At least two Golden Triangle public school districts are voicing some concerns about potential revenue loses if EdBuild’s recommended school funding changes are enacted.
EdBuild, a New Jersey-based nonprofit, crafted a proposal for state lawmakers that frees additional state funds for some school districts and increases the burden on local taxpayers in others. The proposal includes estimated state funding changes, ranked by districts that would have to contribute the most in local funds if lawmakers approve the proposed formula.
EdBuild’s report recommends that the state move away from the “27 percent rule.” That policy, according to the report, says no local district has to pay more than 27 percent of the minimum calculated cost of public education.
The report instead recommends using 28 mills, or 2.8 percent of taxable property value, as a minimal local funding level for school districts. If approved, the policy change could greatly impact local districts. Districts with large assessed values could receive less state money, while poorer districts could receive more.
Estimated projections in the EdBuild report show Lowndes County School District taking an $8.2 million loss in state funding — the third-highest in Mississippi. The loss equates to $1,718 per student.
LCSD Superintendent Lynn Wright said the district has seen estimates that show losing anywhere from $4 million to the reports $8.2 million total. None of them show the district gaining any funds.
Wright said LCSD “isn’t hitting the panic button” yet, with the proposal still in the very early stages. However, he said such significant losses could force the district to cut up to 20 percent of its personnel.
“If that did materialize, or something like that, it would be very detrimental here in Lowndes County,” Wright said.
The blow could be softened somewhat by increased ad valorem collections for several parcels on the Severstal (now Steel Dynamics, Inc.) campus in the Lowndes County Industrial Park.
According to Lowndes County Tax Assessor Greg Andrews, 12 properties at the Severstal campus, the largest of which is Steel Dynamics, Inc. all begin paying full property taxes next year – as their 10-year fee-in-lieu agreements that allowed them to pay taxes on one-third of their value will expire. He estimated that could bring the school district an additional $4.5 million annually.
However, Wright said the district is facing paying for series of major, district-wide construction projects that amounted to $75 million expenditure over the last two years. LCSD used a bond purchase to pay for $44 million, a lease-purchase for $19 million and used its fund balance for the remaining $12 million.
“We knew we were about two years away from having a major increase in revenue,” he said. “We were trying to lock in the bond issue while rates were low before construction costs went up so we could get the best bang for our buck. We’ve already allocated a lot of ad valorem taxes toward servicing our debt.”
While the district could raise property taxes to make up for the loss, Wright signaled his reluctance to do so.
“One of the reasons we’re doing as well as we are is the fact that people are building and moving to the county because tax rates are reasonable,” he said. “If you go raising taxes, people aren’t going to be building in the county because they won’t be moving out here.”
The Associated Press recently released an analysis of the EdBuild formula that includes funding change estimations. The estimates account for factors such as special education, poverty and gifted students, which would allow additional state funding for school districts.
AP’s estimate for LCSD shows the district losing $1,142 per student, or $5.85 million total per year in state funds.
Starkville-Oktibbeha Consolidated School District is bracing for a $1.9 million loss in state funding, or $410 per student.
“Our state formula requires the local government to put up 27 percent of the MAEP (Mississippi Adequate Education Program) and for us that’s a little over $7 million,” SOCSD Superintendent Lewis Holloway said. “What EdBuild wants to do, instead of having 27 percent as part of their portion, they want to move it to 28 mills. If we went to 28 mills as a portion of our state funding, that causes us to lose $1.9 million in (maintenance and operation) for us.”
Under the proposed EdBuild funding change, Starkville’s local contribution would rise from $7.1 million to $9.1 million, while state funding would fall from roughly $19 million to $17.1 million.
While Holloway said it’s too soon for the district to start worrying about it, the potential loss is concerning.
“This is such a big number,” he said. “It’s going to take $100 million out of the MAEP formula and pass it on to school districts. I think that’s a pretty big pill to take.
The AP’s analysis shows Starkville-Oktibbeha Consolidated School District could gain about $1 million in state funding, though. That would equate to a gain of $200 per student.
The AP’s calculations for Starkville account for the district’s relatively large proportion of special education students, as well as its large proportion of gifted students, relative to the rest of the state. Those factors, along with a higher proportion of poverty compared to other districts, would allow SOCSD to make up for projected loss.
EdBuild’s report calculations do not take special education and poverty-based state funding into account.
Columbus and Noxubee
The EdBuild report does estimate exactly how much funding districts that gain might receive, though it notes changes to the formula should free up about $120 million total in state funding.
Columbus Municipal School District and Noxubee County School District both stand to gain state funding under the EdBuild formula. According to the AP analysis, Noxubee could gain about $1.5 million, or $910 per student, while Columbus could gain $1.3 million, or $345 per student.
CMSD Superintendent Philip Hickman, who recently spoke to lawmakers about EdBuild’s proposal, said he opposes the formula, even if it benefits CMSD. One issue, he said, is that it uses census data, rather than free and reduced lunch data, which is normally used by schools and government entities to determine poverty levels.
“It’s not complete and causes inequality,” Hickman said. “Even though school districts like ours would gain, there are other districts with comparable demographics like Vicksburg and Natchez, that would lose.”
Noxubee Superintendent Roger Liddell said his district would use any potential gains in funding to bolster the technology available for students.
“With the increased revenue, if we get it from the state, we would certainly use it at the teacher and student level,” he said. “It would not be used to hire more teachers. I think we will be OK if we can maintain and retain the teachers that we have. …Improved student achievement in the classroom would be priority number one.”
Alex Holloway was formerly a reporter with The Dispatch.