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FULL TEXT: Superintendents -- 'School equity' plan promotes anything but

BISMARCK, N.D. -- The following comments have been generated by school superintendents across the state. We all are in support of a more equitable plan for school funding. Senate Bill 2200 definitely creates some long-term losers in terms of stat...

BISMARCK, N.D. -- The following comments have been generated by school superintendents across the state. We all are in support of a more equitable plan for school funding. Senate Bill 2200 definitely creates some long-term losers in terms of state funding.

We are not trying to detract from those schools who are winners in the formula. We simply believe that the state has a responsibility to fund ALL schools in a more equitable manner. We do not support robbing one district to pay another.

Origin of this funding plan:

A handful of schools filed an equity lawsuit against the state of North Dakota because they are experiencing definite funding disadvantages under the present formula that need to be fixed. Legislators and commission members serving larger school districts have seized this opportunity to use their political clout to transfer state funding from smaller surrounding communities into their general funds.

All legislators have a constituency. Lawmakers must not lose sight of the fact that they serve for the best interest of all North Dakotans. When $80.5 million in new dollars are earmarked for education and 10 percent of the schools -- 20 of them -- are getting 76 percent of the new money (that is, any school that will get more than $200,000), this is not equity. This same 10 percent of the schools that make up only 55 percent of the student population in the state.


Solutions to the Equity Problem?

No one other than the Governor's Commission on Education Improvement is authorized to run projections and use state data. This restriction makes it very difficult to research and analyze the many ideas that administrators can offer. It is better to explore other options than to adopt a funding plan that inevitably will hurt many school districts.

  •  A transition period with an open-ended formula
  •  Focus on a formula that assigns minimum enrollments to schools (it takes the same amount of staff and dollars to teach 15 students per classroom as it does 25 students per classroom)

Is there truly an equity problem? Forty districts are to get an equity payment. Of these, 23 do not have a general fund levy of 185 mills. If these schools are operating on less money than they could levy for, then giving them an equity payment is like pouring gas on a fire. If they needed more money, they would have asked for it locally. Instead, the state will give them an equity payment and let them waste it on things they never have wanted or needed in the past.
Problems with SB2200

Nothing adds up with the printouts. Each time the legislators are given a new set of figures from the state Department of Public Instruction, the numbers mysteriously change. As an example: Last month, legislators were given a spreadsheet that states the 06/07 Net Entitlement to be $326,526,937. But the spreadsheets given out March 28 show this 06/07 Net Entitlement dropping to $319,623,344. What happened to the $6,903,593 that was to be distributed to schools based on what the 2005 Legislature decided?

It appears as if this money was taken out of the formula to make all of the projected increases and percentages look better. If the 2005 Legislature decided that these funds should be passed on to schools, why is the money suddenly being taken away?

Since its origin several years ago, the Legislature has offered schools a financial incentive called Teacher Compensation (up to $3,000 per full-time teacher). This was Gov. John Hoeven's plan and platform to boost North Dakota's teacher's salaries from the nation's cellar.

But it seems that the governor and Legislature are willing to abandon their commitment and dump these dollars into the SB2200 formula. Since all dollars in SB2200 are computed on a "per student" basis, small schools cannot possibly recoup the losses from the teacher compensation payments. Unfortunately, small schools will experience many such scenarios under SB2200.

How the formula determines the wealth of a district can also create a very skewed product. Wealth is determined when you divide the number of students into a district's taxable valuation. To put this into perspective, a school with a taxable valuation of $3.4 million and a student population of 150 is considered to be a wealthy district, because $22,666 of potential tax dollars is behind each student (150 divided into $3.4 million = $22,666).


Another district with the same taxable valuation of $3.4 million and 250 students is not a wealthy district because it has only $13,600 of potential tax dollars per student (250 divided into $3.4 million). Yet the school district with 250 students has roughly the same number of staff and will collect $323,888 additional dollars in the formula.

In other words, as schools lose enrollment and lose state funding per student, they become theoretically "wealthier" districts. There is something drastically flawed with this concept!

Other problems include the requirement to use fall enrollment numbers (schools no longer have an option to use the previous spring's enrollment numbers to help combat declining enrollment).

Conflicting Legislation and Goals

Gov. John Hoeven referenced in his State of the State Address that we must grow rural North Dakota. He cited examples and cities and was very proud of what was happening in these communities.

Does Hoeven realize that some of the very communities he mentioned in his address would be nothing more than a memory on North Dakota's future landscape if SB2200 passes?

Included in SB2200 are minimum mill-levy caps. If a school district's general fund mill levy falls below this level, large financial penalties are enforced. These districts as well as many other school districts will need to levy more local taxes as a result of SB2200.

