Peter McWalters, education commissioner, right, waits yesterday for a legislative committee studying school financing to convene. At left is Rep. John Savage, and below is Rep. Edith Ajello, committee co-chairwoman.

The Providence Journal / Connie Grosch Connie Grosch

PROVIDENCE — An advisory group charged by lawmakers to develop a statewide school-financing formula presented an initial report at the State House last evening that outlined, in broad strokes, what expenses should be included in the formula and what costs should be absorbed entirely by the state or local districts.

Among the suggestions was one that will likely appeal to cities and towns — having the state take over two of the most burdensome costs for school districts: out-of-district transportation and the most expensive special-education students, whose needs can reach or exceed $50,000 a year. Other costs, such as running group homes for youth in state care, might also be assumed by the state over time.

Another expensive item, teacher retirement, would remain with local districts.

The Foundation Aid Technical Advisory Group, headed by Elizabeth Burke Bryant, executive director of Rhode Island Kids Count, met six times in the past five weeks and presented its findings to the Joint Committee to Establish a Permanent Education Foundation Aid Formula.

“Rhode Island needs a funding formula for education that is permanent and predictable and that results in an increased state share of funding for education over a period of years,” Bryant said. “The environment right now, which has placed limits on local funding, is making this issue even more urgent.”

The advisory group reviewed formulas developed by other states and borrowed from two recent reports estimating how much it would cost to “adequately and equitably” educate Rhode Island students, Bryant said.

A recent proposal suggested a base amount of $10,000 per student. Bryant said her group is still running the numbers but will probably recommend a slightly higher “foundation cost” closer to $11,000.

In the end, the 14-member group, which included state Commissioner of Education Peter McWalters, Timothy C. Duffy, president of the Rhode Island Association of School Committees, Marcia Reback, president of the Rhode Island Federation of Teachers, and Will Van Horne of the business-backed Education Partnership, made the following recommendations:

•The financing formula should be “weighted” to allocate additional money for the neediest students. The cost of educating a special-education student, therefore, would be twice the base amount, or a figure close to $20,000 a year. The cost for low-income students would be 1.75 the base amount if they receive free lunch, or around $17,500, and 1.25, or $12,500, if they receive reduced lunch. The cost to educate students at career and technical schools would also be budgeted at 1.25 the foundation cost, and the cost to educate English-language learners would be 1.2 times the base amount.

“We don’t yet know exactly what the weights should be because those more sophisticated systems to determine weights don’t exist yet,” McWalters said. “But don’t abandon the idea of weights, because it is fundamental to the idea of fairness.”

•The formula should ensure a base amount per student to every district, regardless of how wealthy it is, and should not take away state money a district is currently receiving.

•The formula should be evaluated for periodic “mid-course corrections” and should be phased in over several years, as the state gradually takes over more education costs.

McWalters said the state Department of Education will produce estimates on what local districts might receive under the proposal and also how much they would save if big-ticket items were assumed by the state, and submit them next week.

The proposal does not suggest how to pay for the school-financing formula.

That difficult task was assigned to a second advisory group, the Tax Relief Technical Advisory Group, chaired by Gary Sasse, executive director of the business-backed Rhode Island Public Expenditure Council.

That group met only once, on April 25, with just seven members attending.

It is unclear why the group did not explore possible financing sources for the education formula, including an increase in sales tax, use of Lottery money, or cigarette taxes.

“It was a bit chicken-and-egg,” said Rep. Edith H. Ajello, D-Providence, co-chairwoman of the joint committee. “The tax group seems to want to know what the formula is and what the costs are before they look into ways to finance it.”

Ajello said the committee will meet again next week to review the education department’s estimates and hopes to craft a bill to go before the General Assembly before the legislative session ends next month.

jjordan@projo.com