Research & Commentary: Funding Formula Committee Has Chance to Transform Public Education in Idaho

Published June 14, 2018

For the first time since 1994, Idaho’s Public School Funding Formula Committee is considering dramatically altering the method the state uses to allot public school funding. To accommodate budgetary concerns and revolutionary shifts in the classroom, the committee will recommend changes that could be implemented in the 2019 legislative session, possibly replacing an outdated public school funding formula that has been in place for more than 20 years.

Idaho’s 1994 funding formula “did not contemplate a variety of different learning modalities, the increasing mobility of students and the state’s move toward mastery-based education,” according to the Education Commission of the States. Additionally, Idaho’s current menu of public school choices—charter schools, magnet schools, and open enrollment—and its corresponding infrastructure did not exist in 1994. Roughly 25 percent of Idaho’s 300,000 students don’t attend their government-assigned neighborhood public school. Moreover, 14,000 students take online courses at places such as the Idaho Digital Learning Academy.  

The committee has an opportunity to fundamentally transform public education in the Gem State. This can be accomplished by shifting the funding formula to a child-centric model, where funding follows students, not schools.

Currently, roughly half the taxes collected for education flow from taxpayers to federal or state departments of education. From there, the funds go to local school districts and finally to public schools and teachers. Local property taxes typically go to local school districts or to state agencies for redistribution to less affluent school districts. Shockingly, 40 percent of school tax dollars are funneled into bureaucracy instead of classrooms. Unfortunately, this funding system grants arbitrary power to out-of-touch, unelected officials. Over time, this system has become overly rigid, wasteful, and corrupt.

In the private school sector, funding follows a different set of rules. At private schools, parents pay tuition directly to the educators they choose for their children, so funds automatically follow the child. This freedom to choose motivates parents to study their choices closely and cooperate with educators on educational issues. Competition for tuition leads educators to modify and improve their offerings.

Idaho should move to a student-based budgeting model in which funds are allocated to students so families can choose the school that best fits their needs. These funds should also be weighted according to the circumstances and needs of each child, like low-income of special needs students, just to name two examples. This would end the antiquated system that forces students to attend government-assigned public schools, and it would allow total open enrollment. Students taking online classes should receive the same funds as students in traditional brick-and-mortar public schools.

Sadly, Idaho is also a private school choice desert. Idaho should allow for universal private school choice programs, which would could rely on education savings accounts, vouchers, or tax-credit scholarships. These programs would allow families additional opportunities to fulfill their child’s individual education needs. Idaho should also permit tax credits and deductions to families with children attending private schools.

Tax dollars raised for education should follow the child and not restrict a child to his or her zip code. Public education in Idaho ought to allow all parents to choose which schools their children attend. This simple notion would compel schools to compete for students and thus ensure every child has the opportunity to attend a quality school.

The following documents provide more information about education funding and school choice.

State Education Trends: Academic Performance and Spending over the Past 40 Years
This Cato Institute study adjusts state SAT score averages for factors such as participation rate and student demographics, which are known to affect outcomes, then validates the results against recent state-level National Assessment of Educational Progress test scores. This produces continuous, state-representative estimated SAT score trends dating back to 1972. The study charts these trends against both inflation-adjusted per-pupil spending and the raw, unadjusted SAT results, providing an unprecedented perspective on American education inputs and outcomes over the past 40 years.

Back to the Staffing Surge: The Great Teacher Salary Stagnation and the Decades-Long Employment Growth in America’s Public Schools
In this study for EdChoice, Dr. Ben Scafidi, professor and director of the Education Economics Center at Kennesaw State University, measures U.S. public school employment growth versus student growth, as well as teacher salary fluctuations and student outcomes for the past 65 years. The results go against the grain of a common educational philosophy: that politicians should give public schools more money so they can pay teachers more and reduce class sizes.

School Closures and Student Achievement: An Analysis of Ohio’s Urban District and Charter Schools
This Fordham Institute study examines 198 school closures that occurred from 2006 to 2012 in the Ohio “Big Eight” urban areas. The study reveals that children displaced by closure make significant academic gains on state math and reading exams after their school closes. Further, the study reveals that students who attended a higher-quality school after closure made even greater progress.

The Effect of School Closings on Student Achievement
This report, published in the Journal of Public Economic, examines the closure of more than 200 schools in Michigan. The report’s authors concluded school closings do not persistently harm the achievement of displaced students. They also determined putting closure students in higher-performing schools can result in achievement gains for those students.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, save taxpayers money, reduce segregation in schools, and improve students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.

Education Savings Accounts: The Future of School Choice Has Arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal educational savings account (ESA) programs offer the most comprehensive range of educational choices to parents, describes the six ESA programs currently in operation, and reviews possible state-level constitutional challenges to ESA programs.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
This Policy Analysis from the Cato Institute examines the effect increased access to private schooling has had on international student test scores in 52 countries. The Cato researchers found that a 1 percentage point increase in the share of private school enrollment would lead to moderate increases in students’ math, reading, and science achievement.

2017 Schooling in America: Public Opinion on K–12 Education, Parent Experiences, School Choice, and the Role of the Federal Government
This annual EdChoice survey, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at [email protected] or 312/377-4000.