Education funding

Overview

South Carolina’s system of funding public schools is broken, a fact we have recognized, studied and argued in court for more than a decade. It is hugely complex, a tangle of laws and funding streams that few people can begin to unravel. It is inadequate and unstable, leaving schools at the mercy of fluctuating state resources and restricting their ability to make up the difference with local revenues. SCSBA has teamed up with several state educational organizations to develop a comprehensive tax and funding reform plan that resolves these longstanding problems, creating a system that is simpler, more adequate and fairer to all districts.

The proposal, called The South Carolina Jobs, Education and Tax Act (SCJET), would generate funding for schools in two ways. First, the plan would establish a uniform statewide tax rate of 100 mills on taxable property (excluding homestead and owner-occupied property), immediately lowering rates in 78 of the state’s 81 districts.  Second, funding from more than 70 separate state revenue streams, including the Education Finance Act, the Homestead Exemption Fund, and some Education Improvement Act funds, would be rolled up into a single source.

Read more about SCJET (PDF)

  • Background: The Proviso Subcommittee of the House Ways and Means Committee on Tuesday approved the K12 education subcommittee budget provisos to include changes and additions. The Full Ways and Means Committee is scheduled to take up the budget next week. The Education Finance Act (EFA) proviso was amended to:

    • increase the base student cost (BSC) from the current year funding of $2,220 to $2,370, or an average increase of $150 per student;
    • add Dual Credit Enrollment of 0.15 to the pupil classification weightings and to require students enrolled for dual credit to be identified in Power-School as taking a course that leads to both high school and post-secondary credits and districts to assist students in accessing applicable lottery tuition assistance;
    • change the definition of students in poverty used in the pupil classification weightings from students eligible for free/reduced lunch and/or Medicaid to the U.S. Department of Agriculture community eligibility criteria, and include students eligible for Medicaid, classified as Migrant and classified as Homeless and direct the Revenue and Fiscal Affairs Office to also use this definition;
    • delete the requirement that the Revenue and Fiscal Affairs Office continue to use 2013-2014 school year counts to determine poverty funding for the add-on weighting and delete the reporting requirement on the effects of USDA community certification. The technical assistance to low performing schools funding proviso was greatly amended as follows:
    • Directs that funds be used to provide “intensive support” to schools and districts with the lowest percentages of students meeting state standards on the most recent state test or with the lowest high school graduation rates.
    • Directs the SC Department of Education (SCDE) to create a system of tiers of technical assistance for low-performing schools and districts and require schools and districts to be placed within the tiered framework by December 15.
    • Requires a diagnostic review of low performing schools and for the SCDE to monitor progress on implementation of amended plans and report their findings to the local legislative delegation and the governor.
    • Authorizes the state superintendent to declare a state of emergency in a school or district if it’s accreditation status is probation or denied, if a majority of the schools fail to show improvement on the state accountability system, classified as being in “high risk” status financially, or for financial mismanagement resulting in a deficit. The state of emergency declaration allows the state superintendent to take over the management of the school or district which may include consolidation with another district, charter management, public/private management, or contracting with an educational management organization or another school district.

    Other provisos of note:

    • Provide a 2 ½ percent cost of living increase for the full day 4K program.
    • A new proviso to direct the SCDE to report on the costs associated with moving the department out of the Rutledge building to the Chairmen of the Senate Finance and House Ways and Means Committees and to the Department of Administration by September 1, 2016.
    • A new proviso to require the SCDE to use Technology Technical Assistance funds to increase the capacity of the original trial and plaintiff school districts in the Abbeville lawsuit and direct that the funds be used to procure appropriate technology devices and infrastructure in accordance with technology review team recommendations to build the capacity to offer online testing and increased access.
    • A new proviso directing the SCDE to procure an IT Academy for public schools statewide and direct that the academy offer certification opportunities for educators to receive teacher certification exams, for middle school students to receive software training and for high school students to receive programming credentials.
    • Add “non-certified” public school teachers, “career specialists” and individuals employed by a publicly funded full-day 4K classroom to those individuals eligible to receive the teacher supply reimbursement of up to $275 each school year to offset the expenses they have incurred for teaching supplies and materials.

