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Issue Position: School Funding Formula

Issue Position

Location: Unknown

Many of you have asked about the school funding formula which will begin to take effect with the fiscal year 2012 budget next July. The essence of a formula is to determine state aid based on student enrollment, student need for resources and local property tax capacity.

RI had a formula but moved away from deliberate recognition of proportionate need. School districts were allotted the same share of the total each year. In flush budget years each district received the same percentage increase; in bad budget years, as recently, there was an across the board decrease. Over the years this "level funding' took us further away from distribution based on proportionate need. As school enrollment numbers and property values changed some communities received more and some less than a formula would have allocated.

Making matters more complicated, categorical funds were added as patches to the funding system. To encourage economies of scale districts were encouraged to regionalize with the offer of a 2% per regionalized grade bonus in recognition of the initial costs of the consolidation. The bonus was to phase out over eight years. The bonus meant an added 28% for Bristol/Warren for consolidating pre-kindergarten through high school grade 12. But, a year or so after the regionalization bonus was enacted the funds were blended into the "level funding' system. For the regionalized districts the embedded regionalization bonus allowed for richer programming and/or hidden property tax relief.

I have not heard of any state that has legislatively enacted a school funding formula without adding enough new money so that each district received at least a small increase in state aid. To my mind, this is a formula on top of level funding, not really a formula.

Clearly RI cannot afford a formula on top of level funding though that approach was exactly what one of the funding formula bills proposed would have done, waiting to take effect until state revenue had increased in two successive budget years. To my mind that approach is like saying we cannot afford to fund education fairly or proportionately or reasonably.

The good news is that the enacted RI funding formula will phase in increases in state aid for underfunded districts and decreases for other districts. That taking "from Peter to pay Paul' was the hard part. Commissioner Gist and other RI education officials are to be congratulated for developing and pressing forward with such a formula.

Over the ten year phase in period Providence will receive annual increases of $3 million. In fiscal 2021, assuming no change in enrollment or other formula elements, Providence will receive $30 million more per year than this year, fiscal 2011.

The formula recognizes that statistically children living in poverty come to school with need for more resources to reach standards of proficiency in core subject areas. I would have preferred a formula that similarly recognized the additional resources needed by English language learners and special education students with individual education plans.

I would also have preferred a different measure of local property tax capacity to determine the appropriate state share. For the local ability to pay element the formula uses the percentage of students living in poverty with the districts' equalized assessed taxable property value in a quadratic mean. This portion of the formula disproportionately benefits five shoreline communities: Block Island, Jamestown, Little Compton, Newport and Narragansett. Each of these communities has taxable property per student in excess of $2.1 million, far above the statewide average. I'm a little resentful about subsidizing these seaside community property taxpayers, many of whom are non-resident, not RI income tax payers.

But, to summarize, I think the glass is more than half full. RI enacted a formula without waiting for new funds. The formula will direct state aid so that "the money follows the child.' The formula provides funding for resources to meet the needs of children living in poverty. And, the legislation commits to increasing the state share of education funding so that RI will begin to move out of the bottom quartile nationally. The glass is well more than half full.

Importantly, Providence is projected to receive an increase of $30 million per year by the end of the formula phase in period.

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