Category Archives: School Funding

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Funding Board Foul

The Tennessee State Funding Board – the group responsible for setting the revenue projections used in state budgeting – met this week and got it wrong. Again. Like they do every single year.

Why does this even matter? Well, the Funding Board estimates are used to determine the parameters for the state budget. When the question is asked “why don’t we budget more for X,” the answer can be: The Funding Board says we won’t have that money.

Except, well, the Funding Board is wrong. ALL THE TIME.

Let’s look at the most recent evidence. This year, Tennessee is sitting on the largest budget surplus ever. EVER. That’s because state revenue came in at $2 billion ABOVE projections.

While the Funding Board is estimating growth for the upcoming (2023) fiscal year to be 2%, the Sycamore Institute notes that revenue for the current fiscal year is coming in at 24% above projections (so far).

  • Actual collections for October 2021 were about 22% higher than budgeted.
  • As of October 31, 2021, Tennessee had collected about 24% of the $16.5 billion in total budgeted revenue for the current fiscal year.
  • Collections through October were about $902 million higher (or 24%) than what was budgeted for the time period.
A Bountiful Harvest

While this MIGHT be understandable given the COVID-19 pandemic, the reality is the Funding Board gets it wrong a lot – and this results in budgets that are significantly lower than revenue growth would allow. So, we now have a giant surplus while schools are significantly underfunded.

Here’s some analysis from 2020 on what these underestimates mean:

For five years actual revenue growth was more than double state estimates, leaving $3 billion in surplus while public schools remain under-funded. While state K-12 funding did increase by $700 million over those years, had the state doubled K-12 investment to $1.4 billion, a substantial surplus would still have remained while also moving Tennessee schools out of the bottom 10 in funding. 

That’s right, for five consecutive years starting in 2015, state revenue growth was double or more than what the Funding Board projected. The pandemic is no excuse. This is a planned, intentional underfunding of the state budget. Frankly, taxpayers should be furious. Money is being paid in so that the state may offer services. Then, the state is simply NOT offering the services. Or, they are offering services at levels well below what they should be.

K-12 funding is a great example. A bipartisan state body suggests we need an additional $1.7 billion to adequately fund schools. The money is there – in fact, nearly double that amount of money is there. And, we’re collecting around 24% more than planned so far this fiscal year. That’s a HUGE surplus. In fact, it’s nearly $1 billion in just the first three months of the fiscal year.

Still, the Funding Board seems content to set its sights low – far underestimating the potential of Tennessee. This means our schools, our infrastructure, our health care system, public safety, and more are being shortchanged.

Lawmakers would do well to question these faulty estimates. Or, better yet, just throw them away. We have years of historical data that can give us a pretty clear picture of where our revenue will be. We’re $1 billion ahead this year already.

Looking back at 2020, here’s more evidence that the Funding Board is basically just making stuff up – possibly in hopes of starving public services to serve some unknown goal:

There is already a problem with this year’s estimates. The State Funding Board, a panel of constitutional officers and the state finance director, recently approved a growth rate of between 2.7% and 3.1%, well below even the most pessimistic predictions by economists hired by the state. 
It is the lowest rate since 2014, when the board predicted little to no growth. This led then-Gov. Haslam to eliminate a promised $50 million state teacher raise. Actual revenue grew 5% in 2014-2015, leading to a $552 million surplus while teachers got nothing. 


The board also had to increase its growth estimate for 2019-2020, predicting a general fund surplus of $430 – $500 million. Even this upward revision may be far too low. First-quarter general fund growth was 8.1%, more than double the revised estimate, which could generate a surplus up to $900 million.

Getting it wrong by a point or two is expected. Being off in a single year by 2 or more points is an anomaly, but it could happen. But, when actual growth is double or more your estimate year after year for five years or more, there’s a deeper philosophical problem. Or, you just don’t know what you’re doing.

It seems more likely, though, that those behind the numbers know exactly what they are doing.

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A Bountiful Harvest

Tennessee Gov. Bill Lee is seeking to reallocate the school funding pie in a state that historically earns low marks for its investment in schools. Now, the Sycamore Institute reports Tennessee has a significant surplus – both banked dollars and recurring money – that could be used to help address a range of priorities.

Governor Bill Lee and state lawmakers just used some of Tennessee’s largest ever budget surplus to fund a historically large incentive package for Ford Motor Company. Even after that deal, policymakers may still have at least $3 billion in unallocated funds to appropriate next year. This total includes a record-setting $2 billion for recurring items – and that’s before even speculating about routine revenue growth. For comparison, Tennessee’s total budget from state revenues this year was about $21 billion before the Ford deal passed.

