School financing expert Joe Martin talks about House Bill 824

(From Maureen Downey’s AJC blog)

School financing expert Joe Martin sent out this note about House Bill 824, which deals with a school funding mechanism in Georgia that few people understand. Historically, DeKalb has paid into the system, while Gwinnett, deemed ‘rural and poor’ reaps extra. We have registered our complaint about that for some time, however, we completely understand the need for additional funding in truly poor, urban counties in Georgia.  We have many counties that need help. Read on for his explanation of action being taken in the Georgia legislature:

The sponsors of the proposed change in Equalization Grants are trying to make the best of a bad situation, and they should be commended for redirecting more of the available funds to the least wealthy systems. Nevertheless, we have to recognize the far-reaching consequences of HB 824 over time unless it is amended.

The General Assembly has not followed its own formula for calculating Equalization Grants in recent years. Instead, it has reduced these grants by whatever percentage was needed to keep the overall total at a certain amount. When compared with the current situation, HB 824 would provide short-term relief to the least wealthy systems, but this would be accomplished by substituting a new formula that would cut all of the grants almost in half even before any further reduction is made. This formula would establish a much lower ceiling for Equalization Grants from now on.

As a result, one of the primary forms of equity in the financing of Georgia’s schools would be greatly diminished – not just temporarily to meet an immediate problem – but permanently.

One of the recommendations to the State Education Finance Study Commission was to set the “benchmark” for calculating Equalization Grants at the statewide average instead of the tax digest per student for the system at the 75th percentile. There is a simple and compelling rationale for this approach in the sense that every local system should be able to raise at least as much revenue for its schools as it could with a tax base equal to the statewide average.

Some of us went a step further to recommend lowering the benchmark below this level on a temporary basis if it was necessary in any year to reduce the total amount of these grants by a certain amount. This is a fairer way to make adjustments than the current method of reducing all of the grants by the same percentage.

HB 824 incorporates both of these ideas, but uses them to produce a much different outcome than was intended. As the old adage goes, the devil is in the details.

The proposed benchmark is the statewide average, but this “average” is being calculated in an artificial way. It is not unusual to exclude the “outliers” at the top and bottom of a distribution, but care should be taken to ensure that the items being deleted are similar in nature. In this case, the top nine and bottom nine systems are being excluded, but the systems at the top are three times larger than the ones at the bottom and have 20 times as much taxable value. If there is going to be an exclusion, it should be based on a group of systems at each end of the distribution which have roughly the same number of students.

The proposed approach has the inevitable result of lowering the “statewide” average, and the implications are quite significant. The total amount of Equalization Grants in FY 13 would be reduced by $340 million or 41 percent from $832 million to $492 million, and even the smaller amount might not be fully funded in next year’s budget.

Unfortunately, the guiding principle in supporting our schools has become not what is best for our students, or required by the Georgia Constitution, or even logical as a matter of public policy, but what the state can afford after continuing to make tax cuts and exemptions for other reasons.

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3 Responses to School financing expert Joe Martin talks about House Bill 824

  1. “Unfortunately, the guiding principle in supporting our schools has become not what is best for our students, or required by the Georgia Constitution, or even logical as a matter of public policy, but what the state can afford after continuing to make tax cuts and exemptions for other reasons.”

    I read this last paragraph as, let’s throw more taxpayer money at it! In DeKalb County’s instance we have the money, it’s just being spent on ridiculous expenditures like America’s Choice(return on an 8 million investment), MIS solutions that were wasted, odd accounting practices, the friends and family plan, too many lawsuits, a feckless BOE and budgets being balanced on the back of teachers. Mr. Martin you have a great idea about the funding, but can we first let everyone know that Gwinnett County is NOT a poor rural county? Mr. Martin, don’t you think being fiscally responsible with the money you already have should be the first priority? When the taxpayers see the waste and mistakes made, like a $41 million dollar short fall, our trust that our government leaders can get it right falls to a new low each and every time.

    I fear all this fancy gold dome legal language in these bills from the left and right, are written to confuse the public and in the long run are no REAL value to anyone! Here in DeKalb, all we want is a system the parents can trust to educate the kids, be transparent about decisions and be FISCALLY RESPONSIBLE. These lawmakers and School Leaders never feel that they work for US and that is the conundrum in today’s political gamesmanship or should I say one-ups-man-ship?

  2. Anon says:

    I’m ready for vouchers and free market…. if we can’t have forensic audits and on-line check and pcard registers….it’s time for free market.

  3. dekalbdoyenne says:

    Hear! Hear, Anon!

    Online check registers, P-card registers and forensic audits should not be a problem if there is nothing to hide. The DeKalb Board of Education has plenty to hide, however. And, unfortunately, Superintendent Atkinson, with her “leadership” team appointments has now shown her true colors. Atkinson is “on board” — no pun intended — with ignorance, incompetence, corruption and chicanery.

    I would even go a step or three further and say that it is time for Gov. Deal to be a stand-up adult, show that he cares about children and educational excellence, and dismiss the current DeKalb Board of Education for incompetence and inability to do the job for which they were elected.

    The men and women of the Georgia General Assembly also need to be stand-up adults and make it possible for the DeKalb County School District to be divided into two separate districts and/or for cities within DeKalb County to establish their own smaller, manageable school systems.

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