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Dec 08

The 65% Solution?

School divisions should spend the majority of their money on instruction.  That makes sense. However, some members of the Virginia General Assembly appear not to trust school boards to allocate the largest percentage to instruction.

The Virginia General Assembly has repeatedly considered setting a minumum percentage to be spent on instruction, most recently through HB 1416 which would require school divisions to spend 65% of their budgets on instruction.  This bill, introduced in the House of Delegates during the 2011 session, passed the House 48-46, but failed in the Senate Committee on Education by a vote of 5-10.

The intent is noble.  All citizens are likely to agree that most of their tax dollars for education should go toward instruction. But what is considered “instruction”?

The 65% Solution has generated considerable discussion and debate on what should or should not be included in the expenditures for instruction.  Excellent arguments can be made to include or exclude particular expenditures.  Facilities, school counselors, administrators, transportation, child nutrition services, and professional development are but a few examples of what some believe benefits instruction and merits inclusion or what some believe does not benefit instruction and merits exclusion from instructional spending.

Lengthy discussions will occur when this legislation reappears, resulting in wasted time and energy.  But to consider expenditures and any arbitrarily established-percentage to spend for instruction is misguided.

The discussion on the percentage of expenditures for instruction is illogical because the real issue is revenue.

Federal and state revenue and much of local revenue for education is already ear-marked according to existing legislation.  The impact of legislation mandating that 65% of revenues must be spent on instruction would affect only local revenues in excess of the reqiured local effort (RLE). Let’s take a look:

Federal revenue is expicitly prescribed.  Title I and Title VIIB funds, for example, require school divisions to spend these federal revenues for specific purposes, reading and special education respectively.  School divisions do not have the option to spend federal revenue for reasons other than those prescribed by Congress and the United States Education Department (USED).

State revenue is explicitly prescribed.  Similarly to federal revenue, the Virginia Department of Education (VDOE) sends revenue (basic aid, Standards of Quality aid, categorical aid, incentive aid, etc.) with requirements on how to use the state funds, what match of local dollars is required, what the funds must be spent on.  No exceptions are permitted.  Superintendents document each summer through program certifications that the state revenue (state and locally-required matching funds) were spent in accordance with VDOE expectations.

Local-required-expenditures revenue is explicitly prescribed.  State revenues have required local effort (RLE) matches of local revenues from city councils and boards of supervisors related to the above category examples.  For example, funding for special education is calculated on a per pupil basis with the local composite index determining the state share of revenue and the local required matching share of revenue.  Local funds must be provided for the revenue line for special education per the funding formula, and the local and the state funds must be expended for special education per the directions of the VDOE.  That means that the General Assembly dictates how both state and local revenues must be spent.

The lesson is that revenue/funding from Congress and the General Assembly must be spent per their directions – no exceptions. If you take their money, you must spend it according to their rules.

What is left?

All divisions receive revenue from the local governing bodies beyond the required local effort.  According to the Virginia Department of Education, the per cent of local funds beyond the RLE for FY10 ranged from 2.15% to 178%.

Local funding exceeding required matches is used to address needs and priorities identified by administrators, school board members, boards of supervisors and city councils members, students, parents and community members.

For example, for several years the Amherst County School Board was working with the Amherst County Board of Supervisors to have school nurses in each school because state revenue was insuffucient to do this.  Since having a school nurse in each school was cost prohibitive, the school board and the supervisors developed a plan with additional local revenue for one additional school nurse and seven certified nurse assistants to provide health care in each school.

This was done with local funds at a cost of approximately $127,00. If the 65% rule were in place, $363,000 in new local revenue would be needed to provide nursing staff in schools. Why?  Because 65% of any local money ($363,000 in this example) must be used for instruction.  Of our $363,000 example, that’s $236,000.  The remaining 35% ($127,000) could then be spent on school nurses.  Finding $363,000 in new local revenue would have made the plan that has provided non-instructional nursing support financially impossible.

The 65% rule would in essence become a means for the General Assembly to control the expenditures of local dollars.  I suspect this is the intent of those who introduced and support the 65% legislation.

The issue is not a minumum of 65% expenditures for instruction.  The issue is revenue and knowing the requirements as prescribed by Congress and the General Assembly.  School boards, supervisors, and city councils must and do comply with the requirements – they have no choice.  At the local level there must be the autonomy to establish and fund local priorities.

Ill informed General Assembly mandates should not be forced on school divisions as they work to provide local money for initiatives to support the children in their communities.  School divisions must have spending authority without interference from the General Assembly.

This blog was submitted by guest blogger John Walker, associate professor at Lynchburg College