(The Center Square) – K-12 education is the top expenditure in Tennessee’s budget and has more than doubled, adjusted for inflation, since the current school funding plan began in 1992, a Sycamore Institute report shows.
Tennessee’s education funding model, called the Basic Education Program (BEP), is used to disperse state funds to individual school districts. Tennessee spent $5.2 billion on K-12 education in fiscal year 2020, while TennCare, the state's Medicaid program and second-highest expense, cost the state $3.6 billion.
The state spent about $2.2 billion to fund schools in 1992, adjusted for 2020 dollars.
Brian Straessle, director of external affairs at the Sycamore Institute, said the nonprofit will be looking more into K-12 education funding this year since the BEP has been subject to lawsuits and criticism over the years. There is potential to make changes to the BEP in next year's legislative session, he said.
“There are few that really understand that formula,” Straessle said. “Some work like this (report) to create more understanding of how funding works can be helpful.”
Rather than giving a set amount or percentage of funding to each Local Education Association (LEA), the BEP formula uses 46 different components to determine how much each district will receive.
The primary source of revenue for BEP distribution is the state’s sales tax, which accounts for 95% of funding. Sales tax revenue accounts for 69% of the state’s $13 billion in general fund revenue each year.
“Local and federal dollars also help pay for education,” Sycamore Institute Director of Policy Mandy Pellegrin wrote. “In fiscal year 2019, for example, state revenues provided half the money for elementary and secondary education, 43 percent came from local revenues, and the rest from the federal government.”
Per-pupil spending has become the standard for analyzing school spending in recent years, especially after it became mandated to be released by each LEA by the federal Every Student Succeeds Act.
The Sycamore Institute used those numbers and adjusted it 2.3% annually for inflation since 1992 in its analysis.
“When you have more students, you generally need more money for teachers, facilities, textbooks, etc,” Pellegrin wrote. “Similar to accounting for inflation, looking at per-pupil spending helps us make meaningful comparisons over time as enrollment changes. It’s a good starting point for understanding how we fund education in Tennessee.”
The report showed 29% of the state’s dollars were spent on the Department of Education since 1992.
Straessle said the Sycamore Institute plans to do more in-depth looks at education funding and spending in the coming months as it continues to be a hot discussion issue heading into the new legislative session in January.