equity amid the pandemic.
5 min read
Image of a $100 dollar bill that is cut into blocks for distribution.
E+/Getty
Education Funding New COVID-19 Aid Coalition Highlights Strategies for Retaining Teachers, Digital Learning
The coalition representing school officials, teachers' unions, and others, has pledged a multiyear effort to use relief aid effectively.
2 min read
Mary Euell helps her sons, Michael Henry, left, and Mario Henry, work through math lessons remotely in their Erie, Pa., home.
Mary Euell helps her sons, Michael Henry, left, and Mario Henry, work through math lessons remotely in their Erie, Pa., home.
Christopher Millette/Erie Times-News via AP