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N.D. LEGISLATURE: Small schools criticize plan

About 40 North Dakota school superintendents say the Legislature's main school finance bill - touted as historic and aimed at redesigning the state's K-12 public school funding system now challenged in court - will give many rural districts the s...

About 40 North Dakota school superintendents say the Legislature's main school finance bill - touted as historic and aimed at redesigning the state's K-12 public school funding system now challenged in court - will give many rural districts the short end of the stick, while sending large, urban ones a "cash cow." According to the letter, published on page 4A, only 10 percent of the state's public schools would receive 76 percent of the $80.5 million in new money earmarked for education under the plan, Senate Bill 2200. The same 10 percent of the schools make up just 55 percent of the student population in the state, the superintendents said in their letter, addressed to legislators.

"I don't understand how it provides equity," said one who signed the letter, Brent Bautz, Bisbee-Egeland School District superintendent. "Basically, it's not helping us out one bit."

The way the plan determines the wealth of a district is flawed, according to the letter from the 41 superintendents who represent 46 districts, mostly in the west and west-central parts of the state.

Wealth is determined by dividing the number of students into the taxable value of private property in the district. So, as small, rural schools that cover large land areas lose enrollment, they not only lose per-student funding, they become, under the new formula, considered "wealthier" districts. And that will make them eligible for less state funding, the 40 superintendents argue.

The Bisbee-Egeland School District, with 56 students in grades K-12, is one of several small districts that would receive only about a 2 percent funding increase under the plan, Bautz said. Bisbee-Egeland, which has a total budget of about $1 million, would receive about $3,500 more in the state share of funding under SB 2200, he said.

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The district won't receive as much as some others because property in the district has a high taxable value, Bautz said. But, the district can't levy much more in local property taxes without a referendum, he said. Districts levying over 185 mills need to approve the amount through a public vote.

But supporters of SB 2200 say it's the biggest increase of "new dollars," into the state's K-12 system in history, and will bring equity to the current system.

Sen. Tim Flakoll, R-Fargo, served on the commission that drafted the plan and wrote Sunday in the Forum of Fargo-Moorhead praising it:

"This legislation is not a political placebo, but legislation that will be the new bricks and mortar that will form the foundation for our new funding formula. In one session it will provide a tremendous level of equity and make a giant step toward adequacy."

Under the current system, Flakoll argues, property-rich districts have as much as $478,000 in taxable value per student, while other districts have as little as $236 in taxable property value per student. The new plan will tend toward more equality in per-pupil state funding for students across all districts, Flakoll argues.

The new plan, and SB2200, stem from 2003, when several districts considered relatively "property-poor" districts, especially in relation to the number of students - including Hatton, Thompson and Grafton - filed suit, claiming the state's public school financing system was unconstitutional.

While denying the complaint, the state, in response, formed the governor-led commission, of which Flakoll was a part that came up with the plan now embodied in SB2200. The 40 superintendents who wrote the letter criticizing the plan tend to be in geographically large, relatively "property-rich," districts.

Warren Larson, superintendent of the Williston Public School District, has been a main promoter of the SB 2200 and its source, education improvement commission's plan.

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Larson argues that some small, property-poor schools will benefit a lot more under the new plan than under the current system. The bill takes into account many of the complicated factors in the school funding process, including land wealth and mill levies in each district, as well as oil revenues that some districts have and others don't.

In a recent letter to the Herald, Larson addressed the arguments of critics of the bill, such as the 40 superintendents who wrote to the Herald themselves: "We must set aside special interests and the voices of the detractors and address the greater good."

But the 41 superintendents writing today in the Herald say the new plan does not hand out the new money fairly.

They say that 23 of the 40 districts that will receive an equity payment under SB 2200 do not even levy as many as 185 mills, so they will be given extra money they haven't felt it necessary to have before, the superintendents argue. If they needed more money, they would have asked for it locally, the superintendents said.

The Adams and Edmore school districts also would receive only a 2 percent funding increase under the plan, according to superintendent Keith Arneson. The Edmore district, which has an annual budget of $1.25 million, would get about $3,300 more from the state, he said.

"It isn't any different than what it has been for years," Arneson said. "Education has been under-funded since the '80s."

Arneson said the school districts have combined with neighboring districts in an effort to be proactive in increasing student numbers and the available tax base. Adams has 70 students in grades K-6 and Edmore has 80 students in grades 7-12.

"We're property rich, but we're student poor," Arneson said. "There's a lot more to equity besides a dollar behind each student."

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It takes the same amount of staff and dollars to teach 15 students per classroom as it does 25 students per classroom, the superintendents say.

Bautz said Bisbee-Egeland is looking to combine with the Cando School District, but funding still wouldn't be likely to increase under SB 2200.

Arneson and Bautz said it's hard to know exactly how to fix the problem.

According to the superintendents' letter, no one other than the Governor's Commission on Education is authorized to run projections and use state data, making it difficult to research and analyze other ideas.

"In a formula that claims ALL revenue is being considered," the superintendents write, "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?"

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