Public school funding and financing are areas difficult to comprehend for any of us. At the same time, those with whom we charge for their management and oversight are often scrutinized and open for public angst. Still, school funding and financing are critical issues that we need to better understand as engaged citizens.
Since this topic is contentious, I went outside our region and interviewed a school district CFO for his insights. I used this as an opportunity for him to let us know “what I wish the public understood about school financing.” His responses were forthright, honest, deliberate and compelling. He certainly made a difficult topic very approachable.
Before I share his thoughts, I want to give an interesting aside. Many years ago, when I served as a public school principal, I read a meta-analysis of research showing what impacts student success. As a meta-analysis, it reviewed over 10,000 studies to see what was most often cited. The results were fascinating.
As I recall, there were about 47 items impacting student success. The one area that had the least impact? State and federal policies and regulations– not too far from that were school board policies.
What had the greatest impact on student success?
The students themselves – their work ethic. The second most impactful item was the student-teacher relationship. These findings make sense to us. I suppose similar results could be found in almost any profession.
Now, back to my interview with the CFO. We began by discussing public school system funding sources. The State Constitution of Georgia says that “the state will provide for the funding for a free and appropriate public K-12 education.”
This means for all students with all their needs. Local school boards are subsequently given taxing authority by the state constitution to appropriate local funds to supplement state-provided funds to meet federal, state, and local requirements for free and appropriate education.
Many years ago, state taxes provided roughly 80 percent of the district funding needs through the Quality Basic Education (QBE) formula, and local taxes paid the other 20 percent. That math has shifted dramatically– most districts now find the funding to be roughly 50/50. What hasn’t shifted over the years is the list of unfunded and underfunded mandates by the state and federal governments.
Property taxes make up the majority of the non-state revenue for local school districts. These sources include commercial and industrial properties, home properties and agricultural land. Counties with large commercial and industrial tax digests have an advantage over counties with a largely agricultural or residential base.
These property revenues, along with QBE funds, pay for the daily operational or General Funds for each school district. On average, roughly 85 percent of a district’s General Fund budget covers salaries and fringe benefits.
The teacher salary scale is dictated by the state. In order to be competitive, virtually all districts supplement the state scale for teacher and staff salaries. Local dollars pay this additional expense. The state base is now at $39,000 for first-year teachers directly out of college with no previous teaching experience. No inflationary adjustments are built in.
Sales tax, via ESPLOST, can help local districts to offset capital outlay but are not permitted to pay for personnel. Tourism, of course, helps support sales tax. These tax programs come up for a vote every five years. The state lottery helps a little. It was originally designed to help pay for computer technology.
The Federal government provides a modicum of support – typically less than 5 percent a year. These past three years, however, CARES Act funding was critical. Typically, Title I is the largest program.
These funds are devoted to supporting schools with low socio-economic status. IDEA funds support programs for students with disabilities. The federal government’s original intent was to cover 40 percent of expenditures for students with disabilities, but it has never paid even as much as 20 percent.
The state and local taxpayers pick up the difference.
Outside pressures have adversely impacted school budgets. Insurance and energy costs have made a dramatic impact. For example, this CFO reported that his district receives $2 million dollars from the State for transportation costs, but his district now spends $27 million annually. Labor and fuel costs are going up significantly, but state assistance has not. Diesel fuel costs have gone up 30 percent.
I asked my friend if there is one thing he could change, what would it be? His answer was swift and emphatic: modernize the QBE – the state funding mechanism. It was designed in 1985. “It needs to reflect reality.”
The QBE does not adequately address the needs of districts with economically disadvantaged students. Likewise, it does not make any adjustments for technology, and those needs have certainly changed since the 1980s. Most importantly, we need more help for the mental health needs of our students with additional counselors, social workers and psychologists.
My final question focused on checks and balances. The CFO implored, “It’s imperative for citizens to know they are the checks and balances and need to attend board meetings and to run for their board of education. The bureaucracy won’t check itself, not sufficiently. It grows incrementally and is inward looking.”
I have a feeling there are another couple future columns coming from this conversation.
Dr. Perry Rettig is a community contributor for The Northeast Georgian. He is a former vice president at Piedmont University and is now a distinguished university professor at Piedmont.