Reserve a Portion of Annual Increases in State Revenues for K-12 Education Reform

This tenet is fairly straightforward, so I won’t belabor its explanation. Reserve half of the state’s annual increases in revenue for funding K-12 basic education redefinition/reform, until basic education reform’s implementation is complete. Once the redefined K-12 basic education plan is implemented, which is scheduled for 2018, the need for such dramatic investments will not be as high. So at that point, the annual increase dedicated for K-12 education can grow at a more modest pace, yet still keep up with education needs. In my modeling, I have the percent of state revenues for education at 50% through 2018, and about 6% in 2019 and thereafter.

Summary:

There are a few notable facts that make this tenet compelling.

First, this approach does not introduce higher taxes. This approach leaves the tax rates the same, and simply uses the natural growth of the economy as the engine to fuel revenue increases.

Second, it harnesses what I call amplification of the investment (yes, I made that up). In 2009, K-12 education accounted for 41% of general fund expenditures. I’m proposing setting aside 50% of the overall annual increases in revenue for education, so even when the economy grows at 5%, dedicating half of the annual increase in revenue results in more than a 2.5% increase for education (50% of that 5% increase is 2.5%)… it results in a 6% increase in education funding. Since that might not sound logical, let me illustrate with some basic numbers: say the overall budget is $100, and $41 of that goes for education. With 5% growth, next year’s budget is $105. Fifty percent of that $5 increase equates to $2.50. When we add that $2.50 to the $41 for education, we get $43.50. And from a percentage increase perspective, that $2.50 addition translates to a 6% increase in education funding. That may not sound like a lot, but over time, it has a big impact.

Third, this 50% growth dedication shouldn’t last forever. Imagine you inherit a house that has no carpet, old plumbing, a heater that doesn’t work properly, and no furniture. Ugh. You want a better life for you and your family, especially your children, so you decide that for the next eight years, you will dedicate half of your pay raises to improving those basic home needs. Of course you start with buying a bed for the kids, blankets for them too (you pay most attention to the neediest in the family – good job), then work your way through the rest of the house. In eight years, your house is in good shape. Congratulations. And guess what? After that point, your costs will be for incremental maintenance and upkeep, so you don’t need to dedicate half of your raises any longer.

For our current redefinition of education, using 50% of increased revenues gets us a good part of the way to the funding that’s needed, but doesn’t get us all the way there. That’s why there are five tenets in all, and they are a package; one needs the other to provide a complete solution.

The next tenet describes how to get us the next big chunk of remaining revenue that’s necessary. Click on the link in the bottom right side of this page to learn about Tenet 2. 

Reasoning: