• A new report proposes a major overhaul of Rhode Island’s education funding to simplify the system.
• The plan would shift many education costs, like teacher pensions and transportation, from cities and towns to the state.
• This proposal includes a net increase of about $300 million in overall education spending.

A proposed overhaul of Rhode Island education funding unveiled by a panel of experts and the Rhode Island Foundation on Monday, Jan. 5 would simplify the way public education is paid for and shift spending from municipalities to the state.

A 33-page report from the Blue Ribbon Commission describes the state’s current funding formula as “complex,” “opaque,” and “unpredictable,” the product of years of emergency tweaks and political compromises.

“We are constantly confronted with the limitations of the current funding formula. We hear about it all the time, both as a funder and as a partner in the public education sector,” David Cicilline, Rhode Island Foundation president and former congressman, told reporters at a briefing on the plan, whose release was delayed as a result of a shooting at Brown University.

The commission recommends that the state share the cost of some things now borne entirely by local governments, such as transportation, building maintenance and vocational schooling. And it wants the state to take on some costs entirely − including retired teacher pensions, high-cost special education and out-of-district transportation − that are now shared with municipalities.

The current system places “an outsized fiscal burden on districts,” the report’s executive summary says.

But the price tag for taking that burden from cities and towns is large, and in a time of economic uncertainty might give Rhode Island State House leaders sticker shock.

At the same time that the commission shifts costs to the state, it is also proposing a roughly $300 million net increase in education spending to better reflect what its experts believe is necessary to guarantee.

The commission’s preferred scenario, in which the state covers 58% of school costs, would increase the state education budget by $590 million. Under this plan cities and towns would save $278 million.

Cicilline notes that state leaders could choose to phase the new spending in over two or three years to soften the budget impact.

Recent years have seen significant annual increases in education spending under the existing funding formula. The current state budget saw a $59 million increase in education spending from the previous year.

Cicilline also noted that the state’s unfunded pension obligation is projected to fall dramatically in 2036, at which point the cost of covering those payments for cities would fall.

The state currently pays 40% of teacher pension costs. Picking up the full cost of retiree pensions would push the state cost from a little over $100 million to more than $270 million, according to projections from the commission.

Who participated in the Blue Ribbon Commission?

The commission, hosted by the Rhode Island Foundation and Brown University’s Annenberg Institute, included representatives of nonprofits, municipal government, teachers unions, research academics and public schools, both traditional and charter.

The panel did not include any elected officials or state policymakers, such as members of the Rhode Island Department of Education or members of the General Assembly. However, Gov. Dan McKee, House Speaker K. Joseph Shekarchi and Senate President Valarie Lawson were briefed on the recommendations.

How did state officials react to the recommendations?

All reserved judgment on the plan, although many of the ideas in it align with priorities that Lawson, president of the National Education Association Rhode Island, expressed in an interview at the start of the month.

Shekarchi thanked the foundation and said the House will be “carefully reviewing” the recommendations. “A strong educational system is essential in making sure our students are well prepared for the rapidly-changing 21st century economy and is a critical component of our state’s future prosperity,” he said in an email.

The report “reflects a strong commitment to strengthening public education and expanding opportunity for every Rhode Island student – goals my administration has been working towards diligently,” McKee said in an email.

Senate spokesman Greg Pare said the Rhode Island Foundation is slated to give the chamber a presentation on the report Jan. 15.

“The Blue Ribbon Commission’s work raises important issues that we will be exploring, including state support relative to areas such as high-cost special needs and transportation,” Pare wrote.

Municipal winners and losers under new funding plan

Although most cities and towns come out big winners with the Blue Ribbon plan, some do better than others, and a few communities are projected to see a net loss.