5 issues to watch as Tennessee education funding proposal gains momentum

People mill inside of an ornate building lit by a large chandalier.
State lawmakers, lobbyists, and troopers mill inside of the Tennessee State Capitol, where the 112th General Assembly is in session. (Larry McCormack for Chalkbeat)

Gov. Bill Lee’s sweeping proposal to change how Tennessee funds public education faced an uphill legislative battle just weeks ago, but Republican leaders now sound optimistic about the prospect of approving his plan before adjourning next month.

“I think it will pass the Senate this year,” Lt. Gov. Randy McNally said Thursday, as his chamber prepared to start discussions in committee.

On Friday, Speaker Cameron Sexton said the House of Representatives has “ample time” to work through concerns and vote on Lee’s plan this spring. He added that lawmakers can make adjustments as needed when they return to Capitol Hill next year, since the plan takes effect with the 2023-24 school year.

Outnumbered Democrats have a different perspective.

“What’s the rush? This is too important,” Nashville Rep. John Ray Clemmons said as the bill debuted before a House education panel earlier in the week. 

“I think it’s premature to talk about whether we’re going to pass a piece of legislation that, at this point, so few people understand,” Senate Minority Leader Jeff Yarbro, also of Nashville, told reporters later.

The Republican governor released details on Feb. 24 for his plan, called the Tennessee Investment in Student Achievement, or TISA for short. He wants a simplified student-based formula to replace the state’s 30-year-old Basic Education Program, or BEP, a model that focuses more on providing schools with resources and is considered among the nation’s most complicated education funding systems.

Local leaders have been poring over the governor’s 34-page proposal and projected state allocations under TISA to analyze the potential impact on their school communities. They have lots of questions, as do legislators.

“There’s a lot on the table,” said Jon Lundberg, a Bristol Republican who chairs the Senate Education Committee. “And it seems like the more I know, the more that I realize I don’t know.”

As discussions ramp up, here are five issues to watch:

Understanding the per-pupil base

The proposed formula would set a base of $6,860 per pupil, then distribute additional money per pupil to support students in certain groups who need the most help. That student-centered approach has broad support. However, Lee’s administration has not released details to show how it determined the base amount. 

Other questions remain about approximately 10,000 licensed educators whose positions are currently paid for locally — not through state allocations, which has been a major criticism about the inadequacy of Tennessee’s existing funding formula. Education Commissioner Penny Schwinn has said 265 principals outside of the BEP would move under the TISA base but has not addressed whether the state would assume responsibility for paying for thousands of licensed teachers currently outside of the BEP.

Who gets extra funding?

Using a student-weighted formula, the governor wants to direct an extra $1.8 billion toward students who are economically disadvantaged, have unique learning needs, attend charter schools, and live in communities that are rural or have concentrated poverty. But leaders from traditional public schools and local governments have criticized the extra funding weight for charter school students.

“Charter schools are public schools in Tennessee, and their students should get base funding just like every other public school student,” said Dale Lynch, who leads the state superintendents organization.

Schwinn said the weight is necessary to help charter schools pay for their facilities, but others point out that charter students also would get access to new resources under the proposal, such as a coordinated school health program that would be moved into the base under TISA and could benefit all public schools.

Another concern is TISA’s definition of which students are considered economically disadvantaged. In addition to identifying students who are homeless, foster, runaway, or migrant, Lee’s administration proposes using a process known as direct certification for people with low incomes to receive certain federal benefits. However, the state could expand the definition by adding to the criteria several other existing programs such as TennCare, the state’s Medicaid program.

What are local funding impacts?

Because local school funding typically accounts for about 65% of local government budgets, changing the state’s funding system could have a dramatic effect on local spending plans and taxes. The governor has said he doesn’t want to trigger local tax increases and would set lower local contributions to TISA for four years until 2027 to give governments time to transition to the changes. But what would happen after that?

“We have a lot of questions,” said David Connor, executive director of the Tennessee County Services Association, which represents county mayors and commissioners who oversee most local school funding. “We know the General Assembly is going to need to put in more state money to the formula year after year, which is going to trigger additional increases in the local match.”

Another concern is the state’s plan to simplify how TISA would calculate how much money local governments should contribute for schools. Currently, the BEP uses two formulas, but Lee’s plan would switch to only one method from the University of Tennessee’s Center for Business and Economic Research, or CBER. 

“Moving completely to CBER appears to hurt about 99 districts and it’s better for maybe 44 districts,” said Connor. “Rural districts would be less protected, but Nashville’s district also would do worse under CBER. The question is: Are we making this change just for the sake of simplification? If so, we’re penalizing some districts over others.”

Holding districts accountable

One major change from the BEP is a new pathway for lawmakers to hold districts accountable for low-performing schools. 

Under TISA, district leaders could be ordered to report to a new legislative committee if one or more of their schools receive a D or F on the state report card. The ad hoc committee, whose members would be appointed by the speakers of the Senate and House, could require a “corrective action plan” or appoint an inspector general to oversee the district’s “academic programming and spending.”

Rep. Vincent Dixie, a Nashville Democrat, noted that one low-performing school could trigger the action, which is more likely to happen with large school systems that operate dozens of schools.

“In essence, our superintendent of schools would come in and answer questions all the time,” said Dixie. “And you have someone putting an action plan together who has no educational expertise.”

But Republican leaders say tying funding to performance is necessary, especially if Tennessee invests an additional $1 billion annually in public education as Lee has proposed.

“The public has been asking for years for proof of the return on their investment,” said Bo Watson, a Hixson Republican who chairs the Senate Finance Committee.

Who makes the rules?

TISA gives the state education department responsibility to write rules and regulations for overseeing the new funding system. Those would include the details of the accountability provisions mentioned above and the parameters of a “corrective action plan” that lawmakers could order. For instance, would the ad hoc committee have authority to fire a superintendent and replace elected school board members with appointed ones?

Some legislators have discussed whether the state Board of Education might be better suited to the rule-making task. That entity already sets rules on an array of K-12 issues ranging from academic standards to teacher licensure to charter schools.

“TISA would be a significant policy shift, and we’re putting a lot of weight into figuring out the details later through rules that would be determined at a later time,” Lundberg said. “I want to know more about how the department would develop these rules.”

To learn more, scroll down to see state’s projections for how much money districts would receive under TISA. The department is answering frequently asked questions here and this week released a two-minute video about student-based funding. You can track the bill’s movement via the legislature’s website.

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Funding increase excludes outcomes and growth.

Marta W. Aldrich is a senior correspondent who covers the statehouse for Chalkbeat Tennessee. Contact her at maldrich@chalkbeat.org.

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