Gov. Bill Lee wants review of Tennessee’s education funding formula

Tennessee Gov. Bill Lee and Education Commissioner Penny Schwinn announced the state’s intention to review and explore the creation of a new formula for how the state funds K-12 education.

The state announced the launch of a 90-day public comment period, during which the Tennessee Department of Education will hold committee meetings, public forums and launch surveys to seek feedback from educators, policymakers, advocates and parents.

“We will pursue a rigorous review of our state’s education funding to ensure we are properly investing in students and stewarding our resources well,” Lee said in a statement. “I invite every Tennessee parent to tell us about their current experiences as well as their hopes for the education, environment and experience in our K-12 public schools.”

The process is intended to explore the creation of a completely new education funding formula, scrapping the controversial Basic Education Program funding formula that the state has used since 1992.

The move comes as a lawsuit arguing that the formula leaves Tennessee schools underfunded — filed by the state’s two largest metro areas, Shelby and Davidson County, among others — currently makes its way through the court system. It is scheduled to go to trial next year, and Schwinn said the case needs to play out in court, separate of the state’s new initiative. 

Student-centered approach likely

The new model will likely take a more student-centered approach, Schwinn told The Tennessean Thursday. That could mean potentially allowing the state to establish a weighted student-based formula in which a certain amount of funding follows every student, no matter where they attend school. 

In fiscal year 2021-2022, the state is on track to spend $7.8 billion in state dollars on K-12 education — the single largest expense in the state budget. 

But Tennessee currently ranks 43rd in the nation based on per pupil funding levels, spending about $4,000 less per pupil than the nationwide average, according to the Education Law Center. Critics continue to point to how they say the state is dramatically underfunding public education. 

“The real problem here isn’t the complicated formula to split up the BEP funds. The problem is the uncomplicated decision to invest fewer dollars in education than basically every other state,” Senate Minority Leader Jeff Yarbro, D-Nashville, said in a statement Thursday.

“We’ve reviewed, task forced, and blue ribbon commissioned the BEP to death over the last two decades,” he said. “There’s no shortage of solutions, so much as there’s a shortage of will to follow the recommendations we’ve received.”

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The BEP has long been a point of contention for educators and lawmakers alike.

Adopted in 1992, it was last updated in 2007 by former Gov. Phil Bredesen. Under former Gov. Bill Haslam, parts of that update were rolled back.

Since then, the amount of state spending has increased about 2.3% annually per pupil, or about $86 per student per year, according to a recent study from The Sycamore Institute, a nonpartisan think tank based in Nashville. 

The BEP consists of a complicated rubric with 46 components the state uses to determine how much money schools get for things ranging from teacher salaries, books and transportation.

But the formula is dependent on the amount of funding the local government can contribute, namely from property taxes, and leaves out many positions and services required for operating schools.

In some districts, the BEP funds less than half of a school district’s total operating budget.  Other districts, especially in rural, distressed counties, rely almost completely on the BEP.

Over the years, lawmakers have garnered criticism from constituents experiencing uneven increases in districts even when the state increases funding for K-12 education due to the categorical nature of the BEP formula and some educators have characterized the formula as “antiquated.” 

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Diverse representation sought

Schwinn said the steering committee and subcommittees will consider specific student populations when it comes to funding, such as English language learners, students with special needs or disabilities, students in fast-growing communities and low-income families.

She also said she hopes for diverse representation from both rural, suburban and urban areas of the state, as well as from the state’s three grand divisions. Advocacy organizations might be tapped to take part in certain committees and at least one committee will consist of local elected officials, including school board members and county commissioners who will consider the local match component of a new funding formula.

Public engagement will focus on prioritizing students, empowering parents and creating “flexible funding that prepares students for postsecondary success,” the department said.

But the commissioner cautioned that there is no “perfect formula.”

“That’s impossible. What I did think when I think about winners is that you have to make sure nobody has less funding than they had before, because that’s unfair,” Schwinn said in an interview. “This isn’t an unlimited pot, so there are always going to be haves and haves not and opportunity costs. So if you want to fund more in English learners then what does that mean we can’t fund as much?”

The move from Lee comes as the state is flush with cash — thanks to a budget year that saw more revenue collected than initially projected as well as billions of dollars of federal stimulus funds allocated to the state.

Schwinn declined to say if the state should spend more on K-12 schools in addition to revamping the model when asked Thursday. She also didn’t say whether the department hopes to have something to present to lawmakers during the 2022 legislative session but said Lee will eventually want to move quickly.

“I think philosophically, he wants to move as quickly as possible once we have the right thing in place. He really understands that this is our biggest state-level investment … and we have to make sure we can stand behind $7 billion of funding,” she said. “Is it transparent? Do we know where it’s going? Is it going to move the needle for kids and families? When we get to yes on those, then we need to move forward.”

But some lawmakers say more investment is exactly what Tennessee schools need from the state.

“While we’re all for adjusting the components and calculations to address inequities and outdated assumptions, the real question is our timeline for investing an additional almost $2 billion each year in schools — so that we might catch up to our neighbors and might get out of the bottom ten list for per pupil funding,” Yarbro said. 

The department has already studied several states’ engagement strategies for similar reviews of student funding models, including Texas, Maryland, California, Ohio and Florida.

The department plans to announce committee chairs and topic areas early next week and launch a landing page where the public can find out more about the process, with committee member introductions to follow. 

“How we fund education is one of the most important conversations that we can have as a state,” House Education Administration Committee Chair Mark White said in a a statement.

“Today’s announcement and the engagement opportunities to follow will better equip leaders at all levels as we ensure that school funding works to serve all students,” he said “I am excited for the opportunity to work alongside my colleagues in the General Assembly, the administration, local officials, educators, and parents on this important topic.”

This is a developing story. Check back for updates. 

Yue Stella Yu contributed to this report. 

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Meghan Mangrum covers education for the USA TODAY Network — Tennessee. Contact her at Follow her on Twitter @memangrum.

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