The state is $65 million short of meeting school facilities funding needs under the state's adequacy requirements for 2015 and 2016, Arkansas Department of Education officials told a legislative committee Monday.
Charles Stein, the director of the Division of Public School Academic Facilities and Transportation, told a special legislative committee on school facilities that the state has been about $40 million short each funding cycle since the facilities funding program began about a decade ago. He said Monday that a pot of one-time money from the Legislature has been used up, leaving school districts across the state in the lurch for funding help that is guaranteed under the state's adequacy formula.
"Sixty million dollars is the amount given to us, and there is an average $100 million of need every cycle," Stein said. "We have made up for those shortfalls using one-time money. As far as that one-time money, it's now gone."
The state gave the facilities program $456 million in one-time funding through Act 1031 of 2007, which has been used to fill that gap in each funding cycle since then.
Gov. Mike Beebe also gave the program $20 million in one-time General Improvement Funds in fiscal 2014 to fill an anticipated gap after the Legislature moved about $16.3 million from general facilities funding and supplemental millage incentive funding -- both of which helped fund the facilities adequacy program -- to help patch the teacher insurance plan.
But Stein said none of that money is currently available to fill the gap between the $108 million in anticipated funding and $173 million in approved projects over the next two calendar years. He said under the state's adequacy rules, the division is not allowed to turn down districts that qualify for the facilities funding and meet the applicable guidelines just because of a lack of money.
Stein said the $65 million shortfall estimate could grow, depending on how a few different issues pan out.
In his estimates, Stein projected about $10 million in carryover money from the current cycle of school building projects, some of which could come in under budget. There might also be leftover General Improvement Fund money. Those figures could affect the shortfall estimate.
He said 25 districts are also appealing rulings from the facilities division that their projects were not eligible for funding in the 2015 cycle. If those appeals are successful, it could also extend the funding gap.
Also Monday, state Sen. Joyce Elliott, D-Little Rock, chairman of the Academic Facilities Oversight Committee, cut from the agenda several presentations from school districts appealing facilities funding decisions, saying it was not the proper venue to air grievances during the appeals process. Representatives from the Charleston, Lamar and Des Arc school districts were on the agenda, as well as a Little Rock attorney representing other districts.
A handout given to the legislators Monday laid out an argument from about 40 districts that their disapprovals were based on not having proper schematic drawings. The handout, which did not include information on who wrote it, said the rules for those schematics changed in January, but were not readily available through the online facilities funding guidelines or in memorandums from the education commissioner -- both of which redirected those districts to the old schematic rules.
Mike Mertens, assistant executive director for the Arkansas Association of Educational Administrators, tried to talk about the rule changes during brief testimony Monday, but was cautioned by Elliott not to address any of the appeals.
"Some of his points that stood out to me is that the pot of money that was set aside almost a decade ago is pretty much gone," Mertens told the committee.
"[Stein] also mentioned less than $60 million going into the partnership fund each year. And to put that in perspective, El Dorado built a new high school not too long ago, and I think that cost them about $56 million. So, a major project like that, that wants to access partnership funds ... those funds could be eaten up with maybe just one or two projects each year."
Mertens said the association has recommended that the Legislature put more money into the fund because of "critical" needs at some districts.
Several legislators had questions about how the available money would be prioritized for school districts if the shortfall was not patched by a funding increase or one-time money.
The committee did not discuss individual projects, but Stein described how the projects are prioritized under state law.
Through 2019, districts with smaller tax bases -- often with smaller student bodies and needs related to keeping students "warm, safe and dry" -- get first crack at about $10 million of the funding.
Second priority is given to districts with large growth in student population, and third priority is given to other districts with issues relating to the "warm, safe and dry" requirement under the state's adequacy rules.
The changes in 2019 will be to place a stronger priority on schools with space problems because of growth.
State Sen. Linda Chesterfield, D-Little Rock, asked about the likelihood that Jacksonville would receive facilities funding if voters approve the city forming its own school district in an election today.
Stein said the potential district has missed the application deadline for funding in this two-year cycle and would likely have to wait until March 2016 to apply. But advocates for the creation of a Jacksonville district are hoping the Legislature will make an exception.
Daniel Gray, chairman of the Jacksonville North Pulaski Education Corps, said the group is trying not to think ahead of its immediate goal of forming the district. But he noted that facilities were a major reason to seek formation of a new district. Jacksonville students now attend school in the Pulaski County Special School District, which is considered too wealthy to qualify for facility funding from the state.
"We are looking at our facilities, and they are not equitable ... and we fully expect that state money to be there," Gray said. "That's something we've been concerned about because of the teacher insurance money transfer last year. The Legislature needs to figure out how to refund that partnership fund. There are a lot of school districts in Arkansas that still need that adequacy funding that are not excludable at this point."
Metro on 09/16/2014