Why Fix the BEP?

I’ve written recently about the growing state revenue collections and the corresponding request (in the form of a lawsuit) from school districts that the BEP (state school funding formula) be adequately funded – to the tune of some $500 million in new money.

But, some might ask: Why even fix the BEP? It’s a complex formula and besides, don’t our schools already have enough money?

The short answer is no. No, Tennessee schools do not have enough money.

I have gone so far as to suggest the BEP is broken and to explain the reasons for its current inadequacy.

Now, more evidence suggesting the need to fix the BEP. Essentially, it’s this: Since 2008, Tennessee’s “effort” in terms of percentage of state revenue devoted to school funding has fallen. I’ll show you a hand graph on that from the Education Law Center:

Source: "Is School Funding Fair?" by the Education Law Center

While an number of states began making improvements after 2011, Tennessee was not among them. Recent investments may have returned Tennessee to pre-recession funding levels, but not by much.

And then, there’s a recent report from Rutgers that suggests that when it comes to school funding, Tennessee gets an “F.”

From the Commercial Appeal:

The annual report card out of Rutgers University that grades states on how they fund public education shows Tennessee at the “bottom of the barrel” in fairness. Besides being one of 16 states earning an F for percentage of state resources allocated to K-12 education, family incomes of children attending its public schools on average are half that of children in private schools or being home-schooled.

“That’s a warning signal,” says David Sciarra, executive director of the Education Law Center.

“It becomes difficult to get the kind of forward-thinking reform in legislation if you have more affluent families not invested in this system,” he said.

The study looks at “fairness” in funding, including whether states allow more resources for districts with high numbers of students in poverty. Tennessee earned a B in the category, but Sciarra says even that is misleading.

“Because spending is so low, it really does not amount to much,” he said.

So, why fix the BEP? Because school funding in Tennessee is both inequitable and inadequate. Of course, making the needed investments would normally be a heavy lift, but with recent rosy revenue news, fixing the BEP (and improving the future for our students and entire state) requires only a little hard work and some political will.

For more on education politics and policy in Tennessee, follow @TNEdReport

500 Here, 500 There

So, the state keeps taking in more revenue — a lot more than it planned — and it’s starting to add up to real money, some $500 million and the year’s not over yet.

Andrea Zelinski has the story:

Nearing the end of state government’s fiscal year, Tennessee has collected nearly one half billion dollars more than expected, according to state officials.

Revenues totaled $974 million for May, when $50.5 million more than expected pouring into state coffers. Overall, the state has collected $495 million more than anticipated in the first 10 months of the budget year, with $452 million overcollected for the general fund, according to the Department of Finance and Administration.

What’s interesting about this story is that the total amount of over-collection represents almost exactly the dollar amount needed to satisfy school systems suing the state for inadequate K-12 funding.

$500 million appears to be the magic number:

Achieving a level of adequate funding as contemplated in the lawsuit would cost an estimated $500 million. Should the motion be granted, all 141 school systems in the state would effectively become a party to the suit — an unprecedented show of strength in what has historically been small school systems suing over equity. This suit differs from the previous “small schools” suits in that it focuses on the inadequacy of the funding formula rather than on any inequities that may exist.

So, we have $500 million in revenue over anticipated collections on the one hand and school systems suing to restore adequacy to the BEP to the tune of $500 million on the other.

Seems like someone (legislators, Governor Haslam, anyone…) ought to be able to work with these numbers and find a positive solution.

For more on education politics and policy in Tennessee, follow @TNEdReport

 

 

That’s a Big Class

According to the Chattanooga Times-Free Press:

Every school district in Tennessee could be part of the Hamilton County Department of Education’s lawsuit against the state’s Basic Education Program school funding formula if a judge grants a motion to grant it class-action status.

“While the larger districts have been the ones voicing concerns about the underfunding of education, this underfunding has ramifications literally everywhere,” school district attorney D. Scott Bennett said.

Hamilton County Schools and six nearby school districts — Bradley, Coffee, Grundy, Marion, McMinn and Polk — are plaintiffs in the lawsuit Bennett filed on March 24 in Davidson County Chancery Court.

The suit claims the state has “breached its duty under the Tennessee Constitution to provide a system of free public education for the children of this state.”

