Thursday July 13, 2023

ANALYSIS: School Funding Analysis Reveals What Local School Districts Already Know

ANALYSIS: School funding study reveals what local school districts already know

The Commonwealth of Virginia continues to fall down on the job funding public schools … sort of

Photo by CDC on Unsplash

by Martin Davis

If there were any doubt that Virginia schools are grossly underfunded, check out what Gov. Glenn Youngkin had to say about the Joint Legislative Audit & Review’s report on public education funding.

The budget we passed last year was the largest education budget in history, including a 10 percent pay raise for our teachers. Today’s JLARC report lays plain that the previous two administrations failed to provide adequate funding in K-12 education.

Of course, he blamed the Democrats. And the Democrats shot back:

The budget passed last year was proposed by Ralph Northam. GOP spent ten years after the Great Recession ignoring education while in the majority. It took Democratic wins in ‘17 and ‘19 to get the state to reinvest. If the Governor wants to reform how we fund schools I’m in.

Congratulations. What is arguably the most important issue facing Virginia this year, and every year - education - is once again nothing but fodder for a middle-school game of “nah-nah-nah-nah-nah-nah, I’m right” played by the people who are supposed to be the adults in the room.

So let’s cut right to the quick - Virginia has been underfunding education for decades. Democrats. Republicans. Independents. School reformers. Non-school reformers. There’s plenty of blame to go around.

Instead of playing the all-too-tired blame-game, let’s actually work on the problem. And the problem goes beyond one number - how much money students receive from the state. The real issue is whether we’re spending the money we have in the most efficient ways.

School funding is clear as mud

There is little doubt in our area that schools are grossly underfunded. And the problem starts with a faulty funding system that is now 50 years old. The Local Composite Index.

Though the JLAR report gives the LCI an overall favorable review, noting that “The LCI formula’s original assumptions about which revenue sources Virginia localities rely on are still reasonably close to today’s revenue sources,” that doesn’t mean it’s working. The JLAR report says as much:

Though the LCI is a reasonable measure of ability to pay, it can lead to sudden, large changes in the state or local funding share between biennia for certain divisions.

And that’s exactly what happened to Fredericksburg City Schools in May 2020 as it was planning its 2020-21 budget, when Superintendent Marci Catlett’s original budget proposed in February of 2020 proved too expensive for the city when the governor’s projection for state funds dropped, as did the projected amount from the LCI.

In fact, cities in Virginia are often hit hardest by the LCI, a reality detailed in a 2015 study by the Virginia Municipal League.

Education funding for the state’s Standards of Quality (SOQ) should be based on the actual costs for school divisions to meet the Virginia Board of Education’s Standards of Learning for students and Standards of Accreditation for schools. Also, the local composite index (LCI) is a crude and often inaccurate proxy for determining the ability of each locality to pay its share of K-12 expenses as defined by the SOQ. The Commonwealth’s education funding formulae (SOQ and LCI) are more sensitive to the state’s revenue situation than the educational needs of Virginia’s students. VML supports a JLARC or other state study that examines the ways other states fund education and whether the Commonwealth should use a funding strategy that establishes a more realistic base foundation amount per pupil – plus add-on funding to reflect higher costs for educating at-risk, disabled, ESL, and gifted students.

Fredericksburg is hardly alone in being on the short end of the Virginia funding stick. But the problem isn’t always the LCI.

In Spotsylvania County, Superintendent Mark Taylor - who spent years as county administrator arguing that schools were overspending, and then did everything in his power to keep school funding flat, and thereby effectively underfunding Spotsylvania schools for years, suddenly found himself facing reality.

So it wasn’t LCI, but the county’s stinginess and unwillingness to recognize that citizens were going to have to pay more in personal property taxes (already some of the lowest in this area) to get the schools their children deserve.

In his first budget season as superintendent, he complained about the county short-funding the schools, but he also complained about the state short-funding the schools - apparently all that money Youngkin was sending to teachers wasn’t enough to sate Taylor.

Seemingly surprised that funding was an issue, Taylor did what someone with no understanding of education would do. And he immediately leveled threats of Draconian cuts.

Now he’s an advocate of funneling all kinds of dollars to Spotsylvania schools. But as with so many issues Taylor confronts, he has no real idea how that money could be leveraged for better educational outcomes. He just knows he wants more of it - a lot more. The Board of Supervisors, fortunately, turned a deaf ear.

And then there’s the reality of the fiscal shortcoming facing Stafford County Public Schools. Again, LCI isn’t the problem, but a burgeoning population and a tax base that is already staggering under the load it imposes on citizens.

In the most recent budget cycle, the school board requested from the Board of Supervisors $29 million more than Superintendent Thomas Taylor requested. The reason?

While the percentage of the budget funded by the county has decreased since 2011, enrollment has increased from about 27,000 to over 30,000 students.

That according to Adele Uphaus, who covered the budget negotiations for the Free Lance-Star.

The county board delivered on some of this, raising the tax rate to 93 cents.

