The Atlanta Journal-Constitution
Equalization funds not given equally
School districts in 3 counties getting bulk of $40 million in state money.
Gov. Nathan Deal won praise in January when he announced plans to plow an additional $40 million into struggling Georgia school districts that are having trouble raising enough money to educate their children.
What neither the governor nor applauding lawmakers knew at the time was that virtually the entire increase next year will flow to Gwinnett, Clayton and Paulding Coun- ty schools. Many of the smalltown systems that most Georgians would call poor are getting nothing.
That’s according to calculations the Georgia Department of Education recently made using a new equalization funding formula legislators approved last year. About twothirds of districts get the money on top of their regular state allocation to help address the financial disparity between wealthy and poor systems.
Gwinnett County’s equalization take alone next year will rise from $43.2 million to $65.6 million. Meanwhile, dozens of small, rural systems in Georgia — and many of metro Atlanta’s biggest systems — will get no extra funding. It makes some superintendents wonder whether the formula was drawn to help certain districts and not others.
“I am not sure there is anything equal about it,” said Cherokee County Superintendent Frank Petruzielo. “It seems to me that it is the most politically motivated component of education funding in Georgia.”
House Education Chairman Brooks Coleman, R-Duluth, who co-chaired an education funding commission that recommended the changes to the equalization law, said politics has nothing to do with it. Gwinnett, he said, is benefiting from the formula used to determine payouts because it has a giant, growing student enrollment at the same time property values have tanked.
“There was nothing done to specifically help Gwinnett,” Coleman said. “It’s a function of the numbers.”
Brian Robinson, spokesman for Deal, said the governor didn’t know where the extra money was going when he proposed the increase.
“The Legislature changed the way we calculate equalization last year. We fully funded the formula that is now in the law,” he said.
Using more up-to-date enrollment and financial data, the House slightly altered Deal’s original request, approving $474.4 million in equalization funding for the upcoming school year, up from $436.1 million this year. Excluding Gwinnett, Clayton and Paulding, the amount of equalization funding would actually drop, slightly, next year. About half of all equalization funds go to suburban or exurban metro Atlanta-area districts.
The equalization fund, set up in 1985, is supposed to provide greater equity in school funding for systems with lower property tax bases. It was often thought of as a way to help poor, rural districts that can raise little from property taxes. But the collapse of the real estate market in metro Atlanta changed the equation, and the largest grants in recent years have gone to districts that are neither rural nor comparatively poor.
The state’s formula for disbursing the money uses the number of students in the district, the value of property and the property tax rate. A property wealth-to-student ratio qualifies some suburban and urban districts to receive grants.
In the final hours of their 2012 session, state legislators passed a bill intended to slow the growth of the equalization fund and get more money to poor rural districts. The changes reduced the number of systems getting equalization — weeding out some of those deemed too “wealthy.” In some cases, rural districts got more. In others, they were left out completely.
Gwinnett has been getting an increased share of equalization money in recent years because it has the right combination of rapid enrollment growth and eroded tax base.
Rick Cost, the school system’s chief financial officer, noted that in 2007, Gwinnett schools enrolled 9.1 percent of all students in Georgia. Its tax digest was 8.9 percent of the state’s total. Next year, he said, Gwinnett will enroll 9.9 percent of all students in the state, but its tax digest will amount to 8 percent of the state’s total.
In 2007, Gwinnett didn’t qualify for equalization funding. Since then, it has been ranked poorer and poorer by the state formula, and has collected an extra $186 million. That money goes to help offset the system’s loss in property tax money.
“Since fiscal 2008 ... we have lost $143 million in annual local tax revenue ... and we have 26,000 more students,” he said.
The tax base in many systems has plummeted since the recession, but enrollment in those districts is not growing like Gwinnett’s. Enrollment in DeKalb, Cobb and the city of Atlanta systems, for instance, has remained about the same or fallen since the October 2007 count. Enrollment in much of rural Georgia has been stable or fallen as well.
Gwinnett is often considered an innovator in education. Even in tight times, it is making a digital push to invest $54 million in technology improvements that, within a few years, will make hardback textbooks obsolete, allow students 24 /7 access to their schoolwork and give teachers the ability to give tests and track student success — all via the Internet.
By contrast, some of the small, rural systems missing out on equalization have one teacher per subject in their high schools, few advanced courses or foreign language options, no financial reserves to fall back on and no hope of raising serious money from property taxes.
Quitman County’s district, with 345 students, has a much smaller enrollment than most Gwinnett elementary schools. Its superintendent, Allen Fort, worries about having to lay off one or two of his few teachers because of limited funds.
“But somehow we’re richer than Gwinnett County,” said Fort, whose Southwest Georgia district doesn’t qualify for equalization funding. “Don’t call it equalization, because it’s not equal.”
Fort said Quitman schools raise about $70,000 from a mill of property taxes. The system’s budget is $3 million.
“One mill (of property taxes) in Gwinnett County could run my system for 10 years,” he said. “I am not against Gwinnett getting money, I am just trying to figure out how we got none.”
Sen. Freddie Powell Sims, DDawson, a member of the Senate education and appropriations committees, represents much of Southwest Georgia. Several of her districts don’t receive equalization funding.
“If you look at the financial challenges these districts continue to have, it’s not fair,” she said. “There needs to be a concerted effort to take a long, hard look at how you define equalization. Without proper funding, there is no way for our students to compete against students from other parts of the state.”
David L. Sjoquist, a state tax and funding expert at Georgia State University’s Andrew Young School of Policy Studies, noted that officials have made efforts in the past to lessen the amount of equalization money going to districts like Gwinnett.
“Everybody has looked at that and scratched their head. Everybody has looked at that and said, ‘That’s not fair,’” he said.
Sjoquist said there have been proposals in the past to incorporate some measure of personal wealth into the equation, which would help places like Quitman County, where household income is about half of Gwinnett’s, and the poverty rate is twice Gwinnett’s. But so far the idea hasn’t gone anywhere.
Coleman, the Gwinnett lawmaker, said counties like Gwinnett and Clayton get the equalization money because they have “earned it” under a formula designed to help systems that need it the most. “Gwinnett is big, and it’s poor,” he said.
But Gwinnett also has a strong legislative delegation, and the school system has its own lobbyist at the Capitol. Fort has a hard time believing Gwinnett’s political clout hasn’t played a role in developing and maintaining a system that benefits the local school system.
“Clout, hell, they’ve got a sledgehammer,” he said. “There are more senators and representatives in Gwinnett County than there are in South Georgia. In the end, we don’t matter.”