School Funding

Funding ND Education?

At the beginning of the month I attended the interim committee on educational finance.  I did so because the topic potentially has some big implications on schools like ours.  In the last biennium the governor talked about getting all schools on the formula.  Some schools receive a different per pupil amount due to a law changing funding in the 2012-2013 school year.  For Elgin/New Leipzig this would have been a dramatic cut to our state funding.  This did not come to pass, and the legislature decided instead to reset these payments.  The result is that Elgin will maintain its present state funding for this year and the next even if enrollment declines.  You can see some of my previous articles if you want more detail on what exactly happened to funding.  This minimum in our funding is not permanent and this committee was formed to discuss how to get all schools in North Dakota on the same funding formula.  How is North Dakota going to have one calculation for school funding that is fair and equitable?  It’s a tough and complicated question that has serious implications for schools.

Lady Justice

Lady Justice

North Dakota has been sued several times in the past for inequity in the funding formula.  This occurred in 1989 and 2006.  A result of these litigations were changes to the funding formula and a study by Picus in 2007.   North Dakota used this information from the study to determine changes in funding that occurred in 2012-2013.  Like any change, there were going to be winners and losers.  To protect those schools who stood to lose a substantial amount of funding due to these changes, transition minimums were established.  Those schools who were affected by this feature of the legislation were considered “off the formula.”  Until now, increases in school funding have simply been applied to both schools on and off the formula.  Some consider these differences in funding to be inequitable and there is a strong push to create a formula without transition minimums.

During the meeting I attended on October 1st, the legislature talked about what to do for those schools who stood to be losers when transition minimums go away.  One state the legislatures has looked at to see how they deal with funding sparsely populated areas is South Dakota.  South Dakota has something called a Sparsity Formula.  I don’t think it pays to get into specifics at this point, but in general this formula provides more funding to schools that are in areas of sparse population and far away from another school (isolated).  In a formula like South Dakota, Elgin would stand to receive additional monies. At this point it was only a discussion point.

One point of discussion was the differences in taxation in different school districts. Some school districts are maxed out on their levying authority but are still struggling for funds.  Other districts are struggling to levy the minimum amount in the formula due to rapid growth in property.  Both are very different problems.  The committee talked about what sort of local contribution should most districts need to stay viable.  It also talked about at what point is a school no longer viable.  At what point does it not make sense for the state to keep financing a school?  I can say that Elgin/New Leipzig is not the type of school district they are talking about being too small.

Busses in a line


The other major talking point of the day was funding school transportation.  The committee discussed the declining contribution the state has been making to transportation and funding out of district transportation.  They talked quite a bit about whether the state should be providing funding to school districts to drive into a neighboring district to pick up an open enrolled student.  At this point I consider it likely that the state will cease funding these miles on a school’s route.  Nothing concrete has really been discussed as far as changes to this type of funding.

The last major point I will go into is taxation.   The main point of this conversation is the difference in each district’s ability to generate local revenue from property tax.  Districts with high property value will generate more money from their levies than a district that has low property value, even if they are of a similar size.  The amount districts are levying locally to fund their schools can vary dramatically.  Some districts are maxed out on their levying authority, while others tax under the minimum amount factored into school funding.  It was also discussed how to reduce the burden of school funding on local taxpayers and how much funding should be coming from the state for education.  How can we even the playing field?  I certainly don’t have a solution to this dilemma, but I feel it’s important for districts like ours to be at the table for these discussions.

Having a Say picture

Having a Say

I will be attending this committee again in January and be a part of this conversation.  I believe its important for small schools to have representation on this committee.  Its easy to put towns like ours on the back burner if no one is present to vouch for their concerns.  It is also easy to neglect the issues and difficulties we face if they are not brought to the table.  This committee will have an impact on how funds are distributed in the state to fund schools.  I thank anyone who takes the time to give communities like ours a voice and a seat at the table.  Your efforts are appreciated.

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