Editor’s note: This commentary is by state Rep. Ann Manwaring of Wilmington, a Democrat who is a member of the House Education Committee.
[H].361, the newly enacted education governance reform law, has set in place a process designed to lead to larger school districts, a process that if not achieved by a certain time, will result in action by the state if local actions do not result in the desired reforms. This bill is the culmination of several years of work by the Legislature and the administration, borne of the belief that larger school districts will be more efficient and can lead to savings in a public education system that has declining student population, some of the highest teacher to pupil ratios in the country, and is one of the most costly on a per pupil basis.
This frame of the problem, pointing toward local actions as the root cause of too much spending, ignores at least two other driving forces for upward pressure on school spending; a) actions of the Legislature and the administration putting ever more obligations on schools and b) the functioning of the Act 60/68 financing formula itself.
Neither of these sources of upward pressure on spending will go away or be ameliorated as a result of the proposed governance changes, even if revised governance structures are successfully implemented in the required time and even if the changes result in savings.
H.361, as it left the House, had language in it that set in place a process whereby legislation proposed in the future that would result in increased education costs, as determined by a fiscal note prepared by the Joint Fiscal Office of the Legislature, any increased cost would have to be paid by the general fund and not the education fund. This is significant as the state’s general fund, the bucket that collects and spends the bulk of broad-based taxes, has rigorous rules around it that contain spending if there isn’t enough revenue to support the spending. The education fund, which is approximately 67 percent property tax revenue, does not have an equivalent disciplinary structure.
H.361, as it left the House, had language in it that set in place a process whereby legislation proposed in the future that would result in increased education costs, as determined by a fiscal note prepared by the Joint Fiscal Office of the Legislature, any increased cost would have to be paid by the general fund and not the education fund.
At the beginning of the House Education Committee’s process to develop H.361, we had included language for a two-year moratorium on any legislative increase in spending, but Rep. Patti Komline proposed this link to the discipline found in the general fund as a better solution to containing education spending driven by actions at the state level. The governor in his initial legislative proposal to the Senate had also included a moratorium, but the Senate Education Committee declined to support it as they moved through their process. And at the end, the conference committee members declined to include the House language in the final bill.
Regarding the formula itself, the final bill does have a change in how the formula works by shifting to what is called a “yield formula.” This is simply a change in a numerical process within the financing formula designed to make it more obvious to school boards the effect of spending decisions on tax rates in their communities. This is not a bad idea, but it yet again focuses on spending decisions only at the local level and doesn’t at all address the consequences of 15 years of our statewide education financing mechanism and its role in upward pressure on overall spending.
An example of one such consequence is when we use a statewide per pupil spending average as a benchmark and permit all school districts below to increase spending to the level of the benchmark while penalizing those above it to contain spending; the year-after-year effect is that the statewide spending benchmark increases by the cumulative effect of those actions. This is a clear frame for winners and losers with little or no accountability for the outcomes of those decisions or the effective use of the money.
The spending cap that is included in the legislation, developed by Rep. Oliver Olsen of Londonderry, is based on statewide growth in education spending of 2 percent, but each district is limited in its per pupil spending growth based on its deviation from the prior year’s statewide per pupil spending benchmark. This is a new twist in that every district is evaluated against its own prior actions and not just a single statewide standard. There are penalties for exceeding the cap. But this frame will sunset in two years, with no provision for what happens after that, nor any language to evaluate its impact on outcomes for children.
A second element included in H.361 as it left the House was the creation of a Legislative Education Oversight Committee composed of the chairs of the House and Senate education committees, appropriations committees and the House Ways & Means and Senate Finance committees. The purpose was to bring policy and money into one conversation. Similar oversight committees in corrections and health care have proven valuable in bringing together House and Senate policy and money perspectives to work throughout the year to pave the way for actions the following year. Perhaps the greatest value of similar effort in education would lead to a common understanding of the problem we need to solve and a wider understanding of the tools and strategies that will lead to better outcomes for all students at a price that taxpayers, parents and voters value, while still respecting the value of equity of opportunity for all children as laid out in Brigham. This, too, did not survive the House/Senate Conference Committee and was eliminated from the final legislation.
The world around us is changing rapidly and that includes how organizations, both public and private, arrange themselves to use their resources to carry out their mission. In the current economic environment, the pressure to spend less on education while at the same time get better outcomes for our children requires that the Legislature own up to its own role in escalating costs. In addition, we need to take a real look at the Act 60/68 financing structure that has been in place now for 15 years and identify whether and if so how it has had the unintended consequence of leading to upward pressure on costs by its very structure. Local school districts are not the only actors on this stage. That is why it matters.
