Funding Our Children For Success
Over the forty years since the passage of the Education Finance Act (1977), South Carolina’s K-12 education financing has evolved in a piecemeal fashion to become a complex spider web of funding. Since 2001, per pupil expenditures have grown faster than inflation, while student achievement has faltered. A new model that focuses on students instead of programs is necessary to ensure a stable, equitable system.
The 2014 South Carolina Supreme Court decision in Abbeville County School District, et al. v. The State of South Carolina found the state’s “educational funding scheme is a fractured formula denying students… the constitutionally required opportunity” to education. This fractured formula fails students for several reasons:
- Expenditures are not directly tied to actual student costs.
- Revenue Streams are unstable and unpredictable, causing significant year- over-year variation in funding.
- Overly-complex funding formulas preclude transparency and disguise inefficiency.
- The state/local cost-sharing formula does not effectively promote equity across districts.
Funding For Success
Our recommended K-12 Finance Model is a ‘back-to-basics’ model that embodies the essential elements of a stable, transparent and equitable system. It contains three basic components.
- Foundation Aid The “foundation” amount required to educate a single typical student.
- Exceptional Student Weighting Factors The additional funding amount required to educate students with exceptional needs, including poverty, limited English proficiency, gifted, vocational and special needs.
- State/Local Cost Sharing The formula requires each local district to levy a state-defined minimum millage rate such that, on average, local districts contribute 1/3 and the state contributes 2/3 of K-12 funds. The myriad of current state funding streams would be merged and distributed based on formula from a single source, guaranteeing transparent, predictable appropriations every year.
Re-inventing the K-12 education funding formula is a significant effort which will require a shift in the finance and accounting methods for both the state and local districts.
- Require a phase-in period of 5 to 8 years smooth transition with clear, predictable estimates of budget changes.
- Districts that stand to lose state funding will be held harmless (provided funds to make up for the losses) during phase-in.
- Require annual review of data to optimize, prevent formula from becoming obsolete, and ensure appropriate use of funds.