Rearranging the broken chairs on the deck of the Titanic isn’t what school finance reform ought to be about.  Yet increasingly that’s the message being conveyed by Office of Policy and Management (OPM) Secretary Ben Barnes.  His implicit warning of no new money for education anytime soon was delivered as recently as last Wednesday at the CT Conference of Municipalities (CCM) annual convention in Hartford. 

In case you missed the Titanic analogy, try this one:  No new money for the public schools sets up a zero-sum game, wherein tweaks to the ECS formula by the Task Force or legislators would likely incite some version of musical chairs.  Some players might not even get a seat when state aid is reallocated.  (Be sure to read the Call to Action at the end of this column.)

Any reallocation or redistribution of state aid, aka revenue-neutral school finance reform, would not result in adequate or equitable funding of the public schools.  It also would not ensure equal access for all students to a quality education, lessen a reliance on property tax rates across all municipalities, or achieve other important goals of any state aid equalization formula.

RI:  A Sobering Case Study in Revenue-Neutral School Finance Reform

Underscoring OPM’s hints of no new money for schools in the short term was a presentation to the ECS Task Force this past Thursday by Dr. Kenneth Wong, a Brown University professor who was one of the designers of RI’s new school finance formula.  Dr. Wong’s eloquent, beguiling delivery style and his adroit ability to mask essential underlying features of that formula belie the fact that the RI formula ought to be viewed by CT policy makers, educators, and parents with considered incredulity if not downright alarm.

In a nutshell, the new RI foundation formula provides a core instruction amount of $8,295 per pupil, which purports to adequately fund core instructional needs via a “market basket” approach that includes 100% of the per pupil cost of teachers, administrators, instructional support, textbooks, and equipment, plus 60% of the cost of benefits for all staff.  Its “student success factor” adds a 40% weight to the core instructional cost for students eligible for free and reduced-price meals.  No other student needs are weighted in the formula.  The state share ratio considers the capacity of each district to generate tax revenue, based on property values, median family income, and the concentration of at-risk students.  All resources, both state and local, follow the child from one district to another or to a charter school.  The formula supposedly provides additional state aid to 70% of students in the state.  Districts that receive additional state aid will see a gradual increase in aid over 7 years, while those that will receive less have a 10-year phase-in period before the lower amount takes full effect.

At least on the surface of things, the new RI formula sounds fairly innocuous, right? Two particularly appealing provisions of the formula are the annual Consumer Price Index adjustments to be made for core instructional services that form the base of the formula, and the separate phase-in schedule for the formula’s winners and losers.  Why it should require 7 years to phase in the modest increases of this revenue-neutral formula, however, is unclear and probably of little consolation to those 30% of students who have become “losers” as a portion of their state aid now goes to augment funding for the 70% of “winners.” 

A taste of the new formula’s less palatable aspects should weaken the appetite of anyone who thinks there may be easy solutions to school finance reform in neighboring RI.  (Sorry, no easy solutions to be found in other states, either.)  My primary beefs are the following:

1. No new money.  The RI formula rests on the false assumption that no additional state money is necessary, that current funds just need to be distributed differently.  Later, when parents and the education community raised somewhat of a ruckus (and in light of the current adequacy and equity lawsuit against the state, Woonsocket vs. Carcieri, brought by poor urban communities serving high-needs students), it was conceded that as the economy improved, more money could be added to the formula, including additional weights for other categories of student need.  But that additional need is already abundantly clear, as is evidenced by the state’s poor-to-mediocre student performance data, so why weren’t those weights added from the get-go?  Answer:  Because the formula was designed explicitly to require no additional contribution from the state, regardless of student needs or the urgency of resources for closing the achievement gap and driving school district improvements. 

2. Core instructional cost calculation.  Core instructional costs purportedly were derived from averaging the expenditures of RI with three other New England states (CT, MA, and NH) using 2005 data adjusted to reflect 2010 dollars.  The notion that an ideal funding level can be obtained in this manner is pretty absurd, in that every state is unique in the makeup of its towns and their citizens’ demographics, and the cost of doing business differs not only by community within each state, but also even more markedly across state lines.  CT’s geographical and demographic makeup, for example, is not like that of MA, and it is even less like those of RI or NH.  Why such a comparison-state tact was employed (and why VT and ME were excluded from the New England grouping) remains a mystery.  That approach is also an outlier from the way in which other state formulas have been designed and/or revised in recent years.

Indeed, the questionable methods used by the RI design team beg the question, Why wasn’t RI’s education adequacy cost study utilized in designing this formula?  Reportedly, the 2006-07 adequacy cost study, commissioned by the RI legislature and conducted by R.C. Wood & Associates, was relegated to legislators’ “bottom drawer” when all four of the methods employed therein found that the state was significantly underfunding education.  Cost estimates for supporting students to meet the state’s educational standards, as generated by the study’s four research models, called for increased spending that ranged from $42.4 million to $204.8 million per year.  The base cost per student ranged from $9,150 to $10,112, to which all four models added student weightings for poverty, English language proficiency, and disabilities, and no “market basket” approach was contrived, thereby leaving districts free to utilize their state allocations to support the full gamut of their educational offerings.  While the adequacy study’s findings may have been politically unpalatable and fiscally unrealistic in the short term, methodologically it employed well-established approaches used by school finance experts nationally to estimate the cost of an adequate education.

