insights (2005-40)

Boosting State Funding for Knox Schools

State officials appear to be moving toward rectifying inequities in the state’s convoluted formula for funding public schools that have left Knox County at the bottom of the totem pole.

A committee of the state Board of Education is addressing an adroitly crafted package of changes in the formula that would increase Knox County’s slice of the $3 billion pie by more than $20 million when fully implemented. Knox County and Hamilton County, the two bottom feeders as matters stand, would be the biggest winners under the reallocation. But nearly every county school system would benefit to some extent at the expense of municipal school systems, which have been making out like bandits under the existing formula.

A pivotal date is Oct. 17, when the BEP Review Committee of the Board of Education convenes in Nashville to make funding recommendations for the fiscal year ahead. BEP stands for Basic Education Program, which is the landmark 1992 statute that has driven state funding of public schools ever since.

The BEP Review Committee is charged by state law with making annual recommendations to the governor, by Nov. 1 each year, on whether the funding formula should be changed. But aside from a few tweaks, the only substantial revision in 13 years came in 2003, when funding for teacher salaries in poorer, mostly rural school systems got a big boost to comply with a state Supreme Court directive to make teacher pay more nearly equal throughout the state.

This year, however, big changes are on the table, prompted in large part by a set of principles enunciated by a task force appointed by Gov. Phil Bredesen in 2003 in the wake of the Supreme Court’s teacher pay inequity decision. In addition to devising the formula revisions for making teacher pay more equitable, the task force went on to recommend several farther reaching changes in the BEP formula. Those include:

• Revamping the complex model developed in 1992 by the Tennessee Advisory Commission on Intergovernmental Relations for measuring the fiscal capacity of school systems. The lower a system’s capacity (as measured by its tax base, per capita income and other factors) the higher the percentage of state funding it’s entitled to under the BEP. But the model only measures the fiscal capacity of the state’s 95 counties, without taking into account the additional revenues available to municipal school systems. That’s a big part of the reason why cities like Oak Ridge, Maryville and Alcoa are able to pay their teachers so much more than Knox County. The model revampment that’s proposed would measure the fiscal capacity of each of the state’s 136 school systems.

• Replacing what’s known as the Cost Differential Factor (CDF) in the present formula that puts a multiplier on teacher salary payments in counties where prevailing wages exceed the state average. The preponderance of the state’s $93 million in CDF outlays goes to only three counties: Davidson, Shelby and Williamson. And the Department of Education has proposed reallocating this money and then some to an increase in the percentage of teacher salaries covered by the state in all school systems.

• Increasing BEP funding for at-risk students and English language learners (primarily Hispanics) to strengthen programs concentrating on their special needs. That would be accomplished in two ways: 1.) by applying a multiplier of 1.2 in the funding formula for each at-risk student (defined to mean one who qualifies for free or reduced-price meals) at a cost of some $140 million; and 2.) by funding a specialized instructional position for each 25 ELL students instead of the present 50, at a cost of about $20 million.

The sum of the costs of all those steps, when taken in conjunction, would appear to be on the order of $270 million. A big reason for taking them in conjunction is that it holds down the overall cost because gains in teacher pay, at-risk and ELL funding would offset much of the losses incurred by school systems adversely affected by changes in the fiscal capacity model. When viewed in isolation, municipal systems and two counties (Sevier and Williamson) would stand to lose some $70 million, and the state would be obligated to cover this shortfall to preserve their stability.

Even so, $270 million is far more than the state can afford to pay up in a single year. Such an increase would come on top of the $80 million-plus by which BEP funding typically grows each year to cover enrollment increases and inflationary factors. Then, there’s the $60 million cost to the state of a 3 percent teacher pay raise that can be anticipated in this upcoming election year plus expansion of pre-school funding, which has been Bredesen’s paramount priority. Add all those figures up and you’ve consumed all of the state’s revenue growth for the year, leaving nothing left over for TennCare, higher education, pay raises for state employees and all the rest of the state’s needs.

So it’s clear that the proposed BEP changes will have to be phased in over several years, and the BEP Review Committee will leave it up to the governor and the Legislature to decide how many. Still, even a five-year phase-in would yield the Knox County school system upwards of $4 million a year in increased state funding, atop any other increases to which it’s otherwise entitled. Such growth can make a world of a difference in relieving the school system’s budgetary strains, which have been getting increasingly severe.

In the face of opposition from municipal school systems, it’s by no means sure that the pending package of funding changes will gain the BEP Review Committee’s recommendation or Bredesen’s approval. But the executive director of the Board of Education, Gary Nixon, reports that he “senses there has been a lessening of tensions” since the package got bundled. The Tennessee Education Association’s savvy research director, Graham Greeson, says, “I think it’s inevitable that we’re going to the 136-system model, and it’s imperative that we increase at-risk and ELL funding. After 12 years of helping small school systems that needed it, our greatest need now is to help the large urban systems.”

Knox County Mayor Mike Ragsdale is championing the push for greater urban county funding, and it should be hoped here that his efforts will be rewarded.

© 2005 MetroPulse. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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