School funding

Chronic state underfunding of education spurs lawsuit by seven school districts

Gov. Bill Haslam speaks earlier this month to constituents from Chattanooga, home of the Hamilton County Board of Education, which sued the state Tuesday with six other school districts for underfunding education in Tennessee.

Charging that the state has breached its constitutional duty to provide “a system of free public education” for children in Tennessee, the Hamilton County Board of Education and six smaller school districts sued state officials on Tuesday, asking that the court order the General Assembly to address a broken system that has resulted in hundreds of millions of dollars of underfunding.

The suit asserts that, instead, the state has created a system that “shifts the cost of education to local boards of education, schools, teachers and students, resulting in substantially unequal educational opportunities across the State.”

Specifically, the suit claims the state’s funding formula underestimates the cost of teachers’ salaries by about $532 million and that schools face an annual shortfall of about $134 million in classroom costs.

The suit was filed in Davidson County Chancery Court by school boards in Hamilton, Bradley, McMinn, Marion, Grundy, Coffee and Polk counties. It names Gov. Bill Haslam, Education Commissioner Candice McQueen, Lt. Gov. Ron Ramsey, House Speaker Beth Harwell, and members of the State Board of Education.

The lawsuit was the first legal volley fired by local school officials weary of chronic underfunding by the state. The action came one day after superintendents from Tennessee’s four largest school districts, including Hamilton County, met with Haslam in Nashville to discuss school funding issues.

Haslam spokesman David Smith said the governor was “very disappointed” about the lawsuit after committing Monday to collaborating with superintendents to address the challenge. “Litigation will obviously decrease potential for collaboration,” Smith said in a statement.

Hamilton County Superintendent Rick Smith said his district intends to continue working with the governor and legislative leaders. “The board does not believe that its decision to assert its legal claims should preclude productive dialogue since everyone, ultimately, wants the very best education for everyone in our state,” he said in a statement.

Local district leaders across Tennessee have intensified discussions about inadequate state funding since 2013 when representatives of Metro Nashville Public Schools discovered fundamental questions about the state’s Basic Education Program (BEP), the state’s school funding formula.

The school boards of Shelby, Knox, Hamilton and Bradley counties voted earlier this year to explore possible legal action, while school leaders in Nashville chose negotiation over litigation.

Dorsey Hopson
PHOTO: Kyle Kurlick
Dorsey Hopson

Shelby County Schools Superintendent Dorsey Hopson, who represents the state’s largest public school district, wants a legal analysis conducted before determining whether his district should go to court.

“Being a lawyer, I want to understand the merits … and make sure it’s a winnable suit before you jump out there,” he told the district’s Board of Education Tuesday night.

Hopson, who was among superintendents who met with Haslam on Monday, complimented the governor for initiating discussions on the matter. “I can tell you he’s committed to increasing student achievement outcomes for students and expressly stated funding isn’t all of that but a lot of that,” Hopson said.

Board member Chris Caldwell, who has shepherded Shelby County’s exploration of possible legal action against the state, expressed frustration over the legislature’s unwillingness to adequately fund education for all Tennessee children. “I think the governor has tried to do a lot of good things,” he said. “My concern is his being able to get the General Assembly to go along with him.”

In January, Haslam unveiled his budget proposal to include an additional $170 million in state spending for K-12 education, including $44 million for the BEP.

However, that’s far below the funding outlined in Tuesday’s lawsuit. Specifically, it cited the legislature’s 2007 amending of the BEP to include the cost of teachers within the funding formula, with adjustments anticipated from time to time based on recommendations from a BEP review committee.

The lawsuit notes that the review panel’s most recent report, issued last November, found that the BEP formula failed to: estimate accurately a local district’s cost of insuring its teachers; use the actual salary costs incurred in employing teachers; provide the required 75 percent of classroom expenses set forth under Tennessee law; provide the cost of professional development and mentoring of teachers; fund school nurses and technology coordinators; provide adequate funding for teaching materials and supplies; and account for the increased use of technology within school systems.

“In total, the BEP Review Committee concluded that the General Assembly is underfunding education in Tennessee by hundreds of millions of dollars,” the suit says.

While commending the state for initiating higher academic standards and accountability measures, the suit says the state has not provided adequate funding for such education reforms, placing additional demands on local boards to pay for unfunded mandates.

Meanwhile, the suit notes, parents in more affluent communities are paying fees and participating in fundraising activities that defray local education costs while also contributing to an inequitable level of funding education across the state.

“The General Assembly has been aware of its obligation to fund a system of free public education across the State for more than 20 years and yet has been deliberately indifferent to its constitutional duty,” the suit says.

Contact Marta W. Aldrich at [email protected]

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money matters

Why money for Memphis schools is about to be based on students, not adults

PHOTO: Laura Faith Kebede
Under a budget model switch, Shelby County Schools would focus more on the types of students in their buildings and less on the number of staff per school.

Educators generally agree that a one-size-fits-all approach to teaching doesn’t work. Now school leaders in Memphis are saying it doesn’t work when distributing money to schools, either.

Beginning this July, Tennessee’s largest district will pilot student-based budgeting at up to eight schools, with the expectation of expanding to the entire district in three years. The goal is to distribute money more equitably.

Under the new method, each student brings to their school a certain dollar amount, which can grow based on factors like whether the student has a disability, is an English language learner, or comes from a low-income family.

That’s a big change from traditional budgeting, which distributes money primarily based on how much it costs to pay the salaries of adults who work in a building. The traditional model usually allocates less money to schools with high-needs students because they generally employ less experienced and lower-paid teachers.