3. Student success factor calculation.  The selection of a 40% weight for students eligible for free and reduced-price meals (some 62,500 students, or 43% of the state’s public school enrollment) appears to be an unfortunate cost-containment choice.  Among competing estimates found in national research studies, the best of studies have estimated the real cost as being significantly higher.  Particularly inasmuch as no other student needs are included as separate weights in the formula, the 40% poverty weight is inappropriately low.  But kudos to RI for the use of free/reduced meals as the poverty measure, with the concentration of poverty based upon kindergarten through 6th grade numbers of low-income students.  This is decidedly superior to the indefensible way that CT measures student poverty (a 33% weight for children receiving federal Title I services, which accounts for only about one-quarter of all students receiving free/reduced meals).

4. No weights for English language learners or special education.  The lack of weights in the formula for these categories of need is highly problematic from both an educational and equity perspective.  It also ignores federal and state laws giving these students extra protections in securing access to equal educational opportunity.  The extensive body of research and best practices that outline effective programs and services make it crystal clear that there are significant extra programmatic and staffing costs in meeting the learning needs of these students, over and above the cost of delivering effective services to children in poverty.

Education Commissioner Deborah Gist herself has gone on public record admitting that RI Latino students, which constitute more than 20% of the state’s public school enrollment (roughly 30,000 of the state’s nearly 144,000 students) have some of the lowest test scores in the nation for their demographic.  Somehow that message didn’t translate when the new formula was designed.  Officially, limited-English students number some 7,000 (5% of the school population), and special education students represent a whopping 17% (25,000 students).

In response to ECS Task Force member Mary Loftus Levine’s questioning of this, Dr. Wong replied that assigning weights to capture those costs is unnecessary because these special populations are highly correlated with students in poverty and therefore already weighted at 40%, and that any additional weights would merely create fiscal incentives for local schools to over-identify them and excuses for separating them programmatically and physically from the mainstream student body.  Wow!  But as polite hosts, no one took him on for such ludicrous assertions that fly in the face of established equity principles and straightforward accounting evidence (not to mention federal laws)!  At least CT’s ECS formula includes a weight of 15% for ELL students who do not receive bilingual services under a separate state grant, though that paltry weighting fails to adequately address the extra costs inherent in educating ELL students. 

No mention of a categorical grant for ELL was found on the RI Department of Education website, but it does appear that a new grant has been created for extraordinary special education costs, to be reimbursed after a district’s expenditure for a particular child has exceeded by five times that district’s core instructional spending per pupil.  That same reimbursement threshold was formerly the standard in CT but is now 4.5 times a district’s net current expenditure per pupil.  CT’s ECS formula, like RI’s new equalization formula, includes no weights for mild or moderate special education needs, resulting in the gross state underfunding of these vital but resource-intensive state- and federally-mandated services.

5. Local tax dollars to follow the child.  From my involvements in RI over the past several years and colleagues there, it appears that bolstering charter school funding and paving the way for rapid expansion of those privately run schools was a sacred principle that, together with revenue neutrality, drove the design of this new formula.  The 2,000 charter school students mentioned by Dr. Wong are actually closer to 4,000 and growing, according to RI Department of Education online enrollment figures.  And, as in CT, the charters are highly racially and economically segregated (poor and minority) and located in urban districts that accordingly are now experiencing declining enrollments that under the new formula means reduced state and local revenues.  While the funding of charters is a controversial issue everywhere, including in CT, the notion that local tax dollars can be moved at the whim of parents and their children across town boundaries or out of traditional public schools into the privately controlled charter schools is not likely to pass muster here anytime soon. 

Indeed, CT’s convoluted funding of both interdistrict magnet schools and vocational agriculture centers poses similar headaches, and it’s not inconceivable that the state’s efforts to shed direct control of its Technical High Schools will further complicate funding matters.  All these fiscal issues can be resolved and funding integrated into a single fair and affordable school finance system, but designing a funding formula primarily to feed charter school management organizations’ insatiable desires for unfettered growth is not the way to go about designing a formula that will adequately and equitably serve all children, all schools, and simultaneously preserve historically cherished preferences for local control of education by publicly elected officials.

6. Questionable state and local funding shares.  The “market basket” approach for calculating core instructional costs aims for the state to sufficiently fund all resources needed to support the basic curriculum laid out in RI’s Basic Education Program (BEP).  That is considered the extent of the state’s obligation for funding an adequate education.  Responsibility for funding all the co-curricular “extras”— which includes most performing and visual arts (band, chorus, drama, dance, painting, sculpture), all sports, and any after-school clubs or activities — resides with the local communities.  Problem is, not every community can afford to meet that burden, though these offerings are essential to providing a comprehensive education and motivating students to stay in school.

