RIPEC: Some changes to education aid were positive but ‘reversed progress’ on equity

Updated at 2:55 p.m.

PROVIDENCE – A new report released Thursday by the Rhode Island Public Expenditure Council offers mixed views on the state’s changes to education aid that were included in the 2024 fiscal budget. While the council feels the changes are positive in some areas, the organization said the changes to the funding formula reversed progress made toward equitable funding.

Therefore, the council suggests the R.I. General Assembly take a serious look at making comprehensive reforms to the funding formula.

In its 21-page report titled “Rhode Island’s Education Funding Formula Revised,” RIPEC analyzed all the changes to the funding formula, which allocated $1.15 billion in formula aid to the local education agencies for fiscal year 2024. That amounts to 78.7% of the state’s total $1.5 billion in state education aid.

Other changes, RIPEC said, include the General Assembly establishing an enrollment loss transition fund and a poverty loss stabilization fund, essentially to compensate districts that experienced enrollment losses. The report notes that all but three school districts – Smithfield, Lincoln and East Providence – experienced enrollment loss from March 2020 to this year.

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RIPEC CEO and President Michael DiBiase said the report focused on funding equity because  the state’s five core urban districts – Providence, Woonsocket, West Warwick, Pawtucket and Central Falls – are “particularly vulnerable” and dependent on state funding. DiBiase said state government “did some good things” with the changes, but at the end of the day the changes “look like they have retreated on equity.”

RIPEC in the report says the transition fund is a “positive change” given the various challenges school districts faced to reduce costs when students leave those districts. The fund, RIPEC says, will allocate $32.5 million across all districts over the next two fiscal years, including $20 million in 2024.

This fund calculates enrollment losses by using a high-water enrollment mark from the previous three years – 2020 through 2022. By doing that, RIPEC Public Policy Analyst Jeff Hamill said the General Assembly is providing $13.7 million more to districts in fiscal year 2024 and $10.4 million in fiscal year 2025 than if the enrollment losses were calculated year over year.

But, RIPEC says these changes “may have gone too far” in continuing to insulate districts from needing to respond to enrollment declines and other reasons for declining state aid. One example is Woonsocket is receiving $1.2 million for losing 204 students, yet the district had a year-over-year net gain of 39 students.

“Excessive hold harmless policies allow school districts to avoid reasonable efficiency measures such as reducing classrooms and administrative overhead to respond to smaller student populations, and consequently results in less funding being available for needier districts,” RIPEC said in the report.

RIPEC also said in the report that the General Assembly also increased categorical spending for multilingual learners and high-cost special education, which the council also considered those changes being “positive.” Providence Public School District is expecting to receive $9.9 million in multilingual categorial aid, the most of the five core urban districts identified by RIPEC.

But RIPEC says it’s currently unclear whether this funding is “adequate” given the increasing population of multilingual learners within Rhode Island. Also, RIPEC found “most troubling” is the funding formula changes had “reversed progress” toward more equitable funding.

ACCORDING TO ANALYSIS from the Rhode Island Public Expenditure Council, Providence, Central Falls, Pawtucket, West Warwick and Woonsocket received 49.5% of all new funding between the 2021 and 2024 fiscal years, a 10% drop over the last decade. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL
ACCORDING TO ANALYSIS from the Rhode Island Public Expenditure Council, Providence, Central Falls, Pawtucket, West Warwick and Woonsocket school districts received 49.5% of all new state funding between the 2021 and 2024 fiscal years, a 10% drop over the last decade. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

According to the report, Providence, Central Falls, Pawtucket, West Warwick and Woonsocket received 49.5% of all new funding between the 2021 and 2024 fiscal years. That represents close to a 10% drop of increased funding during the funding formula’s 10-year phase-in period between 2012 and 2021, RIPEC says. Plus, Providence’s percentage increase in aid of 16.6% was below the 19.7% state average.

“This retreat from more equitable funding is illustrated by the fact that some of the state’s most affluent districts received the greatest percentage increases in state aid per pupil over the past three years, while none of the five urban core districts were among the eight districts receiving the highest percentage increase in state per pupil aid,” RIPEC said in the report.

When asked by Providence Business News if the lower state funding over the last few years for urban schools goes against the state’s overall push for diversity and equity, DiBiase said urban schools having to do more with less, especially having high resource demands in teaching economically disadvantaged students, is “fundamentally unfair.”

Based on the analysis, RIPEC offers four recommendations, the most significant of which is having the General Assembly do a comprehensive reform of the funding formula. The council says a legislative commission should be formed, engaging with stakeholders and experts on how the formula should be changed.

DiBiase said RIPEC had been calling for the formula to be reformed even before the COVID-19 pandemic took hold. The formula, he said, had not delivered enough equity to districts that are in need of states assistance.

“It’s a heavy lift,” DiBiase said. “The first funding formula to a great deal of effort and federal funding to get us there. But we think we’re at a point where [reform] is necessary.”

RIPEC also suggests the state should adopt a constitutional right to education, citing reversed progress that was made over the last three years in state aid. A constitutional right to education, RIPEC said, is necessary to ensure that education funding is adequate and equitable for all students in the state.

DiBiase also told reporters Wednesday that states having a constitutional right to education – which needs voter approval to take effect – “seem to have more urgency” around funding equity, providing high-quality education and making education reform.

RIPEC also recommends the state should provide adequate funding for multilingual learners and incorporate it into the funding formula instead of remaining as a supplemental funding item. The state’s method of calculating students in poverty should also be improved, RIPEC says, as the new counting method “resulted in significant undercounting of poor students overall and wide disparities … among districts.”

The R.I. Department of Education will continue to work collaboratively with state leaders to make sure education funding is adequate and equitable so that all students in the state receive a high-quality education, RIDE spokesperson Victor Morente told PBN Thursday. He said the department has worked diligently to provide state officials all necessary information as they consider possible adjustments to the funding formula that will “better meet the needs of all school communities across Rhode Island.”

Morente also said RIDE is pleased that the new fiscal budget includes an increase of more than $75 million in education funding, including aid to stabilize districts facing enrollment declines and additional support for underserved students.

“These investments are critical as the state seeks to accelerate learning across Rhode Island and improve academic outcomes post-pandemic,” Morente said.

(UPDATED to include response from the R.I. Department of Education.)

James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on Twitter at @James_Bessette.