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A look inside the new funding formula

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A new formula that would update the way Mississippi funds education has been introduced by Speaker Philip Gunn (R-Clinton).

Key Takeaways:

  1. The base student cost is set at $4,800 with additional weights based on specific learning needs.
  2. Funding for districts is based on “Average Daily Membership” rather than “Average Daily Attendance.”
  3. The “27 percent rule,” which limits the local share for school funding at 28 mills ($28 for every $1,000 collected in local property taxes) remains.
  4. There are several transparency provisions now in place, including one that will allow anyone to track how districts are spending their money.

Our view: After careful review of EdBuild’s report released last year and Speaker Philip Gunn’s introduced legislation (HB 957), we enthusiastically endorse this proposal. No funding formula is perfect, but we believe a new formula should be equitable, transparent, and student-centered. This proposed legislation accomplishes all three, while implementing the vast majority of EdBuild’s recommendations.

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In the 2017 legislative session, there was hope that a new education funding formula based on national organization EdBuild’s recommendations would be created to replace the Mississippi Adequate Education Program (MAEP).  However, the session ended without a bill even being introduced and since then, Mississippians have wondered if the unwieldy formula would be addressed at all.

Last Thursday, they got their answer.  Speaker Philip Gunn filed HB 957, a bill that reflects many of EdBuild’s original recommendations, offering a more transparent, student-centered method for sending education dollars to school districts.

MAEP has been criticized for its complexity, hold-harmless provisions, resource-based programs and much more.  Each year, the battles between those who want “full funding” as prescribed by the automatic MAEP formula and the Legislature, tasked with funding public schools in light of budget realities, have grown worse.

Mississippi is already 19th in the nation for the state share of education spending, and spending has steadily increased over the years even as public school enrollment has decreased.However, it makes more sense to fix the issues in our current formula to make funds more predictable and accurate as they flow to districts.  The best way to do this is to tie every dollar to students and their needs.

Here is our breakdown of HB 957’s most important provisions:

PER-STUDENT FUNDING

Current formula:  Under MAEP, the base student cost is calculated based on spending in districts with an average performance and 5% is added for “at-risk” students.  Funding for students with special needs, students in alternative, vocational, or gifted programs, and more is calculated outside of the formula and based on teachers needed.

Proposed formula:  Now, under the proposed funding formula, the base student cost is a flat $4,800 each year that is not subject to an automatic formula but, instead, the Legislature must review and revise the formula every 4 years after an initial review period.  On top of the base student cost are additional weights that can be added cumulatively:

  • Grades 9-12: 1.3
  • Low-income: 1.25
  • English Language Learners: 1.2
  • Gifted: 1.25
  • Special Education Tier 1 (Specific learning disability, speech and language impairment, or developmental delay): 1.6
  • Special Education Tier 2 (Autism, hearing impairment, emotional disturbance, orthopedic or other health impairment, or intellectual disability): 2.25
  • Special Education Tier 3 (Visual impairment, deaf-blindness, multiple disabilities, or traumatic brain injury): 2.7
  • Students in a “sparse school district”: 1.10

Our view:  The proposed method of funding is student-centered, connecting funding decisions to actual student need.  MAEP requires funding calculations and distributions that are based on school performance and teacher salaries, distancing dollars from the very children for whom they are being allocated.  Additionally, this bill sets up a process of review and revision that recognizes the Legislature’s ultimate authority on funding issues and can make for more productive conversations in the future.

STUDENT NUMBERS

Current formula:  Funding for districts is based on the number of students attending school on certain days of the year to come up with a district’s “Average Daily Attendance.”

Proposed formula:  Funding for districts is based on the number of students enrolled on certain days of the year to come up with a district’s “Average Daily Membership.”

Our view:  The ADA method does not capture all students a district serves, while ADM generates a more accurate number.  This is helpful to districts and, again, more student-centered as it bases funding on actual enrollment rather than attendance on a few days of the year.  The discrepancy between enrollment and ADA numbers is wide – MDE reports a difference of over 30,000 students, meaning schools are not receiving funding for many students they may be serving.

LOCAL AND STATE SHARES

Current formula:  The local share for school funding is 28 mills ($28 for every $1,000 collected in local property taxes) or 27 percent of the cost of an “adequate” education for students, whichever is less. This local contribution is known as the “27 percent rule.”

Proposed formula:  This provision remains the same and does not correspond to EdBuild’s recommendations to do away with this rule altogether.

Our view:  The state of Mississippi provides an oversized share of education funds compared to other states. By capping the amount that high wealth districts have to contribute to the formula, the 27 percent rule is the main reason local governments do not contribute a greater share. We support local control of education, so if this proposed formula passes into law, we urge policymakers to review the 27 percent rule in the future—perhaps in conjunction with broader tax reform—to shift more education spending back to localities. Historically, local education funding was greater than other funding sources and a sign of the amount of influence localities retained over state or federal governments.

Federal Funds State Funds General Formula (As a component of total state funds) Local Funds Taxes (As a component of total local funds)
Mississippi 14.9% 50.2% 47.6% 34.9% 28.3%
National Average 8.6% 46.7% 32.5% 44.7% 38.7%

TRANSPARENCY AND ACCOUNTABILITY

Current formula:  MAEP does not contain any meaningful transparency or accountability provisions.  It requires funding to grow automatically, often based on historic numbers rather than reality.

Proposed formula:  The proposed formula includes provisions to require transparent spending practices and district-by-district comparisons.  It requires MDE to develop a financial rating system that allows for comparison as well and lays out consequences for districts that receive poor ratings.  Additionally, MDE is required to review the impact of regulations on districts, and committees are established to study funding for early learning, students with special needs, and more.

Our view:  Enabling the public to track how their district spends money and how that measures up to other districts is a good thing.  As MDE and new committees consider how to improve spending practices, they have an opportunity to do away with burdensome requirements and unintended consequences.  We will be watching to see what they come up with as well as what sort of system the department develops and implements to rate districts.

You can read the proposed formula here.