What’s next for education funding reform in Delaware

Skepticism among lawmakers, a reluctance to engage in election-year discussions about a need to increase spending and silence from a governor in the final months of his last term make it unlikely that significant steps on school funding reform will be taken before the end of this year’s General Assembly session on June 30.

Aside from a hearing before the Senate and House Education Committees on March 7, there has been little visible progress to advance the recommendations of the American Institutes for Research’s (AIR) Assessment of Delaware Public School Funding commissioned by Gov. John Carney’s office as part of a settlement to a lawsuit that challenged the constitutionality and adequacy of funding for English learners, students from low-income families and those with special needs.

“I’m one person, one of 62 [legislators]. My colleagues are all over the place,” said state Sen. Laura Sturgeon, D-Brandywine West, chairman of the Senate Education Committee and a member of the Joint Finance Committee. “If I don’t have the full backing of the administration …” she added, ending in mid-sentence.

Laura Sturgeon

“Maybe there’s a way to get legislation that sets the ball in motion,” said funding reform proponent, Paul Herdman, president and CEO of Rodel, the education-focused nonprofit that has been on the front lines in advocating reforms. But his optimism is guarded, with numerous education issues, not to mention the state’s annual budget, confronting legislators during the final three months of their session.

The AIR report made eight recommendations to restructure a school funding framework that has been in place for about 75 years. The prime recommendation, investing in a weighted funding system that would adequately meet the needs of all the state’s public school students, would cost between $500 million and $1.1 billion more per year. Key items among the other seven recommendations were:

• Distributing more resources according to student need
• Allowing more flexibility in how school districts use resources
• Regularly reassessing property values 
• Implementing a weighted student funding formula to replace the unit system now used to allocate most state funds to districts and charter schools

Of those recommendations, only the reassessment of property values is under way. The reassessments now in progress in all three counties are the result of a settlement of another portion of the lawsuit, which claimed that previous assessments, last conducted in the 1970s and 1980s, were so outdated as to be unreliable. Lawmakers also passes legislation last year requiring each county to reassess property values at least once every 5 years.
“If I could describe the activity so far in one word, it would be ‘fence-sitting,’” said Shannon Griffin, a policy advocate for the Delaware chapter of the American Civil Liberties Union, which provided legal assistance to the plaintiffs in the funding suit. The joint legislative hearing committee meeting “was pretty much it,” she said, adding that the consensus of what she has heard is essentially “we already spend so much on education, why should we spend more?”

The governor and the candidates

Citing recent funding reform efforts in Tennessee and other states, Herdman said such initiatives are more likely to succeed when the state’s governor takes on a leading role.

Herdman notes that Carney has taken significant steps on several education issues, including early childhood education and improving teacher salaries. But Carney made no mention of the AIR report in either his budget address or his state of the state address.

“This is an opportunity for the next governor to play a more central role,” Herdman said.

In a recent interview with Delaware Public Media, Lieutenant Governor Bethany Hall Long, one of three contenders for the Democratic gubernatorial nomination, said “it is paramount that we have equity” and that “we’re going to have to reformulate” the school funding system, but she stopped short of endorsing the report’s recommendations.

New Castle County Executive Matt Meyer, another candidate, said in an interview, “The levels of funding for education are drastically inadequate…. We’re going to implement [the report’s recommendations] with urgency.”

The third Democratic contender, Collin O’Mara, former state secretary of natural resources and environmental control, listed “fix our public schools” as the first of five top priorities on his campaign website. One bullet point pledged to “Enact the recommendations of the Assessment of Delaware Public School Funding report to adopt an equitable school funding formula based upon student needs.”

Jerry Price, the only announced candidate for the Republican gubernatorial nomination, makes no mention of education funding on his campaign website. He did not respond to an emailed request for comment.

The Joint Education Committee hearing

The March 7 hearing began with Drew Atchison, primary author of the AIR report, summarizing its highlights. During the ensuing question-and-answer period, lawmakers expressed diverse opinions, ranging from support to serious doubt.

Under the state’s current funding system, “dollars never seem to make it to where they need to go,” to provide programming for students with the greatest needs, said Rep. Nnamdi Chukwuocha, a Wilmington Democrat.

