Funding Formula on Final Approach

Coming out of last Thursday's State Board of Regents for Education meeting at the West Warwick High School Auditorium, if I had to place a bet, I would have to put my money down in favor of a "funding formula" for distributing state education aid being passed this session, probably a plan that is very close if not identical to the plan that has been put forth by Rhode Island the Department of Elementary and Secondary Education and officially endorsed by the Regents.

Momentum for passing a "funding formula" is coming from three main sources…

1. Valid or not, Rhode Island's governing class cannot resist the argument of "49 other states do this, so we have to do it too". (We'll find out exactly what the number-of-state threshold is for this rationale when a few more states eliminate straight-party voting, but I digress)
2. Eligibility for future Federal education aid will likely be conditioned on having some kind of "funding formula" in place, and
3. Perhaps most importantly, the Department of Education has come up with a plan that is more politically viable than the "Ajello" plan (named for its primary sponsor, Providence State Representative Edith Ajello) that has dominated "funding formula" discussions for the past several years; according to the Department of Education's presentation, under their “funding formula” proposal, schools serving 71% of the students in Rhode Island can receive "more resources" (that's education official-speak for "more moolah"), without any new revenue having to be raised.

This outcome is made possible, in large measure, by drawing Rhode Island’s charter schools into the same state-aid system as the geographic-monopoly district schools and shifting a portion of state-aid away from the charters. The 71% figure also depends upon current big-aid communities not getting quite as much as they would under the usual Ajello numbers, e.g. Providence gets "only" $30 million under the Dept. of Ed. plan instead of $50 million under the Ajello plan, Woonsocket gets $4 million instead of $13 million, Pawtucket gets $7 million instead of $10 and 1/2 million, etc., with much of the difference going to communities that would "lose" under the Ajello plan (though some of the differences may also be attributable to declining enrollment in some cities over the past 2-3 years).

If one thing is most likely to stop a "funding formula" from being implemented in the very near future, it would be representatives from the traditional big-aid recipients getting greedy and trying to re-jigger the numbers to get more for themselves (already, at Thursday's meeting, a number of public comments boiled down to "this is a good start, but urban districts need more more more"). There is also the little matter of slipping a 15% cut in aid to Newport past Senate President Teresa Paiva-Weed (D - Jamestown/Newport) that cannot be entirely overlooked. However, politics being what it is, if the new “funding formula” holds together around its current form as it passes through the legislative sausage factory, there will be a large legislative majority able to vote in favor of more money for their constituents, by voting in favor of the new formula.

In the pre-Deborah Gist era of Rhode Island education policy, the impact of the new formula on charter school funding would be of definite concern -- specifically, are the cuts to charter schools intended as a backdoor way to kill charters altogether? Given her record so far, I believe that the Commissioner has earned the benefit of the doubt here and that due-diligence has probably been done to make sure the cuts won't be fatal (plus, could Federal replacement money for charters be a future possibility, if everything breaks correctly?). From a more affirmative perspective, a reasonable trade-off appears to be involved: for the cost of an upfront hit to their current aid, charters become fully integrated into a follow-the-student system for distributing state money, where increased funding is virtually automatic to charters able to attract larger numbers of students.

A few other items worth noting…

1. The new formula eliminates the "regionalization bonuses" that were given to districts that chose to regionalize in the 1990s (according to Commissioner Gist’s remarks on Thursday, the bonuses were supposed to be phased out anyway but never were, when state aid amounts got frozen in the 1990s).
2. In terms of quantifying student need, the formula uses only a single weighting-factor, the number of students receiving free or reduced priced lunch.
3. The loss in aid to Central Falls (about $11 million) won't occur as quickly as losses in other districts (on a percentage basis), as the transition will be eased along with money from a separate "state stabilization fund".
4. Commissioner Gist mentioned that the "Gallo" approach (named for Hanna the State Senator, not Frances the Superintendent), i.e. changing funding amounts only after state revenues increase, had been considered but rejected as unrealistic.

So is this a good plan for Rhode Island? As recently as two or three years ago, the "funding formula" was the only change in education policy in Rhode Island seriously being considered at the statewide level. A major component of my skepticism was that if our political capacity was limiting us to a choice of only one thing that could be changed, then the "funding formula" was a poor choice of focus as shifting money between existing education structures, without changing them in any way, was unlikely to produce any significant impact on educational outcomes. However, given the willingness now in evidence of the Education Commissioner, the Board of Regents, and even the Federal Department of Education to undertake multiple reform initiatives, concern that we will hear “we just passed a funding formula, we don't need to do anything else for a while” from our public officials has been greatly reduced, at least for the moment.

Which is not to say that the details of this plan can be forgotten about as we move towards other kinds of reforms. For one thing, Rhode Island's education reformers need to make sure some kind of anti-charter poison-pill isn’t inserted into Rhode Island law, in the middle of the night, on the last day of a legislative session, in the next few years. For another, the Department of Education and Board of Regents have to rigorously and seriously follow through with the spirit of their own recommendations (see page 12) for monitoring and updating funding policy results on a regular basis. In that vein, I would like to offer a suggestion for fiscal oversight that is important to the rectitude of any statewide "funding formula", but has been largely missing from the debate that has brought us to where we are…