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In a legal maneuver last year, a coalition of small school districts in Tennessee joined a lawsuit brought by Shelby County and Metro Nashville Public Schools over the adequacy of the state's public education funding.

It was a major development, since the large districts in Memphis and Nashville had been going it alone in their lawsuit, originally filed in 2015. The Tennessee School Systems for Equity brought 84 small school districts on board as well.

By joining the lawsuit, the small school districts underscored the argument that the problem with Tennessee's education funding is not just that it is inequitable for the urban school districts, which educate a disproportionate percentage of poor students, English-learning students and disabled students.

Tennessee's funding formula, known as the basic education program, is inadequately funding all public schools, plaintiffs say, burdening the finances of local governments and leaving educators underpaid.

The lawsuit has been an odyssey.

Originally filed in 2015, the case has been undergoing fact-finding in recent months, including document requests and depositions of public officials. There was also a recent change in judges. It is yet to be determined whether an October trial date will remain on track.

The debate over increasing education funding has ratcheted up in recent weeks with grassroots groups, including the Nashville Public Education Foundation and the League of Women Voters in Tennessee, joining the push for dedicating more money to basic education.

At stake is hundreds of millions of dollars annually in Tennessee, which routinely ranks among the bottom states in the nation for education spending per pupil.

SMALL SCHOOLS ENTRY

The entry of the small schools association was a legal battle unto itself. The small schools, represented by attorney Jonathan Cole from Baker Donelson (also the law firm hired by Memphis and Nashville schools) entered the legal fray last summer.

When the small schools sought to join, attorneys for the state objected.

After a series of competing filings, Chancellor Ellen Hobbs Lyle ruled in September that the small school districts could join the lawsuit as plaintiffs.

The small schools' argument is essentially the same as the two large urban school districts'. They say the state is underfunding the basic education program and placing a disproportionate burden on local governments to pick up the slack.

The issue is nuanced.

The funding formula relies heavily on a city or county government's ability to raise taxes and generate local tax revenue. This means that the amount of state money dedicated to Metro Nashville Public Schools in Nashville, where the economy is thriving, is less than the amount committed to Henry County, where the government's ability to raise taxes is limited. The state funds about 35 percent of the Nashville schools budget, but as much as 75 percent of some small school districts' budgets.

"There comes a point in time when the local districts are simply incapable of covering the expenses and costs associated with providing an adequate and equal education to their students because the state is failing to appropriately calculate their fiscal capacity," the small school districts claimed in a legal filing last year.

The genesis of the basic education program was a lawsuit filed by the small school districts in the 1980s over the equity of education funding. The small schools claimed at the time that the state's funding strategy was unfair for rural schools. It's a common argument in the world of public education funding. In some instances lawsuits have sprung up over the equity of education funding: Are rural schools or urban schools being favored by the government's education spending?

While those lawsuits stem from how funds are divided up, the most recent lawsuit is over the total funding that's being divided — arguing there is not enough to go around.

"However, it has been the experience of many of [the small school districts] that in addition to the [basic education program] failing to incorporate the actual cost of providing an adequate education, the fiscal capacity determined by the state is not an accurate reflection of the local funding the member district can reasonably expect to raise or receive," the small school districts argued in a recent filing.

Will Pinkston, former Nashville school board member and policy adviser to former Gov. Phil Bredesen, played a critical role in the decision by Metro Nashville Public Schools to sue the state over education funding. Pinkston said the Bredesen administration recognized the basic education program as a policy that needed to be updated regularly.

"The [basic education program] is like any other piece of policy that's part of state statute. It lives and breathes and changes based on changes in the economy, based on changes in student demographics," Pinkston said. "It requires, just like anything else, maintenance here and there to keep it in step with the times. There are moments when the pendulum will swing too far in favor of rural systems as it relates to how money is distributed. The issue now is the entire system is woefully underfunded."

Pinkston said the Bredesen administration updated the formula at the end of its term in 2010 with the expectation that future administrations would follow suit.

"I fought for years to, No. 1, get us into court, which eventually happened. And, No. 2, to make sure when we did go to court we weren't going to accidentally end up at war with rural school systems, because that would have been a losing proposition. The litigation is adequacy litigation not equity litigation."

 

NOT ENOUGH

The crux of the basic education program litigation is that the state's current $4.8 billion public education budget is inadequate.

The 2020 Education Week Quality Counts report gave Tennessee an F grade for overall spending and an A- grade for equity, which measures how fairly funds are spent. Tennessee ranks 43rd in education spending per pupil at $9,544, according to the most recent rankings by EducationData.org. Virginia, which came in 25th in the rankings, spends $12,216 per pupil and New York, which was first, spends $24,040 per pupil.

Chris Henson, chief operating officer for Metro Nashville schools and member of the state's basic education program review committee, pointed to two areas where districts take issue with the current formula.

State law sets the elementary school per-pupil ratio at 20 students per teacher. But, local districts are often forced to hire more teachers in one school to compensate for disproportionate enrollment. As Henson explained, students don't enroll in neat 20-child bundles, leaving the district to need more 3rd grade teachers at one school than another.

Tennessee districts employed 11,433 more instructional positions than the basic education program funds, as well as an additional 1,285 assistant principals. The necessity of school nurses became clear during the pandemic, but the basic education program only funds 354 school nurses across the state, while districts employ 1,394. The gap in each of these areas is made up by local school districts that pay the difference.

A critical argument made by plaintiffs in the case is that state leaders have failed to recommend adjustments to the basic education program formula recommended by the review committee, on which Henson serves, to account for factors like classroom ratios.

"I think the adequacy discussion really started generating some steam when statistics came out to show comparisons of state funding per student," Henson said. "And then, I think people have become a little more understanding of the formula just by becoming more interested in it to note several of the inadequacies that stand out, that just don't make sense."

By far the biggest issue, according to the plaintiff school districts' filings, in regards to education spending is teacher pay. The basic education program allocates an average salary of $48,330 per teacher, principal and assistant principal.

But local school districts, especially in Nashville and Memphis where the cost of living is higher than rural parts of the state, are paying significantly more than that. Metro Nashville Public Schools' average teacher salary was $51,893, according to data cited in the lawsuit.

An opaque component of the dispute over education funding is that critics don't offer a firm annual dollar figure for how much the state ought to be spending. A key argument made by the state in objecting to claims that more should be committed to education is that advocates are effectively demanding a blank check.

But, there are clues available for how much more state dollars could be dedicated.

Last year, Democratic lawmakers filed legislation to update the basic education program's average teacher salary to align with the actual average salary that districts were paying. The legislation was affixed with an estimated cost of $406 million, and the bill failed to advance.

Gov. Bill Lee's administration committed to 4 percent raises for teachers, but even that increase didn't approach the average salary districts are already paying teachers.

"The state's method of funding staffing needs for the districts is completely inadequate in all regards," the plaintiff districts claimed in their recently updated complaint. "The funding formulas use salary amounts well below what the Metro and Shelby districts actually pay staff and, for the reasons explained herein, the staffing formulas fail to allocate enough teachers to actually cover classrooms with the required student to teacher ratio."

 

QUESTION OF JURISDICTION

In a series of filings during the nearly six years of litigation, attorneys for the state have repeatedly argued that the lawsuit originally brought by Shelby County and Metro Nashville should be dismissed because those districts are not suing over the equitability of the basic education program, but over its adequacy. Attorneys have argued in several motions to dismiss the lawsuit that the Chancery Court lacks jurisdiction "because the claim raises a nonjusticiable political question."

The state has argued that similar lawsuits in other states over the adequacy of education funding have been dismissed on the grounds of "justiciability."

In case the courts are found to lack jurisdiction, advocates are pushing through the political system to increase education funding.

In this month alone, influential nonprofit the Nashville Public Education Foundation released research outlining how inadequate funding is impacting schools and advocating for more money. Public Education Foundation President and CEO Katie Cour said she senses the "moment" is arriving for stakeholders to push for investing more in education. She said the issue is especially vital in Nashville, where the district educates a high percentage of students who require additional resources.

"We have more English learners than many districts," Cour said. "We have more special education students than many districts ... because we have such a high property tax and are considered to have a high fiscal capacity, the burden is falling on us at the local level to make up that difference."

Last week, the League of Women Voters of Tennessee also joined the chorus of those pushing for better education funding.

"This goes beyond how you slice the pie to provide varying amounts of funding to the diverse counties of our state – the pie itself is simply not big enough," said Debby Gould, president-elect of LWVTN. "The league's position on education is that the state's coverage, implementation and funding of the basic education program should be adequate to assure a high standard of public education."

Read more at TennesseeLookout.com.

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