1889 Institute: School district funding during Covid-19 made worse by bad policy

Stress of School District Funding During Covid-19 Made Worse by Bad Policy

By Tyler Williamson, 1889 Institute

A recent article in The Oklahoman discussed the financial impact of the mid-year funding adjustment for Oklahoma school districts. School administrators bemoaned the adjustment, citing the hardships of the pandemic. This reduction should come as no surprise, however, considering how Oklahoma’s school district funding works.

State appropriated school district funding is allocated based on Weighted Average Daily Membership (WADM), a convoluted “per student” measure. WADM is then used to calculate how much funding a school district will receive from the state. Basically, the more students there are in a district, the more money the district will receive. Therefore, if a district loses students, it will receive less funding, and if a district gains students, it will receive more funding.

In 2020, Oklahoma school districts decided to shut-down in-person learning but were not adequately prepared to teach students virtually; consequently, they lost students to schools that did virtual schooling better. Over 60,000 students left traditional public schools and enrolled in various charter schools. Therefore, the traditional districts’ enrollment fell while charter school enrollment rose. As a result, based on our discussion of formula funding above, you would think that traditional school districts would lose funding and charter schools would gain.

However, there’s a caveat—the three-year funding high. When the state does its funding calculation, it uses the highest WADM from any of the past three school years. As a result, districts with declining enrollment continue to receive funding for students that are no longer in their district (sometimes called “ghost students” since they’re counted without being present). Herein lies the problem. If traditional school districts receive funding based on their previous enrollment high (before massive numbers of students left for charter schools), and charter schools receive funding based on their new enrollment, the students that left their district for charter schools get counted twice for purposes of calculating the per-student allocation used in the funding formula.

Because total funding for this year remains the same regardless of the number of students, but the total number of students has been artificially increased, the average per-student allocation of funds decreased with the mid-year adjustment. As a result, every single school district in the state bears the cost—even school districts that did not lose students.

Oklahoma lawmakers’ attempt to shield school districts from the financial result of declining enrollment has caused all the districts to suffer unnecessary financial hardship. Successful Oklahoma school districts should not be forced into financial hardship when other school districts underperform. The legislature should stop protecting underperforming school districts that are shedding students, forcing other districts to pay for it by funding “ghost students.” The legislature should immediately do away with the three-year funding high and fund every school district based on its current enrollment.