BEP 2.0

What you need to know about the governor’s school funding plan

Gov. Bill Haslam delivers his 2016 State of the State address in February, including his proposal to increase funding for K-12 education for the 2016-17 year.

Gov. Bill Haslam’s proposal to alter the way Tennessee funds its public schools is winding through the legislature, setting the stage for a potential increase of $261 million in K-12 education spending next year while also addressing the state’s ever-present malaise over the state of school funding.

Haslam championed his plan to update the state’s spending formula, called the Basic Education Program, or BEP, in his State of the State address in February. The resulting changes, as well as one-time investments in literacy and teacher pay, would amount to “the largest investment in K-12 education in Tennessee’s history without a tax increase,” Haslam said at the time.

The state defines the BEP as the amount of funds sufficient to provide a “basic level of education” for Tennessee students. The formula was created in 1992 after a group of small Tennessee school districts banded together in the late 1980s to sue the state for more funding. The legislature revised the formula in 2007 to a version known as BEP 2.0, but that version has never been fully funded.

Haslam has been examining how to change the BEP since at least 2014, even before two separate lawsuits were filed last year by Shelby County Schools and by seven districts in southeastern Tennessee led by Hamilton County Schools. Last month, Haslam told his teachers cabinet that BEP is “one of the hardest things” he deals with because Tennessee’s 142 districts vary so much in size, demographics and wealth.

“We worked really hard to balance the competing needs,” he told teachers.

His proposed changes are to be considered next in the Senate Finance Committee and a House finance subcommittee. Should the bill pass the legislature, here’s what it would mean:

BEP 2.0 is done for.

In 2007, then-Gov. Phil Bredesen proudly unveiled BEP 2.0 as a school spending plan that would infuse school districts with almost $500 million more.

“The chance is here to seize the moment,” he told the General Assembly of the ambitious plan, which would fully fund the state’s portion of costs associated with “at-risk students;” fund the state’s portion of student growth costs immediately; expand funding for the state’s growing English language learner population; and update the ELL student-to-teacher ratio from 1:45 to 1:30.

Then the recession hit, halting BEP 2.0’s rollout. The state opted instead to use a hybrid formula — half BEP 2.0, which was developed by the University of Tennessee, and half of the original formula, which was developed by the Tennessee Advisory Commission on Intergovernmental Relations. Many educators eagerly anticipated the eventual day the legislature would fully fund BEP 2.0.

This budget nips that hope in the bud by enshrining the hybrid formula into law.

But districts would get more money for teacher salaries, English language learners, technology, special education and other components provided for in BEP 2.0.

Though the governor’s plan nixes BEP 2.0, it permanently increases the state’s spending on English language learners (funding ELL teachers at a 1:20 student ratio and translators at a 1:200 student ratio), and special education students, technology and teacher pay, especially when it comes to teachers insurance. For years, the state only paid for teachers to have 10 months of health insurance. Last year, the General Assembly mandated that the state provide for 11 months of insurance. Haslam’s proposal this year finally gives teachers’ year-round insurance.

Stephen Smith, deputy commissioner of education, recently told lawmakers that the state is now exceeding its commitment set forth in BEP 2.0 by $178 million.

While Haslam proposes to increase money allotted for salaries, many districts will be required to up local spending on salaries too. Any resulting increase in state funding of instructional components is accompanied by a 30 percent increase in required local funding, on average. Individual districts may have local matches more or less than 30 percent, depending on their affluence. BEP 2.0 would have upped the state’s share of education costs to 75 percent.

Some districts will receive less money in other areas.

Another carryover from BEP 2.0 is the eventual elimination of a “cost differential factor,” known as CDF, that 16 districts in five counties receive to address a higher cost of living. Reducing the CDF would cut state spending by about $34.7 million. Almost half of that money would have gone to Shelby County Schools and the municipal districts in Shelby County. Other counties that would be impacted are Davidson, Anderson, Williamson and Sullivan.

Want to know more about the BEP proposal? Check out this report from the Tennessee Comptroller’s Office of Research and Education Accountability.

Clarification: March 24, 2016: The story has also been clarified to reflect that the state will have exceeded the funding commitment set forth by BEP 2.0 in 2007 in total, not just in teacher salaries.


Payday coming soon

Pension paybacks for Detroit district employees may show up in March  

Thousands of Detroit district school employees may reap the benefits of a lawsuit over pension funding as soon as March.

School employees who worked for Detroit’s main district between 2010 and 2011 can expect refund checks in their mailboxes soon, district leaders say, but making sure the money ends up in the right place will be difficult.