Last night, Stafford's Board of Supervisors adopted … a real estate tax rate of $0.93 and a motor vehicles personal property tax rate of $5.49 ($2.745 effective rate). …

The Board of Supervisors provided a $16.2 million increase to the School budget, the largest increase in history. The increase includes a 5% percent pay raise for all school employees. The Budget also includes several enhancements to public safety, such as one new fire crew, six new deputies for the Sheriff's Office, 11 school protection officers and a Homeland Security investigator.

The problem? That money doesn’t come close to touching the money the school board said it needs, and it’s $13 million short of what even the superintendent said was needed to be effective.

And all this worry over funding locally is happening against the backdrop of Youngkin holding the budget hostage so he can dole out millions in tax cuts, leaving schools just a few weeks before opening still unclear of exactly how much money they’re going to receive from the state.

So in Spotsylvania, Stafford, and Fredericksburg, the commonwealth’s inability to deliver a consistent funding mechanism that fully funds what it actually costs to educate students has negatively affected each of the counties and the city.

So yes … more money is needed

There’s no doubt that here in our area, years of perpetually underfunding education has created the crises we now face, and that’s going to take more money to fix.

But it’s not just the underfunding. It’s the increased cost of educating students that is playing a role, too.

In fact, the real costs of education children is up significantly over the past 20 years. Why?

In 2015, which marked the 40th anniversary of the Individuals with Disabilities Education Act (IDEA), the Education Commission of the States issued a report on the soaring cost to fund education for special education students.

Not only is the federal government not doing enough to fund special ed students, states and localities are burdened with finding the extra money. And this puts strains on each of us, because raising property taxes at the local level in Virginia and in income tax rate at the state level are about the only mechanisms that we have to cover that additional cost.

Another factor that is escalating the cost of education? Standardized testing.

A 2019 report from Penn State University concluded:

Studies show that states spend over $1.7 billion every year on standardized testing. After looking at spending data for 45 different states, it was determined that they spent over $669 million each year on primary assessment contracts. With the introduction of Common Core, little information has been kept up to date concerning the costs of assessment systems set in place throughout the United States. There is a clear lack of transparency in the pricing of assessments. This hinders the ability of states to make informed decisions regarding the testing systems chosen.

So all those “accountability” measures that have led to students being tested at levels no students in U.S. history have ever faced is also adding reams of greenbacks to the cost of educating these students.

Clearly - the question of education funding is a cloudy one. That’s to be expected when every state makes up its own funding rules, while balancing federal mandates, fickle state budgets, and local budgets that are straining under educational needs and social service needs and more.

And this has led to the mistake we continue to make - to tie spending against educational success.

The mistake that gets made

With the skyrocketing cost of education students, there’s always an argument to be made that more money is needed. And those arguments are grounded in the hard reality of what schools have to do.

For that reason alone, yes, schools need more money. Today, that’s led to both political parties to launch an arms race to see who can throw more cash at the problem.

Is it any wonder people are frustrated with the education discussion?

Schools may be underfunded in terms of what they need, but the amount of money being spent on education is actually up - quite a lot. All the while, test scores (for what they’re worth) are down. So what, people rightly ask, is the money being spent on? And will additional money fix the problem, which is improving student performance?

The answer is, it depends.

More money can lead to better outcomes, if that money is being spent on the right things.

But for more than 50 years, as Marguerite Rosa of the Edunomics Lab program at Georgetown University points out, we haven’t done that. That’s because we’ve bet on funding staff - teachers, and all the support personnel that have become standard fare at most every public school.

From parsing K–12 investment patterns over the decades, it seems the thinking behind the big-bet theory on dedicating that influx in funding to growing the staffing counts might have gone something like this: we have new funding for schools, but rather than spend it to give students more time in school or to raise teacher salaries, the very best way to increase outcomes for students is if there are more adults in the building on the days they are in school. To wit, schools today have many more adult employees (of nearly every type) than typical schools did four or five decades ago. Many built-in cost drivers, from rising health care costs to pensions, make unabated continued growth in the number of staff financially unsustainable. As we all know, each time a new staff member is hired, the system pays salary and benefits.

Who are these people being hired? Everyone from the lowest person on the totem pole to administrators. For all those bodies, however, frustration with outcomes is as high as ever.

The problem, then, becomes that we simply can’t afford everyone that we have brought aboard. (Roza has also shone a bright light on this problem, and noted that lay-offs are almost sure to start happening in 2024.)

It’s past time that we took a long, hard look at what we want from our educational system. And then smartly move in that direction. What gets cut? Personnel? Testing? Fewer mandates? Buildings? Transportation? Social services?

The answers will vary from school to school. Meaning that we need to find a way to more accurately calculate what students and schools need (the JLAR report has some good ideas), and then deliver them.

The funding systems that Democrats and Republicans alike have constructed over 40 years aren’t working and aren’t sustainable.

Adding more money is welcome, but it won’t change anything if we aren’t smarter about how we spend it.

There are no magic bullets here. Culture wars. Parents’ rights. Adding still more adult bodies to schools. These are all distractions.

Let’s start there by admitting where we’ve erred and begin working to understand students’ needs, then create an equitable way to fund those needs. That will get us to where we need to go.

Teachers are our best resource in launching this discussion. Start with them.

It’s time for the grown-ups to start solving the problems, instead of creating them.