Achieving a level of adequate funding as contemplated in the lawsuit would cost an estimated $500 million. Should the motion be granted, all 141 school systems in the state would effectively become a party to the suit — an unprecedented show of strength in what has historically been small school systems suing over equity. This suit differs from the previous “small schools” suits in that it focuses on the inadequacy of the funding formula rather than on any inequities that may exist.

That’s money House Majority Leader Gerald McCormick says the state can’t afford:

“They are suing the taxpayers, that’s who they are suing,” said House Majority Leader Gerald McCormick, R-Chattanooga.

Fully funding the BEP has been estimated to cost $500 million. McCormick said that would have to come out of existing programs, such as funding colleges and universities, because the state constitution mandates K-12 education but not higher education. And Tennesseans don’t want higher taxes, he said.

Of course, McCormick also supported legislative efforts designed to keep local school systems from suing the state for adequate funding.

A look at three revenue issues reveals that McCormick is just plain wrong in his assertion that addressing BEP funding inadequacy would necessitate higher taxes.

First, state revenues are continuing a trend of coming in over projections.  Andrea Zelinski notes:

Year to date nine months into the fiscal year, state revenues are $444 million more than anticipated.

So, if Tennessee invested 100% of these over-collections into K-12 education, we’d come very close to the $500 million needed to adequately fund the BEP and provide more resources to local school systems to educate their students. Of course, it’s wise to save some of that money, but even a 25% investment would mean an additional $111 million a year for our schools. All with no new taxes.

Next, it’s important to protect the existing tax base. Governor Haslam took a small step on this front this year for the first time in his administration. The Revenue Modernization Act is projected to result in $20 million in new revenue by closing loopholes and helping the state collect the taxes it is owed. This is a start, but by way of comparison, the Bredesen Administration collected $500 million in revenue by aggressively protecting the tax code and ensuring that taxes owed were taxes paid. That is, they went after corporate tax avoidance strategies in smart, effective ways, year after year. It’s estimated that between $30 and $50 million a year in revenue can be protected each year by closing loopholes.

Add the mid-range, $40 million, to the low estimate of new revenue coming in over projections available for use and you’re looking at over $150 million in new money each year for schools over and above current funding levels.

Finally, I wrote in 2014 about the state’s planned loss of revenue. More specifically, the state is phasing out the inheritance tax – a move that has limited benefits but has a definite impact on the bottom line in terms of revenue collection. Specifically:

Additional revenue is lost by the gradual phase out of Tennessee’s estate tax, previously impacting estates over $1 million.  The plan is to phase that out entirely by 2016, with an estimated revenue loss of around $30 million this year and around $97 million in 2016-17’s budget. So, that’s roughly $76 million, or close to half of the projected shortfall for the upcoming budget cycle. To his credit, Haslam says he wants to hold off on efforts to repeal the Hall tax on investment income – a tax paid by a small number of wealthy Tennesseans with investment income.  However, he has also said reducing or eliminating the Hall tax is a goal. Phasing out the tax, as proposed in legislation under consideration this year at the General Assembly, would mean a loss of $20 million in the 2015-16 budget year and an ultimate loss in state funds of $160 million a year and in local revenue of $86 million a year.

If the estate tax was returned to its previous level, it would mean some $97 million in available revenue next year. Policymakers could tinker with this formula to ensure some taxes are collected, but the rate is lower and easily collect $50 million a year in revenue.  Adding these three items together and being conservative, Tennessee could easily invest $200 million more a year in its public schools.

That means Gerald McCormick is wrong. Making significant new investments in Tennessee schools DOES NOT require raising taxes or implementing new taxes. It does require political will and a little hard work.

MORE ON THE BEP:

Money Talks

Shelby County Votes to Sue

Why is he (Gerald McCormick) so angry?

Why is TN 40th?

For more on education policy and politics in Tennessee, follow @TNEdReport

 

Adequate and Equitable

That’s what the Shelby County Schools are seeking from the state — adequate and equitable school funding. As the state currently provides neither, the Shelby County School Board voted Tuesday to hire legal counsel to pursue such funding, an action which may ultimately result in filing a lawsuit against the state, the Commercial Appeal reports.

Recently, Jon Alfuth over at Bluff City Ed suggested that Shelby County should join the 7 other Tennessee districts already suing the state over inadequate school funding.

