Legislators debate fairness of BEP 2.0

Hank Hayes • May 28, 2007 at 12:00 AM

In the maximum scenario of Tennessee Gov. Phil Bredesen’s proposed $476 million education funding reform plan, rural Hancock County in Northeast Tennessee would receive an extra $157,000, while mostly urban Knox County is projected to get more than $26.6 million new dollars.

Pickett County, one of the state’s poorest counties, would get no extra education bucks — zero.

Sound fair?

Or unfair?

While Bredesen’s so-called “BEP 2.0” — his planned upgrade of the state’s Basic Education Program — is being dubbed as a “fair, sustainable, accountable” funding formula, there are some nagging perceptions that it doesn’t treat every locality fairly.

One of those perceptions is held by state. Sen. Charlotte Burks, D-Monterey, who noted in a Senate Education Committee meeting that “rural counties are kind of getting shafted a little bit” by the proposed BEP formula change. Her district includes Pickett County, which ranked 89th in per capital personal income in the state in 2003, according to the Tennessee Advisory Commission on Intergovernmental Relations.

“They have lower incomes because there is no industry. ... They rely mostly on tourist dollars,” she said of Pickett County.

But another part of Burks’ district, Putnam County, stands to receive more than $6.8 million under Bredesen’s “BEP 2.0” initiative.

Comptroller John Morgan, who has made presentations about the BEP’s adequacy, suggested lawmakers should move past territorial concerns and start looking at Bredesen’s education funding changes with a statewide perspective.

“We are so hung up about fighting about fair share,” he told the committee.

State Rep. Nathan Vaughn, D-Kingsport, is on board with Bredesen’s plan.

“This beats what was on the table before, but the issue is still going to be how your community makes out in the plan,” he said.

A number of lawmakers appear more than willing to revise the county-level fiscal capacity model used since the BEP’s inception in 1992. Since then, there have been three Tennessee Supreme Court decisions striking down the state’s method of funding public schools.

State Sen. Jamie Woodson, the Senate Education Committee chair, indicated judges won’t wait forever for the state to make meaningful BEP changes.

“We can wait for a judicial hammer or be proactive,” Woodson, R-Knoxville, told committee members.

The current BEP funding method has been criticized for its complexity and using numerous factors in determining a locality’s education financial share. Those factors have included everything from average daily school membership to wage competitiveness.

Bredesen’s proposed education funding formula uses “the two largest factors” to determine education funding revenue — each county’s sales and property tax base.

“If you believe that looking at sales and property tax is a fair way of allocating the (education) burden across the state, then it suggests that the current system we are changing from perhaps doesn’t treat people fairly,” Morgan said.

In one of his presentations, Morgan contended the current BEP formula is “input driven” — by money — rather than being “outcome focused.”

The comptroller also insisted to Burks that Bredesen’s plan, in fact, does treat all localities fairly.

“If you own a $100,000 house in Pickett County your (education funding) burden — at least the way we calculate your burden — will be the same in Pickett County as it is in Montgomery County (in Middle Tennessee) as it is in Shelby County (in West Tennessee),” Morgan said. “If you make a purchase, your share of the BEP is equal to about 1.07 percent of every purchase you make whether you make it in Pickett County or some other county. ... It really treats everybody the same in terms of allocating their burden.”

Morgan acknowledged that when localities see their BEP allocation “all of us will pick a different number” under any scenario.

“Everybody wants their county to do better. Everybody can’t do better relative to everybody else,” he said.

But Morgan pointed out every school system will do better financially because Bredesen’s plan calls for the state to pick up an extra 10 percent of the cost of instruction — valued at an estimated $290 million.

Lt. Gov. Ron Ramsey, who noted Senate Republicans want more accountability in the BEP, said any education funding formula adopted by the state will have some flaws.

“There are some who feel that if we run it through the old formula, they would have been winners,” Ramsey, R-Blountville, said. “Any formula you use there’s always winners and losers, but the bottom line is everybody would get more money than they would without this passing.”

Morgan also contended that Bredesen’s BEP changes won’t make all of Tennessee’s education funding problems go away.

“This is a significant step toward what we need ... (but) we will still be lagging behind other states in improving education,” he said.

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