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October 17, 2008

Funding Formula Follies in South County

Carroll Andrew Morse

Liz Abbott of the Westerly Sun has a summary of a local-forum debate between the three candidates for District 36 State Representative: incumbent Donna Walsh, Republican Dave Cote, and independent Matt McHugh. Here are their answers on the topic of education…

QUESTION: In these challenging economic times, should the Paiva-Weed Act, which was adopted to provide some relief to taxpayers from the cost of funding the schools, be amended to provide more school aid?

COTE: Citing Rhode Island’s poor educational performance compared to Massachusetts, and the fact that Massachusetts has provided greater property tax relief than Rhode Island, Cote said, “Money does not make for better education.” If elected, he would work to “reorganize” public education by reshaping curriculum to include more math and science. He would also seek to eliminate “bumping’’ and other union-sanctioned practices that do not always benefit students.

MCHUGH: McHugh said he still endorses the idea behind the Paiva-Weed legislation, and it should be left alone for the time being. He would handle the need for more state aid by finding savings in the existing system, exploring ideas such as regionalization, and by calling for a moratorium on state educational mandates that cost local school districts a lot of money.

WALSH: She supports the idea of providing relief for taxpayers and would not seek to amend the Paiva-Weed legislation at this point in time. “I think it has merit,” she said. But the General Assembly needs to follow through on what it has already said it would do, namely, review the state educational mandates and keep working to find a new formula to fund public education.

But all a "funding formula" does is shift money from one community to another; it does not and can not by itself create revenue. For a "funding formula" to be part of a coherent policy proposal, an explanation of the source of the funds to be shifted must also be provided.

I wonder if Representative Walsh is aware of how much money the most recent version of the "funding formula" would have shifted away from the four communities of District 36…

  • State education aid to Chariho District (which includes Charlestown) would have been cut to $2 million, resulting in a loss to the school system of over $12 million.
  • State education aid to New Shoreham (Block Island) would have been cut to $0, resulting in a loss to the school system of over $100,000.
  • State education aid to South Kingstown would have been cut to $0, resulting in a loss to the school system of over $10 million.
  • State education aid to Westerly would have been cut to $0, resulting in a loss to the school system of over $6 million.
As this example shows, telling the public you are in favor of a "funding formula" does not tell the public all it needs to know in order to gauge the impact of what's being proposed. When Representative Walsh states that she supports a "funding formula", she could be saying that she only will support a funding formula that reduces the percentage of state money going to the current big-recipients (but no one has made a concrete proposal in this direction as of late). Or she could be saying that she supports a statewide tax-increase that will give the government new monies to transfer between communities on top of what it is already transferring (but is raising your income and/or sales tax to reduce your property tax really "tax relief" in any meaningful sense?). Or she could be saying that she is ideologically committed to the idea of a funding formula, is happy to let someone else decide the transfer structure, and will hope for the best.

Voters in District 36 -- and in every House and Senate District in Rhode Island -- need to ask any candidate attempting to sell a "funding formula" as the solution to the state's education problems about where they are expecting the money they'd like to see transferred between communities to come from.

Comments

Excellent point. In view of the state's fiscal situation, the reality is that any change to the funding formula would be a redividing of the existing pie, not an enlargement of it. More specifically, state aid would be diverted from the suburbs to urban areas. Why is Rep Walsh looking to disadvantage her district this way?

Additionally, Cote is correct. With education spending in the top fifth and student achievement in the bottom fifth, Rhode Island is the living experiment that demonstrates that mo' money does not equal a good education for our children.

Posted by: Monique at October 17, 2008 6:57 PM

"I wonder if Representative Walsh is aware of how much money the most recent version of the "funding formula" would have shifted away from the four communities of District 36…"

Of course she is aware-as are all suburban Democrats. Which is why the "funding formula", formerly known as "Guaranteed Student Entitlement" has been-and continues to be-the state's longest running joke. 2 decades long and running. The laughter will continue in January.
The REAL funding formula we need is to restore the seperation of School and State. Provide vouchers to legal citizen parents with COLA's-not a penny more.
The illegals? They can watch Telemundo.

Posted by: Mike at October 17, 2008 7:15 PM

If you want to resist the call for a rational funding formula because it changes the current funding distribution, perhaps you should start by asking whether the current distribution of state dollars is rational. Since it's not, it has no claim to be preserved.

If you're looking for an explanation of why Rhode Island should STOP being the ONLY state in the union not to adopt an education funding formula, you can find it here:
http://www.rilin.state.ri.us/Documents/EFF.doc

Posted by: Thomas Schmeling at October 17, 2008 7:30 PM

Two more points:

1. Do not forget that RI is close to last in the percentage of education funding that comes from the state- we rely more heavily on local (property) taxes than almost any other state. If you want to know why your property tax bill is so high, this is a good part of the answer.

2. Why would a suburban legislator support a rational funding formula, even if that means that her/his district would get less state money than it currently does? Perhaps because "right" and "fair" and "rational" mean something to some people... at least to people who can think beyond "I got mine".

Again, RI is the ONLY state without a funding formula. There's a point when "independent" becomes "cranky and foolish". It happened to RI in 1789 and it's happening on this issue today.

Posted by: Thomas Schmeling at October 17, 2008 8:37 PM

Ah, yes, Mr. Schmelling.

