January 16, 2008

Is an End to the Education Funding Formula Distraction Near?

Carroll Andrew Morse

Commenter "Mike" points out a Jennifer D. Jordan article in today's Projo that declares, if not dead, the idea of a statewide "funding formula" for education is now comatose…

An unlikely coalition attempting to develop a statewide school-financing formula has broken apart just as the state grapples with a $600-million budget gap over two years, leaving the future of the ambitious plan in jeopardy.

A hearing to discuss the formula was scheduled for 1 p.m. today at the State House. The House Finance Committee was to hear from a consultant hired last year to help lawmakers develop the formula.

Members of the Joint Committee to Establish a Permanent Education Foundation Aid Formula said they hoped the meeting would resurrect the discussion. But it is unclear if there is enough political support to approve the formula this year.

I suspect the political-slash-fiscal reality that the proposed "funding formula" was going to require significant tax increases across the state while only benefiting a few communities finally sank into the minds of many of the politicians who would have to vote on it. "I'm voting to raise your taxes but give you nothing in return -- it's all going to the urban core because their problems matter and yours don't" is not exactly a winning formula in the suburban ring and the exurbs. And the politicians outside of the urban core probably didn't feel good about the positions they were hearing from urban reps like Edith Ajello…
Last June, the joint committee, chaired by Rep. Edith H. Ajello, D-Providence, and Sen. Hanna M. Gallo, D-Cranston, ended the session without passing a formula.

“I am hoping to push forward the concept of a formula even if there isn’t any money,” Ajello said in a recent interview.

So if a formula were to be passed, without new money being allocated, what would happen? Would everything get pro-rated to the amount of revenue that actually exists, requiring cuts in aid to some communities, so others could get their formula mandated percentages?

Finally, the Projo article quotes Valerie Forti of the Education Partnership on alternative proposals…

“We didn’t want to give local districts more money without getting outcomes,” said Forti, whose group pulled out of the coalition last year. “The formula should require more from districts. It might require a certain kind of professional development for teachers, or give principals more control over teacher placement, or require a longer school day and year.”
…to which I'll add one more: open districting, with money allocated to schools based on parents and students choosing to attend them. In a small, densely populated place like Rhode Island, a plan similar to the "San Francisco plan" described here could be very effective.

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It is coming more and more apparent that we need reform in the structure of the state senate. We have to move away from the senate apportionment based on population to one based on location. One senator for each RI city or town. If it is good for the US, it should be good for RI. After all, does not little Rhody benefit from having equal footing with NY?

Posted by: Max Fenig at January 16, 2008 10:54 AM


Let me play devil's advocate and offer a different way of looking at this, as well as a modest proposal. If you can bear with me through this rather lengthy comment, please tell me what you think.

Some set-up is required:

The 2000 census says that 16.6% of Rhode Island's population lives in Providence. This is a little out-of-date, but not a lot here depends on this, so it should do.

In 2006, 27,900 children attended Providence Public Schools. This was 19% of the 147,083 children in RI public schools. Also in 2006, Providence received $185,048,912 in state education aid. That was 27.8% of the total state aid package of $666,277,071. (I gathered this data some time ago and haven't double-checked it, but I believe it is pretty accurate).

I understand your argument to be something like this: The situation described above is already unfair, because non-Providence residents are subsidizing, through their state income taxes, the cost of educating Providence children. A funding formula that futher shifts education funding from property taxes to state income taxes would be even more unfair.

[Additionally, there could be an overall increase in total spending on education but, for what follows, let's leave aside whether or not there will be or should be such an increase. That's another debate, and it does not logically have to be part of a change in the sources of education funding.]

Several counter-arguments to yours have been made: Providence has more hard-to-educate children (English language learners for instance) than other communities. Even so, it spends less per-pupil than some. Providence's 2006 property tax rate was $29.65 per $1K, the highest in the state. The average was $16.46. Thus, Providence is already "taxed-out" to a greater extent than other communities. Moreover, even if it is not "fair" that suburbs subsidize urban education, it's good policy because a failed Providence school system will drag down the entire state, since the effects of increased crime, reliance on public assistance, and poorly educated workers and voters, will not stay within Providence's borders. In addition, our state's very high reliance on property taxes to fund education (47th in the nation) puts an unfair burden on fixed-income homeowners, especially retirees, in every city and town in RI. Finally, property-tax-based funding is unfair because it makes the amount available for each child's education dependent on where their parents live.

