Dear Neighbors:
I hope you take some time this Veteran’s Day weekend to reflect upon the risks and sacrifices the members of our military service bear to preserve our liberty and well being as Americans. In this week’s letter, I discuss the funding dispute between the Providence Public Schools and the City of Providence, and remind you of an upcoming neighborhood meeting.
1. The School Funding Dispute
On Friday (November 8), the Superior Court ordered the placement into escrow of $8.5 million of State aid Providence had expected (and budgeted for) from the State’s automobile excise tax reimbursement program. The parties expect the Court to rule later this week on the disbursement of the escrow fund between the Public Schools and the City.
I have followed this dispute at a bit of a remove, having informal discussions with members of both sides without researching the record completely. I will share with you what I think I know, with the caveat that my analysis may be incomplete or perhaps inaccurate due to the complexity of the record beyond my limited study.
I see the dispute consisting of five basic elements, namely (A) the legal requirements of the Crowley Act, (B) the current financial position of the Providence Public Schools, (C) the current financial position of the City of Providence, (D) the parties’ prior financial decisions and exchanges and (E) the State’s role.
A. The Crowley Act
State law imposes a “maintenance of effort” requirement on school districts, prohibiting local governments from reducing their contribution to the school department as a condition for receiving State aid. The State took over the Providence Public Schools under the authority of the Crowley Act, which changes the “maintenance of effort” requirement for local governments (in this case the City of Providence). Instead of merely requiring Providence to match the prior year’s contribution, the Crowley Act requires Providence to increase its locally funded portion of the school budget by the same proportion as State education aid increases.
Providence Public Schools and the City dispute the meaning of this requirement – should the proportionate increase be based on the increase of State funding to all school districts collectively (as the School District maintains), or should it be based only on the proportionate increase to Providence (as Providence argues)? I think Providence has the better argument, as it would not make sense for the State to give a dramatic increase to every district except Providence while reducing aid to our City, and then require Providence to contribute local funds to match the increase that every other district except for Providence received. We may need to enact legislation to clarify this.
B. The Current Financial Position of Providence
The City argues to the Court that a ruling to redirect the $8.5 million of State aid away from the City’s treasury will have severe impacts on taxpayers and residents, as we are in the middle of a budget year that counted on the receipt of those funds, a reasonable assumption given the longstanding pattern and practice of this form of State aid.
C. The Current Financial Position of Providence Public Schools
Last month, Providence Public Schools announced that its current school year budget had a deficit of $10.9 million, and that a number of programs (including sports and RIPTA bus passes) would be cut absent the prompt infusion of City funding to close the deficit. The City pushes back, arguing that Providence Public Schools did not follow sound budgeting practices in assuming that the City contribution would increase by this amount, as it exceeded the amount officially approved in the City’s budget in June.
D. The Parties’ Prior Financial Dealings
During the early years of the takeover, the City (under Mayor Elorza) and Providence Public Schools reached an agreement on an increased City contribution for the first couple of years of the takeover. Since that time, the City contribution appears less than even what the City maintains in its court filings the amount it should be contributing to meet its obligations under the Crowley Act. Through the mediation process, the City has questioned the quality of the Providence Public Schools’ accounting records and practices, insisting on an audit.
E. The State’s Role
The Court file contains a letter from the Governor rejecting the use of additional State funds to close any part of the budgetary gap. In my opinion, the financial stresses our schools face result from inadequate State funding under the current funding formula. Providence has seen significant increases in its populations of multilanguage learners and special education students, as have urban districts across the State. If Rhode Island distributed local education aid through the same policies as Massachusetts (which traditonally leads the country in student achievement, and which Rhode Island persistently identifies as the standard to which we should aspire), the additional tens of millions of dollars Providence would receive in annual state aid would not only address the current crisis, but would provide a foundaiton for greater educational progress. I am currently working on legislation to revise the State school aid funding formula to bring more elements of the Massachusetts program to the Ocean State.
F. Conclusion
The two sides to this dispute each have valid points to make, seeking to focus the Court’s attention on their best claims. Providence Public Schools emphasizes the City’s failure to meet even the City’s own interpretation of the Crowley Act, as well as the grim fate Providence students face in the wake of the current deficit. The City emphasizes the School Department’s imprudent decision to begin the year on an unbalanced budget, assuming the City would pay additional funds that were not included in its budget, as well as the impact on the City of a mid-year $8.5 million budgetary hole. In my opinion, both sides have valid points, and the needs of the children in Providence must come first. I also believe the State can and should do more to contribute to a solution.