Idaho’s K-12 school districts and teachers unions regularly gripe about being the last state in the country in per student spending. The central problem, however, is an inflexible and arbitrary education funding model that is not meeting students' or educators' needs. Currently, only 2.4% of Idaho’s education operating dollars are allocated to schools based on students. Idaho could maximize every dollar by adopting a student-centered school finance system that prioritizes families and educators.
This spring, the Idaho Legislature approved a $3.1 billion budget for the state’s education system. This gargantuan allocation makes up 49% of the general fund, excludes local property taxes and levies that supply more than $700 million to their respective school districts. Where does all this money go?
Idaho is one of seven states that still utilizes an antiquated resource-based funding formula for appropriating education dollars. This model allocates funds based on support units (a combination of average daily attendance, district size and enrollment by grade level) rather than a weighted or fixed dollar amount per pupil. Districts receive funding based on employees they hire, where these employees fall on the career ladder (employee salary schedules) and the multiplier table for administrative staff.
A central problem with Idaho’s public school funding formula is inequitable funding patterns that arbitrarily favor some students over others. Wealthier districts receive more funding from local property tax revenues and operations levies. According to Reason Foundation scholars, “Idaho’s wealthiest districts receive 34.3% more per pupil than the state’s lowest-weath district in state and local operations dollars.” Additionally, higher wealth districts receive more per-pupil funds from the state foundation program. Ultimately, wealthier districts have more money per pupil to hire additional staff and fund more programs.
For example, Boise receives $5,000 more than Kuna for each support unit, which is likely due to differences in staff experience and education levels rather than student needs. Additionally, Boise is generally able to offer higher teacher salaries than Kuna. When neighboring districts can offer more competitive pay, lesser resourced districts will struggle to retain teachers. Even more concerning is that this causes districts with less-experienced staff to essentially subsidize those with more tenured staff. Reason Foundation scholars explain, “This means that dollars saved by hiring younger teachers can’t be spent on things that would benefit students.”
Ultimately, this inflexible formula arbitrarily funds systems rather than students, and it gives certain districts an unfair advantage when competing for talented educators.
To maximize every dollar in Idaho’s education system, policymakers could adopt a student-centered funding model. Under this model, funding is based on student enrollment, accounts for students' needs, and has no relation to local property wealth. The benefits of this reform are allowing districts to spend dollars flexibly. Accomplishing this goal would require streamlining education tax dollars into a weighted student funding formula that adjusts funding based on student needs.
Additional consideration should be given to adjusting funding based on student performance and demographics. Funding levels under a student-centered model would no longer be based on staff experience, district size or average daily attendance. Instead of attaching strings, tax dollars could be delivered to the school district officials empowered to make spending decisions that are in the best interest of their students.
Shifting to a student-centered formula can also supplement the Idaho legislature’s efforts to create a school choice program, allowing students to choose which school they attend. For example, House Bill 293 would have returned education tax dollars to families, but Idaho’s current school funding formula unnecessarily prevents money from following the student.
As election season is fast approaching, candidates need to make funding students over systems a prominent part of their campaigns. Many will probably argue for more funding, but the focus should be on creating a fair, efficient, and student-centered funding model.
Reforming Idaho’s education funding model would eliminate the inequitable funding shortages between school districts and prioritize the needs of families and educators. The future of Idaho’s education system should be one where dollars actually help students, and taxpayers get to keep more of their paycheck.
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