Friday, May 27, 2011

No increase for District 742 in Education Finance Bill, Despite Claims to the Contrary (1)

I've been trying to share information on the financial impact on our local district as compared to other districts and charters across the state.  In my last posts, I showed that our district, one of the most financially stressed in the State, is slated for a $74 per student reduction by the house and senate education finance bill.   I complained that some other school districts and charters are receiving substantial increases, but that urban districts and districts serving students in poverty, come out substantially worse.  To catch a reminder of what I said, just click here.     Some constituents passed along my position to a local legislator, who wrote back claiming that I was wrong.  Actually, he claimed, our district was in for a great big increase.  Now we're still sorting through all of the end-of-session material. And as we sort, we're finding out more about what happened, but the more we learn, the less we like what we see.

This happens every two years, whether the republicans are in control, or the democrats.   After the education finance bill is passed, and the session closes, the majority party comes home and brags about how much they have done for education.   And, typically, when we look at the increases (if any) that we received, and compare that to the increases they tell the public we are going to receive, we find a substantial discrepancy.   So whose right and what's the explanation.     None of us, the legislators, nor I, want to be wrong on this. Because sooner or later, if the law passes,  we're going to find out when the money actually is distributed.  So I'm spending  chunk of time analyzing, probing and querying to make sure.   As of today, to my regret, I'm still claiming that I'm right:  and that the Education bill cuts funding for the St. Cloud school district.

Scoring Education Finance Bills--Understanding Comparison-to-Base Runs:  Education finance bills are passed once every biennium, in odd numbered years.  The traditional way to score education finance bills is to create a spreadsheet called "runs," which show what each school district would receive under the former funding formula (called the base) and compare what that school district would receive under the new funding formula for the new biennium.   The comparison-to-base method, then shows what we would have  received per student under the old bill (including any increases and decreases that result from application of the formula), versus the amount that we would receive by application of the new formula.

The formula includes a variety of measures designed to reimburse school districts for higher or lower costs.  Special education is the best example (although the actual reimbursement is way way lower than actual cost).  The formula provides the district with more money for special education because educating students with disability cost more.   Under the comparison to base method, the "runs" assume that if the base formula awards more money to the school district for special education, that's not an increase that is caused by the new legislation.  Similarly, if a school district loses money under the formula, because it has fewer students who are costly to educate, under the comparison to base method, that's not counted as a decrease caused by the new legislation. 


Under that measure (new formula versus base) -- which is the customary measure used to evaluate education finance  our school district takes a $74 per student bath.  Our annual cuts will thus reach $710,000 in the second year of the biennium.  But the comparison-to-base runs do not fully state the magnitude of the cuts.   One reason is that the legislature is forcing up our contribution to employee pension plans by $250,000 per year, without reimbursement.  These runs don't report the mandated spending increases that come with legislation..

Another problem is that the legislative counting system wrongly assumes that each school district will receive a substantial increase in special education funding, even though in our case we will not.  Our state special education support has not increased since 2005, but each biennium, the runs report that we are going to receive an increase.  We can't increase special education spending, because we cannot afford to do that.   That's because the State doesn't reimburse all of our expenditure increases in special education and provides no revenue source to fund the difference.  This gift of additional special education funds, that they offer us comes with a poison pill.    If we accept the invitation of the comparison to base run to spend more in special education,  the unreimbursed  extra costs will drive us into deeper financial difficulty.  So the comparison-to-base system pretends that you will get money that you will not get.  And if you do get the money, you are actually put deeper in debt.  This system is so flawed, so misleading, so dysfunctional, that the accounting for it is wildly difficult to explain and even more difficult to understand.  Most legislators have given up trying.

There is another method of comparing the impact of legislation, and that is to count as an increase money that you were going to receive anyway on programs that require you to spend more as an increase provided by the legislation.   Under this approach, if you were going to receive a $100  per student increase under the existing formula (because of a change in student mix) and the legislation takes all $100 of that increase away, why that would be counted as revenue neutral.   So some legislators are telling voters that their school district didn't get cut, even if they took away increases that their district was due to receive under the old formula.   I'll talk more about this method of analyzing school finance legislation in my next post.

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