The new approach would give principals more say in how they allocate money within their building. The system also appeals to those who want schools with greater challenges to receive more funding. And recently, student-based budgeting got a boost from President Donald Trump, whose proposed budget includes $1 billion in incentives for school districts with poor students that make the switch.

Leaders with Shelby County Schools have been working for more than a year with Education Resource Strategies, a Massachusetts-based consulting organization, to lay the groundwork for the transition. The method already is being used in districts in Nashville, Indianapolis, Denver, Boston and Houston.

David Rosenberg, a partner at Education Resource Strategies, said traditional budgeting models cater to the most politically savvy principals who find funds for academic programs and interventions in system loopholes. Student-based budgeting changes the dynamic to empower principals, making them more like CEOs than strict academicians. It also means principals will have to learn more about the complexities of budgeting.

“It works because you make it more flexible for schools and teams for how they see fit within parameters the district provides,” Rosenberg said.

During the next few months, the Memphis district will analyze how money is being allocated to its schools — which ones don’t have enough funds and which ones have too much under the new formula. The change will create winners and losers, and it’s the losers that concern some school board members.

PHOTO: Caroline Bauman
Lin Johnson, finance chief of Shelby County Schools

The board is generally supportive of student-based budgeting and is scheduled next week to vote on a resolution endorsing it. But board members also want the transition to be as painless as possible in a district that they say is underfunded by the state.

Finance chief Lin Johnson reassured board members at a work session this week that the district can mitigate losses for schools with less money. Options include tapping a separate pool of money to lessen the shock and giving some schools an extra year for the transition.

“The goal is not to fund all schools equally, but equitably (and) to make sure the funding we have is meeting the unique needs of students,” he said. “We need to work with schools to provide training and examples, to give schools the support they need to maximize the resources that they have.”

In Metropolitan Nashville Public Schools, which fully switched to student-based budgeting 2015, about 60 percent of schools received more money than the previous year. The rest received the same amount.

In other districts, the model has had the effect of shaking up central office structures, increasing the need for fiscal oversight, and stretching principal capacity.

Below is a video from Nashville’s school district to explain how student-based budgeting was rolled out there.


Teacher pay overhaul would establish merit pay, tackle salary inequities

PHOTO: Laura Faith Kebede
Trinette Small, chief of human resources for Shelby County Schools, explains the district's proposal for a new teacher pay structure.

Since 2014, Superintendent Dorsey Hopson has tried to establish a merit pay plan for teachers in Shelby County Schools but, for one reason or another, it’s eluded the district.

Now, his team is trying again — and they’ve come up with a proposal that they hope will help Tennessee’s largest district retain its most talented teachers, while also appealing to teachers that previously have balked at shifting to performance-based pay.

The proposal unveiled Tuesday would address inequities in the pay structure that have given higher salaries to newly hired teachers than to existing teachers with the same experience for up to 10 years.

Any subsequent raises would be based on teacher evaluation scores of 3 to 5 on the state’s 1-to-5 model, which is based on classroom observations and student test scores.

The plan also would resurrect additional compensation for job-related advanced degrees — but only in the form of bonuses if the teachers rate 4 or 5. The same goes for hard-to-staff teaching positions such as in special education, math and science, as well as veteran teachers who have reached the district’s maximum salary, which would go from $72,000 to $73,000.

The overhaul would take effect next school year using $10.7 million earmarked in Hopson’s proposed $945 million spending plan for 2017-18. The school board is scheduled to vote on the budget in April.

Recruiting and retaining effective teachers is a high priority as Shelby County Schools seeks to boost test scores in low-performing schools with many poor students. And research shows teachers have the most influence on student achievement.

Trinette Small, chief of human resources, said the district has to keep its pay structure competitive to retain its most effective teachers, especially with six municipal school systems nearby.

“This is trying to get base pay stabilized,” Small told school board members during a budget review session. “This is an investment in teachers but this is something we can afford.”

In exit surveys, a fourth of high-performing teachers cited noncompetitive pay as their reason for leaving the district, she said. And most who left had the second-highest evaluation score.

The plan pleased school board members, and parts of it appeared to appeal to teachers unions, although its leaders still had some concerns.

Chairman Chris Caldwell said the new structure positions the district for a more stable learning environment.

“The big point about the change was to have (pay) merit-based and not just longevity-based because at a certain point, they plateau,” Caldwell said. “The main thing we got to worry about is student draining and teacher draining.”

School board member Mike Kernell said the plan should boost teacher morale by addressing inequities in the system. “I think by resetting this, we’re going to start seeing more experienced teachers at the right level starting to help the younger teachers without the resentment that you’re making $2,000 less,” he said

Tikeila Rucker, president of the United Education Association of Shelby County, was mostly pleased with the proposal but took issue with tying pay for advanced degrees with evaluation scores. Teachers should be rewarded in their base pay for advanced degrees, not through bonuses, she said.

Rucker and Keith Williams, executive director of the Memphis-Shelby County Education Association, both said the initial leveling up should apply to all teachers on the former step schedule up to 17 years, instead of stopping at 10.

“If you’re going to abandon the schedule system, at least level everyone up,” Williams told Chalkbeat. “If it’s not going to benefit everybody, you might as well throw it in the trash.”

Small said the leveling up is meant to make teacher pay competitive with new hires. Since the district only incorporates up to 10 years of experience in pay for new teachers, the leveling up was limited to the same.

The New Teacher Project provided consultation on the district’s pay plan by gathering data, conducting focus groups and crafting the compensation model.

Editor’s note: This story has been updated to show the district proposes to level up pay up to 10 years of experience.