*Mississippi Today’s education writer Kate Royals addresses some of the questions swirling around the current effort in the Legislature to rewrite the funding formula for state public education. *

**Why do we need a new funding formula?**

Supporters of a new school funding formula say the state’s current formula, the Mississippi Adequate Education Program (MAEP), is antiquated and no longer works. In addition, Lt. Gov. Tate Reeves and Speaker of the House Philip Gunn have said the state needs a new formula that ensures funding is reaching students in the classroom.

Many say the problems leaders cite with the MAEP have to do with perpetual underfunding. The formula has been fully funded only twice in 20 years. For example, if the MAEP had been fully funded this school year, the base student cost would have been $5,358 per student. However, the actual funding per student came out to $4,980.

The 2015 failed ballot initiative that would have required the Legislature to fully fund the MAEP highlighted the need for action on a new formula, several lawmakers have said.

Citing a report showing administrative spending has increased from 2005 to 2014 while instruction spending has declined, some say the MAEP is to blame. However, Sen. Hob Bryan, D-Amory, a co-author of the 1997 law, says the formula distributes lump sums to districts. Districts then decides at the local level how the funding should be spent.

Legislators also cite issues with funding of special education, which Bryan acknowledges needs to be reworked.

**Who is EdBuild and what role do they play?**

EdBuild is the New Jersey-based nonprofit hired by the Legislature last fall to propose how to rewrite the state’s school funding formula. A relatively new organization, it has worked with Connecticut and Georgia on school funding, but none of its recommendations have been implemented in those two states.

**What does EdBuild say about the MAEP?**

EdBuild CEO Rebecca Sibilia told legislators that the state bears more of the cost of school funding than in most other states.

“Relying on the state for such a large proportion of schools’ resources, particularly given the 27 percent ‘guarantee’ that reduces the local funding responsibility for districts with large property tax bases, has the effect of reducing the overall amount of resources available for education in the state,” EdBuild’s January report states.

Sibilia advocates for a “student-based” funding formula. Currently, parts of the MAEP are calculated based on needed resources, instead of specific student characteristics such as special needs, at-risk or English Language Learners.

**How does our current funding formula work?**

Currently, Mississippi’s formula is a mixture of student-based and resource-based funding, meaning the amount of money is partly determined and distributed based on individual student characteristics and the other based on needed resources, such as staffing and supply levels.

The current funding formula funds students at a base student cost of $4,980, but the total number of students are counted according to average daily attendance. Average daily attendance only captures students who are at school for the majority of the day on a given day, not the total number of students enrolled. Critics say basing the funding formula on average daily attendance fails to fully fund the schools.

The MAEP uses school districts performing at a ‘C’ level to determine a base per student cost. That cost number is then multiplied by the average daily attendance. All districts receive an additional amount of “at-risk” funding, which is calculated by multiplying 5 percent of the base student cost by the number of free and reduced lunch participants. That amount is then added to a district’s funding.

**What are local districts required to spend on education?**

Each district is expected to contribute $28 for every thousand dollars of taxable assessed local property wealth in the district to support the schools. (This is the 28-mill requirement.)

The school district’s total local contribution, the amount raised by the 28 mills from ad valorem taxes, is then subtracted from the total allocation the state is required to provide under the MAEP formula. The remaining amount is given to the district by the state.

However, the 27 percent limit means that the local district is not required to provide more than 27 percent of the funds calculated through the MAEP formula. If the value of 28 mills is more than 27 percent of the total funding amount, the formula subtracts 27 percent, or the lesser of the two figures. In this way, EdBuild says, the state is essentially providing an unnecessary subsidy to property wealthy school districts that could otherwise generate the money through local taxes.

Communities may raise millage up to 55 mills to raise extra money for schools.

Funds for add-on programs such as special education, vocational education and transportation are added on to the total amount.

The original goal of the formula was to create an equitable system of funding, or one that would not punish students in property poor districts across the state.

**What is behind reports showing which districts will gain or lose money?**

One quick calculation is to look at the 27 percent rule. EdBuild recommends that local districts be required to pay more of the cost of public education.

EdBuild estimates that the 27 percent rule alone requires the state to spend some $120 million more on education than if the rule was eliminated and the state only paid for that portion of the local districts costs that were not covered by the 28 mill requirement.

EdBuild notes that while some districts would lose money if the 27 percent rule was waived, there are other factors in their formula in which they weight specific types of students that would bring more funds to a district.

The difficulty in assessing the impact on local districts is that the EdBuild proposal gives weights to certain categories of students. Each district has to report how many students fit each of the weighted categories and then the total number of weights are added to the base student cost to get the amount the district would receive.

