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School districts’ losses under bill put in millions

It re-divvies education cash tied to lunch-aid categories by Noel Oman | April 4, 2013 at 5:10 a.m.

Dozens of school districts in Arkansas face the loss of millions of dollars if the Legislature approves a new funding formula championed by Senate Education Committee Chairman Johnny Key.

The Mountain Home Republican wants to change the way the state distributes money for education that is tied to student qualifications for the National School Lunch Program. This is extra education money that goes disproportionately to schools with high numbers of students receiving free or reduced-price lunches.

Senate Bill 811 would change the way nearly $200 million is distributed.

The existing formula has three categories of funding. Districts where fewer than 70 percent of the students are economically disadvantaged received $517 per student, and districts where 90 percent or more of the students are poor receive $1,549 per pupil. Districts in the middle receive $1,033 for each student.

But studies have shown small changes in student populations could result in wide funding disparities. The difference between a district with 69.9 percent of its students identified as economically disadvantaged and one with 70 percent was $516 per student.

Under the new formula, most districts will lose funds; some will gain money.

Taking the biggest hit in terms of raw dollars is the Little Rock School District, according to an Arkansas Department of Education spreadsheet distributed Wednesday at a meeting of the Senate Education Committee.

The district would lose more than $4.1 million if the formula took affect July 1. In the current fiscal year, it is to receive $17.6 million but would only receive $13.5 million if the Legislature enacted the new formula.

Other districts that would lose a large amount of funding under the new formula include the Bentonville, Cabot and Fayetteville school districts, all of which would lose more than $1 million. School districts in Conway, Bryant and Hamburg would lose just less than $1 million each.

Reaction was immediate.

“There’s no way from where I stand that I can support the bill,” another education committee member, Sen. Jason Rapert, R-Bigelow, told Key. “I am going to be loaded for bear on this issue.”

The committee didn’t vote on the bill but instead engaged what Key called an “excellent conversation” about the proposal.

Tom Kimbrell, the commissioner of the Arkansas Department of Education, said the new formula was “an attempt to get the greatest amount of dollars to those school districts with the greatest percentage of economically disadvantaged students.”

To do that, he said, the department separated impoverished students into two tiers: students who qualify for free lunches and students who qualify for reduced-price lunches.

“Those poorest students require additional weight in their funding - in other words, more dollars,” Kimbrell said.

Testimony from executives from associations representing school district superintendents and school boards and others urged caution in moving too quickly, noting that many school districts are in the midst of preparing budgets and hiring for next year.

Clay Hendrix, superintendent of the Lincoln Consolidated School District in western Washington County, told the committee that his district stands to lose $200,000 under the new formula on top of an estimated loss next year of more than $420,000 from federal budget cuts, smaller enrollment and lower assessments.

“Next year is too soon and too fast,” he said.

But all agreed that the formula needed to be changed.

Some think the money should be spent on a few specific categories that are likely to help poor kids perform well.

Currently, the money can be spent on numerous programs, and the Bureau of Legislative Research said it’s hard to show a connection between the extra money and academic achievement gains.

“The problem is it’s become an unrestricted fund,” said Jerri Derlikowski, education-policy and finance director for Arkansas Advocates for Children and Families. “If you don’t need it for low-income students, maybe you don’t need it at all.”

Key said he wanted to engage in more discussion, in particularly on phasing it in, but rejected a suggestion the bill be referred to interim study.

“It sounds like there’s widespread agreement [that] we need to change the formula,” he said. “We have agreement on that. I think we have stepped a long way toward our end goal. And now I think we have to debate and decide how we phase this.”

Front Section, Pages 6 on 04/04/2013

Print Headline: School districts’ losses under bill put in millions

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