State Funding Formula Changing for Schools

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By Ron Barry
Managing Editor

“We are on the cusp of achieving an updated approach to public education that prioritizes students and invests in the future of Tennessee.”

With those words, Tennessee Governor Bill Lee set the stage for the passing of HB2143/SB2396, better known as the Tennessee Investment for Student Achievement (TISA), passed by the state legislature on April 28 and signed into law by Lee on May 2.
The new law revamps the State funding formula for public schools and culminates a six-month effort by Tennessee’s Department of Education to develop a method that “would incentivize strategic and efficient spending to accelerate student achievement and support a more thoughtful allocation at the local level,” according to department officials.
The new formula, set to go into effect in the 2023-24 school year, was designed to meet five primary goals: (1) it would be strategic for all students, meaning the priority would be funding students and not systems; (2) it would be easy to understand; (3) it would be sustainable; (4) it would be outcomes-driven; and (5) it would be flexible, allowing local entities to determine their own spending priorities.
Beginning in October 2021, Lee and Education Commissioner Dr. Penny Schwinn set in motion an extensive public engagement process, working with 18 subcommittees and gathering public comment from Tennesseans across the state. Several town hall meetings, live online chats, phone calls, and emails gave the various publics opportunities to have input.
The State was also taking advantage of the federal COVID-19 relief funding to the various school districts, which provided the opportunity to supplement local needs, bring in additional expertise, and capitalize on the current openness and need for change. The current funding formula, known as the Basic Education Program (BEP), was created in 1992 and has been modified slightly only twice – in 2007 and 2016 – since then.
The process built on almost two decades of discussion through BEP Review Committees and the work of a year-long task force in 2014 to arrive at the bill that Lee signed in May. The subcommittees were comprised of district and school leaders, higher education partners, elected officials, business leaders, families, education stakeholders, and members of the public.
Recommendations went to a steering committee of state officials for discussion and feedback, and led to the eventual guidance provided to the Department of Education.
According to the Department, TISA is designed to “empower each student to read proficiently by the third grade; prepare each high school graduate to succeed in the postsecondary program or career of the graduate’s choice; and provide each student with the resources needed to succeed, regardless of the student’s individual circumstances.”
The overall funding landscape provides $9 billion in total education funding for 2024 (state and local), with $1 billion in new recurring state funds ($250 million in Fiscal Year 2023 and $750 million in FY24) and $750 million in one-time state funds in FY23.
The student-based formula incorporates a four-part framework: (1) the base, which covers the essentials each student needs for a K-12 education; (2) weights, which provide additional funds for students with unique learning needs or who may need additional supports; (3) direct funding, which offers students learning opportunities beyond everyday classroom instruction; and (4) outcomes funding, which incentivizes achievement and education excellence.
The amount of $6.6 billion was allocated to base funding; the Department says “existing funding was maintained and strengthened.” That may be true as far as the total amount allocated, but it should be noted that the TISA base for an individual student is $6,860 – that is actually less than the 2022 level, although it actually exceeds the national median for base funding in the United States, which is $6,000.
Included in the base funding total is additional funding provided for teacher salaries, nurses, counselors, principals, technology, and Response to Instruction and Intervention (RTI2) – Tennessee’s academic three-tiered framework for teaching and learning that begins with high-quality, differentiated instruction throughout the day and emphasizes intervening with students when they first start to struggle, to avoid prolonged academic difficulties.
TISA base monies also fund school support staff so teachers are empowered to concentrate more on academic instruction. Some of the base funding enables Tennessee to recruit out-of-state teachers and grow the in-state teacher workforce.
A total of $1.8 billion has been allocated to weight funding, which provides extra monies for economically disadvantaged students; those particularly affected by poverty; students in sparsely-populated and small-populated districts; students with unique learning needs such as disabilities, dyslexia, and those still learning English; and charter school facilities in the same amount that is currently funded.
As currently proposed, TISA would provide funds for the $6,860 base, plus: 25% more for economically disadvantaged students; 5% more for students living in areas of concentrated poverty; 5% more for students in sparsely-populated communities (less than 25 students per square mile) and students in small districts (1,000 or less students in the district); and a range of 15% to 150% more for students with unique learning needs. Each student may generate up to four separate services within the ULN weight category.
The amount of $376 million has been allocated to direct funding, which supports programs that offer students learning opportunities beyond everyday classroom instruction. The breakdown: $145 million to enhance K-3rd Grade literacy ($500 per K-3 student); $8 million to offer literacy tutoring to 4th-Graders who need more support ($500 per student); $210+ million to support career and technical education (CTE) – this item has a $5,000 average per student; and $13 million to fund post-secondary assessments (ACT tests and ACT Retake) – this item is worth $185 per student and is designed to pay for two administrations of a post-secondary test.
The outcomes funding allocates $100 million and: awards per-student bonuses when students demonstrate success in learning to read and college and career readiness; awards per-student outcomes funding for students who are on-grade level in reading at the end of 3rd Grade, with additional funding for students who are economically disadvantaged; awards per-student outcomes funding when students achieve college and career ready benchmarks of either ACT performance or improvement, or earning a Tier II or Tier III industry credential. Additional funding is awarded for economically disadvantaged students and those who enroll in college or directly enter the workforce in a CTE field.
Under the TISA plan, an elementary school student with no weighted measures would bring $6,860 (the base) to a district. But a student with six or seven of the weighted items could bring a district $15,592. While the base for a middle school student remains at $6,860, he or she could bring as much as 70% more with a specific ULN assessment, or add $4,500 more if CTE training is involved.
An economically disadvantaged high schooler, who lives in a concentrated area of poverty, has a 40%-level ULN, takes CTE training, and qualifies for the post-secondary assessment funding, can bring $17,847 to a district. So the range of possibilities is wide.
In Fiscal Year 2023, $125 million is being designated specifically to increase public school teachers’ salaries. It also requires increases in education funding to also trigger increases to state minimum salaries, currently on-track to increase the state minimum salary to $45,000 by 2026.
The state and local share of each district’s funding is split 70/30 for the base and weights only. The state will cover direct funding, outcomes, and extra funding for fast-growing districts. Local contributions are set to be lower in FY24, FY25, and FY26 before beginning to increase again in FY27.
School boards must establish academic goals that the local budget is intended to support, and must describe the results and return on investment of the prior year strategy, in an effort by the state to improve transparency and accountability. Detailed reporting on funding and spending will be publicly posted at the school and district levels, per federal requirements, and be included on the annual report cards.
Districts must maintain current levels of funding effort without allowing additional state dollars to supplant local funding. But in the TISA alignment, the majority of funding is flexible and tied to the local needs.

Cody Bishop

Cody Bishop

Hi! My name is Cody Bishop and I'm currently working as a Graphic Designer for Magic Valley Publishing, the parent company of the Crockett County Times.

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