At today’s BEP Review Committee meeting in Nashville, James W. Guthrie, Director of the Peabody Center for Education Policy at Vanderbilt University, gave his presentation on an alternate method of determining fiscal capacity.

Last year, the Legislature charged the BEP Review Committee with the task of developing a “consensus recommendation” for moving to a system-level fiscal capacity formula.  Last year proved conclusively that there was not, and would never be, a consensus for the TACIR prototype system-level formula developed by Harry Green, since it caused a majority of Tennessee school systems to lose money while enriching the state’s four largest cities.

Guthrie’s proposal uses only property tax base (value of taxable property) and sales volume to calculate fiscal capacity; each is multiplied by a “computational” tax rate (in theory, something like the state average or mean, I guess) to determine a school district’s ability to pay.  There would be no sharing between Counties and municipal or special school districts therein, and the City or SSD residents would pay taxes only for the school district in which they live.  It’s clean, it’s understandable, and transparent.

In other words, no black magic box filled with hexes to twist and distort statistical data that at most three people in the state truly understand; there’s room for a lot of mischief in the nine-variable “least squares multiple linear regression model” that TACIR proposed, and last year’s BEP Review Committee set forth as one of its objectives that the formula should be straightforward, understandable, and explainable.

There are no numbers yet, but a draft should be prepared in advance of the next meeting on Oct. 11th.  Other factors such as at-risk students and English Language Learners can be incorporated into the BEP formula itself, although there may have to be some tweaking of Guthrie’s proposal to adjust for municipal systems that are only K-6 and such.

This one looks as though it could be fair and equitable.  The question is, can the state add enough money that funding for every child in every  district is adequate?  It must be.  The answer to our problem is not to simply rearrange who gets a bigger piece of the pie at someone else’s expense — there must be a minimum standard of adequacy.

We will all be better off to resolve this problem.