None of the above arguments seem to sway suburban opponents of shifting funding away from property taxes. Their view seems to be each town's kids are that town's problem, to be paid for by that town's money. I take it that is more or less your view as well.

Let me offer another way of looking at what is going on. According to the 2006 Report of the RI Bureau of Labor and Training, employment statewide was 480,589 jobs. Of these, jobs 113,104 (23.5%) were in Providence. which, recall, has 16.6% of the population. Providence has .65 jobs per resident. Outside of Providence, the number of jobs per person is .42.

Total wages for the state of RI were $19,432,663,286 . Of this, $5,138,771,318 (26.4%) were generated by Providence employers. The average wage in Providence was about $5K higher than the state average including Providence.

Now, there are two possibilities. First, assuming all of this income from Providence jobs goes to Providence residents, we could say that Providence residents are also bearing 26.4% of the state income tax burden. Given higher wages in Providence and progressive income taxation, the percentage that Providence pays would actually be higher than that. This would be at least the proportion of state aid going to Providence schools. (27.8%), so it would be hard to call this unfair. Moreover, Providence residents would also be funding more than 26.4% of ALL state expenditures, despite being only 16.6% of the population.

The second, more reasonable, possibility is that not all income from Providence jobs stays in Providence. I don't have the figures yet, but it seems reasonable to think that many people, especially managers and other professionals whose incomes are higher, work in Providence but live in the suburbs. In that case, there is a net outflow of income from Providence to the rest of the state, not the reverse.

Here, at long last, is my point: Providence does indeed consume an percentage of state education funding greater then its proportion of the state's population. But Providence also produces a disproportionate amount of income in RI. If you want to insist that fairness requires not transferring money from one community to another, then what seems really unfair is that people who derive their income from Providence's robust economy use that money to pay property taxes to finance their suburb's schools, and then say "isn't it terrible that those Providence people want our money to educate their children. This money belongs in (or to) Barrington (or E. Greenwich or whatever)."

It is only possible to say that the suburbs are subsidizing Providence if you look soley at the expense side of the equation and ignore the income side. So, here's my modest proposal: If we're not going to set aside the "my town versus your town" approach to a funding formula, maybe we should follow it to its logical conclusion. I'm starting to think we should cut property taxes and institute a "city and town income tax" that keeps the money in the town that produced the job.

You can argue whether it would be good policy or not, and I'm not confident that suburban legislators would find it more appealing than a funding formula, but there is nothing unfair about it.

What do you say?

Posted by: Thomas Schmeling at January 17, 2008 4:22 PM


There are good arguments in favor of what you say, but also good arguments against it. However, In order to do what you suggest, you would have to amend the US Constitution or get the Supreme Court to overrule the 1964 case of Reynolds v. Simms.

Posted by: Thomas Schmeling at January 17, 2008 4:36 PM

aargh. That was for Andrew, not Marc of course. I appear to be having a hard time today.

Posted by: Thomas Schmeling at January 17, 2008 5:55 PM


I'm stuck running around today, but I will give a full answer to your comments.

I thought the no-Senate-like-apportionment for cities/towns Supreme Court case was Baker vs. Carr.

Posted by: Andrew at January 18, 2008 9:52 AM

Baker v. Carr (1962 ruled that the issue of reapportionment was not a "political question"* and could be decided by the courts. Two years later the USSC got two cases- Wesberry v. Sanders and Reynolds v. Simms. Both were decided based on the idea that the equal protection clause of the 14th amendment requires "1 person, 1 vote", which translated into the principle that every legislative district must have the same population.

Wesberry applied to Congressional districts. Reynolds applied to state legislatures. Reynolds says that the Constitution forbids states from having US senate-type arrangements because they treat voters unequally and lead to minority rule. For instance, Max's proposal would let the 15K people in Foster and Glocester outvote the 175K people in providence 2-to-1. I'm guessing that's exactly what Max would like to see happen.

Baker/Reynolds/Wesberry were not uncontroversial at the time. Chief Justice Warren thought it was more important than Brown v. Board. A movement to amend the constitution (not surprisingly, started by legislators who were about to lose their districts) nearly got the required 2/3 of state legislatures signed up. Today, however, after 44 years, I don't think it's going anywhere.

*One of the most famous USSC cases involving the political questions doctrine is Luther v. Borden, which arose out of Rhode Island's Dorr rebellion of 1841.

Posted by: Thomas Schmeling at January 18, 2008 10:46 AM

what I don't understand is why towns don't get equal $ of state school funding?

Posted by: Tanja Paustian at February 9, 2008 12:00 AM
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