Home » Legislative Update from Senator Joey Hensley: Review of State’s Education Funding Formula

Legislative Update from Senator Joey Hensley: Review of State’s Education Funding Formula

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   Review of State’s Education Funding Formula is important to local students, teachers, parents and schools: Senator Hensley invites input from local residents

    Governor Bill Lee announced last week that he is tackling one of the most important issues affecting education in Tennessee — our state’s funding formula for K-12 schools. The current formula is complex and confusing. It leaves few people who understand how it works and many to disagree on how it should work. 

    One thing that everyone can agree on is that it is very important to students, teachers, parents and schools in our district and statewide.

    Created in 1992, the Basic Education Program (BEP) is the main source of K-12 education funding in Tennessee. The funding formula will distribute approximately $5.6 billion to public school districts during the 2021-2022 fiscal year. It has two parts: a state share, and a local match contributed by local school districts.

   The formula’s state and local shares are currently based on each county’s fiscal capacity, which is their ability to raise local revenue. This portion of the BEP was put into place after the Tennessee Small Schools Systems filed a lawsuit in 1988 charging that the former funding formula resulted in a constitutionally inequitable distribution of state money to local school systems. The Small School Systems won their lawsuit in 1993, but the court concluded that the legislature’s adoption of the BEP had resolved the inequities. Under the formula, counties with less ability to fund education – referred to as a lower fiscal capacity – receive more state funding and have a lower match than counties with more capacity to raise revenues.

   In addition, the BEP is split into four main categories, (instruction, benefits, classroom and non-classroom), each made up of separate components related to the basic needs of students, teachers, and administrators within a school system. Altogether, there are 46 different components that generate funding, most of which are based on student enrollment (average daily membership). 

   Some districts question whether the BEP, which was adjusted in 2007 and 2016, represents a fair and equitable distribution of funds. Others maintain that it has been almost 30 years since there has been a meaningful update in the funding formula during a time in which many reforms have occurred in Tennessee’s education system. Governor Lee has stated he wants the formula to reflect a more student-centered approach. These are a few of the reasons in which a review has been called.

   In a nutshell, we need to take a fresh look at the formula, identify strengths and weaknesses and determine any changes which are needed. In order to accomplish this task, the Department of Education has announced a central steering committee and 18 subcommittees will rigorously review the BEP over the next several months. District and school leaders, elected officials, families, education stakeholders and members of the public have been invited to become engaged in this process through these committees, survey opportunities, and local meetings throughout the state. 

    I invite you to weigh in with your thoughts on how we can improve education though a fair funding system that meets the 21st century needs of our students. Visit this webpage for more information and learn how to get involved: https://www.tn.gov/education/tnedufunding. Also, please feel free to contact me with your thoughts and ideas on how we can improve education with a more efficient, effective and transparent education funding plan that gives our students the best opportunity to succeed. I look forward to hearing from you.

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