**Does every district tax its residents at the 28-mill level?**

No. Realizing that there is a wide difference in the property available for taxation and the value of property in different locations around the state, the Legislature in the MAEP formula allowed districts to raise local ad valorem taxes up to 55 mills.

EdBuild’s reports says only one school district continues to charge the 28-mill minimum local tax to support schools. The report says that 17 school districts have reached the 55 mill cap and another 13 have used special provisions to exceed the 55 mill cap.

**What is the EdBuild proposal? **

Under EdBuild’s proposal, the state would use the number of enrolled students to fund schools, rather than average daily attendance. EdBuild proposes a slightly lower base student cost — $4,840 — than the current MAEP forumla. But by using enrollment as a base for calculating the per student cost, more funds are provided overall to each district.

EdBuild recommends using a student-weighted formula. Once the base cost per student is established, weights are added to particular categories of students to compensate the district for the additional resources needed to address those students’ needs.

EdBuild recommends the following weights for different categories of students, with a base student counting as 1:

- Low-income students: 1.25
- English-Language Learners: Between 1.15 and 1.25
- Special Education Students: 1.6 for students with low-level special needs; 2.25 for students with autism, hearing impairment, emotional disturbance, orthopedic impairment, intellectual disability; 2.7 for students with visual impairment, deaf-blindness, multiple disabilities and traumatic brain injury
- Gifted students: Between 1.2 and 1.26
- Early grades
- High school grades

For example, for each student who meets the qualification of low-income, the district would receive the base student cost plus an additional 25% of that number, or $4,840 plus $1,120, for a total of $5,960.

EdBuild also recommends some other variations, such as an additional payment amount to rural school districts. It notes in the report that the state’s main accommodation to rural districts is adding additional transportation funds. The report recommends a 10 percent per pupil payment for each student in a district where there are less than four students per square mile.

In a similar vein, EdBuild notes that the state has passed legislation requiring an extra focus on 3rd grade reading as well as on high school graduation. The group recommends that the state consider adding weights, though none is specifically cited, to assist districts in serving those specific subsets of the student population. The state did not provide additional funding when it imposed the 3rd grade reading gate, for example.

**How does EdBuild recommend addressing the needs of low-income students? **

EdBuild also recommends changing the method of determining a low-income student. Currently, those who qualify for the federal free and reduced price lunch program are designated low income. EdBuild recommends counting students whose families are at the federal poverty level, according to the U.S. Census data.

The report notes that changes in federal law have allowed school districts with more than 40 percent of students qualifying for free and reduced price lunch to count 100 percent of the student body as qualified. This makes an accurate count of low-income students difficult, EdBuild says.

By switching to counting those at poverty level, EdBuild says the state can more accurately monitor and track the students who need the most attention because of their families’ economic background.

EdBuild recommends a dramatic increase in the funding for low-income students. Currently the MAEP formula provides 5 percent more or an average of $268 per student. EdBuild recommends funding low-income students at 25 percent above the base level, which the report estimates would result in payments of about $1,200 more per low-income student.

**What can be done for the districts facing dramatic losses in state funding?**

EdBuild recommends a phase-in of the new formula over a period of 5 to 8 years. A phase-in would protect districts that could lose a significant amount of money by limiting losses to no more than 3 percent each year and limiting any school district’s gain in funding to no more than 8 percent each year.

The provision would be eliminated once the formula was fully implemented at the end of the transition period.

**When will specifics be proposed in the Legislature?**

Although there are many uncertainties about what a new formula might look like and how it would impact individual school districts, lawmakers have been clear that any legislation presented would include what they refer to as a “student-based” formula. Every student in Mississippi would receive a starting amount and additional weights, or multipliers, would then be added to that base amount depending on individual students’ characteristics.

Any deviation that legislators wish to take from the EdBuild proposal will require massive recalculations of the impact. Legislative leaders have said they intend to provide legislators with more specific information about the impact of any formula changes on each district before they are asked to vote on the changes.

Significant decisions remain to be made. Among them:

• Will the state waive the 27 percent rule or gradually phase it out?

• Will the state adopt the base student cost recommended by EdBuild?

• Will the state agree to begin using average enrollment instead of average daily attendance in computing the funds going to each district?

• Will the state adopt the weighted formulas for student categories proposed by EdBuild or will it adjust those?

The next Legislative deadline is Feb. 9 for the House and Senate to pass bills originating out of their own chambers. Both the House and Senate could debate and vote on bills that would include specific proposals, but they could also vote on dummy, or placeholder, bills, similar to what was done in committee last week.

Top lawmakers have repeatedly said all of EdBuild’s recommendations will likely not be used, so it remains to be seen what combination of suggestions from the report will be included in the legislation.

*More questions? Email us at info@Mississippitoday.org*

*Editor’s note: A previous version of this story misstated EdBuild’s base student cost recommendation as $4,480. It is $4,840.*