Key Points in the Financing of Georgia’s Schools
- The total state budget in the current fiscal year, including federal funds and transfers, is nearly $36.0 billion, of which about $18.5 billion or roughly half comes from state revenues. Nearly $7.0 billion or 38% of the total amount of state funds is being spent on K-12 education. In addition to state funds, there are substantial commitments of local and federal funds. Based on data for FY 2010, the overall mix for school operations is about 43% state, 43% local, and 14% federal.'
- State funds are allotted to local school systems according to a formula, known as the QBE Formula, which is supposed to represent the cost of providing a “quality basic education” as defined in state law. This formula is based on the number of full-time equivalent students in each of 19 instructional programs. There are additional categorical grants for student transportation, nursing services, and equalization grants, which have their own formulas. (The funds “earned” by local school systems through the QBE Formula, when including health insurance, totaled about $9.3 billion in FY 2011, of which nearly $1.7 billion came from the local share, but the State reduced its share of QBE by more than $1.1 billion to about $6.4 billion. The categorical grants totaled another $.6 billion.)
- The QBE Formula is a logical framework, but the components or building blocks that comprise the formula are seriously outdated and unrealistic. This is also true for the categorical grants. (In total, these components are at least $1 billion less than the costs they are supposed to represent.)
- The State has not even funded its share of the basic formula, applying general “austerity” reductions. These cuts came to $963 million in FY 2011 and $1.15 billion in FY 2012 after federal stimulus funds.
- The state budget for FY 2013 will continue the deep cuts in the allotments to Georgia’s public schools. The increase of about $200 million in state funds for K-12 education will be consumed almost entirely by a slight increase in enrollment, additional costs for teacher pensions, and salary adjustments related to degrees and experience. There will be no adjustment for general inflation. The state salary schedule for teachers will remain the same for the fifth consecutive year, with their actual compensation being reduced by the furlough days that continue to be prevalent across Georgia. The formula for equalization grants, which assist the least wealthy systems, was cut by 41% to $492 million, and only $436 million of this amount was funded.
- The total amount of state funds to local school systems has decreased by 24% over the last decade on a per-student, inflation-adjusted basis. As a direct result, there has been a significant shift in the funding of our schools from the state to the local level, with local revenues now exceeding state funds. Some systems are able to make up the difference from local resources, while other systems lack the fiscal capacity or political will to do so.
- The investment in our schools is only one of many factors, but there has to be enough to support a basic instructional program to meet the needs of all students. (The funding provided by the State is at least $2 billion less than intended under state law or more than $30,000 for a class with 25 students.) The State is not fulfilling its clear obligation under the Georgia Constitution to provide “an adequate education” for every student in Georgia, with grave consequences for our children and our state.
April 15, 2012