According to the report, Board members referenced the 2007 funding formula update known as BEP 2.0 and noted that if it were fully and properly funded, Shelby County would receive $103 million in additional funding next year.

Rather than push for full funding of BEP 2.0, Governor Haslam has appointed his own task force asked to redistribute the pie rather than increase its size.

Other than chastising districts for asking for the full and equitable funding they deserve, the General Assembly did little this past session to address the BEP situation.

Three previous lawsuits against the state seeking improved school funding have all been successful and all resulted in significant cash infusions to local school districts.

More on the BEP:

Money Talks

Why is TN 40th?

For more on education politics and policy in Tennessee, follow @TNEdReport

Should Shelby County Schools Sue the State?

Jon Alfuth over at Bluff City Ed says YES!

Here’s the basic reason why:

Education funding has been creeping up slowly, but its not enough. We’re at a critical juncture in urban districts like Shelby County, and the only realistic way we are going to find the funds to adequately support our schools is from the state. Local taxes are tapped out and the district has cut to the bone. And at the same time, the state has indicated very little willingness to adequately fund BEP 2.0.

More on BEP Funding:

Why is He So Angry?

Money Talks

Hungry for BEP Reform

Of Poverty and Teacher Pay

For more on education politics and policy in Tennessee, follow @TNEdReport

 

 

A 5% Raise?

That’s what teachers and other school employees in Williamson County are likely to see next year if Director of Schools Mike Looney has his way.

Despite some contention at last night’s County Commission meeting, it appears the school system will be able to proceed with the raises as planned because the proposed budget is balanced without asking for additional revenue from the County Commission.

At least one County Commissioner called for merit pay, but Looney said the issue is his district’s ability to recruit new teachers and employees. He cited specific challenges, as noted by Jessica Pace at FranklinHomePage.com:

Looney defended the school board’s proposal by citing the district’s struggle to recruit high school level and specialty teachers, school nurses and bus drivers due to lack of competitive pay.

Looney’s concerns echo the findings of a study by the Appalachia Regional Comprehensive Center:

Since 2009, Tennessee has identified shortages in the overall numbers of K-12 teachers needed for public schools as well as teachers for specific subjects. There is a critical need in the state for STEM teachers, as well as shortages in high school English, social studies, world languages, Pre-K through high school special education, and English as a second language.

It’s not just Williamson County that is having trouble recruiting new teachers, it’s a statewide problem. Williamson is addressing that challenge by using its portion of the $96 million in new state money for teacher compensation to provide a meaningful raise in pay for all teachers and system employees.

Will other systems follow suit and offer significant pay increases to their employees across the board, or will they follow Haslam’s advice and move toward merit pay schemes? It’s budget time and that question will be answered in system after system in the coming months.

More on teacher pay in Tennessee:

Why is TN Teacher Pay 40th?

From 40th to 1st?

For more on education politics and policy in Tennessee, follow @TNEdReport

Why is he so angry?

Gerald McCormick is pissed.

The House Majority Leader apparently doesn’t like it very much when the school system in the county he represents sues the state alleging inadequate school funding.

So, now he’s going to teach them a lesson. He’s supporting a measure that is nothing more than a blatant attempt to keep school boards from asking for the adequate school funding they need.

Andrea Zelinski has the story:

Legislators are baking into one of several budget bills a ban on local school districts using state money for attorney’s fees, court costs or other expenses to sue the state, state agency or state official.

“I know you don’t want your own dog to bite you, I understand that part of it. But still, it seems a little unfair if you have a just cause against the state and you can’t have the ability to sue them,” said House Minority Leader Craig Fitzhugh, D-Ripley, in a Finance Committee meeting Wednesday night before lawmakers approved the change on a voice vote.

If the state were to prevail in a legal challenge, the legislation would give the state power to recoup its own legal costs by pulling money out the school district’s education funding, also known as the Basic Education Program, BEP, funding formula. The language would also apply to county and municipal governing bodies suing the state, and would pull from its state-shared taxes if the local government lost.

McCormick is on record this legislative session as saying Tennessee’s public schools have adequate funding. And he’s clearly not happy with his home county suing and asking him to work a little harder at his job.

Note that I bolded that words: If the state were to prevail in a legal challenge.

That’s because every time the State of Tennessee has been sued over school funding, the state has lost. So, local boards probably have nothing to worry about.