Pointing to a steady decline in performance by Delaware students in the National Assessment of Educational Progress (NAEP), Sen. Stephanie Hansen, D-Middletown, said, “This is horrifying…. I am scared.” She asked whether scores are dropping “because we began spending less starting in 2013, or is it something else?” Atchison replied that looking for a reason for declining test scores was not within the scope of the study the state requested.

Sen. Eric Buckson, a Dover Republican, said the state should be able to give building principals more of the flexibility they seek without increasing spending. If spending is to be increased, he would like to know how the additional dollars would be allocated before giving approval. “Let’s not look to spend more money just to get flexibility.”

University of Delaware

The session’s final speaker was Kenneth Shores, an assistant professor of education at the University of Delaware who was not involved in preparation of the AIR report. Shores pointed out that from 1987 to 2008, the year of the Great Recession, 38 other states enacted school funding reforms that increased average state per-pupil spending by $1,000 or more. Most of those reforms involved transitioning to a foundational funding system, with spending determined on a per student basis, and usually with added weights applied for students with special needs, he said.

The revenue issue

Hardly mentioned during the legislative hearing was the multi-million-dollar question: if funding reforms require increased spending, where does the money come from?

Buckson was not the only one to suggest that reforms need not carry the price tags suggested in the AIR report.

In interviews with Delaware Public Media, both Herdman and Rod Ward, president and CEO of CSC Global and an longtime supporter of education reform, pointed to 2008 reports from the Leadership for Education and Achievement in Delaware Committee (LEAD) that suggested the possibility of millions of dollars in savings, primarily through more efficient management.

“Members of the Joint Finance Committee know how strapped we are…. Given the revenues we have, it’s hard to fund it all,” Sturgeon said. “To do what is required we need more revenue but nobody in an election year is going to say we have to raise taxes.”

What might those taxes be?

In his presentation to the Education Committees, UD professor Shores cited steps taken in other states to finance school reforms, including increasing sales and/or income taxes and instituting a statewide property tax. He also noted that Delaware’s school districts rely less on local property taxes for revenue than districts in most other states.

“We’re never going to implement a sales tax,” Sturgeon said.

If elected governor, Meyer said he would recommend raising personal tax rates on high-income individuals.

Sturgeon indicated that a statewide property tax for education could receive consideration, but no formal proposals have been made. The countywide property reassessments now underway could make it easier to implement such a tax because real estate throughout the state would be assessed at current values.

A related issue is the possibility of legislation that would give local school boards the authority to make limited increases in property tax rates without calling for a referendum.

Another possibility would be to consider raising taxes and fees on businesses that make Delaware their corporate home. Taxing corporations rather than individuals would be less likely to upset the average voter, Sturgeon said, but Ward cautioned that there could be a backlash from out-of-state businesses that incorporate here because of the reputation of Delaware’s courts in handling corporate law matters.

In addition to the revenue and taxation issues, some of those familiar with the education scene say the state needs to take a closer look at school management while it determines how to allocate additional funds.

Ward, who says he is tired of hearing school administrators who support the current unit system “putting [financial] stability and predictability above student outcomes,” suggests taking an approach tried in several other states: putting funding reform measures in place on a trial basis, testing them for a couple of years before making permanent changes.

Griffin, the ACLU advocate, believes that funding and programming changes must occur simultaneously and suggests that experts from other states be brought in to monitor and evaluate reforms while they are in progress.

“You’re not getting results because you’re not giving school leaders the tools they need,” Ward says.

ACLU repeats its warning

While all these options are under consideration, the state faces another threat if it defers action indefinitely.

When the AIR report was released, Dwyane Bensing, the Delaware American Civil Liberties Union attorney who worked on the case, said: “This report will be Exhibit A of the next lawsuit if the state fails to act.”

Griffin, the Delaware ACLU policy advocate, said Bensing’s warning still stands. “It’s still on the table, but I can’t give you a timeline,” she said.

“The state has a history of making education reform decisions through the judiciary,” Ward says. “It would be a nice change for the General Assembly to take the initiative on this one.”