Big money

Board of Regents asks state lawmakers for additional $2.1 billion in school funds

PHOTO: Monica Disare
Regent James Tallon after a recent Board of Regents meeting.

In the run up to the legislative session, the state’s education policymaking body staked out an “aggressive” position to increase state education funding over the next three years, including a $2.1 billion increase next year over last year’s $24.8 billion budget.

Central to the board’s proposal is a three-year phase-in of “foundation aid,” a formula created over a decade ago and derailed by the recession that aims to provide sufficient funding to districts with high-needs students. In New York City, 30 percent of the state’s allocation to the city comes from foundation aid, according to the city’s Independent Budget Office.

The Board of Regents is poised to call for a full phase-in of $4.3 billion in total aid by the 2019-20 school year, including $1.47 billion to be provided next year.

“We thought it appropriate for the Regents to remind everybody that foundation aid is something the Regents made a commitment to a long, long time ago,” said Regent James Tallon,who chairs the Regents state aid subcommittee. “And therefore, in doing the three-year phase-in, I think we’re being aggressive.”

The state’s foundation aid formula was created in response to a lawsuit claiming the state does not provide enough funding to give each child a sound basic education. Funding increases were put on hold during the recession, while many districts across the state absorbed education budget cuts. The state restored some recession-era cuts last year, leaving advocates hopeful the state legislature will refocus its commitment on restoring foundation aid this year.

Still, extra education funding is far from a done deal. The Board of Regents has no formal power over the legislature, so their proposal is only a suggestion for lawmakers. Making matters more complicated, the state recalculated the amount districts are owed in foundation aid after November and increased the total owed to districts by $500 million, mainly because of increased student enrollment in high-needs districts.

“We are by no means out of the woods,” Tallon said. He also acknowledged that budget constraints could make a full restoration of aid an uphill battle. “We’re not unmindful of the fact that the state is in one of these cycles that going to place a lot of constraints on revenue,” Tallon said.

The increase in foundation aid represents a large portion of the Regents proposal, but there are a number of other initiatives that bring the board’s total suggested increase to $2.1 billion. The other budgetary asks include $100 million to support English Language Learners and $60 million to build career and technical education programs. The total ask is a bit less than the $2.4 billion increase Regents proposed last year, but far more than the $1.5 billion in additional funds that ended up in the final budget.

State officials also suggesting changes to how the aid formula calculates poverty. Like most states across the country, New York has long used free and reduced-priced lunch to calculate student need. But that metric has become increasingly flawed as more schools offer universal free lunch, leading fewer families to fill out the free lunch form.

Instead, the Regents have suggested switching to “direct certification,” which counts students whose families are engaged in other programs like Medicaid or the Supplemental Nutrition Assistance Program (SNAP). State officials said they expect the proposal — which suggests using a blend of free and reduced-priced lunch and direct certification while the state makes the transition — to have little effect on the total funding directed towards New York City.

On Monday, the Regents gave preliminary approval to the proposal. They are expected to cast a final vote on the state aid proposal on Tuesday.

school finance

Memphis charters could soon qualify for free rent in district-owned buildings

PHOTO: Courtesy of Vision Prep
Building maintenance is a challenge for charter schools in Memphis that pay rent to Shelby County Schools, including Vision Preparatory Charter School pictured here in spring 2017.

In a sea change, some Memphis charters could soon use district buildings without paying rent, though which would qualify is yet to be determined.

The proposal is the latest from the committee of charter and district leaders tasked with working through thorny issues between the sectors, which often have a tense relationship because they are competing for students. Shelby County Schools board members will discuss the recommendation at its meeting tomorrow evening and vote next Tuesday.

The group is also recommending that Shelby County Schools sell its unused buildings to charter schools if the buildings are in good enough condition. Of the 10 vacant district-owned buildings, four would qualify.

The proposed policy would go a long way in clarifying charter school access to public facilities and speeding up Shelby County Schools’ shedding of excess buildings, an issue that has become more acutely felt as enrollment declines.


2016 map: Half of Memphis schools closed since 2012 stand empty


Charter schools authorized by Shelby County Schools make up about a fourth of the district, the most in the state, but only five of the 51 schools use district space. The rest rent private space or, in a few cases, own their buildings.

One barrier to using district space: Until recently, district officials required charter schools to pay rent because not all schools agreed to pay an “authorizer fee” meant to defray the costs the district incurs in overseeing charters. But now that a new state law requires charter schools to pay 3 percent of their state and local dollars to their authorizers starting next year, the district is under less pressure to recoup costs.

The prospect of a change is exciting to Tom Benton, the founder of Vision Prep, one of the five schools currently operating in district space. The school has been spending $79,000 a year to rent its southwest Memphis building, while also footing the bill for maintenance, utilities, some insurance, and any capital improvements it wants to make.

Benton said there are better uses for taxpayer dollars.

“That money could have bought us a new roof,” Benton said from his office, which is one of several parts of the school that have flooded during recent rainfalls. He recently promoted a part-time building engineer to full-time to deal with the issue.

“This is a public school with public school children,” he said. “We feel like those dollars should follow the child.”

