NASHVILLE — State Comptroller Justin Wilson is calling for an overhaul of Tennessee’s school funding formula because he believes it is overly complex and lacks safeguards against errors in distributing state money.
“It certainly should be transparent, it certainly should be verifiable and it certainly should be understandable,” Wilson said Friday. “It’s none of those three.”
Wilson’s comments came after he sent a letter to Education Commissioner Kevin Huffman earlier this week calling attention to problems with the formula known as Basic Education Program that determines how $3.8 billion is directed to school districts around the state.
Auditors for Wilson’s office said they were able to find only “two or three people” at the Education Department with a firm grasp of the funding formula and its supporting worksheets.
The comptroller’s study found that average attendance figures — which play a key role in determining the level of state funding — are self-reported by schools, and that there is little the state can do to verify those numbers. There is no statewide standard for counting the average attendance and no penalties for inaccurate reporting, according to the report.
“There are different ways of counting students, and you have different results, and not applying that consistently across the state is not good practice,” Wilson said.
The Basic Education Program, or BEP, was enacted in 1992 in response to a lawsuit and a later state Supreme Court ruling that the state’s old formula unconstitutionally deprived children in poorer counties of an adequate education. The BEP uses several indicators to evaluate each county’s ability to pay: property and sales tax capacity, per capita income, tax burden and school population.
The last major change to the school funding formula occurred in 2007 under former Gov. Phil Bredesen. The changes involved tripling the state’s cigarette tax to help pay for the increased cost of educating children from poor families, adding English-language instructors and improving teacher salaries.
Wilson said the Education Department and state lawmakers should work on ways to improve the formula without making it more complicated.
“Experience has shown that when questions arise regarding the fairness of the BEP formula, the response has been to add more complexity to the calculation,” Wilson wrote in the letter. “The changes make it harder and harder to understand, or question the formula’s basic support and foundation.”
Wilson warned that not addressing concerns about the funding formula could have more than just budget implications for the state.
“If the calculations are not understandable and consistent, there may also be increased risk of intervention from the courts,” Wilson wrote.
The Education Department had no immediate comment on the letter.