Turns out, Tennessee continues to collect significantly more money than it plans to spend. Sycamore notes that through the first three months of the fiscal year:

  • Actual collections for October 2021 were about 22% higher than budgeted.
  • As of October 31, 2021, Tennessee had collected about 24% of the $16.5 billion in total budgeted revenue for the current fiscal year.
  • Collections through October were about $902 million higher (or 24%) than what was budgeted for the time period.
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The point is: Tennessee is overflowing with cash. It seems that a conservative government would use this opportunity to return the money “to the people” by way of key investments. Among these should be investing in our chronically underfunded school system.

Let’s face it: The GOP has been in complete control of Tennessee state government for a little over a decade now. During that time, we have consistently ranked between 44th-46th in school funding. We’ve had multiple failures of our state testing system. And, we now face a teacher shortage crisis.

But, good news abounds! We have a HUGE surplus – including billions in RECURRING revenue. This means we can invest in schools without raising taxes a single penny.

For a little more than half of the surplus, we could completely shore-up our K-12 funding system. After all, a bipartisan state research body found that schools in Tennessee are short-changed on the order of around $1.7 billion.

Comprehensive Review

Of course, the track record on using surplus state funds for schools is, well, now all that good:

Do We Really Have to Do This?

Significant surplus revenue has been a recurring story in recent years. It’s almost as if those in power are deliberately keeping money away from our public schools. It could be, as some have speculated, they are saving all that public money for a massive school voucher scheme.

The BEP Voucher Plan

2022 is an election year. When your lawmaker tells you they’ve voted to invest in our schools, ask them why we are still $1.7 billion behind. Ask them how much of the $3 billion surplus they want to invest in schools. Ask them to stop talking about what they’re going to do and start actually allocating dollars to education.

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The BEP Voucher Plan

Tennessee teacher and education blogger Mike Stein offers his take on Gov. Bill Lee’s latest run at school vouchers. This time, Lee’s plan appears to be to use the state’s school funding formula (BEP) to create a voucher scheme.

Here are some highlights from Stein’s piece, written after he’d been to one of TN DOE’s BEP Town Hall events:

I had so much to say! I wanted to mention how atrocious it is that in 2021 teachers in this state are still limited on how many copies they can make for their classrooms. I wanted to go into how students’ mental health is poor. That fights during school are on the rise because they don’t know how to properly deal with their emotions and the need for school counselors, psychologists, and social workers is at a critical point. I wanted to mention my idea for attacking the substitute teacher crisis in Tennessee, which is to include substitute teacher pay as a component in the BEP. Rural systems like mine can not afford to pay them a decent wage (they can literally make more money at any fast food establishment), so if TDOE creates a baseline pay of $120 per day for non-licensed substitute teachers that is reimbursed to districts, then we will be much more likely to attract and keep quality substitute teachers. The $120 figure comes from paying them the equivalent of $15 an hour for the length of the school day. If the substitute is a certified teacher, then I believe that amount should equal $160 per day. I wanted to raise these points–and more–but the two minute time limit had me rethinking what I was going to say.

Is the answer already decided?

. . . because in January they plan on presenting their new BEP formula to the state legislature. 

Stop and reflect on that last sentence. If their timeline is to present their plan in January then it can only mean one thing–it’s either already written or close to it. This means that TDOE’s public town halls and their funding review committees are either entirely or mostly a farce. They’re going through the motions of eliciting public feedback because to redo the BEP formula without attempting to do so would mean their suggestion in January would most assuredly be D.O.A.

The tea leaves are not difficult to read here. The new BEP formula will include some form of vouchers (they, of course, won’t be called that) and because the BEP funds public schools across the state, then it will not violate the “Home Rule” provision. State legislators will be put in a position to either vote in favor of the new BEP formula (which will undoubtedly include actual needed improvements that will be popular with their constituents) or reject it. It’s a lose-lose situation for them. Either support the new BEP formula that will actually privatize public schools or be accused of being against public education. 

Stein then does a great job of breaking down the members of the Fiscal Responsibility Committee – noting that many of them are decidedly pro-voucher.

Check out his post for more on Bill Lee’s continued effort to send public money to private schools.

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TN School Funding Report Card: 1 D, 2 Fs

While Gov. Bill Lee’s Administration is off discussing potential changes to state’s funding formula for schools (the BEP), a joint report from the Southern Poverty Law Center and Education Law Center indicates there’s a lot of room for growth. It’s not just how the funds are allocated, it’s also about how much – turns out, Tennessee is near the bottom in the nation when it comes to things like funding level and funding effort – we’re not putting in much money and we’re not trying very hard to change that. Lee so far has not committed to any funding increase in his proposed formula change.

