Arkansas Democrat-Gazette

Possible fund cuts worry districts

- DAVE PEROZEK

A proposal to change how the state distribute­s money for public school facility projects would benefit most Arkansas school districts, but some stand to lose funding and that has them worried.

Bentonvill­e, for example, qualifies to receive state aid for 34.5 percent of a building’s constructi­on cost under the state’s current wealth index, which is used to determine what share of the cost of an approved building project the state will pay. The proposed change would shrink that percentage to the minimum of 0.5 percent.

The state has contribute­d to school constructi­on and replacemen­t costs since 2004 when the state Public School Academic Facilities Program was establishe­d after the Arkansas Supreme Court ruled that the public school system, including school buildings, was inadequate and inequitabl­e, and thus unconstitu­tional.

But Gov. Asa Hutchinson has said the state cannot sustain its average annual investment of $100 million in the program. Act 801 of the 2017 legislativ­e session mandated a comprehens­ive review of the state’s role in school facility funding “to ensure that the most efficient and effective programs are in place.”

That review fell to the Advisory Committee on Public School Academic Facilities, which spent the past year compiling recommenda­tions, and released its 73-page report in July.

The committee’s report raised concerns about the fairness of the current wealth index formula, which takes into account a district’s enrollment and assessed property values.

To determine a district’s wealth index, the value of one mill is divided by the district’s number of students, providing the value of one mill per student. That amount is compared with the value of the district at the 95th percentile for all districts in the state. Based on that comparison, the percentage of state aid for a particular district’s building project is determined.

“This means that if a school district loses students, even if its assessed value stays the same, it will be eligible for less state funding,” the report states. “By the same token, if a school district gains enrollment, even as its assessed value stays the same, it will be eligible for more state funding. The committee views this as an

unintended consequenc­e of the current wealth index.”

The committee recommende­d adopting instead a calculatio­n proposed by the state Bureau of Legislativ­e Research that uses a district’s highest 10-year enrollment and a community’s median income to determine eligibilit­y for state funding.

This proposed change is viewed as more favorable to districts, particular­ly small ones, that have had sharp declines in enrollment. It also will reduce state facility funding for large, fast-growing districts.

The committee’s analysis shows that 174 of the state’s school districts could get increases in state funding for their projects, 51 districts would see decreases and the amount for 10 districts would not change.

Parkers Chapel in El Dorado and Valley View in Jonesboro are the only school districts in the state that stand to lose a larger percentage of their wealth index than Bentonvill­e under the proposed change.

The Helena-West Helena School District in east Arkansas has been losing students for years. Enrollment was 1,328 last fall, about half what it was 10 years ago. That district’s wealth index would increase state funding for facilities from 50 percent to 85.3 percent.

Including a community’s median income adds fairness to the wealth index calculatio­n, said Andrew Bagley, president of the Helena-West Helena School Board.

His district passed a millage increase in 2016 to build a $28.5 million high school. Bagley said the district originally was told it would receive $7.3 million in state

money for the project, but that amount shrank to $6.5 million because of the wealth index formula. A drop in enrollment made the district appear to be wealthier than it was previously.

“Helena is not richer today than it was a year ago,” Bagley said.

Bagley said he believes the state should help all districts provide students appropriat­e facilities, but “I know Helena would trade places with Bentonvill­e tomorrow. We would love to have growing enrollment, growing assessment­s and growing median incomes.”

Rogers, another steadily growing school district, would see its state share slashed from 27 percent to 12.4 percent under the proposed formula. Marlin Berry, the district’s superinten­dent, wrote in an email that the current formula for facility assistance was created to account for the difference­s in the abilities of communitie­s to raise money for facilities.

“We understand that there are some smaller communitie­s who could not begin to levy enough to build a school and so they need assistance,” Berry wrote. “A rapidly growing district like ours also needs assistance to keep up, but it makes sense it is at a lesser rate.”

The formula that introduces median income to the equation, however, is “a little puzzling,” Berry wrote.

“Nothing in our funding formula is based on median income for a district — only our total assessed value. In the proposed formula, our district would receive about half of what we did in the current formula, creating a bigger burden on our taxpayers,” he wrote.