The reimbursements are the outcome of a controversial move during Gov. Jennifer Granholm’s administration to withhold additional money from employees’ paychecks to pay for retiree health care benefits.

The Michigan Supreme Court upheld a ruling by the state Court of Appeals that the withdrawals were unconstitutional. As a result, the state is giving back $550 million to school employees with interest. The amount employees get depends on what they were paid at the time, either 1.5 or 3 percent of their salary.

While every district in the state is charged with handling the refunds, the Detroit district has a larger burden, tasked with processing 13,416 refunds totaling $28.9 million.

Some of the employees no longer work for the district and do not have an updated address on file, the district said, so employees have been asked to update their information by Feb. 28.

Another challenge: The district is trying to fill five positions in the financial department, the area charged with issuing the checks.

Jeremy Vidito, the district’s chief financial officer, said the state did not allocate extra dollars for additional support staff to help with the task, so the department is working overtime to process the checks.

“It’s prioritizing,” he said. “So there are items that we are going to push back to make sure this happens. It’s also … asking people to do more with less.”

Despite the challenges, the district said it plans to begin mailing checks starting the third week of March.


heated discussion

Aurora budget talks devolve into charter school spat

Aurora Public Schools board of directors and Superintendent Rico Munn, center.

Aurora isn’t facing major budget cuts, and school board members don’t have any significant disagreements with their superintendent’s budget priorities, but that didn’t stop a school board meeting this week from turning into a heated back and forth. At issue: the impact of charter schools, how new board members got elected, and what that says about what the community wants.

Four of the seven school board members were elected in November as part of a union-supported slate, sometimes speaking against charter schools. Many have been wondering what changes the new board will bring for the fifth largest district in the state, and Tuesday’s discussion shined a light on some rising tensions about different priorities.

The budget discussion was the last agenda item for the school board. District staff and Superintendent Rico Munn intended for the school board to provide guidance on whether their proposed budget priorities were the right ones.

Union-backed members who were sworn in in November pressed the superintendent and staff to talk about how charter schools would impact the district’s long-term finances.

“What I’ve always said is that charter schools have a negative impact on our financial model,” Munn said.

Veteran board member Dan Jorgensen asked Munn to clarify his statement.

“I don’t say necessarily it’s negative to the district, I say it’s negative to our financial model,” Munn said. “I just think that’s a fact.”

Then the conversation turned to the community. Board member Monica Colbert, one of the longer-serving board members, said the district is changing whether or not the board agrees because the community is demanding something different. The community “came out in droves” asking for the DSST charter school, she said.

Board President Marques Ivey, who was elected in November, disagreed.

“Not (to) this group that was voted in, I guess,” Ivey said. “I have to look at it in that way as well.”

Jorgensen supported Colbert’s argument.

“I think often times our perspective is also skewed by who we engage with, of course,” Jorgensen said. “But we need to be mindful we are here to represent our whole community.”

He added that a small fraction of Aurora’s registered voters voted in the school board election, saying, “there’s no mandate here at this table.”

When Ivey tried to dispute the numbers, Jorgensen continued.

“It’s not a debate,” he said. “That’s not the point. No one sits here based on — I mean there’s a lot of factors that contributed, like half a million dollars behind us or this or that.”

November’s election included large spending from the union and from pro-reform groups. The union slate of board members raised less money on their individual campaigns, but had the most outside help from union spending, totaling more than $225,000.

“I’m not going to let you get away with that shot,” Ivey said, stopping Jorgensen.

Then another board member stepped in to change the subject and ask for a word change on Munn’s list of budget priorities.

The district isn’t expecting to make significant budget cuts this coming school year, but in order to pay for some new directives the school board would like to see, district staff must find places to shrink the budget to make room.

The proposed priorities include being able to attract and retain staff, addressing inequalities, and funding work around social, emotional and behavioral needs. More specifically, one of the changes the district is studying is whether they can afford to create a centralized language office to make it easier for families and staff to access translation and interpretation help. It was a change several parents and community members showed up to the meeting to ask for.

Board members did not have major objections to the superintendent’s proposed priorities.

During the self-evaluation period at the end of the meeting, board member Kevin Cox said things aren’t as bad as they look.

“We’re building cohesion despite what may seem like heated discussions,” Cox said.

Things could be worse, he added – he’s heard of other groups getting in fist fights.

Correction: A quote in this story was changed to remove an expletive after Chalkbeat reviewed a higher quality audio recording of the meeting.