When it comes to funding level, Tennessee earns a ranking of 44th in the nation and is near the bottom in the South, earning a grade of “F” on the Report Card. These numbers are adjusted for regional cost differences and so acknowledge that costs are typically lower in state like Tennessee than they are in places in the Northeast or West Coast.

Next, funding distribution. Tennessee does a little better here, coming in at a D. However, the report notes:

In Arkansas, Louisiana, Mississippi and Tennessee there is no clear variation in funding relative to student poverty. These “flat” funding distributions disadvantage students in high-poverty districts by failing to deliver the additional resources they need to close persistent achievement gaps.

Finally, funding effort. Here, Tennessee is 47th in the nation. Another F. We’re simply not trying very hard to direct money to schools.

The effort index is an important indicator of how a state prioritizes
education spending relative to its economic capacity.

In short, Tennessee has the capacity to direct significant funds toward schools, but policymakers are simply choosing NOT to do so.

April Showers

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Who’s Driving the Bus?

A bus driver shortage in Nashville has reached a crisis, and bus drivers are speaking out. NewsChannel 5 has the story of a severe shortage and potentially unsafe conditions for students.

Battle said they are 200 or more drivers short, and many are doubling and tripling routes, forcing kids to sit three to a seat.

She also cited safety concerns with buses being overcrowding.

Drivers held a rally this morning to highlight the challenges currently being faced. The bottom line: Buses are at capacity at all times and there simply aren’t enough drivers.

Pam Battle, who heads up the union representing bus drivers, says the drivers want better pay and benefits.

The current situation, Battle notes, is untenable. To put it simply, the job is not attractive from a pay standpoint and the safety issues under current conditions make it even less attractive.

“So, it is time for this district to sit down with me and let’s figure out a plan here because we’re headed in the wrong direction, and if they don’t wake up and listen to us, I promise a parent, it’s coming. So, they better get ready. They cannot say that ‘no one has told them.’ The board cannot say ‘they have no knowledge of this.’ Dr. Battle cannot say ‘she has no knowledge of this.’

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Snail’s Pace

The Tennessee State Board of Education has set the state’s minimum teacher salary at $38,000 for the upcoming school year. That’s $49 more than the current average minimum salary, according to a story in Chalkbeat.

While the overall boost in minimum teacher pay is certainly welcome news, what’s interesting is to examine the pace of change in teacher pay over time.

As the Chalkbeat piece notes, the average teacher pay in Tennessee overall is $51,349.

Here’s why that’s so fascinating. Back in 2014, the state’s BEP Review Committee issued a report calling on the state to fund teacher salaries by way of the BEP at a level equivalent to the actual state average salary. That average? $50,116. So, the average now is just a bit over $1200 more than the average in 2014. In other words, teacher pay in Tennessee is creeping up at a snail’s pace. And, of course, teacher pay in our state is still below the Southeastern average (about $2000 below).

As Chalkbeat notes:

The improvement comes as Tennessee lags Southern and national averages for both starting pay and overall salaries. The state is also bracing for a wave of retirements and struggling to secure teachers for hard-to-staff areas such as special education and classes for students learning to speak English.

A recent analysis by the Southern Regional Education Board shows Tennessee’s average educator salary in 2018-19 trailed half of the region’s states, including in border states like Georgia, Kentucky, North Carolina, and Virginia.

What’s unfortunate about this situation is this: Tennessee can actually afford to make a huge investment in teachers and schools. We have a $2 billion surplus this year alone!

We could afford to push starting teacher pay above $40,000 for all teachers in the state. We could afford to give every single teacher a significant (10%) or more raise this year. We could dramatically increase the per pupil expenditures.

But, we’re doing none of those things. Gov. Lee’s budget reflects a lack of imagination and a refusal to dream of what is possible. Instead, he’s content to continue the status quo of underfunded schools and underpaid teachers.

As Chalkbeat further notes, it’s not clear how much of this raise will reach teachers:

The $2,000 bump in base pay doesn’t mean all teachers will see a noticeable pop in their paychecks, though.

Districts have flexibility over how to use state funds toward teacher compensation, so it’s uncertain how much of Tennessee’s 4% increase will trickle down to teachers who are paid more than the state minimum.

Because of disagreements on the adequacy of state funding, districts have hired about 10,000 teachers beyond what the state’s formula provides. Any increase could get spread across those salaries too. Districts also could opt to use next year’s increase to hire more staff or improve benefits.

Lee has claimed to support teachers and teacher pay, as Chalkbeat notes:

Early in his administration, Lee vowed to make Tennessee the best state in America to be a teacher, but pandemic-related budget uncertainties and cuts delayed increases planned for the 2020-21 school year.

The reality, though, is that Lee has not invested seriously in schools in spite of a significant state surplus:

“The budget passed by the General Assembly is disappointing when we have a historic opportunity to get Tennessee out of the bottom five in education funding. With a record revenue surplus and hundreds of millions unappropriated, this was the time to stop underfunding our schools.

There were bills to provide for more nurses, counselors, RTI specialists and social workers that our students need today and moving forward to meet their mental and academic challenges cause by the pandemic and the problems of chronic underfunding. Instead, we saw a trust fund set up that will cover barely a fraction of the needs years down the road.  

Lee’s commitment to putting just about everything ahead of funding schools and paying teachers may remind some of the previous governor, another guy named Bill who just couldn’t see fit to invest deeply in schools despite making a lot of promises.

Gov. Bill Haslam tweeted on October 3, 2013: “Teachers are the key to classroom success and we’re seeing real progress.  We want to be the fastest improving state in teacher salaries.”

Instead, in 2014:

Haslam is balancing the state budget by denying promised raises to teachers and state employees and ditching his proposed increases to higher education.

Tennessee leaders do a lot of talking when it comes to investing in schools. “Fastest-improving” “Best place to be a teacher.” The reality is that teacher pay and overall investment in schools is moving at a snail’s pace. In fact, a recently released analysis shows that Tennessee invests less in public education relative to taxable resources than any other state in the nation.

I will note once again that this year would be the easiest in decades to invest in public schools – a $2 billion surplus is instead being used for tax cuts and to boost the state’s already overflowing savings account.

I would also note that every time the budget situation seems even a little tough, funding for schools is the first on the chopping block. Good times, bad times, more money, less money – it doesn’t matter. The last decade has made abundantly clear that Tennessee’s policymakers are not at all interested in paying for schools or investing in the teachers who make them work.

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The Lowest in the Nation

Tennessee has one of the lowest overall tax burdens in the United States. While that may be a positive in some ways, it can mean less overall revenue available for public investments. However, just because our tax burden is relatively low doesn’t mean we can’t make smart choices. Policymakers could dedicate significant portions of that revenue to high return public goods – like our schools.

Instead, they just don’t.

According to a newly-released report from Education Week, Tennessee spends just 2.9% of all taxable resources on public education. That’s the lowest rate of any state in the nation.

In fact, the report notes that Tennessee ranks 43rd in the nation in terms of investment in public schools. The Quality Counts report produced by Education Week also gives an overall grade on school funding based on inputs such as equity, percent of resources spent, total funding, and percent of students who receive funding at or above the national median average. Tennessee’s grade? A D+. While we receive an A for funding equity, we get an F just about everywhere else.

And, don’t get too excited about that A in equity. We are merely equitably distributing a terribly small piece of pie.

Here’s the deal: Tennessee’s public schools are underfunded by $1.7 billion. We have policymakers, including our governor, who simply are not interested in investing in schools.

Tennessee policymakers, who recently adjourned their legislative session, could have paid for at least a third of the school funding shortfall with JUST the April surplus. Of course, that would assume these lawmakers are serious when they say they want to fully fund schools.

To be clear, making even a $600 million down payment on the necessary investments in schools would leave the state with a surplus approaching $1.4 billion and three months left in the budget year.

Tennessee has one of the lowest tax burdens in the nation. We have a budget surplus that is of historic proportions. We could fully fund our public schools and still have hundreds of billions of dollars leftover. This, then, is not a decision about “keeping taxes low” or about fiscal responsibility. It is, instead, a decision about denying the best possible education to our state’s children.

A budget is, at its core, a policy document. Our public policy in Tennessee is clear: Public schools are not a public good worth funding. This has been true for years and Gov. Lee is merely continuing this sad tradition.

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Memphis Teachers to See Pay Raise

Thanks in large part to federal stimulus money, teachers in Shelby County will see a raise and the district plans to build new schools and renovate additional buildings if the County Commission signs off on the proposed budget unanimously adopted by the School Board.

Chalkbeat has more:

Shelby County Schools board members unanimously approved a proposed budget of $2.19 billion Tuesday night, an increase of nearly 60 percent over last year.

