If you read the headline here, it says Governor Lee is proposing a 4% raise for teachers. When you get down into the text, it actually quotes him more closely which says, “Tuesday, Governor Lee announced a proposal for a four percent recurring increase to the funding formula for all Tennessee teachers.” That’s the rub. This is a 4% increase to the funding formula, but that’s not going to be a 4% raise for teachers. But why? How does this funding formula work? I’m going to attempt to take you through the complexities of it so that you understand it, and that way, when you see “4% raise!” you’ll know it means something quite a bit different. Of course, someone writes something like this every time the state offers teachers a raise.
If you don’t want to read all of this, it’s as simple as this: every school system, by necessity, employs many more employees (especially teachers) than for whom the state provides funding. This dilutes the percentage of any raise employees would receive.
Basic Education Program
The TN Funding formula for public school is called the Basic Education Program, or more commonly its abbreviation, BEP. If you want to know more about its history, you can read that here. It has been around since 1992 after a lawsuit by 77 small school system who said that the previous funding formula was inequitable.
Average Daily Membership (Enrollment)
The BEP funds school systems based on ADM (Average Daily Membership). This is the number of students you have enrolled in a school system the previous year. The average is weighted using four of the nine Reporting Periods (20 day periods). The weights are as follows: Reporting Period 2 (12.5%), Reporting Period 3 (17.5%) Reporting Period 6 (35%) and Reporting Period 7 (35%) (pictured below). This weighting values the two reporting periods in the Spring Semester (January 30-February 27 and February 28-April 2) more than the two in the Fall.
Every single school day, school districts send a report to EIS (Educational Information System). These are done through extracts from your local Student Information Systems (such as Aspen or PowerSchool or the like). These extracts include data about student enrollment, all the information about those students like demographic information, attendance, and even grades/credits. This is how the state determines your ADM. It’s the average of your enrollment in a 20 day period referred to earlier as a reporting period. Also note that all numbers are rounded to the ten-thousandths place.
Funding Areas
There are four areas that the state funds for schools:
Instructional Salaries (State 70% share): If you look at the components in here, it includes teachers, administrators, and supervisors.
Instructional Benefits (State 70% share): This is what the state funds to help with benefits for teachers.
Classroom Funding (State 75% share): This includes nurses, assistants, textbooks, and other materials.
Non-Classroom Funding (State 50% share): This is everything from the superintendent to secretaries to custodians and other building maintenance.
School systems are funded for the next school year based on their ADM for the previous school year. And that funding mechanism is broken down into four different categories that you can see here. Each category is broken down into several components.
For example, the state will send funding for one teacher for every 20 K-3rd grade students. That means if your school has 100 K-3rd grade students, the state will fund them for five teachers. For every 25 4th-6th grade students, your school system will be funded for one teacher. That means if your school has 100 4th-6th grade students, your school system will be funded for four teachers. If you read all the categories in the link above, you can see how that works. Also, note that the default is for the state to fund 70%, 70%, 75%, and 50% of the expenses with the county’s portion defaulting to 30%, 30%, 25%, and 50% (which is considered their maintenance of effort), but the state calculates every county’s ability to fund education and kicks in a higher percentage for many (more on that in a second).
(Note: for counties that have more than one system (Anderson County in whose borders also has the Clinton and Oak Ridge school systems, for example), they have to split the BEP allotments which is prorated based on their ADM. That’s a conversation for a different day, but it does explain why counties containing large metro areas decided to consolidate (Hamilton County, Shelby County, Knox County, and Davidson County); it’s a more efficient use of their funds).
State percentage versus local
The argument you often hear from school systems is that BEP inadequately funds schools, and the retort to that is typically, “The BEP isn’t a spending formula; it’s a funding formula.” In other words, spend it however you want it, but this is how we determine how much you’re getting. The state’s percentage for funding is determined by a fairly complex process. The starting percentage is 70%, and then two indices are used to rank every county in the state to determine their ability to fund schools. This is done using a combination of the TACIR and CBER models (see p. 92 and 93).
“Tennessee’s fiscal capacity model was developed at TACIR and adopted by the State Board of Education to fulfill the requirement of the Education Improvement Act to equalize state education funding through the Basic Education Program (BEP) formula. The model is used to help determine how much local governments have to contribute to the BEP for each school system. Fiscal capacity is the potential ability of local governments to fund education from their own taxable sources, relative to their cost of providing services. The formula estimates how much revenue per pupil each county area can afford to raise for education.”
The state of Tennessee will fund some counties’ education program over 70% and some less than 70% depending on the TACIR and CBER indices. Think of it this way: the state ranks every county with how much they can afford to pay, and the higher you’re ranked, the less the state pays. This allows poorer counties to be able to provide an equatable education to their students and pay competitive wages to their employees. There is also a cost-differential factor for systems where the cost of living is greater than the statewide average that can adjust the percentage the state will pay.
Computation
Once a system’s ADM, state’s percentage of payment is determined, and System BEP Instructional Salary, then you can compute the amount the district will receive the next year using the handbook for computation. This handbook has example sheets of how BEP is calculated (p. 87-91).
So what does this have to do with the raise?
So the Governor is not saying he is going to fund education in each school system to the extent that each teacher will receive a 4% raise. What he is saying is that the portion for salaries will be increased by 4% than it currently is. In my school system, the System BEP Instructional Salary multiplier was $49,296.00. This means this multiplier will now be $51,268.00. This is an increase of almost $2000 per teacher, but yet, it will fall short of the 4% increase per teacher. Plugging this into last year’s BEP How to for my district, this would have given us $617,084 more for the instructional salary component. This is approximately an $1646 annual increase per teacher or $164.60 per month increase. Of course, because of the way teacher salaries work, it would work out differently for educators with different education levels and different years of experience.
The problem, of course, is that all school systems employ more teachers than the BEP funds. For example, last year, my school system earned 339.92 teachers based on the ADM formula. Currently, we employee 375 teachers, and that’s with the highest teacher:student ratio we can tolerate. So just for my system, we have to make up millions of dollars to pay teachers over what we are funded; it’s more than that because of the different steps and years of experience. As you can see, a 4% raise would be 4% if we only employed 340 teachers, but those 35 (nearly 10%) teachers above the BEP reduce the percentage of the raise.
Many other school systems employee even more teachers above the BEP than we do. This will dilute their raise even more. I would rather see a solid, legislated plan to increase salaries over time rather than these bills passed that are shot from the hip, and in this case, the spoonful of sugar to make all of the other dumb stuff they’re passing taste better.
What other issues are there with the BEP?
Can you imagine running a large elementary school without an assistant principal? Can you imagine having only one nurse in a school system? It doesn’t take long reading down the list to discover how much funding doesn’t match with reality in today’s schools.
School systems are funded for one nurse per 3,000 students. Having 12 schools, my school-system employs many more than that even though our student population is 5,100 total. This is an unfunded need. If you’re wondering why we need nurses, every school has students who are on an Individualized Health Plan (IHP) and emergencies to deal with. Every year, but this year especially, our nurses have been instrumental in keeping our students safe. They bring a level of expertise that every school needs, and who would feel safe without a nurse in their school especially if there are multiple students with severe health problems, and nearly every school has that these days.
Counselors are funded at the following levels: 1 per 500 K-6th grade students and 1 per 350 7th-12th grade + vocational students. The American School Counselor Association recommends a ratio of 1:250. And in their standards, that the state of TN recently adopted as their own, they recommend spending 80% of a counselor’s time with students. How would you do that with 350 to 500 students in a meaningful way?
My system employs four elementary assistant principals, but we don’t receive funding for any of them. We employ four and a half high school assistant principals between two high schools, and we are only funded for 2.29 of them. Why doesn’t the state value assistant principals while simultaneously pushing having a leadership pipeline? What many systems have done to offset this cost is having jobs like “Assistant to the principal” or “Program assistant” which is way to have an elementary assistant while paying them teacher pay. Parts of that are great, but everyone who takes on the mantle of leadership is committing a lot of additional time and responsibility and stress no matter what you call them. The allocation is listed below. A school has to have 880 students before they are allocated for a full-time elementary assistant principal. That seems a little crazy to me.
Conclusion
The BEP is an interesting way to fund school systems, but it is antiquated because of its 1992 roots. The world has moved on since then, and it needs to be updated. TN Governors need to stop throwing out percentages for raises when they know it won’t end up being a 4% addition to a teacher’s paycheck.
My recommendation is to do a bill that has annual re-authorization that puts teacher raises in a five or ten year plan rather than giving these diluted raises whenever it is politically expedient to do so. In other words, it’s better governance to have a plan for this type of thing.
What I didn’t include
The Special Education funding is its own beast, and I didn’t bother to mention it because I felt like it would have been more confusing than enlightening.
Local funding levels are another thing. Some counties give millions more than their maintenance of effort and some give the minimum amount. I did an anecdotal study that showed that the amount of money that locals give correlates strongly with higher test scores, but I didn’t want to open that can of worms here.
A smart aleck response to commenters on local news sites who say things like “They’re keeping them schools open so they can have more money.” Hopefully, more information will make for a more knowledgeable group of stakeholders.
The impact of geography on county school systems. In city systems like Greeneville or Bristol or Kingsport, their coverage area for providing transportation is very small compared to a county. Consider Carter County where it is almost an hour from Happy Valley to Cloudland. Or Greene County where is nearly an hour from South Greene to North Greene. Consolidating schools is nearly impossible in these systems because of having to bus students for such a long time. Small municipals systems don’t have these challenges, yet they often take the funds from the county systems keeping them from being able to fix some of their issues through tuition students. I have worked for two small municipal systems, and I would have been firmly against consolidating with the county system mostly because of those specific situations. It can’t be generalized.
I left out things like funding School Resource Officers because it is different in different places.
Resources
Education Law Center: BEP Primer
TN DOE - Education Information Systems