In fact, funding now is nearing the levels deemed constitutionally inequitable in the Small Schools III lawsuit.

Of course, the current lawsuit by Hamilton County and six other districts is actually claiming funding is inadequate. That’s a fair claim, at least if you read the reports from the state’s own BEP Review Committee.

And, despite McCormick’s claims to the contrary, the state isn’t even funding its mandates. For example, the Response to Intervention and Instruction (RTI2) program is mandated, but there are no state funds to support it.

Here’s why that’s especially troubling:

…those districts with higher concentrations of poverty (and likely to have higher numbers of students needing intervention) also have the least resources available to assist students.  The poorest districts, then, are left further behind as a result of a well-intentioned unfunded state mandate.

The unfunded RTI mandate is clear evidence of inadequacy and also sets the stage for further inequity in Tennessee schools.

Rather than dig deep and find some solutions, Gerald McCormick and his legislative buddies appear willing to attempt to punish school boards. Here’s some advice: If you don’t want to be sued for inadequately and inequitably funding Tennessee schools, get to work finding the resources to support them and a funding formula that distributes those resources fairly.

For more on education politics and policy in Tennessee, follow @TNEdReport

Money Talks

Funny how a little thing like a BEP lawsuit asking for more than $600 million can cause Governor Haslam to propose adding a little more money to the education pot.

Yes, seven Tennessee school districts are suing over the inadequacy of the state’s education funding. And, just one week after the suit was filed, Governor Haslam suddenly “found” some $30 million to invest in funding an additional month of teacher health insurance. The state currently pays 45% of 10 months of teacher insurance, but teachers are insured for a full 12 months.

The districts are suing based on numbers provided by the BEP Review Committee, the state group tasked with annually reviewing the BEP formula and making recommendations for improvements.

The idea is that the BEP Review Committee will highlight issues that need attention and help the state avoid additional funding lawsuits.

The reality is that the BEP Review Committee reports go ignored by the legislature and most Governors until a lawsuit is filed. Twice since the original “Small Schools” suit that initially brought about the BEP the state has been sued over funding equity. Twice, the state has lost those equity lawsuits.

Governor Haslam’s administration has said that education funding is now a priority — but that wasn’t the case last year and he didn’t seem to be making any real moves this year until a lawsuit was filed.

Only seven districts are party to the current suit while others continue to debate joining in.

In Metro Nashville, some on the Board have openly suggested a more collaborative approach. I would suggest that after giving Bill Haslam four years to get serious about school funding, the time for collaboration is over. Haslam has created a duplicative BEP Task Force that has the stated goal of rearranging the slices of a pie that’s too small.

When asked about the latest threat of a suit before it became a reality, Haslam said he was committed to doing “something” about school funding, but he just didn’t know what yet.

This $30 million is a tiny olive branch, but far from a serious move toward funding schools properly. And, with legislators like House Majority Leader Gerald McCormick saying Tennessee’s schools are currently properly funded, it’s unclear how much support truly improving the funding situation will have. In fact, at today’s legislative hearing on school vouchers, McCormick took a swipe at school boards, suggesting they should focus on educating kids instead of filing lawsuits.

I would also note that for those on the MNPS Board who want to collaborate with Haslam that he has been supportive of voucher schemes that will devastate public schools, especially MNPS. Haslam’s support of dangerous voucher schemes and lack of any serious effort to improve school funding combined with his legislative leaders taking verbal swipes at school boards means he’s deserving of a serious confrontation — not a collaborative spirit.

You don’t wait around for someone who has never shown an interest in making an effort to see if they suddenly will do something good. You don’t take the coin they toss in the way of some insurance money as evidence they are finally serious about giving you what you deserve.

The bottom line is this: The BEP is broken. 

Bill Haslam has made no meaningful effort to fix it. Until a lawsuit was filed, his administration wasn’t even willing to admit there was a problem with funding for teacher insurance.

Tennessee school districts, teachers, and parents should start working together to insist that the legislature and the Governor develop serious, long-term funding solutions for our state’s schools. If the BEP problem is not fixed by legislative action, the legislature and Governor may be forced to fix it by the courts. It’s long past time for the serious work of making the BEP work for all of Tennessee.

