The needed push to reform Tennessee’s outdated school finance system
2282617 © Chad Mcdermott |


The needed push to reform Tennessee’s outdated school finance system

Tennessee has an outdated school funding formula that is poorly suited to serve the needs of the state’s public-school students in 2022. 

Tennessee lawmakers recently returned to session with a potential K-12 school finance reform being the top priority. Gov. Bill Lee announced his plans for the state to explore creating a new K-12 education funding formula in October of last year and since then 18 exploratory subcommittees made up of teachers, lawmakers and researchers have been busy discussing how to improve Tennessee’s education funding system.

These discussions should be welcomed by parents, educators, and taxpayers, as Tennessee has an outdated school funding formula that is poorly suited to serve the needs of the state’s public-school students in 2022. 

Tennessee’s current education funding formula, which determines how many dollars each of the state’s 147 school districts will receive, is 30 years old. It’s one of only a handful of K-12 funding formulas in the country that primarily funds school districts based on restrictive staffing inputs and programs rather than individual student needs.

Furthermore, the most recent data published by the state education department indicate systemic inequities in the current formula. Counties in Tennessee with greater property wealth tend to receive more state and local education dollars per pupil, and school districts with large proportions of low-income students don’t receive more funding than their less-poor peers despite their greater needs. 

For instance, consider the Scott County and Rutherford County school districts, which have Census Bureau poverty rates of 30.3% and 10.2%, respectively. Despite having a poverty rate nearly three times that of Rutherford County, Scott County receives less—only $8,480 per pupil—from state and local sources while Rutherford receives $8,883 per pupil from those sources.

Moving to a more student-centered funding formula that allocates education dollars based on individual student factors such as being low-income, an English-learner, or having a learning disability would alleviate many of these issues. Plus, the new education funding system would better empower district and school leaders to tailor spending decisions based on unique local needs. 

While it’s true that reforming an entire public school finance system is an ambitious goal for a single legislative session, Tennessee can’t afford to wait.

The fact that many other states also have convoluted and aging funding formulas indicates that the window of opportunity for comprehensive school finance reform doesn’t open often. It’s not every year that Tennessee will have this bountiful of a budget, a willing governor, engaged legislators, and an eager public. 

It’s also not as if state legislators are working in the dark. School finance experts and researchers generally agree that a simple, streamlined, student-centered funding system is the way to go and Tennessee lawmakers have access to best practices resources and reform templates from other states that they can work with.

But some policymakers have expressed concerns that the school finance reform process is moving too quickly. Others are suspicious that this is all merely part of an unspoken plan to advance private school vouchers. Importantly, some lawmakers are suspicious that adopting a student-centered funding formula is a “precursor to setting up for vouchers,” as State Rep. Vincent Dixie put it. School vouchers are publicly funded scholarships that qualifying families can use for private school tuition, and voucher opponents argue that they wrongly divert tax dollars away from public schools to private institutions. But this suspicion that K-12 finance reform in Tennessee is only an effort to get closer to vouchers isn’t borne out by evidence from other states and would make little strategic sense if it were true.

Many states with student-centered funding formulas have no private school choice programs, including Texas, Michigan, California, Colorado, North Dakota, and some northeastern states. Conversely, some states without student-centered funding systems do have private school choice programs, such as Alabama, West Virginia, Wisconsin, and North Carolina. Having a student-centered funding system is neither a necessary nor sufficient condition for adopting school choice initiatives.

If the only aim of the governor and school choice-supporting lawmakers were to advance education choice, there are far easier ways to do it than through comprehensive public school finance reform. Most states adopt private school choice programs without touching the state’s existing K-12 funding system, saving themselves the headache of dealing with complex fiscal issues and the far more complicated politics that accompany K-12 finance reform.

It’s difficult to fault anyone for being cynical about a process as politically fraught as large-scale school finance reform—whether they think the process is unfolding too quickly, that it’s simply a ploy to increase spending, or that it’s a backdoor play for school choice. But all indicators suggest that Tennessee policymakers, Republicans and Democrats, truly want an education funding system that is easier to understand, that’s fairer to all students, and that gives them greater opportunities for success. Whether the effort is being spearheaded by school choice supporters or teachers’ unions, good policy is good policy.

A version of this column previously appeared in RealClear Education.