Governor unveils $9B funding formula based on student needs 

By: - February 24, 2022 10:14 am
Department of Education Commissioner Penny Schwinn, pictured at right. with former Health Commissioner Dr. Lisa Piercey, at a 2020 press conference.(Photo: John Partipilo)

Department of Education Commissioner Penny Schwinn, pictured at right. with former Health Commissioner Dr. Lisa Piercey, at a 2020 press conference. (Photo: John Partipilo)

(Editor’s note: This story has been updated from an earlier version with additional details.)

Using a projected $9 billion, Gov. Bill Lee’s proposed K-12 funding formula for fiscal 2023-24 would start the state’s 1 million students with a base amount of $6,860, then add more depending on individual needs ranging from economic disadvantages to disabilities.

Lee is seeking to replace the “complex” Basic Education Program with a simpler formula. But this one also has a wide variety of factors and percentages it uses to determine the amount of money that will go to every school district in the state based on the needs of each student.

The governor introduced the plan Thursday amid a lawsuit by more than 80 districts that are suing the state for more educational funds. In addition, arguments were made before the Tennessee Supreme Court on Lee’s Education Savings Account program, which directs public funds to private schools.

Under Lee’s proposal, dubbed Tennessee Investment in Student Achievement, the more problems a student faces, the higher the funding. Students also could gain funding for showing success such as learning to read on grade level by the third grade and performing well on the ACT or industry tests in high school.

The money targeted to each student through more than 140 districts covers a range of situations.

For example, a student from an economically disadvantaged family living in a sparsely populated area and attending a small school district and with “unique” learning needs could have a funding total of $15,592. In contrast, a student who learns to read well by second grade and grapples only with a learning problem such as dyslexia could be targeted to receive a total of $8,732.

Funds would go through their school systems, and those projected totals were to be released Thursday.

But with February coming to an end and the Legislature hoping to recess by mid-April to late April, the governor faces a difficult task.

“In the coming weeks, I look forward to working with our partners in the General Assembly to pass this important legislation and improve the way Tennessee funds public education for the first time in over 30 years,” Lee said in a statement.

School districts across the state would be required to publicly report funding and spending online, and they could run into a panel of lawmakers if they don’t do well. 

The Tennessee Department of Education also would put together an academic analysis of each district annually in which the Comptroller’s Office could review districts showing poor performance.

The state is projecting $9 billion in total education funding for fiscal 2024 when the Tennessee Investment in Student Achievement is planned to take effect.

The Lee Administration hopes to pass it this year, even though the governor built in a hedge in case it doesn’t receive approval this session.

The governor is injecting some $1 billion into K-12 education this year, but $750 million of it will go toward technical education and relocating schools in floodplains. The following year, it would be directed to the funding formula, once adopted.

Republicans and Democrats have raised questions about whether lawmakers have enough time to review and digest the plan and vote on it this session.

Democrats contend the funding still falls far short of what is needed to bring Tennessee in line with neighboring states such as Alabama. They also argue this formula is nearly as complex as the BEP.

Senate Minority Leader Jeff Yarbro declared that what he’d seen of the proposal was “not exactly a model of clarity.”

Meanwhile, Democratic Sen. Heidi Campbell said the funding model isn’t “such a bad thing.” The problem, she said, is the spate of education bills surrounding it, including Gov. Lee’s plan to cater to Hillsdale College’s plans to open 50 charter schools in Tennessee through a nonprofit organization. 

In addition, legislation is proposed that would further open the doors to charter schools in the state, mainly by allowing them to go straight to a state charter commission for approval once an organization receives approval for charter school in a district.

For the first time, this legislation would wrap charter schools into the state’s funding formula, a move the governor and Education Commissioner Penny Schwinn defended Thursday.

“We know it’s part of a bigger plan,” Campbell said, who believes the governor ultimately wants to privatize Tennessee’s school system. 

Schwinn contends the funding formula plan would provide all school districts with more funds. School systems would not be required to increase their portion of the funding formula, about 30%, for four years under the proposal. In fiscal 2026-27, local funding would increase similarly to what it does under the current Basic Education Program.

Schwinn contended Wednesday if the Legislature were to put $1 billion directly into the funding formula this year it would require 25% of school districts to increase taxes to boost their portion of funding.

“TISA adds state funding without raising taxes,” Schwinn said.

Republican Lt. Gov. Randy McNally said he expects senators to raise questions and make adjustments to the proposal. But he called it a “good formula” overall.

McNally, of Oak Ridge, said he does have concerns that a portion of the formula provides funds for schools that overachieve but that there are no penalties for schools that underachieve.

Finance, Ways and Means Committee Chairman Bo Watson of Hixson pointed out “student-centered” funding is more prevalent nationally, whereas
Tennessee’s Basic Education Program is the “exception.”

“Replacing a 30-year-old system with something that 39 other states are using gives credibility to the approach we’re taking,” Watson said.

But some members of Senate Republican leadership are not convinced it will pass this session.

Senate Education Committee Chairman Jon Lundberg said he believes the plan is “much less complex” than the current formula.

But asked if the Senate is determined to pass it this session, Lundberg said, “I will tell you there’s a determination to get it right.”

Under the plan, $6.6 billion would go toward the base needs of students and cover funding for teacher salaries, nurses, counselors, principals and technology.

Another $1.8 billion would go toward factors such as economically disadvantaged, concentrated poverty, sparsely populated communities, small school districts and “unique” learning needs such as dyslexia and English language learning. 

The plan targets $500 to improve literacy, $500 for literacy tutoring, an average of $5,000 per student to strengthen and expand career and technical education and $185 per student to pay for administrators on post-secondary assessments such as the ACT.

Another $100 million would go to student bonuses when they demonstrate success in learning to read on grade level at the end of the third grade, as well as good performance on the ACT and industry credential tests.

The governor promised to put $125 million toward teacher salaries in fiscal 2022-23. Questions are raised each year about whether those pay increases make it to teachers’ paychecks.

According to Schwinn, if those increases continue, they will be required to go to salary increases while “commensurate” raises would be made in starting salaries.

The plan also includes stipends for school district that see continual growth.


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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.