So you would have us cut property taxes by shifting more education funding to the state (well, maybe cutting them in places like Providence, if not South Kingstown). And how, pray tell, would you pay for that increase in state spending? By legislating reductions in public sector union pension and retirement health care benefits? By cutting spending on RI's numerous and generous welfare programs? By further cutting spending on our decrepit infrastructure? Or...drum roll, please... by raising taxes on "the rich"?

Please, do tell how you would make the sums balance...

Posted by: John at October 17, 2008 10:53 PM

Yes, John, you are quite correct. I would advocate shifting the burden of education funding from property taxes (which are generally regressive because they put more burden on people whose incomes have increased at low rates while their houses' values- and subsequently their property taxes- have increase much faster) to income taxes. For what it's worth, I don't think I'm rich, but I would personally wind up paying more under the scheme I prefer.

Now, since I've answered your question very directly, I hope someone will answer mine, as nobody here has done so. Here, again, are the questions:

1. Is it a good thing that RI ranks 48th in the percentage of education funding that comes from state taxes rather than local property taxes? If so, why?

2. Is it a good thing that RI is now the ONLY state without a rational funding formula? If so, why?

I will be happy to respond to anyone who answers these questions directly.

Posted by: Thomas Schmeling at October 17, 2008 11:26 PM


A State education funding formula should ensure that each public school student in the state recieve the same amount of tax dollars for education with the exception of special needs students.

Phil the Oyster Farmer

Posted by: Phil at October 18, 2008 6:54 AM

Thomas,

You are using "rational" to mean "closed-form mathematical", but the terms are not equivalent. To quote economist Eric Hanushek, who has studied this subject in detail: "Research has not shown a clear causal relationship between the amount that schools spend and student achievement" (see "The Failure of Input Based School Policies", Economic Journal; February, 2003). You can't have a "rational" formula unless that relationship exists.

Even beyond that significant stumbling block, a "funding formula" is an awfully arbitrary point at which to make rationality the overriding goal. Your argument about needing a rational claim to be preserved to begin from applies just as well to the geographic monopoly system as a whole as it does to a "funding formula" component. There's nothing inherently rational about telling people that your child is required to go to school X, but we're taking bunches of your money and giving it to school district Y. Alter that legacy structure with open districting policies, charter schools, and/or vouchers, and you take a big step towards solving both defined "irrationalities" at once.

As to the ratio of property tax to other taxes, it is a subject that only bolsters the central point of the original post. Last year's version of the "funding formula" would have initially done nothing to change the tax-ratio; all it did was shift around existing state money from one community to another. In fact, unless accompanied by massive program cuts in communities like South Kingstown and Portsmouth, it would have increased the amount of property tax needed just to keep the current system functioning (unless recipient communities decided to use all of their new funding for local tax cuts, instead of education expenditures).

Donna Walsh was asked a question about "relief to taxpayers". She answered "funding formula". That answer is incomplete. Is she really trying to say that tax relief is not possible right now? Is she supporting a statewide tax increase? Or would she like to see a "funding formula" that would increase her constituents' share of funds by reducing funds from the current big recipients? We won't be able to tell, as long as we have elected politicians who use the words "funding formula" to obfuscate rather than clarify their positions on education funding.

Posted by: Andrew at October 18, 2008 7:14 AM

What needs to be done is restore the seperation of School and State. By cutting the per pupil expenditures from $14,000 to $11,000 and paying them only to LEGAL citizens we would cut cut the costs by a third. By raising the voucher each year for a COLA only the corrupt, unsustainable annual increases engendered by the School Commiee/teacher union industrial complex will be ended-permanently. Parents would be free to home school or have theit children educated in the moral or religious system of THEIR choice and not be held hostage by the atheist, pedophile infested (just google the words "teacher sentenced") "public" schools.

“When school children start paying union dues, that's when I'll start
representing the interests of school children.”
Albert Shanker President AFT

Posted by: Mike at October 18, 2008 9:03 AM

Mike,

Even though I don't believe that any mention of pedophilia belongs in this discussion because it seems to me to be mostly a cynical attempt to tar an entire profession with the bad acts of a few individuals, because there have been recent instances where other institutions, e.g. the Diocese of Boston, completely denied any problem with pedophilia and those complete denials led to tragic and avoidable consequences, I am going to this time let your comment above stand as is. This is in no way an endorsement of the view that there is a systemic pedophilia problem in the public school system, or that the topic is at all relevant to discussions of public school finance and instructional reform. And this disclaimer is not an invitation to divert this or any other thread away from its original subject.

Posted by: Andrew at October 18, 2008 10:50 AM

Mr. Schmelling asked the following question: "Is it a good thing that RI ranks 48th in the percentage of education funding that comes from state taxes rather than local property taxes? If so, why?"

The answer is self-evident, as anyone with an understanding of RI political history could tell him. The funding of K-12 eduction via high property taxes frees up state level sales tax, income tax, and gambling revenues to be spent on "best in the nation" benefits for public sector union members and the nation's most liberal welfare programs. Those state level spending priorities are targeted at two groups whose votes are crucial to keeping the Democratic Party in power in the General Assembly.

Next question.

Posted by: John at October 18, 2008 3:05 PM

John,

"next question?" Read the question again, and you'll see you have not answered it. The question was, "Is our current high reliance on property taxes a good thing or not and, if so, why?"

Posted by: Thomas Schmeling at October 18, 2008 4:26 PM