The maintenance of effort requirement, or minimum local contribution for education that cities and towns must make, is an amount not less than the previous year’s local contribution, with optional downward adjustments for declining enrollments and unusually costly nonrecurring expenditures.  All state funds must be used for educational purposes only and “supplement, not supplant” local education funds.  Surplus funds can be carried forward by school districts and cannot revert to municipalities; nor can surplus funds be deducted by municipalities from their subsequent year’s required minimum local contribution. 

RI’s maintenance of effort requirement is similar to that of CT.  Both states’ provisions fail to recognize the principles of property tax equity, municipal over-burden (i.e., the many costly public services that larger municipalities must provide in their roles as regional centers of commerce, health care, employment, etc., costs that are not readily recaptured through property taxes or other means), and other dynamic factors, not the least of which is the uncertainty of state municipal aid.  All of these significantly strain the ability of cities and towns to maintain level aid to their public schools.  School boards, on the other hand, have traditionally focused on securing stable funding from their local communities, when in reality they should have been more concerned about their inadequate levels of state aid and the ever-increasing numbers of costly unfunded and under-funded state and federal education mandates.  That’s a lesson that has been learned in CT (almost, that is), thanks to political activism and school finance litigation.

In years past, RI’s goal for the state’s share of education funding has ranged between 25% and 60% of total costs, with the current state share approximately at 38% and no explicit goal for state/local cost sharing set under the new formula.  Complicating matters further is a cap on property tax increases regardless of a growth in population; for FY12 the cap is 4.25%, with override provisions that allow for unusual circumstances.  Among RI’s historically complex laws that impact education funding is one that declares that unless the state is specifically bound by contract, law, or regulation, any cost-related obligations are the sole responsibility of local communities, and the Caruolo Act, passed in the 1990s, essentially allows school districts to sue their municipalities for more money, thereby pitting underfunded schools against their similarly fiscally distressed communities.  All this sounds somewhat like a recipe for financial disaster for both school districts and municipalities, as well as portending gross educational inequities for students. According to some RI parents and municipal officials, that’s already the case, but the new formula is likely to exacerbate things and spark additional litigation.

Dr. Wong’s way is the wrong way.  Overall, there is little for CT policy makers to learn from the RI school finance formula or even the process that got them there, certainly no more than the positive and negative lessons one gains from the study of most every state’s formula.  (Maryland still tops my list of states that the ECS Task Force should be looking to.) 

The ability of the RI formula to meet any of the goals of an equalization formula is dubious.  Five years or so from now, unless Commissioner Gist is able to produce miracles with few resources other than her bully pulpit and formidable charisma, student performance in RI’s districts most probably will have shown no real uptick.  Today’s poorest, lowest-performing districts will unfortunately remain just that, despite valiant turnaround efforts on the part of teachers and administrators.  Why?  Because meaningful school turnaround requires resources, and that usually means abundant new resources to support carefully targeted, research-based interventions.  Additional resources are especially imperative when current funding is insufficient to support even ongoing basic operations, as is the case in the poorer school districts of both RI and CT. 

In sum, Commissioner Gist’s statement to the press upon release of the proposed new formula (February 26, 2010), that now RI will be “the state with the best funding formula in the country,” is quite ill-founded, given that the formula contains so much not to love and the proof of its success won’t be known for several years.

Meanwhile, in CT . . .

At the same CCM event held at the Hartford Convention Center last Wednesday, Gov. Malloy in the keynote address promised to hold harmless (i.e., level fund) state aid to municipalities for FY13 regardless of the fiscal pressures facing the state.  That’s good news for municipalities — except that it means local communities will continue to bear heavy burdens for funding their schools.  Thus we should anticipate the usual spring acrimony between Town Hall and the BOE, as well as between parents and senior citizens.  Worse still, we should expect even deeper harm to academic quality within school districts that already have been decimated by painful program and staff cuts these past four years that the state has been level-funding education.  And just to be clear:  “Level funding” isn’t “level” at all.  It typically means a 4-6% cut to district operating budgets, inasmuch as costs are largely driven by collective bargaining agreements and the wage increases contained therein, high energy costs, pupil transportation needs, and the ever-escalating cost of mandated services for special education.

A CALL TO ACTION — Let Task Force members hear your views on the status of school funding in your local community!  Do you agree or disagree with a no-new-money approach that would redistribute current ECS funding by “re-slicing the pie” like RI’s formula or in some other manner?  Are your local schools being adequately funded — and if not, what kinds of resources are they lacking?  What do you want the ECS Task Force to do to improve school funding for your community? 

Consider making your voice heard during a special public comment portion of the upcoming meeting of the ECS Task Force to take place in New Haven on Thursday, October 18, beginning at 5 pm (location TBA).  A second opportunity will occur two weeks later in the Waterford/New London area.  Watch CT News Junkie and this column for more information as details of these meetings become available.

Next week:  The Cost of an Adequate Education in CT

Dianne Kaplan deVries is an education consultant who also serves as Project Director for the Connecticut Coalition for Justice in Education Funding, plaintiffs in the CCJEF v. Rell education adequacy and equity lawsuit. Opinions expressed here, however, are solely hers and not necessarily those of CCJEF.

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of