Education

Julia Steiny: The only state in the nation without a funding formula
01:00 AM EDT on Sunday, May 17, 2009
Of the roughly 30 million dollars allocated for charter schools in Rhode Island, half of the money doesn’t go to the charters schools at all. It goes to the kids’ home school districts, to protect districts from losing the revenue the now-charter student would have generated for them — a practice known as “holding the district harmless.”
Some other states with charter schools hold districts harmless for the first year of the kid’s enrollment in a charter, but over a few years the states’ payment tapers off to zero. In time, state funding adjusts to reflect the actual enrollment in each school.
But those states — indeed every state in the nation except Rhode Island — have formulas that calculate education funding according to enrollment. Rhode Island funds by district, regardless of enrollment. And historically, the state has gone to great lengths to hold districts harmless, meaning that state aid to a district is never reduced, only increased.
Another example: many years ago the state awarded fat bonuses to certain tiny districts willing to consolidate into one regional district, with one district office. That bonus was supposed to taper off to zero, over the course of a few years, but the General Assembly decided instead to hold them harmless — to this day.
Over the years all sorts of funny spending got built into these inviolable district budgets. And those expenditures fostered wild inequities between districts’ per-pupil spending.
Instead of using a student-based formula, this state funds each district according to what it got the year before — regardless of enrollment, student needs, or the district’s spending habits, good or bad.
Angus Davis, businessman and member of the Board of Regents, estimates that annually the state spends over $60 million on non-educationally productive purposes like those mentioned above. He says emphatically, “The most important element in any funding system is that it be tied to enrollment, weighted by student need. Funding should follow the children in our system to the public school of their choice, instead of following the adults like it does today.”
Ah, but given the fiscal mess we’re in now, how do we do that? How do we get each kid the same education funding, across all districts, with extras for children with special needs?
We have two options. We can either “level up” so all districts are spending like the most profligates ones — which would be astronomically expensive. Or we can equalize our current investment in education by redistributing it according to a formula, which would create some big winners and losers among the districts.
It’s a miserable, politically impossible choice. No wonder the state can never seem to reach agreement, no matter how hard anyone works on this issue.
The Funding Our Futures (FOF) group has a compromise, explained by John Simmons, director of the business-backed Rhode Island Public Expenditure Council. Their solution is inelegant, but practical. In the short run, it would reduce the giant discrepancies between districts’ spending, which would make equity easier to achieve — someday. It has two big parts.
First, FOF supports the funding-formula bill from Sen. Hannah Gallo, D-Cranston. It sets a fair and equitable formula, but adds funds to the “winner” (currently underfunded) districts when more state revenue becomes available, out in an unspecified future. In the meantime — yep, you guessed it — the bill holds the “loser” districts harmless.
The second and harder part: have the state take over non-educational services that would benefit from economies of scale. Rhode Island’s public-school population is smaller than that of Dallas, Texas, but the state has 36 bus contracts, 36 health-care contracts, 36 (or more) maintenance contracts for copy machines, and so on. Save every possible dime by rendering unto the state that which it can do more efficiently.
For example: Consolidate 36 food-service contracts into one or two state contracts. Projected annual savings: $1.5 million.
And another: Rhode Island is the only state that mandates a bus monitor on every bus. Allow transportation officials to decide which buses really need monitors. Estimated annual savings: $11.7 million.
Instead of at least 36 health-care contracts — some districts have more than one — have all school employees join one or two state programs. Estimated savings: $17 million over three years.
After years of work, this fall Rhode Island will finally have a statewide transportation system for kids bused out of district to charters, private schools and special-education programs. Already the state is saving between $3.5 million and $5 million. Now, if all the kids join a statewide system, the estimated savings is an additional $8 million to $10 million, each year.
Within the month, RIPEC will publish a long, encouraging list of such economies, as estimated by the Department of Education and the Division of Municipal Finance. These are common-sense efficiencies that we should have done ages ago. And they add up to serious, big-time money.
Then, with those expenses off the districts’ back, the districts can focus only on financing education and support for their kids. The district share of the per-pupil expenditure would be far smaller, because it would not include pensions, transportation, health-care. And that would make the differences between districts’ investments in education much smaller and easier to equalize.
Even so, Davis snaps, “We shouldn’t wait for a mythical day when new money arrives to finally provide our kids an equitable and fair system.”
He’s not wrong. But we have to do something immediately. For now, the right and moral thing to do is to get a formula in place and bind ourselves to do everything we can to fund it, asap. Tolerating such inequity is just shameful.
Julia Steiny, a former member of the Providence School Board, consults for government agencies and schools; she is co-director of Information Works!, Rhode Island’s school-accountability project. She can be reached at juliasteiny@gmail.com, or c/o EdWatch, The Providence Journal, 75 Fountain St., Providence, RI 02902.
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