School funding problems series 2 by Sage

 



The Evolution of Adequacy
Historically, states have focused on how to allocate funding
across school districts. Calculating revenues and how they are distributed to school districts are complicated issues and
difficult to understand. Recently, the focus has changed from
equity to adequacy and over the past 30 years, state courts
have played a significant role in shaping education finance
policy. Legal challenges to finance formulas have been
brought in 45 of the 50 states (Smith & Pettersen, 2002).
Many of the early cases centered on “equity.” Equity was
defined as funding every child throughout the state in an
equal manner (Smith & Pettersen, 2002). Alabama changed
its funding distribution method in 1995 to accomplish this
type of equity. Known as the “Foundation Program,” the
funding scheme dictated the distribution of state dollars
equitably on a per pupil or per teacher basis to every district
in the state (Whitney, 1998).
In a report released by Public Affairs Research Council of
Alabama (PARCA), Williams (2006) reported that a foundation program tries to do three things:


 1. Define the components of an adequate K-12 education and the cost of providing them to ensure that
every student, no matter where he or she lives, has an
adequate educational opportunity.


 2. Encourage an appropriate level of local tax support
for every public school system to promote local ownership and to recognize the benefits of good schools
to the community. 


3. Distribute state funds in a way that meets these objectives so that everyone pays a fair share of the burden
of supporting high-quality public schools throughout
the state.
Alabama’s Foundation Program was established to combine both state and local funds to support the standard educational program defined by state laws. These resources are
made available to every local school system, in the following
way: First, the resources necessary for the standard program
are calculated. In Alabama, these are defined in terms of
numbers of teachers and other professionals, plus amounts
for their salaries and fringe benefits, five types of classroom
instructional support and other operating expenses. These
components are then summed to determine the allocation to
each school system for the cost of the foundation program.
Second, a minimum level of local tax support is required for
every school system. The idea is that the local community
should pay a fair share of the cost of the foundation program.
In Alabama, every school system must contribute 10 mills of
local property tax support to the foundation program. This
produces more local funds per student in some school systems than in others, primarily because property uses and values vary across the state. Third, the local share is subtracted
from the defined cost of the foundation program. The remainder is paid by the state.


 The subtraction is larger for school
systems in communities that have the ability to raise large
sums locally. This means that the state pays a smaller share
of the cost of the foundation program for such “wealthy”
systems, and a larger share of the cost where local taxing
capacity is low. The subtraction therefore helps to ensure that
the foundation program is affordable in every community
across the state (Williams, 2006).
PARCA’s report (Williams, 2006) on Alabama’s
Foundation Program validated the benefits of this method of
funding schools. Prior to the adoption of the Foundation
Program, the state distributed its funds to school systems
with very little consideration of local tax capacity.
The Budgeting Process
In the budgeting process, the State of Alabama requires that
the state superintendent develop a budget proposal for consideration for the State Board of Education. 


Once adopted,
the budget is submitted to the Governor, who then makes it
part of the budget proposal that is presented for approval to
the Alabama Legislature. The legislature can approve it in
whole, or they may choose to modify various segments of the
proposal.
The budgeting process has become increasingly complex.
As states attempt to establish some form of equity in school
funding, many factors complicate the process. Differences in
local tax capacity continue to allow some school districts to
provide more services than others. The addition of standards
and a means of measuring whether a district has met those
educational standards have heightened the awareness of a
need for adequacy. The connection of standards to funding
further adds to the complexity of the budgeting process.

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