EdBuild Proposal Shifts School Funding Burden to Local Level

1/23/2017

EdBuild, the consultant hired to recommend changes to Mississippi’s school funding formula, suggests that the state save money by shifting more of the burden for funding public schools down to the local level. They propose to accomplish this by eliminating the “27% option” in the equity provision of the Mississippi Adequate Education Program, our state’s school funding law.

Currently, school districts are required to pay a local contribution in an amount equal to 27% of the base student cost or the amount of tax revenue that 28 mills generates in the local community, whichever is less. This equity portion of the MAEP law was put into place to ensure that property-poor communities were subsidized by the state so that all children, no matter their zip code, would receive adequate education funding.

The “27% option” also protected property-rich districts from having to foot the entire education bill for their students at the local level. The Mississippi constitution states that it is the obligation of the state to provide a public education for Mississippi children. Our tax structure was designed to support that obligation. We send most of our tax dollars to the state level where they are to be distributed equitably to ensure all students adequate school funding, in addition to other state services.

It appears that the proposal is for the Legislature to keep all of the tax dollars we are currently sending to the state level, but to reduce significantly the education funding they send back to our local school districts, requiring local communities to raise more taxes to pick up the state’s slack and pay for our public schools.

Property-rich does not always align with community wealth

It is important to note that “property-rich” does not align perfectly with community wealth. In some cases, the existence of a factory or plant puts a relatively low-wealth community in the “property-rich” category when millage rate is the decisive metric. In fact, among the school districts that would be the hardest hit by the removal of the 27% option are some with very high levels of poverty. The effect is so dramatic in some cases, that there are school districts that would currently be receiving no state funding at all, were the 27% provision not in place. One of these districts has a student poverty rate of more than 90%.

This is a good example of a proposal that has not been well thought through and that would have a very significant negative impact on some local communities. When the required local contribution is increased, taxes must be raised to meet that requirement. Homeowners, rich and poor alike, and small business owners will bear the brunt of those taxes. Taxes on car tags and homes will increase, and rent will go up as landlords pass on the cost of higher taxes to their tenants.

Even more problematic is the fact that the state cannot mandate that the community raise the necessary taxes to meet the “required” local contribution. The state would send less money – in some cases next to none, and if the local community declines to raise taxes or is unable to do so, students in those school districts would simply be out of luck. This is precisely the equity dilemma that the MAEP formula was designed to avoid.