Understanding Tennessee School Funding: A Comprehensive Guide

Understanding Tennessee School Funding: A Comprehensive Guide for Citizens

Navigating the complexities of how public schools in Tennessee are funded can feel overwhelming. Yet, understanding this system is crucial for parents, educators, taxpayers, and community members who want to ensure every student has the resources they need to succeed. This guide aims to demystify Tennessee's school funding mechanisms, from historical foundations to the current landscape, and explain how these systems impact education across the Volunteer State. Our goal is to provide clear, factual information to help you engage in informed discussions about the future of education in Tennessee.

Where Does the Money Come From? Main Funding Sources

Public education in Tennessee is financed through a combination of funding sources [1]:

  • State Funds: The largest portion of education funding comes from the state budget, appropriated annually by the Tennessee General Assembly. For the 2021-22 school year, for instance, over $5 billion was allocated to public school districts, primarily through the state's funding formula. [1]
  • Local Funds: Local governments (counties and sometimes cities) are required to contribute to education funding, typically through revenues from property taxes, sales taxes, or other local levies. [1] The amount of local contribution is influenced by the state's funding formula and the locality's capacity to raise revenue. [1, 2, 3]
  • Federal Funds: The federal government provides grants to support specific student populations (like economically disadvantaged students or English Learners) or targeted need areas (such as teacher professional development or pandemic relief efforts). [1]

Tennessee's School Funding Formulas: Past and Present

Tennessee has utilized different models over the years to distribute state and local funds to school districts.

The Basic Education Program (BEP): A Longstanding Foundation

For over 30 years, the Basic Education Program (BEP) was the primary funding formula for Tennessee's K-12 public schools. [1, 2, 4, 3] Generally considered a resource-based funding model, the BEP aimed to determine the funding level required for each school system to provide a common, basic level of service for all students. [1, 2, 3]

Key Aspects of the BEP:

  • Resource-Based Allocation: The BEP funded schools based on resources deemed necessary, such as staffing (teachers, supervisors, assistants), services, and programs, often using ratios based on student enrollment (Average Daily Memberships - ADMs) from the prior year. [1, 2, 3]
  • Funding Components: The formula was divided into three main categories with different state/local share percentages [2, 3]:
    • Instructional (State/Local = 70%/30%): Included items like teaching positions.
    • Classroom (State/Local = 75%/25%): Covered resources like textbooks and instructional equipment.
    • Non-Classroom (State/Local = 50%/50%): Addressed needs like capital outlay and transportation.
  • Fiscal Capacity and Equalization: A core principle of the BEP was to adjust state funding based on a local school district's ability to raise its own revenue, known as "fiscal capacity." [1, 2, 3] This was intended to promote equity, ensuring that districts with lower local wealth received a larger share of state aid. Fiscal capacity was determined using models from the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) and the UT Center for Business and Economic Research (CBER). [3]
  • BEP 2.0 Revisions (2007): The BEP underwent significant revisions, known as BEP 2.0, aimed at allocating additional state money for school systems with high numbers of at-risk students and those experiencing high growth in student populations. [1, 3]
  • Criticisms: Over time, the BEP faced criticism for its complexity and a perceived lack of transparency, making it difficult for the public to understand how funds were distributed and spent. [3] Some also argued that resource-based models could be less flexible in adapting to changing educational needs. [3]

The Tennessee Investment in Student Achievement (TISA) Act: The Current Model

Effective July 1, 2023, the Tennessee Investment in Student Achievement (TISA) Act replaced the BEP as the state's primary K-12 education funding formula. [4] TISA represents a shift towards a student-based funding model, designed to direct resources more specifically based on individual student needs. [1, 5]

Goals of TISA [4]:

  • Support third-grade reading proficiency.
  • Prepare high school graduates for success in postsecondary programs or careers of the graduate's choice.
  • Provide all students, regardless of their circumstances, with the resources they need to succeed.

How TISA Works:

  • Student-Centered Approach: Under TISA, funding follows the student. Each student generates a base funding amount (e.g., $6,860 for the 2023-2024 school year). [5]
  • Weighted Allocations: In addition to the base amount, students can generate additional funding through "weights" if they have specific needs. These weights are percentages applied to the base amount and are not mutually exclusive [4, 5]:
    • Economically Disadvantaged: 25% weight
    • Residing in Concentrated Poverty: 5% weight
    • Residing in a Small District: 5% weight
    • Residing in a Sparse District: 5% weight
    • Unique Learning Needs (including students with disabilities, English Learners, students with characteristics of dyslexia): Weights ranging from 15% to 150%
  • State and Local Contributions: The state funds 70% of the combined base and weighted allocations. [4] The remaining local share is determined by the district's fiscal capacity, similar to the BEP.
  • Direct Allocations: TISA also includes "direct allocations," which are state-funded at 100% for specific programs or priorities, such as literacy initiatives or career and technical education. [4]
  • Outcomes-Based Funding: The TISA framework allows for potential outcomes-based bonuses, providing additional funding to districts that demonstrate improvements in student achievement, graduation rates, or postsecondary readiness. [1]
  • Transition and Hold Harmless: To ease the transition, TISA includes "hold harmless" provisions for the first few years. If a district's TISA allocation is less than what it would have received under its BEP baseline, the state provides additional funds to cover a declining percentage of the difference over four years. [4]

