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Volume 2, Issue 10 June 6, 2003 published by The Rural Education Finance Center a program of The Rural School and Community Trust  Rural Education Finance Center 3344 Hillsborough St. Suite 302 Raleigh, NC 27607 919-833-4541 Greg Malhoit, Director, greg.malhoit@ruraledu.org Nancy Gottovi, Editor, nancy.gottovi@ruraledu.org Table of Contents for this Issue RURAL TRUST ADDRESSES SCHOOL FINANCE CHALLENGES IN ARKANSAS Rural School and Community Trust staff recently conducted a day-long forum for a number of leading rural legislators, educators and grass roots activists in Little Rock, Arkansas. The purpose of the June 3rd meeting was to provide Arkansas leaders with research-based information about school finance and school consolidation issues. The forum, cosponsored by the Electric Cooperatives of Arkansas and attended by more than 100 people was designed to address issues raised by the recent decision of the Arkansas Supreme Court in Lake View v. Huckabee. In the Lake View case, the court found Arkansas' current education finance to be both inequitable and inadequate. The court gave the state legislature until January 1, 2003 to craft a remedy that would bring the education finance system into compliance with the state constitution. Over the past 6 months, the legislature and Governor have often been at odds as to the best way to address the court decision. Although the court decision did not discuss the matter of school consolidation, the Governor and a number of legislators have attempted to tie school consolidation to other remedies the legislature may enact. Recently, the state hired two national education consultants to conduct a study of the cost of providing students with a quality education. Topics addressed at the forum included: 1) Effective Adequacy Studies, 2) Advantages of Small Schools; 3) the Fiscal Impact of School Consolidation; 4) Effective Ways to Address Rural Teacher Compensation; 5) the Role of Distance Learning in Rural Schools; 6) the Use of Regional Service Cooperatives to Reduce Costs and Improve Education Quality; and 7) West Virginia's Experience with School Consolidation. Written information presented at the forum is available online. A videotape of highlights from the forum may be obtained from the Electric Cooperatives of Arkansas. Return to Top VERMONT LAWMAKERS CRAFT A COMPROMISE FOR ACT 60 Vermont lawmakers have revised the state's school funding formula, managing to continue providing equal access to educational funds across the state while delivering significant property tax relief for Vermont residents. The new law divides taxpayers into two categories, residential and nonresidential. The residential rate will be lower than the non-residential rate. This revenue will go to the state for redistribution to districts based on numbers of students, adjusted for poverty and other factors. If local districts decide to spend more than the amount they received from the state, the local residential tax payers will be taxed proportionally. For example, if a district increases spending by 10 percent, residential tax payers will see a corresponding 10 percent increase in their taxes. For wealthier districts, a 10 percent increase in taxes will generate more than a 10 percent increase in spending would require. For poorer districts, a 10 percent increase in taxes will generate less than the 10 percent increase in spending. In effect, the wealthier districts will continue to share with the poorer. Non-residential property will not be subject to this additional tax. The new law continues the so-called -- income sensitivity -- provision in current law. Under that provision, owners of residential property with less than $80,000 income can opt to limit their school property taxes to a percentage of their household income with the state paying the balance of their property tax bill. In addition, the new law: 1) offsets lower property taxes for schools by increasing state aid through a sales tax increase; 2) establishes penalties for towns that spend more than 135 percent (130% and 125% in successive years) above the statewide per pupil average, and 3) provides for additional study of policy issues, including school consolidation and costs of mandates. More Information Available Online Return to Top TEXAS "ROBIN HOOD" SCHOOL FINANCE LAWSUIT REVIVED The Texas Supreme Court ruled in favor of the plaintiffs in a lawsuit brought by several wealthy school districts against a 1993 law that forced wealthier school districts to share their tax revenue with poorer school districts (the so-called Robin Hood law".) The law was enacted in an attempt to create a more equitable system of school funding. Four school districts filed suit claiming that the Robin Hood law violated a state law against a statewide property tax, because it requires many districts to tax at the state limit. The judges ruled that the districts should be allowed to present their case that they must tax at the maximum rate as a result of state accreditation requirements or to meet the constitutional requirement that schools must provide a "general diffusion of knowledge." The judges ruled that districts might be able to successfully argue that districts having to tax at the maximum tax rate in order meet either of these requirements essentially constitutes a statewide property tax. The Texas House and Senate have been at odds over school finance. Last month, the Senate approved a new education funding plan that would have reduced local school property taxes in exchange for higher sales taxes. But the state House decided to postpone any work on a new education plan pending the results of a special legislative session planned by the Governor for later in the year. More Information Available Online Return to Top OHIO SUPREME COURT ISSUES FINAL DECISION IN STATE SCHOOL FUNDING CASE In a decision that will have far reaching consequences for hundreds of thousands of Ohio school children, the Ohio Supreme Court rejected efforts by the plaintiffs in the state's long standing DeRolph litigation to obtain court enforcement of earlier decisions of the court which held that the state's school finance system violated key provisions of the Ohio constitution. In its May 16, 2003 decision, the high court reiterated its opinion that the state's school finance system violates the state's constitution and that it is up to the legislature to fix it. However, the court forbade a lower state court judge from exercising jurisdiction decisions. In March, after the legislature had rejected the governor's proposal for a tax increase to support education, plaintiffs requested the compliance conference. The state responded by asking the Supreme Court to order the lower courts to refrain from hearing the case. The court's decision means that while students theoretically possess the constitutional right to a quality education, their rights may not be enforced or vindicated in the courts. Willliam L. Phillis, Executive Director of the Ohio Coalition for Equity and Adequacy of School Funding, stated that the chances the legislature would fix the system are slim now, since their will be no court to ensure that the problems are fixed. More Information Available Online Return to Top ANNE LEWIS ARTICLE "ACCOUNTABILITY ON THE BACKS OF RURAL CHILDREN" Writing in the May edition of Phi Beta Kappan, Anne Lewis contends that rural schools are offering true accountability despite disadvantages that include lower teacher pay and the too-common practice of out-of-subject teaching assignments. Indeed, small rural schools act as community centers, offer more parent involvement, closer relationships between teachers, principals, students and their families, and in general, seem to provide learning environments considered desirable by study after study. Yet it is these small rural schools that are teetering on the brink of extinction: school consolidation has reduced the number of school districts over the past few decades from 84,000 to fewer than 14,000 today despite ballooning school enrollments. According to Lewis, the underfunded "No Child Left Behind" legislation in tandem with slashed state budgets threatens their very existence. But rural schools are not going down without a fight, and they've got considerable support on their side. To read more, see the May 2003 edition of Phi Delta Kappan. Return to Top RURAL TEACHER SALARIES LAG FAR BEHIND URBAN, SUBURBAN TEACHER SALARIES The "No Child Left Behind" Act promises a "highly qualified" teacher in every classroom. However, a new report from the Rural School and Community Trust says the law presents special challenges to already stressed rural schools struggling to recruit and retain qualified teachers. A severe teacher shortage, combined with rural teacher salaries that lag significantly behind those of urban and suburban teachers, will make it difficult to achieve the vision articulated in the Act. The report, The Competitive Disadvantage: Teacher Compensation in Rural America, outlines the challenges in making sure that no rural children are left behind in the national quest for education excellence. More Information Available Online Return to Top MAINE GROUP SAYS NO CHILD LEFT BEHIND "IRRELEVANT" TO RURAL STATES A bipartisan group of Maine state lawmakers says they may join other states that are considering "just saying no" to No Child Left Behind. One legislator called the federal law, "detrimental to public education in Maine" because it imposed "unnecessary burdens on Maine schools which national tests show are already high performing." Others cite the huge costs required to meet the requirements of the law, and say that the new annual testing requirements are redundant and and detract from teaching and learning time in classrooms. Maine and other states including Vermont, also argue that the new law rewards states that have lower testing criteria while punishing their own states because they have high standards already in place. In other words, because states are expected to continue raising their standards, some states have lowered their standards so that more students will meet them. Maine legislators and educators want their testing standards to remain high, but it means they risk having too many schools deemed "failing" under the No Child Left Behind law. Return to Top GEORGIA DEPARTMENT OF EDUCATION LOSES $783,000 IN TITLE I FUNDING Georgia may become the first state ever to be penalized for failing to meet with 1994 Elementary and Secondary Education Act testing requirements. The U.S. Department of Education (DOE) has informed Georgia state education officials that the state will not be receiving nearly $800,000 in federal aid due to failure to meet the requirements. According to DOE, Georgia was required to start high school end-of-course testing under the 1994 ESEA law, but was granted a two-year waiver. The waiver expires in June. Since Georgia has not implemented the tests, the Department is obligated to withhold Title I funding. The federal government plans to withhold $783,000 which represents 25 percent of Georgia's administrative budget. The state has 10 days to respond in writing. More Information Available Online Return to Top ABOUT THE RURAL SCHOOL FUNDING REPORT The Rural School Funding Report is a twice-monthly newsletter published by the Rural Education Finance Center (REFC), a program of the Rural School and Community Trust. The Funding Report focuses on important news affecting school finance - particularly equity and adequacy issues in America's rural schools. The purpose of the Center is to help rural people advocate for state school finance systems that provide equal educational opportunities for rural children to achieve academic excellence. The REFC provides information, technical assistance, and strategic support to rural people committed to good schools, equity and adequacy in school finance systems, and efficient fiscal management of schools. We would appreciate your feedback and suggestions for stories and other developments about school finance. More information about school finance as well as other important educational policy issues can be found in The Rural School and Community Trust's monthly newsletter Rural Policy Matters, available free in both e-mail and print versions, which is also available online. To subscribe to this e-newsletter and get it e-mailed directly to you, send a request to subscribe to mbaris@ruraledu.org Events | Services | Newsroom | Contact Us | Search © 2003 The Rural School and Community Trust 
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