Brown’s funding formula must work for all districts

Over the past few weeks, we have seen a marked change in the debate about education funding and the rebuilding of our decimated funding level. Over the past five years, all districts have stood together as revenue limits were cut by roughly 12 percent, our categorical funding was cut by 20 percent, statewide our teaching staffs were cut from 300,000 teachers to only 250,000, and administrators and classified employees suffered the same cuts. Programs for students were cut, employees made concessions from their own pockets, and we were seemingly but one bake sale away from the whole system caving in. But note that all districts were treated roughly the same, no matter the demographics, geography or politics; all districts took the cuts and all employees and students felt them.

Today, our state still ranks nearly last in the nation in per-student spending. We live in a high-tax state, but those taxes have disproportionately favored other governmental needs to the detriment of public education. And as the economy continues its slow uphill climb, Gov. Jerry Brown has proposed a new funding formula that does not look to the cuts of the past as a guide to restoration; rather he concludes that future funding priorities should be different. The debate over the model is rapidly being reduced to a calculation of how individual districts think they will do under the new formula in the short term; the overall level of funding seems to be lost in the discussion.

Under either the current distribution formula or the new one proposed by Gov. Brown, one thing is certain: California will reside at the bottom of the funding rankings for some years to come. And there is no statutory or constitutional assurance that either the new or the old formulas will actually be funded. Under the current funding formula, the state would need to fund cost-of-living adjustment (COLA) plus about 5.5 percent each year to extinguish the deficit factor of 22.27 percent and to restore the cuts to categorical programs by 2020-21. Gov. Brown’s new formula would also require about the same, COLA plus about 5.5 percent to reach his goal by 2020-21.

How many times during the past 20 years have we received COLA plus at least 5.5 percent? Once! During both good and bad economies, public education has lost ground. And we have never made it up. But the debate about winners and losers in the distribution formula brings us perilously close to taking our eye off the real ball — the devastatingly low level of funding that all districts receive. Under either formula, even the districts that gain will remain among the lowest in the nation. We are not opposed to Gov. Brown’s new plan or, for that matter, continuation of the current distribution plan, but neither will by itself revive our educational system. We need a guaranteed funding source and a time-certain plan to move to at least the U.S. average in per-student spending.

Guiding principles for education finance reform

Many of us at School Services of California, Inc., have served in districts that would benefit from one formula or the other, and we feel the urgency to improve conditions for all children by any means possible. But we think that by bifurcating the debate into camps of “haves” and “have-nots” in 2013-14 funding, we fall into the trap of ignoring the fact that under either distribution formula, both groups will continue to be losers relative to other states. The skirmish for the first few crumbs is tempting, but distracts us from the real battle. We need for the state to elevate all districts by committing to ensure that any reform that is enacted incorporates the following principles:

• This reform will represent the biggest change in more than 40 years; the new system needs to be fully transparent with plenty of opportunity for public comment and legislative deliberation and with adequate timelines for implementation;
• The model must establish a meaningful “aspirational” funding goal to bring California to a competitive position at the national level;
• Purchasing power for all districts must be maintained over time by funding the annual statutory COLA for all districts;
• The system must be transparent in that additional funding to serve poor students, English learners, Special Education students and other needy populations as well as funding to support higher level policy decisions is clearly identified;
• All districts must benefit from the new formula; it will likely be with us for a long time, so technical issues like enrollment growth and district reorganization must be specifically included;
• Enough additional funding to make a real difference must be provided; the use of higher than expected revenues for 2013-14 and balancing the buyback of cash deferrals provide opportunities for the state to add more funding as early as 2013-14;
• The system must provide local flexibility and accountability; but in addition to adequate funding, not instead of adequate funding.

We think these basic principles can be incorporated into Gov. Brown’s proposal or even into current law if he or the Legislature chooses to delay implementation of funding reform. But the opportunities for major reform are few and far between; the new system has to work for all of the districts serving all of our students.

(Note: This is an excerpt from the an editorial earier this month in the Fiscal Report. To see the editorial in its entirety, please go to www.sscal.com.)

Ron Bennett is president and CEO of School Services of California, a Sacramento-based company that provides business, financial, management and advocacy services for school districts. He has been the Chief Business Official for Long Beach Unified School District, Fresno Unified School District and ABC Unified School District. Raised in California, he earned his bachelor’s of Business Administration at the University of Oklahoma and his master’s in Business Administration from Michigan State University.