It’s unclear whether Vision Prep will get to operate rent-free. The proposal does not guarantee free rent, only make it available, and it does not specify which charter schools will qualify.

Brad Leon, chief of strategy and performance management, said the district could weigh where the school wants to locate, performance on state tests, and whether the school offers specific programs, such as STEM or Montessori. Those specifications would ultimately be up to the school board, Leon said.


With a charter comes the search for school space. Here’s how one Memphis operator is doing it.


How school districts handle space requests by charter schools says a lot about their relationship with the publicly funded, privately managed schools. In New York City, former Mayor Michael Bloomberg, a charter schools advocate, handed out excess space at no cost — a policy that his successor, the current mayor Bill de Blasio, campaigned on altering. (Legislation has stopped him from making major changes.)

Other urban districts with a large number of charters, including Chicago and Indianapolis, negotiate nominal rents — often just $1 — for charter schools. Those cities have robust charter sectors and, importantly, district leaders who accept that charter schools are going to serve a large number of local students.

Shelby County Schools officials have a more complicated relationship with the city’s growing charter sector. They are actively vying to prevent more students from leaving the district for charter schools. And they resent being required by law to allow the 29 Memphis schools in the state-run Achievement School District, which takes over low-performing schools and mostly turns them into charters, to operate in their buildings rent-free.

Tennessee has helped charter schools with space in other ways. It requires districts to post a list of vacant or underused properties that could be used by charter schools, although it lets districts ultimately decide what to do with the buildings.

The state has shown willingness to help charter schools with facility expenses. The same state law that ushered in the authorizer fee also launched a $6 million grant program to reimburse charter schools for capital projects, rent, or purchasing buildings — if the school has a high academic growth score. Benton said Vision Prep has applied to the grant program to offset the school’s costs.

Alliance

Memphis just gained an important ally in its legal battle with Tennessee over school funding

PHOTO: MNPS
The board for Metropolitan Nashville Public Schools voted Tuesday to become a co-plaintiff in Shelby County Schools' funding lawsuit against the state of Tennessee.

For more than two years, a funding lawsuit by Memphis school leaders has been winding through the state’s legal system.

Now, as the litigation inches closer to a court date next year, Shelby County Schools has gained a powerful ally in its battle with Tennessee over the adequacy of funding for its schools and students.

The board for Metropolitan Nashville Public Schools voted unanimously Tuesday to become a co-plaintiff in the case.

The decision ends almost three years of talk from Nashville about going to court.

In 2015 at the urging of then-director Jesse Register, the district’s board opted for conversation over litigation with Gov. Bill Haslam’s administration about how to improve education funding in Tennessee.

But Register moved on, and the board’s dissatisfaction grew as the percentage of state funding for the district’s budget shrank. Adding to their frustration, Haslam backed off last year from an enhanced funding formula approved in 2007 during the administration of his predecessor, Phil Bredesen.

“We’ve just come to grips with the harsh reality that we are a chronically underfunded school system,” said Will Pinkston, a board member who has urged legal action.

Nashville’s decision is welcome news for Memphis. A statement Wednesday from the state’s largest district called the lawsuit “the most important civil rights litigation in Tennessee in the last 30 years.”

“When you have the two largest school districts in Tennessee on the same side, I think it’s very powerful,” added former board chairman Chris Caldwell, who has championed the lawsuit in behalf of Shelby County Schools.

Both boards are working with Tennessee-based Baker Donelson, one of the South’s largest and oldest law firms. It has offices in both cities.

“We believe that our original case had a strong message about the inadequacy of education funding in Tennessee,” said Lori Patterson, lead attorney in the case from Memphis. “We believe that having the second largest district in the state join the suit and make the same claims only makes the message stronger.”

PHOTO: TN.Gov
Gov. Bill Haslam

Haslam’s administration declined to comment Wednesday about the new development, but has stood by Tennessee’s funding model. In a 2016 response to the Shelby County lawsuit, the state said its formula known as the Basic Education Plan, or BEP, provides adequate funding under state law.

But Shelby County, in its 2015 suit, argues that not only does the state not adequately fund K-12 schools, it doesn’t fully fund its own formula. And the formula, it charges, “fails to take into account the actual costs of funding an education,” especially for the many poor students in Memphis. To provide an adequate education, the lawsuit says the district needs more resources to pay for everything from math and reading tutors to guidance counselors and social workers.

States often get sued over funding for schools — and frequently lose those cases. In Tennessee, state courts heard three such cases from the late 1980s to the early 2000s, siding with local districts every time. Those suits keyed in on built-in inequities in the state’s funding formula that cause some districts to get more money than others.

This time, the argument is about adequacy. What is the true cost of educating today’s students, especially in the shift to more rigorous academic standards?

Tennessee is also the defendant in a separate funding lawsuit filed in 2015 by seven southeast Tennessee school districts including Hamilton County Schools in Chattanooga.

Pinkston said Nashville opted to join the Memphis suit because its arguments are most applicable to the state’s second largest district. “Our student populations are very similar in terms of high socioeconomic needs,” he said.