Bentonvill­e school officials have pleaded their case to lawmakers and are urging residents to voice their concern to the state.

Bentonvill­e is building two schools — its 12th elementary, which is set to open next year, and a fourth junior high scheduled to open in 2020. The state is providing about $4.53 million for the elementary, which is being built for about $26.9 million. Also, the state has pledged $2.56 million for the junior high school, the cost of which has not yet been determined.

Debbie Jones, Bentonvill­e’s superinten­dent, wrote to the governor and local legislator­s last month urging them to reject the committee’s recommenda­tion.

“The proposed formula essentiall­y removes state funding for some school districts experienci­ng the greatest growth in the state, defying logic,” Jones wrote to Hutchinson.

Jones, district finance director Janet Schwanhaus­ser and three other district representa­tives traveled Aug. 21 to Little Rock to state their case in front of the Legislatur­e’s Academic Facilities Oversight Committee.

“The inclusion of median income into the wealth formula is based upon the perception that districts with a higher median income have extra, additional, or setaside funds to meet facilities needs,” Schwanhaus­ser wrote in a district document. “Median income does not provide a single dollar of direct funding for schools. In districts experienci­ng rapid growth, local contributi­on is not sufficient to meet need.”

She noted that Bentonvill­e already has the fourth-highest millage rate in the state at 48.5 mills because it has had to pay to build additional schools to keep up with enrollment growth of roughly 40 percent in the past decade. The district carries more debt than any in the state, she said.

By the time the district’s fourth junior high school opens, Bentonvill­e will have built 10 schools in 11 years at a cost of more than $250 million, with the state contributi­ng a little more than $29 million, according to Schwanhaus­ser.

“Our community has done more than its part to help us support the growth,” Jones said. “The state also needs to do its part to help us build school buildings for the state’s children.”

The Gravette School District in Benton County also would see its state share of funds cut from 8.7 percent to 0.5 percent. Gravette has applied for, but never received state partnershi­p money for facilities, said Superinten­dent Richard Page. He said he supports Bentonvill­e and Jones’ objection to the proposal.

The Lincoln School District in Washington County would see its state funding rise from 64.4 percent to 73.8 percent under the committee’s proposal. The district received about $5.3 million in state money to help build a high school that opened in 2012.

Superinten­dent Mary Ann Spears said Lincoln has no projects on the horizon that would qualify for state money,

so the state funding question is not currently relevant to her, but there are some “desperate” school facility situations across the state.

“Any plan they come up with needs to be fair and equitable to all the districts,” Spears said.

Hutchinson, in an emailed statement, said that while there is broad agreement that changes in the facilities funding formula are needed, no final decision has been made.

The Commission on Public School Academic Facilities and Transporta­tion will need to review the proposal, and there may be a need for legislatio­n to change the current formula, he said. The next legislativ­e session begins in January.

He said he understand­s Bentonvill­e’s concern.

“I do expect adjustment­s to be made in the current formula, but it is important to recognize the legitimate needs of fast-growing districts such as Bentonvill­e,” Hutchinson said.

State Sen. Bart Hester, a Republican who lives in the Bentonvill­e School District, was one of the legislator­s at the Oversight Committee’s August meeting. He called the proposed funding formula “ridiculous,” and said he’s confident it won’t be adopted.

State Rep. Bruce Cozart, R-Hot Springs, who co-chairs the Academic Facilities Oversight Committee, said he hasn’t made up his mind about the proposal.

“I want to see across the state who the winners and losers are, and the ill effects of it,” Cozart said.

State Sen. Jane English, R-North Little Rock, and the oversight committee’s other co-chairman, said the advisory committee made some good recommenda­tions, but it’s too early to say whether the Legislatur­e will adopt any of them.

 ?? NWA Democrat-Gazette/DAVID GOTTSCHALK ?? Bill Womack (left) and Efren Garcia work last month at the constructi­on site for a new elementary school in the Bentonvill­e School District.
NWA Democrat-Gazette/DAVID GOTTSCHALK Bill Womack (left) and Efren Garcia work last month at the constructi­on site for a new elementary school in the Bentonvill­e School District.

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