The poverty prevalent among Oklahoma’s public school students is not adequately considered in the formula used to distribute state funds to the state’s 540 school districts, a legislative report issued Tuesday says.
“In 2022, 72% of all Oklahoma school districts had more than 50% of their students classified as economically disadvantaged, making this the area of greatest need in Oklahoma’s public education system,” Bradley Ward, program evaluator for the Legislative Office of Fiscal Transparency, told a joint legislative oversight committee.
Presenting data he said show a correlation between economic status and academic achievement, Ward said, “Oklahoma is the only state in a seven-state region to not provide additional support for districts with concentrated poverty.”
According to one graphic included in LOFT’s report, 405,000 of the state’s 687,000 public school students — almost 60% — are classified as economically disadvantaged. The report defines economically disadvantaged as those eligible for federally funded free and reduced-price meal programs.
“Oklahoma has one of the highest concentrations of poverty that we’ve seen across the United States,” Ward said in response to questioning.
Individual students qualify for free meals with household income of up to 130% of the federal poverty line or for reduced price meals with household income of up to 185% of the poverty level. Many students, though, qualify because their families receive other forms of assistance or because at least 40% of their school district’s enrollment qualifies individually.
Oklahoma’s funding formula does take into account individual economic disadvantage but not concentrated poverty. Ward and LOFT Executive Director Mike Jackson said many other states, including all of those those neighboring Oklahoma, provide additional per-pupil funding for such schools.
The report criticizes Oklahoma not only for failing to provide such support but for not requiring that the additional state funds schools do receive for economically disadvantaged students be spent specifically on them.
First enacted in 1981, Oklahoma’s complex funding formula is intended to equalize school financial resources across across the state by taking into account such factors as local tax bases and student demographics. One element of the formula is what is known as weighted average daily membership.
Weighted average daily membership is derived by adding “weights” according to each student’s needs. Economic disadvantage is weighted at 0.25, autism at 2.4, vision impairment at 3.8, and so on. The report recommends that economic disadvantage be weighted the same as gifted and talented — 0.34.
The funding formula is set by state statute and has been adjusted many times over the years, but state Superintendent and gubernatorial candidate Joy Hofmeister said major changes have been difficult because of its complexity and the fact than alterations result in some districts losing money while others gain.
“Past attempts to make changes have resulted in stalemate due to the fiscal impact resulting from these changes,” Hofmeister said.
The report also devotes considerable time to the Oklahoma Cost Accounting System, or OCAS.
School districts use OCAS to report revenue and expenditures to the Oklahoma State Department of Education. LOFT said the system does not provide sufficient accountability and is prone to error because of the more than 4,000 classification codes.
The examples of miscoding presented, while amounting to more than $6 million, involved less than 0.1% of total school expenditures, and Hofmeister said current law puts the burden of fiscal responsibility on local school boards.
Hofmeister said the State Department of Education has six employees, including one investigator, assigned to OCAS.
“If the desire and recommendation is for a significantly increased level of auditing oversight, there first must be substantial changes to current structure of laws, regulations and systems, as well as investment and diversion of resources,” Hofmeister said.
That summarized the eternal conflict, played out again Tuesday, between public education and lawmakers: criticism, on the one hand, of burgeoning noninstructional spending, while at the same time pressing for oversight measures likely to add to those administrative expenses.
According to the report, K-12 revenue from all sources for fiscal year 2021 totaled $7.6 billion, with expenditures of just under $7 billion. Local and state governments historically each contributed about 45% of school funding, with the federal government providing about 10%. The federal share has ticked up in recent years because of COVID-related federal money but still remains lower than a decade ago.
Nominal dollar appropriations to common education have increased 29% since 2010 but are actually 2% less when adjusted for inflation.
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