Key Takeaways
- Over the last couple of weeks both a legislative task force and BESE began exploratory efforts to review the state’s Minimum Foundation Program (MFP) which distributes state funding to local public school districts and charter schools.
- Presentations to both groups on the history of the MFP and how it works added valuable context to the discussion.
- Louisiana’s MFP does not appear to be broken, but ideas have emerged for making improvements.
The foundations of Louisiana’s current MFP funding formula for public education were first put in place in 1992-93. It is a complex funding mechanism that has been adjusted over the years, but its overall structure has remained largely the same since it was implemented more than 30 years ago.
Given its complexity, Better Louisiana recently produced a primer on the MFP for citizens and policy makers and a one-pager which describes key elements of the formula. We also featured an in-depth discussion of current issues surrounding the MFP at our recent Future Louisiana Conference in Lake Charles.
A legislative task force has now embarked on a process to review the MFP, driven by a desire to see if it could be restructured to provide a permanent and predictable mechanism for funding pay raises for teachers and school support staff. Both the task force and BESE held recent meetings on the funding formula, which included a great deal of background on the history of the MFP, how it works, and areas where it might be improved.
Findings from Presentations
- Unlike other states that revised their school financing structures in recent years, Louisiana does not appear to be trying to fix a funding formula that is fundamentally broken.
- The MFP has a number of attributes that are generally seen as encompassing best practices:
- It uses a student-based formula with a consistent base amount per pupil based on enrollment.
- It applies added weights to help educate students with greater needs, recognizing the additional costs needed to serve these students.
- It includes mechanisms to provide additional resources to small school districts and those that lack the capacity to generate local taxes to fund public schools.
- Over the last 20 years the base pupil amount has risen from $3,554 to $4,015, an increase of 13%. It was last increased in 2020.
- Just between 2020 and 2026, inflation increased at a rate of approximately 28%. Restoring the MFP to its original purchasing power would theoretically require an increase in the base of $1,128, with a recalibrated total of $5,143 per pupil.
- The constitution prescribes certain requirements for the MFP which cannot be easily changed. These include determination of the minimum cost of education, requirements for equitable allocation among districts, a mandatory local contribution, and requirement that the state fully fund what it determines to be the state’s share of the overall costs.
- There are also a number of areas where there is flexibility outside the constitution, including determining the base per pupil amount, the additional weights for different categories of students who are more expensive to educate, and the way the formula is structured into four defined levels.
- Changes to these areas would have to be done by BESE, not the Legislature, though lawmakers and the governor would clearly have a great deal of influence on BESE’s actions.
Possible Changes
What also emerged from the meetings and presentations were ideas about how Louisiana might improve the MFP in particular, or explore broader policies for school financing in general:
- Consider studying the current cost of providing a minimum foundation of education for Louisiana students to determine if what is being spent now is sufficient in light of inflation and the loss of purchasing power over time.
- The MFP has four levels. Levels 1 and 2 distribute dollars based on student needs and the ability of local districts to generate tax support for public schools. Levels 3 and 4 are generally targeted toward specific policy priorities and allocated across the board. The state might consider placing the funds from Levels 3 and 4 into the sections that provide equitable distribution based on needs and capacity.
- Require that a percentage of any new funds added to the base of the MFP be earmarked for teacher and staff salary increases, similar to what is done in Texas.
- Simplify the formula and provide more transparency so that citizens and policy makers can better understand how the MFP works and clearly see how state dollars are allocated to different school districts.
- Revisit the weights that are currently given to districts to fund education for certain categories of students that are more expensive to educate. These include students with disabilities, economically disadvantaged students, gifted and talented, and students enrolled in career education programs.
- With student enrollment declining, explore state policies outside the MFP that encourage small districts in rural areas to consider district consolidation or make it easier for them to close schools with shrinking student populations.
- Add an element that provides additional funding or “bonuses” to districts that achieve certain student outcomes.
- Create a process to continually review the base funding to allow for periodic increases to respond to higher costs tied to inflation.
Observations
- Most states that have undertaken recent changes to their school funding policies have done so to fix a problem that had been identified regarding how state dollars were being allocated to local school districts.
- In Louisiana’s case, many of the suggestions experts have offered follow along those same lines – how to improve Louisiana’s formula to make it more equitable and tied to meeting student needs. The issue of restructuring to help fund a permanent teacher pay raise offers a new wrinkle to what experts are being asked to consider.
- A number of states that changed their school financing models did so while simultaneously pumping new dollars into public education.
- Restructuring the MFP without new funding will likely create winners and losers among school districts. If Louisiana will not be adding new money, consideration should be given to a transition plan that allows districts to ease into any major funding changes that might occur.
Conclusion
Though the catalyst for Louisiana to consider changes to the MFP – finding a mechanism to fund a permanent teacher pay raise – is unusual, that does not mean that it’s not possible or that the process won’t yield some tangible benefits.
It is likely the legislative task force will complete its work on schedule and submit recommendations for a new formula to BESE by the beginning of 2027. But then, it is up to BESE to take the next big step and develop a new formula.
It is worth noting that in the past when BESE has undertaken reviews of portions of the MFP its work has been thorough and often included experts in school finance. Generally, most would agree that process has worked well over the last 30 years and is probably worth replicating again.
Better Louisiana believes teacher pay is an important issue and well worth the effort to try to address. But doing that by unlocking the complexities of the state’s school funding formula can be tricky. Which is all the more reason to take the time, and get the expertise, to ensure that when we do it, we get it right.