Education Funding Lawsuit Settlement: What it includes and what it means

Delaware Public Media | by Larry Nagengast

A settlement was announced Monday in the high-profile lawsuit filed by NAACP, ACLU and other education advocates seeking to overhaul Delaware’s school funding system to better assist disadvantaged students.

Contributor Larry Nagengast has been covering this case and the issues associated for some time now – and this week examines the settlement itself and what it means.

It’s a big deal, but it’s not a done deal, and it’s not the whole deal either.

That’s the one-sentence summary of the settlement agreement announced Monday that would suspend the current suit filed by Delawareans for Educational Opportunity and the NAACP Delaware State Conference that seeks an overhaul of the state’s school funding system to provide additional funding to benefit low-income children, English learners and students in kindergarten through third grade who have special needs.

It’s a big deal because “it’s been a long time coming. Proposals were first made 20 years ago, so we’ve been working on this for two decades,” said Dan Rich, a University of Delaware professor of public policy who has been involved in education reform issues for many years.

It’s not a done deal because Delaware’s General Assembly, which returns to action in January, will have until June 30 to approve legislative proposals to be made by Gov. John Carney, the prime state defendant in the suit, that would, among other things, increase state funding for these groups of disadvantaged students and make that funding a permanent piece of the state’s school finance program.

If the measures are not enacted, the plaintiffs have the option of going back to Delaware’s Court of Chancery, where the suit was filed, and asking that the case go to trial.

Monday’s proposed settlement was the result of a mediation effort that began Aug. 31 as both sides tried to avoid a trial that had been scheduled to start on Nov. 4.

Nor was the settlement the whole deal, education advocates said.

“This still doesn’t go far enough and doesn’t get at the real challenges,” said Rod Ward, president and CEO of CSC and a member of the steering committee of Educational Equity Delaware, an advocacy group of businesses and nonprofits, “but it is a way to get the necessary dollars to where they need to go.”

“Spending more money on high-needs students is fine, but the agreement has no impact on the way the state currently spends $1.4 billion annually on public education,” said Laurisa Schutt, executive director of First State Educate, a new education advocacy group. “Money alone without moving the [financial] structure of the system doesn’t help us ask difficult questions” about how it is spent, she said.

“In any negotiated settlement neither side gets everything they want [but] it does provide support for children that is desperately needed in Delaware’s education system,” said Jea Street, a leader of Delawareans for Educational Opportunity. “The battle for fairness in public school education in Delaware is not over.”

Even acknowledging those caveats from Schutt and Street, “two things are very important,” Rich said. “This would make the funding commitment recurrent and a matter of law, and the funding levels represent a meaningful increase at a time when state finances are uncertain [due to the Covid-19 pandemic].”

The agreement includes promises from the state to:

  • More than double Opportunity Funding to $60 million annually by Fiscal Year 2025 and make the weighted funding program permanent. Funding will increase automatically with enrollment beyond 2025.
  • Double funding for the Early Childhood Assistance Program (ECAP) to expand access to affordable early education.
  • Provide full funding for K-3 basic special education, consistent with levels for grades 4-12.
  • Provide at least $4 million a year in additional funding for teacher recruitment and retention in high-needs schools during fiscal years 2023, 2024 and 2025.

Currently, the state uses Opportunity Funding, a program created by Carney in 2018, to provide $25 million annually in additional support for low-income students and English learners. That program, however, is due to expire at the end of the current school year. The agreement calls for increasing Opportunity Funding to not less than $35 million for the 2021-22 and 2022-23 school years, not less than $50 million for the 2023-24 school year and not less than $60 million for the 2024-25 school year, with legislation making Opportunity Funding permanent and with adjustments for inflation made annually.

Delaware is now one of a handful of states that does not provide weighted funding for low-income students and English learners as part of its school finance structure.

The early childhood funding, now $6.1 million annually, would increase to at least $12.2 million for fiscal years 2024 and 2025, with at least half of the increase being allocated to add seats to childcare programs not run by local school districts.

The change for K-3 basic special education would provide the same funding for the younger students as for their older peers.

Lawmakers and education advocates welcomed the announcement of the settlement but expressed concerns as well.

“I’m happy. I’ve tried to work for school finance changes for years,” says state Sen. David Sokola, a Hockessin Democrat and former chair of the Senate Education Committee. “It’s unfortunate that it took a lawsuit to get us to do what most other states are doing.” But, he adds, there’s more to making the settlement work than directing more money into problem areas. “How well we implement it will determine whether we succeed.”

“This was a long time coming, and I applaud the governor for agreeing to it,” said Rep. John Kowalko, a Newark Democrat. But Kowalko said he wished that legislators had been a part of the mediation talks rather than being in the position they’re in now of essentially having to ratify the agreements the governor made.

