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Time to rethink education funding
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Technology is poised to fundamentally transform education over the next decade. It offers the opportunity to provide every child in Georgia with access to a high-quality education and new abilities to address long-term challenges such as dropout rates and remedial education. To benefit from this technological revolution, Georgia must remove the barriers to innovation — starting with funding.

As with most things, the adage of “follow the money” is appropriate. State funding formulas have become more complex over the years, pulling schools in multiple directions in order to maximize their revenues. Students and taxpayers are often the losers.

Why debate details such as the level of funding for textbooks, for example, when the question should be why specifically fund textbooks at all? Instead, treat school funding as we do charter schools, focusing on results rather than micromanaging inputs. A lump sum of funding, determined by the student’s educational needs, should follow each child, allowing each school to determine its own funding priorities.

Georgia students already can choose to take classes from outside their own school. The Georgia Virtual School offers a wide variety of choices, from foreign languages to Advanced Placement courses, but the availability of these classes is constrained by a limit on the number of classes funded in the state budget.

The Florida Virtual School is a promising model for Georgia. Funding flows directly from the state’s funding formula, allowing the school to easily meet increased demand. One unique difference between the Florida Virtual School and traditional schools is that it only receives funding for students who successfully complete their courses.

In addition to the Georgia Virtual School, the Georgia Cyber Academy provides full-time enrollment for K-12 students throughout the state. Cobb, Gwinnett and Forsyth school systems have also created their own virtual schools. Finally, high school students can take dual credit classes online from Georgia’s many technical colleges and universities. Unfortunately, schools are not encouraging these options because they “lose” funding. As these options expand, the state should develop an easy way for students to review their many options and provide for a seamless funding process.

As efficiency and slower population growth reduce demand for facilities, we should consider expanding the flexibility of the Education Special Purpose Local Option Sales Tax or ESPLOST. First passed in 1996, this law has funded more than $15 billion in capital improvements. Today, Georgia spends more money per student on capital outlays than all but six states, and more than every Southeastern state except Florida.

The ESPLOST filled an important need to replace aging facilities and keep up with a fast-growing student population at the time, but this may no longer be the most efficient use of scarce resources.  ESPLOST funds are restricted to capital improvements, so could not be used to avoid the furloughs, reduced school days and other cost-cutting efforts implemented over the past few years.

One option to examine would be to convert the current ESPLOST into a state sales tax that could be spent on capital or operating expenses. Just one county in Georgia has no local ESPLOST, so it is essentially already a statewide tax. To the extent that a school system no longer would need to continue spending large sums of money on facilities, this would amount to a sizable property tax reduction.

Shifting funding from local capital projects to state revenues would increase the state’s share of education funding from 50 percent to approximately 60 percent, where it was a decade ago. As an added benefit, this would also fully fund the state’s virtual schools, enabling every child in the state to access a wide variety of high quality educational options.

This shift would create winners and losers, but adjusting the “local fair share” portion of the state funding formula could offset the impact. School systems would still be able to hold a local property tax referendum to fund necessary capital improvements.

Georgia’s children will benefit greatly from digital learning that enables them to learn at their own pace, customizes each lesson to their learning style and offers them a wide variety of choices without needing to leave their local neighborhood school or move to another school district. With Georgia’s per student spending already 23rd highest in the nation, there may be no need to spend more money. But there certainly is a need to spend more wisely. Let’s ensure that “following the money” in Georgia leads to innovation, not to the status quo.

Kelly McCutchen is president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians.