Tag Archives: Fully funding the BEP

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What’s Missing is What Matters

The 2015 incarnation of the BEP Review Committee has concluded its business and issued a report. What’s interesting is that this year’s report is missing something: Hundreds of millions of dollars of recommended improvements that the committee usually makes as a suggestion to the legislature in terms of how to improve funding for the state’s schools.

Instead, the recommendations include finishing out the work on fully-funding teacher insurance — paying for a full twelve months, some vague language about improving teacher salaries, and about $10 million for technology improvements. The total cost of these recommendations is $40 million.

Compare that to last year’s report, which recommended a number of improvements with a cost in excess of $500 million.

The report from last year noted recommendations that included:

Eliminate Cost Differential Factor (CDF)  $(71,182,000)

Fund ELL Teachers 1:20  — COST: $28,709,000

Fund ELL Translators 1:200  COST: $2,866,000

CBER at 100%  $(2,639,000)

Instructional Component at funded at 75% by State  COST: $153,448,000

Insurance at 50%  COST: $26,110,000

BEP 2.0 Fully Implemented  COST: $133,910,000

Other Committee Requests

BEP Salary at $45,447  COST: $266,165,000

BEP Salary at $50,447  COST: $532,324,000

BEP Salary at Southeastern average $50,359  COST: $527,646,000

BEP Salary at State average (FY14) $50,116    COST: $514,703,000

The Committee last year also recommended:

Change funding ratio for psychologists from 1:2,500 to 1:500  $57,518,000

Change funding ratio for elementary counselors from 1:500 to 1:250  $39,409,000

Change funding ratio for secondary counselors from 1:350 to 1:250  $18,079,000

Change funding ratio for all counselors to 1:250  $57,497,000

Change Assistant Principal ratio to SACS standard  $11,739,000

Change 7-12 funding ratios, including CTE, by 3 students  $87,928,000

New BEP Component for Mentors (1:12 new professional positions)  $17,670,000

Professional Development (1% of instructional salaries)  $25,576,000

Change funding ratios for nurses from 1:3,000 to 1:1,500  $12,194,000

Change funding ratios for Technology Coordinators from 1:6,400 to 1:3,200  $4,150,000

Increase Funding for teacher materials and supplies by $100  $6,336,000

Instructional Technology Coordinator (1 per LEA)  $5,268,000

12 Months Insurance  $64,411,000

The 2013 Report made similar recommendations:

Component Change State Cost 12 months’ insurance $60,376,000

Increase funding ratio for psychologists from 1:2,500 to 1:500 $52,799,000

Increase funding ratio for elementary counselors from 1:500 to 1:250 $35,733,000

Increase funding ratio for all counselors to 1:250 $52,909,000

Fully implement BEP 2.0 $146,223,000

Raise Assistant Principal ratio to SACS standard $7,216,000

Reduce 7-12 ratios, including CTE, by 3 students $81,333,000

New BEP Component for Mentors (1:12 new professional positions) $14,333,000

Professional Development (1% of instructional salaries) $22,062,000

Reduce funding ratios for nurses from 1:3,000 to 1:1,500 $9,438,000

Reduce funding ratios for Technology Coordinators from 1:6,400 to 1:3,200 $1,756,000

Increase funding for teacher materials and supplies by $100 $3,655,000

Instructional Technology Coordinator (1 per LEA) $2,960,000

Capital Outlay Restored (done in FY14) – Total state cost of all recommendations $490,793,00

So, in 2013, the BEP Review Committee made recommendations costing nearly $500 million. That was there view on what would be an adequately funded BEP. Then, in 2014, the committee suggested improvements in excess of $500 million.

Now, in 2015, with the state facing lawsuits for inadequately funding its schools, the committee says everything is better and that with just $40 million in improvements, the BEP will be adequate.

It’s worth noting that the state continues to fund teacher salaries at well below actual rates. Adjusting the formula to provide local districts with teacher funding based on actual average salaries would cost more than $500 million. Even getting that number to just $45,000 per teacher would be $266 million.

The committee also has (historically) recognized that local schools need additional assistance in terms of school psychologists, nurses, professional development, counselors, and mentoring of teachers.

Suddenly, this year, the committee has decided these items are not priorities. They don’t even merit a mention in the BEP report, which at just 47 pages is among the shortest reports issued, and fully 1/3 the size of last year’s document.

Maybe if they don’t write down the needs of districts, those needs will go away. Or, maybe the attorneys for the school districts suing won’t find the earlier reports which consistently paint a clear picture of inadequately funded schools while also pointing the way to the steps necessary to improve the BEP formula.

Whatever the case, this year’s report comes up short. Legislators need only  look to the very recent past to find the evidence our state’s schools deserve more than what current funding levels provide.

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

 

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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

 

 

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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