Funding Formula Means Huge Loss of State Aid

Yesterday I attended a meeting of the League of Cities and Towns and, upon reflection, I don’t think I can ever before remember being in the midst of movers and shakers who felt so hopeless and helpless.

The League invited representatives from RIDE to explain the proposed state funding formula for schools to representatives from each of the cities and towns. I attended with the Town Administrator and the Finance Director.

The speaker from RIDE presented a great amount of information, including a number of algebraic formulas that left most of the audience glassy-eyed. They were only interested in the data used to develop the formula and the impact it would have on their individual communities. Both were controversial.

The data used was stale, to say the least. The reference date used for property values was 12/31/06. Since that time, the bottom dropped out of the economy, many districts have had re-evaluations, and property values have changed considerably and even disproportionately.

In addition, references were made to median family income derived from the 2000 Census, which the League stated could be “12 or 13 years old depending on the census date.” One Town Administrator asked why median family income was used when free and reduced lunch data is fresher and less subject to tax anomalies.

The real issue for most was the direct impact on the cities and towns. It is true that the hold harmless provision has, in itself, created inequities that benefitted some municipalities. For example, the Aquidneck Island communities have experienced decreasing enrollments over the years; yet state aid allocations have been held at the same level as when there were many more students in the school districts.

At the same time, towns that experienced enrollment increases did not receive their proportionate share of a limited pot of money. It was always apparent that, if and when a funding formula was enacted, the island communities would be among the “losers,” not among the “winners.”

What is particularly frustrating, however, is the conclusion that well-managed communities will suffer excessive losses because good management creates the perception of a higher tax capacity, i.e., ability to pay. The state is telling us that we should expect to pay more because we can.

The problem now is that the funding formula appears to be a “done deal.” It was developed by RIDE in conjunction with research done at Brown. The legislators have kept their hands off so all they have to do is vote. The truth is that Rhode Island is the only state that does not have a funding formula. Furthermore, because the state is competing for the Race to the Top federal funds, there is impetus to get it done. It’s time has come.

I started this blog because I truly believed that there was an imperative for regionalization on Aquidneck Island. I never believed that money alone would make it happen, and I still don’t think so.

But now there is more reason than ever to give regionalization a second look. There comes a point when hanging onto the past is just living in the past. Our children are the pawns in the adult world’s resistance to change. Regionalization doesn’t have to be a loss. It can actually be a gain for the students in all 3 communities - if we do it right.