Other Significant Funding Streams

Beyond the primary funding formula, Tennessee schools benefit from other sources:

  • Tennessee Education Lottery Scholarships (HOPE): While primarily for postsecondary education, the lottery system's health impacts overall education discussions and perceptions of state investment.
  • Federal Grants: Programs like ESSER (Elementary and Secondary School Emergency Relief) provided significant, though temporary, funding boosts in response to the COVID-19 pandemic. [1] Other ongoing federal grants target specific programs or student populations.
  • Education Freedom Scholarship Act: This program, funded in part by revenues from online gaming, provides scholarships for students to attend private schools. [6, 7] While not direct public school funding, its fiscal implications and impact on the broader education landscape are part of the funding conversation.

Key Challenges & Ongoing Debates in Tennessee School Funding

School funding is a perennially debated topic, with several key challenges and ongoing discussions in Tennessee:

  • Funding Adequacy: Is the overall amount of funding sufficient to meet the diverse needs of all students and provide a high-quality education?
  • Equity: Does the funding system ensure that resources are distributed fairly across all school districts, regardless of local wealth or geographic location? How effectively do formulas like TISA address historical inequities? [5]
  • Transparency: How clear and understandable is the funding system to the public, policymakers, and educators? ([3] criticism of BEP[5] TISA aims for more transparency)
  • Impact of Formula Changes: How do shifts from one funding model to another (like BEP to TISA) affect different types of school districts (e.g., urban, rural, high-growth, high-poverty)? ([8] Comptroller report on TISA beneficiaries)
  • State vs. Federal Roles: Debates sometimes arise over the balance of state and federal responsibilities in funding specific programs, as seen with discussions around summer food benefits. [9, 10, 11]
  • Accountability for Funds: How are districts held accountable for using funds effectively to improve student outcomes?

How Tennesseans Can Get Involved & Find More Information

Understanding school funding is the first step toward advocating for strong public schools. Here’s how you can learn more and make your voice heard:

  • Stay Informed: Follow reputable news sources like tnfirefly.com for ongoing coverage of education policy and funding debates in Tennessee.
  • Visit the Tennessee Department of Education (TDOE) Website: The TDOE often provides resources and explanations about current funding models and initiatives. [12, 7, 13, 14]
  • Review Legislative Resources: Track education-related bills and budget discussions through the Tennessee General Assembly website.
  • Attend Local School Board Meetings: School boards make critical decisions about how local funds are allocated. These meetings are typically open to the public.
  • Contact Your Elected Officials: Share your perspectives and concerns about school funding with your state legislators and local school board members.

Glossary of Key Tennessee School Funding Terms

  • Average Daily Membership (ADM): A measure of student enrollment used in funding calculations. [3]
  • Basic Education Program (BEP): Tennessee's former resource-based K-12 school funding formula. [1, 2, 3]
  • Base Funding Amount (TISA): A per-student dollar amount that forms the foundation of TISA funding. [4, 5]
  • Direct Allocations (TISA): State funds designated for specific programs or priorities outside of the weighted student formula. [4]
  • Economically Disadvantaged: A student characteristic that generates additional weighted funding under TISA. [4, 5]
  • Fiscal Capacity: A measure of a local government's ability to raise revenue to fund education. [1, 2, 3]
  • Resource-Based Funding: A model where funding is allocated based on the costs of necessary resources (staff, materials, programs). [1]
  • Student-Based Funding: A model where funding follows individual students, with adjustments made for specific student needs or characteristics. [1, 5]
  • Tennessee Investment in Student Achievement (TISA) Act: Tennessee's current student-based K-12 school funding formula, effective July 1, 2023. [4, 5]
  • Weighted Allocations (TISA): Additional funding amounts generated by students with specific needs (e.g., economically disadvantaged, unique learning needs) on top of the base funding. [4, 5]

The Future of School Funding in Tennessee

School funding in Tennessee is a dynamic and evolving landscape. As policies are implemented and refined, ongoing analysis and public discussion are vital. The Tennessee Firefly is committed to providing continued, in-depth coverage of these critical issues, helping Tennesseans understand how their schools are funded and how these decisions shape the future for students across the state.

Dive Deeper Section

Dive Deeper into Tennessee School Funding

Explore these key aspects of how education is funded in our state for a more detailed understanding: