There is probably no one in the state of Georgia who better understands school funding than Joe Martin, who helped write the current QBE formula, which he says suffers from legislative failures over the years to fully fund it.
I was impressed that state Rep. Brooks Coleman and state Sen. Fran Millar, both Republicans, asked Martin, a Democrat who ran for state school chief and lost to John Barge, to advise their State Education Finance Study Commission. Their recognition of Martin’s expertise trumped any partisanship, and I think the commission benefits from Martin’s careful attention to detail in drafting a new funding paradigm to consider:
Here it is:
House Education Committee
Hon. Fran Millar, Chairman
Senate Education Committee
FROM: Joseph G. Martin, Jr.
RE: Financing of K-12 Education in Georgia
Thanks for the opportunity to share my views and suggestions with the State Education Finance Study Commission. As I’ve said on several occasions, you have a very important responsibility, and I’m glad to assist you in any way I can. I respect and appreciate the careful and constructive approach you are taking.
The original intent of QBE was to provide funds to local school systems in a rational way on the basis of student needs. That premise is still sound, but the mechanics of the formula have become so detailed and arbitrary that the basic concepts have lost much of their meaning.
It is essential in building public confidence to articulate the needs of our schools in a way that is understandable and transparent. Only then can we explain why our students and state will benefit from investing in our schools. This is why the funding formula must be clear, fair, and flexible and focused on the goal of improving student achievement.
The overall approach I’ve suggested to you is a significant departure from QBE, because it is not based on a weighted student cost. Instead, it relies on the number of “teaching positions” earned by each school system according to approved staffing ratios (but with broad latitude in how these positions are filled). There would also be allocations for various forms of support at each school. Once these needs have been determined, the level of funding would have to be adjusted in relation to the fiscal capacity of each system, but in ways that differ from QBE.
Let me begin by repeating some of the concepts I tried to describe in my presentations.
First, the formula should be as simple as possible, while recognizing the varying needs of each student and the wide fiscal disparities among local school systems. The framework I’ve proposed to you can be summarized on a spreadsheet that is only one page long.
Second, the purpose should be to create a “foundation” of financial support in providing an adequate instructional program for every student in Georgia, regardless of where he or she may live, while affirming the ability of local communities to exceed the basic instructional program based on local needs and desires.
Third, the overall approach must begin with the State’s constitutional obligation to provide an adequate education for every student in Georgia. Fulfilling this obligation requires an effective partnership between the State and local systems, which takes into account the fiscal resources of each system.
Fourth, the basic steps in the funding formula are to (1) define the cost of the basic instructional program, (2) add grants for system-level costs, (3) calculate the required local share of these costs, (4) allow flexibility in the use of state funds, (5) enable local systems to raise additional funds to meet local needs and desires, and (6) provide additional assistance to the systems with the least resources. However, the funding formula loses its validity if the cost components are not estimated realistically.
Fourth, the quality of teaching is the crucial to the success of our schools and represents over 80% of all operating costs at every level. All of our efforts in education should be focused on our students, but the funding formula is tied largely to the provision of teaching positions.
Fifth, the cost to provide teachers for our schools ultimately depends on the number of students, the placement of these students into various programs, the salaries and other benefits for our teachers, and the staffing ratio for each program. Therefore, unless the compensation for teachers is changed from the current schedule of salaries and benefits, the key factor in the cost of education is the number of students per teacher. We have to find effective ways to adjust the staffing ratios without harming the quality of instruction, and the implications of any reduction in state funding should be expressed in these terms.
Seventh, regardless of the funding formula, we have to evaluate the outcomes in terms of student achievement and intervene whenever these outcomes are not acceptable.
My specific recommendations are set forth below. The recommendations that would not be costly and could be implemented with little difficulty are shown in bold type.
A. Calculate the cost of the “Foundation,” including system grants.
1. Determine the number of earned teaching positions to serve the number of students in each instructional program according to the staffing ratio for that program.