Highlights of this year’s budget include five additional prekindergarten classes throughout the district, more money for custodial services, new literacy programs, money for proposed new schools and renovations, and raises for certified and noncertified employees.

The starting salary for teachers will increase about 7% from $43,000 to $45,965, and the maximum salary will rise about 16% from $73,000 to $84,445. The new max salary will raise the salary cap on teachers who have graduate degrees and seniority.

The move in Memphis follows the announcement of a budget in Nashville that will mean teachers there will see an average pay raise of around $7000.

Both cities are using federal stimulus dollars to meet budgeting needs.

Of course, all of this is happening while the state is both sitting on a surplus expected to exceed $2 billion and also seeking to rapidly expand charter schools.

While the State of Tennessee has a record surplus, Gov. Lee and lawmakers have refused to make significant new state investments in public education.

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April Showers

Erik Schelzig in the Tennessee Journal’s On the Hill blog notes that Tennessee’s April revenues were $600 million more than the budgeted estimate.

Go ahead, read that again. In one month, the state collected $600 million more than planned.

Here’s more from Schelzig:

Tennessee’s general fund revenue collections were nearly $600 million above estimates in April, bringing the state’s surplus to $1.9 billion through the first nine months of the budget year.

So, with three months left in the fiscal year, the state is nearly $2 billion ahead of where it planned to be. Even if the surpluses drop off, the state is well on its way to a surplus significantly in excess of $2 billion.

To put this in perspective, the state is $1.7 billion behind where it should be in terms of funding public schools according to a bipartisan legislative commission.

For further perspective, the April surplus alone is three times what Gov. Bill Lee allocated in new education funding for the entire 2021-22 fiscal year.

Tennessee policymakers, who recently adjourned their legislative session, could have paid for at least a third of the school funding shortfall with JUST the April surplus. Of course, that would assume these lawmakers are serious when they say they want to fully fund schools.

To be clear, making even a $600 million down payment on the necessary investments in schools would leave the state with a surplus approaching $1.4 billion and three months left in the budget year.

When all is said and done for the year, it is likely the entire $1.7 billion education funding deficit could be made up and the state would have half a billion dollars or more for savings and other expenses or projects.

For further clarity, not a single Tennessee taxpayer would see any tax increase if schools were funded from this surplus. In fact, it is very likely that a state investment in schools that would make up for the current funding shortfall would actually help local governments keep property taxes low.

This year, groups that typically stay out of the school funding fight like the Nashville Public Education Foundation and the League of Women Voters got involved and urged Lee and lawmakers to make use of this historic surplus to make significant new investments in public education. Those calls, of course, were ignored.

We often hear Tennessee policymakers say they want our state’s schools to be the best in the nation. No doubt, your own lawmaker has probably told you school funding is among their top priorities. However, when there was a giant surplus and the ability to make a huge investment in our schools without raising taxes one cent, these same lawmakers simply walked away. They walked away from our public schools, our students, and our teachers.

In times of tight budgets or when funding schools means raising taxes, it may be understandable that the state is cautious when it comes to investment in public education. However, when a single month’s surplus is $600 million and the overall revenue picture is historic in terms of the excess cash available, there is simply no excuse for not investing in education. The only answer at this point is that lawmakers and our Governor just don’t support our schools.

Tennessee consistently ranks near the bottom in the nation when it comes to school funding. We have an historic opportunity to change that. And, we have policy leaders who just aren’t interested.

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Rhetoric vs. Reality: Bill Lee School Funding Edition

As the Tennessee General Assembly passed Gov. Bill Lee’s budget today which included maintaining the woefully inadequate status quo for school funding, the Tennessee Education Association (TEA) offered the following statement expressing their disappointment:

“The budget passed by the General Assembly is disappointing when we have a historic opportunity to get Tennessee out of the bottom five in education funding. With a record revenue surplus and hundreds of millions unappropriated, this was the time to stop underfunding our schools.

There were bills to provide for more nurses, counselors, RTI specialists and social workers that our students need today and moving forward to meet their mental and academic challenges cause by the pandemic and the problems of chronic underfunding. Instead, we saw a trust fund set up that will cover barely a fraction of the needs years down the road.    

It’s unconscionable for state leaders to not include significant increases for K-12 funding, especially at a time when the state has racked up $1.42 billion in surplus year-to-date. The money is there to make a significant increase to K-12 funding, but Gov. Lee and the General Assembly have instead chosen to continue stuffing mattresses full of cash. 

Elected officials love to claim that Tennessee students, educators and public schools are top priorities, but their action on the state budget tells a different story. As the old saying goes, it’s time to put their money where their mouth is.”

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