For more on education politics and policy in Tennessee, follow @TNEdReport

Hungry for BEP Reform

School Boards in Knoxville, Chattanooga, and Memphis have all voted to begin the process of exploring a lawsuit challenging the adequacy of the state’s school funding formula, the BEP.

This challenge is different from the previous Small Schools challenges in two ways. First, it is being initiated by the large school systems, with some support from smaller districts. Second, it’s about adequacy, not equity. That is to say: The point of this potential lawsuit would be to say Tennessee’s school funding formula does not provide enough funding for ALL districts.

Past suits, focused on equity, argued that smaller and poorer districts lost out because the formula didn’t give kids from all districts an equal opportunity. There’s certainly evidence that the BEP is approaching (or already at) unacceptable levels of inequity. One noteworthy example is teacher pay, which shows a disparity of 42% between the top paying and lowest paying districts. The last Small Schools suit found a disparity of 45% unconstitutional. It’s not at all a stretch to suggest that 42% is also unconstitutional or that Tennessee will very soon be at the 45% disparity level.

This time, though, systems are suggesting that overall funding for schools needs to increase — likely to the tune of $500 million or more.

A story from June of last year might explain why. The Chattanooga Times-Free Press reported on changes to rules governing school nutrition, including what can be sold in vending machines at school. Here’s an interesting note from that article:

Before the change to diet sodas, Soddy-Daisy High School’s vending machines would pull in nearly $40,000 a year — money that helped pay the monthly phone bill or purchase copier paper. Now that revenue is down to about $9,000 annually…

…In Hamilton County, the school district funds teaching positions, maintains building and pays utility bills. But for other costs of running a school — including copiers, phone bills and school supplies — the schools have their own budgets, which often don’t come close to covering annual expenses. That’s why money from school fees, vending machines and fundraisers is so important.

Yes, that’s right. Schools are counting on money from selling unhealthy snacks to teenagers to meet their budgets. Existing funds aren’t enough to pay the phone bill or provide adequate school supplies.

The problem with the BEP now goes beyond equity — the inputs simply aren’t adequate to meet the needs of Tennessee’s public schools.

For more on education politics and policy in Tennessee, follow @TNEdReport

 

Of Poverty and Teacher Pay

Recently, I wrote about the correlation between poverty, investment in schools, and student achievement test scores.

To summarize, wealthier districts with lower levels of poverty tended to both invest more in their schools AND get higher scores on achievement tests.

On the flip side, school districts with higher levels of poverty had less money to invest in schools and also saw lower student achievement scores.

Now, I’ve broken down the top and bottom 10 districts from those posts and I’m highlighting their average teacher salaries. Here’s the data:

TOP 10

District                                    2014 Average Teacher Salary

Franklin Special                   $52,080

Rogersville                             $44,906

Newport                                $42,962

Maryville                               $52,076

Oak Ridge                             $54,039

Williamson                           $48,471

Greeneville                          $45,386

Johnson City                       $52,222

Kingsport                             $51,425

Shelby County                   $56,180

Average for Top 10 Districts: $49,974

 

Bottom 10

District                                   2014 Average Salary

Lake Co.                                 $42,547

Union Co.                               $42,027

Madison Co.                          $45,282

Campbell Co.                        $41,563

Haywood Co.                        $43,318

Hardeman Co.                      $43,556

Hancock Co.                          $39,777

Memphis                               $56,000 (Shelby Co. number, as Memphis is now part of SCS)

Fayette Co.                            $41,565

Humboldt                             $42,072

Average for Bottom 10: $43,770

The salary disparity among the top 10 and bottom 10 districts in terms of academic performance is $6204 — or 14.2%.

These numbers roughly correlate with the districts most able to pay and with the greatest investment over the BEP.

It’s important to note that high pay alone does not represent high student achievement. It is also important to note, though, that those districts with the most consistent high performance on student achievement indicators also consistently pay more than districts that are lower-performing.

Wealthier districts invest more funds in their schools, invest more in their teachers, and see better overall outcomes than low-income districts. Teacher pay is a part of that overall equation.

MORE on Teacher Pay:

A 4% Raise for Tennessee Teachers?

Do Your Job, Get Less Money

Pay Teachers More … A Lot More

Why is TN 40th in Teacher Pay?

For more on education politics and policy in Tennessee, follow @TNEdReport