• The number of teaching positions can be based on the number of FTE students in each of the existing instructional programs in each segment of the school day and the staffing ratio for each program, as is now being done.
• Alternatively, the number of teaching positions can be based on a general staffing ratio for the total number of students at each organizational level (K-5, 6-8, and 9-12 or K, 1-3, 4-5, 6-8, and 9-12) plus the number of teachers required to serve the number of students in Special Education and other supplemental programs for certain portions of the school day.
2. Compute the total cost of these teaching positions, using the salary and fringe benefits for a beginning teacher with the minimum certification (with adjustments to the extent that some of these positions have a higher starting salary).
3. Recognize the salary increments for training and experience through a total adjustment for all of the earned teaching positions in each system based on the overall level of experience and training for these employees.
4. Provide support for staff development, because of the continuing need to update and improve the skills of all educators, at a cost equal to 1.5% of the base salaries for the covered positions.
• This percentage was originally set at 1.5%, but was reduced to 1% in FY 2002 and has not been restored.
5. Add reasonable estimates of the cost for the required supervision of a typical school and school system, at a cost equal to 7% of the total cost of the earned teaching positions at each school for school administration and 3% of the total cost of the earned teaching positions in the system for general administration.
• The prescriptive and artificial staffing ratios for school and general administration should be replaced by simple “overhead” rates, as used by many businesses.
6. Add allowances for textbooks, technology, supplies, equipment, library books and media, and travel, based on a reasonable amount per student at each organizational level, along with specific “add-ons” as may be necessary for certain programs.
• There should be a “reality check” to ensure that the overall total is not less than 75% of the statewide average cost per student for these expenditures in the most recent year for which such data is available.
7. Share in the total cost of facility maintenance and operation, based on the estimated cost per student of maintaining a typical school building.
• There should be a “reality check” to ensure that the overall total is not less than 60% of the statewide average cost per student for these expenditures in the most recent year for which such data is available.
8. Provide a system grant to cover a major part of the cost of student transportation according to the specific needs in that system.
• There should be a “reality check” to ensure that the overall total of these grants is not less than 60% of the statewide average cost per student for these expenditures in the most recent year for which such data is available.
9. Provide a system grant, which includes per-student guidelines, to cover a major part of the cost of nursing services, according to the specific needs in that system.
• There should be a “reality check” to ensure that the overall total of these grants is not less than 75% of the statewide average cost per student for these expenditures in the most recent year for which such data is available.
10. Provide a system grant to defray the extra costs caused by extreme sparsity and the geographic isolation of specific schools, as well as financial incentives to encourage small systems to coordinate services and functions with RESAs and other systems.
B. Create an effective partnership with local school systems.
1. Expect the State to pay 80% of the total cost of the Foundation for the state as a whole, and
2. Allocate the remaining 20% of the total cost for the entire state among all of the local school systems on the basis of their relative taxable wealth per student.
• The total local share would be apportioned among all local systems according to the percentage of the total statewide equalized property-tax digest per student that is represented by each system.
• The total local share would no longer be a fixed amount based on five mills, but would vary according to the total amount of the formula and system grants.
• Nevertheless, the number of mills required to cover each system’s local share would still be the same in every system (with the assessment methods and property tax exemptions being consistent from system to system).
• This approach would create a true partnership in the sense that the State and local systems would share the cost of increases in the Foundation as well as any savings that would result from decreases.
3. Consider adjustments in the taxable wealth for each local school system based on median household income, local retail sales, or the percentage of students who are eligible for free or reduced-price meals.
• Median household income is a more reliable measure than per-capita income, which can be distorted by the presence of a few high-wealth individuals.
• The percentage of students who are eligible for free or reduced price meals is a good proxy for household income. It offers the practical advantages of being updated regularly and being available for independent as well as county systems.
• An adjustment of this nature would recognize the ability of the taxpayers in each system to pay the taxes related to the size of their tax digest per student. It would also assist the systems which have high student needs in relation to their tax base.