“I still have a lot of questions,” Kowalko said, with many of them related to how the state will ensure that all the additional funding is spent for the desired purposes, and not on students who do not have special needs. “We have to do something more than create a pot of money and hope that nobody gets into the room and takes pieces of it.”

The settlement agreement includes annual reporting requirements at the school and district levels but does not detail what these reports must include.

Two other pieces of the settlement that do not have price tags attached could have significant impact: an “independent funding assessment” of state and local financing of public education and creation of an “education ombudsperson” program in each county.

The funding assessment, according to the settlement, must be completed by January 2024 and be prepared by “an organization that is independent of the State,” language that would appear to rule out the University of Delaware, which has researched many other public education topics. Paul Herdman, president and CEO of Rodel, the Delaware-centric education research foundation, said there is a “cottage industry” of private firms that prepare education funding analyses. Some professional organizations, like the National Conference of State Legislatures, perform similar work, he said.

There is some concern that this assessment could become just one more document to be piled atop the heap of studies performed over the last two decades – or more – on how to reform a school funding system that was adopted in the 1940s. “That was a very different time,” Herdman said, when “black kids were not allowed in [segregated] schools, kids with disabilities did not receive any accommodations, nor did students who were English learners.”

Many of those studies recommended additional funding for these groups, but this settlement, if enacted, would be the first time such special funding would be approved on a permanent basis.

Several education advocates, including Herdman, Schutt and Ward, said they hoped that the funding assessment would examine ways of restructuring the current funding system, possibly providing a mechanism for money to follow individual students rather than continuing to be doled out according to the “unit count,” which is based on enrollment counts taken each fall.

The ombudsperson service, to be bid out to private contractors and launched in the 2021-22 school year, would provide advocates to intervene on behalf of students to address complaints related to discipline, access to school programs and “different or unfair treatment” of students. The work would be reminiscent of what Street was doing back in the 1970s, serving as an advocate for Black students from Wilmington who faced suspension or expulsion from the suburban schools they were attending. The post-desegregation division of school entities serving Wilmington has splintered advocacy efforts on behalf of Wilmington students over the past two decades.

“Right now. we lack those trusted advocates for when parents feel poorly served or mistreated by the system,” said state Sen. Elizabeth “Tizzy” Lockman, a Wilmington Democrat and vice-chair of the Senate Education Committee.

State Sen. Laura Sturgeon, a Brandywine Hundred Democrat, chair of the Senate Education Committee and a retired teacher, said having an advocate is “obviously a good thing, but it depends on how it works and what they’re empowered to do.” While it is important for students to have support in addressing discipline and access issues, she says it is more important for the system to develop mechanisms to counteract “the problems and traumas that children are bringing into the school that causes them to be disruptive.”

Also included in the settlement is the addition of an “equity statement” to the “certificate of necessity” that school districts must complete for the state to approve bond issues for school construction and major renovations. The equity statement would include demographic information, such as race, low-income or English learner, on the students who would be expected to benefit from the construction. Aging school buildings have long been an issue in Wilmington, where the vast majority of students fall into the low-income minority demographic. There has not been a new school built in the city since before desegregation began in 1978.

While generally expressing satisfaction with the settlement, Kowalko and other lawmakers, and education advocates as well, said there is much work to be done in spelling out the details of how it will be implemented.

“Understanding that every school has a unique population, what the settlement does not address, and is needed, is flexibility for public schools, charter and district, with all funding that they receive,” said Kendall Massett, executive director of the Delaware Charter Schools Network.

State Rep. Kim Williams, a Newport Democrat who has long advocated for better funding for special education students, said she was “thrilled” with the settlement and expressed hope that she and her fellow legislators could enhance or accelerate the reforms spelled out in the document.

“It’s in our wheelhouse,” she said. “We can write the law. We can do more. We can ask for more.”

Kowalko, tired of studies, is ready to get moving. “We don’t have to study anything. Let’s do it,” he said. “Every day we delay, we lose another child.”

While Monday’s settlement announcement closes, pending final approvals, the portion of the suit that deals with state education funding, activity is about to resume in the case’s second portion, the county track. In May, Vice Chancellor Travis Laster ruled that the property tax assessment system used in New Castle, Kent and Sussex counties violates the state Constitution and state law. The counties rely on data from the 1970s and 1980s to set the value of real estate, which is the basis for levying school and county property taxes. Because the Covid-19 pandemic was likely to impact tax collections this year (property tax payments were due Sept. 30), Laster gave the counties until the end of October to update their data before scheduling the next round of briefings and hearings.

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