    Remaining budget deliberations schedule

    • February 22 – 25: Full Ways and Means Committee budget deliberations
    • March 1 – 7: Appropriations bill printed and placed on the desks
    • March 21 – 24: House floor budget debate
    • March 28 – April 1: House on furlough; tentative date for Senate furlough
    • April 4 – 8: House on furlough

    Position statement: SCSBA supports legislation to reform the state’s education funding structure. Any revision should be based upon specific analysis and recommendations on (1) the current tax structure and the state’s taxing policy, (2) the current education funding formulas and their ability to equalize educational opportunities statewide, and (3) a realistic means of computing the base student cost, which is aligned with state-imposed student performance standards and expectations. Recommendations for reforming the method of fully funding public education in South Carolina must do the following:

    • expand local district revenue-raising authority;
    • generate revenue that is adequate, stable and recurring;
    • ensure equitable and timely distribution, to include direct distribution from the state to a district;
    • provide adequate funding for other operational needs such as transportation and fringe;
    • include state-driven initiatives to ensure that every public school student has the opportunity to learn in permanent school facilities that are safe, structurally sound and conducive to a good learning environment; and,
    • ensure that districts are held harmless from receiving less money through a new funding plan.
  • Background: The K12 subcommittee of the House Ways and Means Committee has completed its proviso work, but 2016-2017 budget amounts, including the Education Finance Act base student cost, have not been discussed or provided. Budget meetings are scheduled to continue through February 25.

    As the Ways and Means subcommittee continues its work on next year’s appropriations bill, many school districts learned in recent weeks that state funding projected for the current year may fall shorter than expected. It is not unusual for differences between projected and actual funding, however, to occur.

    The SCDE notified superintendents and school business officials that higher than projected student enrollments and students qualifying as in need of academic assistance has resulted in a lower base student cost (BSC) from $2,220 to $2,190 or an average reduction of $30 per student. This amount may still need to be adjusted depending on data after the 135-day enrollment numbers are compiled.

    SCSBA, the SC Association of School Administrators (SCASA) and the SC Association of School Business Officials (SCASBO) are still trying to determine what the reduction will mean to school districts and what appropriate actions may be taken at the state level.

    In initial estimates, the BSC was to be capped at $2,172 per student, or an average reduction of $48 per student. Some districts were estimating a reduction of more than $1 million to more than $200,000 in smaller districts.

    The reduction is the result of two factors. The estimate, upon which the EFA request for the current year was based, was 966,029 students. Enrollment reported by school districts for the 45th day was 981,363 and does not include students in the state’s special schools/districts and the state charter school district, which also receive EFA funding.

    According to the SCDE, there were 17 districts that had a 250 student or more increase in weighted pupil units (WPUs) at the 45-day mark.

    In addition, there are higher numbers of students who scored in the lowest category on grades 3-8 on the state’s standardized test, ACT Aspire, in the spring of 2015 and qualifying them for academic assistance weighting added to the EFA two years ago. However, after the SCDE correlated the scores against the former PASS test for Not Met 1, the number of students was reduced.

    The SCDE is working with the Department of Revenue to adjust estimates for next year, but it is still unclear what, if any, actions will be taken to address any shortfalls for this year.

    Position statement: SCSBA is advocating the following three changes to the EFA for 2016-2017 to help address future shortfalls in the BSC. They are as follows:

    • The General Assembly should base any increases in the BSC for next year’s budget on the $2,220 budgeted amount rather than the actual, lower amount to make up the difference in this year’s shortfall.
    • The General Assembly should allocate at least $10 million in the EFA contingency fund which is the amount provided when the fund was established but has since been depleted. Contingency funds are used to fund shortfalls in the BSC from what was projected versus actual amounts.
    • The General Assembly should direct the Department of Revenue and the SC Department of Education to study the process used to estimate the BSC to determine if changes should be made.