C. Allow local flexibility in the use of State funds.
Permit local systems to spend the funds for the Foundation in the way they believe is the most beneficial to their students, subject to overall standards, limits on class sizes, a minimum salary schedule, and accountability for the performance of their students.
• The detailed expenditure controls that now exist (except for temporary waivers) would be replaced by the requirement that all funds allotted by the State to each local school system for direct instruction be spent for this purpose.
• Every local system would have to provide at least as many teaching positions as the number earned through the staffing ratios for the various instructional programs; but as a way to encourage innovative approaches, the system could fill a teaching position by substituting various forms of technology and/or various combinations of certificated teachers and other employees.
• The system would also have flexibility in the size of individual classes so long as any single class did not exceed the base class size for its program and grade level by more than 25%.
D. Enable local systems to raise additional local funds to meet local needs.
Recognize the authority of local systems to levy property taxes in excess of the required local share for the purpose of increasing their salaries above the State’s minimum salary schedule and enhancing the services to their students.
• The amount of this funding would vary from system to system depending on the fiscal capacity and political will of each system.
E. Provide additional assistance to the systems with the least local resources.
1. Provide Equalization Grants to enable all systems to increase salaries and enhance the services to their students on the same basis as the system at a defined level of taxable wealth per student.
2. Set the benchmark for Equalization Grants at the statewide average for the equalized property-tax digest per student instead of the equalized property-tax base per weighted student for the system at the 75th percentile when all systems are ranked on this basis.
• Using the overall state average per student would be much easier to understand and much more stable and predictable from year to year.
• The statewide average ($175,437) is almost exactly the same as the taxable wealth for the system at the 75th percentile ($176,248) in FY 2012.
3. If the total amount of Equalization Grants has to be reduced by a certain amount, adjust the benchmark to a level which reduces the total amount of these grants to the prescribed total.
• This approach would allocate the available funding so that the percentage reduction declines on a graduated basis from the current benchmark to the system with the lowest taxable wealth per student, instead of the current method of reducing all of the grants by the same percentage.
4. Do not recognize federal Impact Aid in the number of mills to be equalized in the calculation of Equalization Grants.
• The current approach inflates the Equalization Grants to certain systems by counting federal Impact Aid as revenue generated by local property taxes.
5. Simplify the calculation of Equalization Grants by using the total FTE rather than the weighted FTE for each system.
• Discontinuing the use of program weights would require the use of an FTE total or some form of adjusted FTE in calculating Equalization Grants, but there would not be a significant shift in the distribution of these funds.
F. Remove the internal constraints that limit the major compensatory programs.
1. Modify the Early Intervention Program to provide the extra help needed by students in grades K-5 to perform at grade level on a sustained basis.
• This program should be offered to those students who either meet the current criteria for eligibility or are eligible for free or reduced-price meals and have not met grade-level expectations for at least two consecutive years (to avoid abrupt changes). In addition, the “cut-off” score for continued eligibility should be increased to a higher level so that a student does not move into and out of EIP as a result of small changes in test scores above the threshold for meeting expectations on the CRCT.
• The rules for implementing the various delivery methods, especially in terms of the maximum class sizes, should be revenue-neutral so that a school can choose the method that is best for its students without a financial penalty.
2. Modify the Remedial Education Program to provide the extra help needed by all of the students in grades 6-12 who are not making satisfactory progress toward graduation from high school, without an arbitrary ceiling on the number of eligible students in each school.
• Participation in REP is now arbitrarily limited to 25% of the students at any school or 35% of the students at a school if half of the students at that school are eligible for free or reduced-price meals.
3. Modify the Alternative Education Program to serve all of the students who need a non-traditional setting to graduate from high school in addition to the students who have been identified as being disruptive, without an arbitrary ceiling on the number of eligible students in each system.
• Participation in AEP is now arbitrarily set at 2.5% of the total number of students in grades 6-12 in each school system.
Thanks again for your dedicated service to our state and the skillful way in which you are leading the work of this commission.
–From Maureen Downey, for the AJC Get Schooled blog