Oblivious to this reality, tax relief bills such as HB1051 and SB2032 include provisions to drastically limit the taxing authority of local government.


So, legislators, you tell many school districts to increase local contributions to education, but then you tell taxpayers that they deserve tax relief. Which is it?

The North Dakota Education Association was heavily involved with and supported the Teacher Compensation payment concept mentioned above. If 2200 goes through as written, there will be many reductions-in-force and jobless teachers.

A question: How does NDEA propose to defend these teachers when they have a seat at the table with the commission and helped with the writing of SB2200?

Fair is a Relative Word

Proponents say this bill is equitable and fair. They claim that it's unfair that some school districts get revenue from mineral resources while others do not. They often forget certain details about fairness, however.

For example, the oil and gas industry contributes $166 million a year to the state's general fund as a result of excise and severance taxes. All school districts share the benefit of this revenue.

School districts who are impacted by the industry divide $8.8 million in taxes. Is it fair that many legislators want 100 percent of these dollars imputed into the formula? Schools that belong to the Oil and Gas Association have been willing to concede 50 percent of these resources to try and avoid dramatic budget shortfalls in the future, but to many, this is not enough.

When Lt. Governor Jack Dalrymple was testifying before the House Education Committee, a legislator asked him if tax exempt businesses were considered as well as revenue received by school districts from businesses "in lieu" of taxes? He responded by saying they were not considered. Is this fair?

In a formula that claims ALL revenue is being considered, what about some districts who get monthly oil royalty checks, taxes from various factories and sporting venue complexes or a percentage from their sugar beet contracts?

Many schools suffer when tuition is imputed into the formula. It is not fair to resident taxpayers to have the burden of picking up the cost to educate non-resident students for expenses beyond the state's "per student" payment. Often, these students are foster children or placed in school districts and have many other special needs. How are these factors being addressed?

The school administrators who have signed this statement represent their school districts. They believe in equity, but believe that the state of North Dakota can address this issue without long-lasting negative effects on some school districts while other districts experience a "cash cow."

This statement has been signed by 41 superintendents, who represent 46 school districts:

Loren Mathson, Superintendent, South Heart Public School

Tony Duletski, Superintendent, Bowman Public School

John Pretzer, Superintendent, Scranton Public School

Murray Kline, Superintendent, Alexander Public School

Royal Lyson, Superintendent, Center-Stanton Public School

Wayne Stanley, Superintendent, Stanley Public School

Larry Helvik, Superintendent, Beach Public School

Keith Arneson, Superintendent, Adams-Edmore Public School

Nancy Wisness, Superintendent, Grenora Public School

Dean Ralston, Superintendent, North Central Public School

Delwyn Groninger, Superintendent, South Prairie Public School

Bradley Webster, Superintendent, Rolette Public School

Steve Heim, Superintendent, Anamoose Public School

Lynn Krueger, Superintendent, Montpelier Public School

Jim Eiseman, Superintendent, Strasburg Public School

Robert Thom, Superintendent, Westhope Public School

Dan Bauer, Superintendent, Kulm Public School

Brian Nelson, Superintendent, Lewis & Clark Public School

Harold Mach, Superintendent, Minto Public School

Kerwin Borgen, Superintendent, Midkota Public School

Ruth Ann Larshus, Superintendent, Powers Lake Public School

Terry Olschlager, Superintendent, Fessenden-Bowdon Public Schools

Jason Kersten, Superintendent, Bottineau and Newburg Public Schools

Larry Zavada, Superintendent, Wolford Public School

Steve Holen, Superintendent, Watford City Public School

Don Nielson, Superintendent, Divide County Public School

Gene Kotaska, Superintendent, Wing Public School

Brent Bautz, Superintendent, Bisbee-Egeland Public School

Mike Klabo, Superintendent, Burke Central Public School

David Rust, Superintendent, Tioga Public School

Gerald Quintus, Superintendent, Richardton-Taylor Public Schools

Brent Johnston, Superintendent, Bowbells Public School

Corbley Ogren, Superintendent, Zeeland Public School

David Bicknese, Superintendent, Dodge-Golden Valley

Les Dale, Superintendent, Ashley Public School

David Wisthoff, Superintendent, Glenburn Public School

Norman Fries, Superintendent, Gackle-Streeter Public School

Brent Engebretson, Superintendent, Drake Public School

Jon Starkey, Superintendent, Napoleon Public School

Rodney Scherbenske, Superintendent, McClusky and Goodrich Public Schools

Kevin Baumgarn, Superintendent, Starkweather and Munich Public Schools

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