Last week, Gov. Butch Otter told a crowd of more than 400 people that Idaho is "probably not" meeting the state Constitution's requirements to provide for education. The implications of that are serious: The state currently is being sued over the issue. “I would say we're probably not, but we're doing the best job that we can, and we're going to continue to do the best job that we can,” the governor said.

Asking the question of the governor was his former longtime chief economist, Mike Ferguson, who now heads the Idaho Center for Fiscal Policy. Ferguson has sent out an op-ed piece to Idaho newspapers, headed, "Election Over, Now It's Time To Focus On Resources," exploring the issue of school funding in the wake of the failure of the school reform propositions on the November ballot. "Two critically important issues need to be factored into this discussion: How much of our financial resources are we devoting to the education of our children, and how are we allocating those resources among those children?" Ferguson asks.

His conclusion to the first question is that the Idaho is spending less and less on public education, falling from 4.4 percent of personal income in 2000 to 3.5 percent this year - a 20 percent decline. He also raises questions about the distribution of Idaho's state school funds with regard to equity; click below to read his full article. You can read my Sunday column here at spokesman.com.

Election Over, Now It’s Time To Focus On Resources

By Michael Ferguson, Idaho Center for Fiscal Policy

Now that the election is behind us, we have an answer from Idaho’s voters on the referenda related to the Students Come First laws (or Luna Laws, depending on your perspective). Both sides in this contentious campaign have now agreed on the need to work toward improving the quality of public education in Idaho. That’s encouraging, not because Idaho’s public schools are broken, but because it’s always going to be the case that there will be room for improvement. Hopefully we will see a renewed commitment to collaboration among the various stakeholders in this most important of our state’s responsibilities.

Two critically important issues need to be factored into this discussion: how much of our financial resources are we devoting to the education of our children, and how are we allocating those resources among those children?

To answer the first question, Idaho is spending less and less on public education. After decades of stable funding at roughly 4.4% of Idaho’s personal income, since fiscal year 2000 Idaho has been devoting progressively fewer resources to its public schools – down to just 3.5% of Idaho’s personal income in the fiscal year 2013 budget. That’s a 20% decline in our effort level, or the share of our resources we devote to public schools. It’s also a factor in Idaho’s decline from 48th among states (and D.C.) in spending per student in fiscal year 2000 to 50th in spending per student in fiscal year 2010.

To answer the second question, Idaho’s spending on public education is becoming more unequal. In 2006 the Idaho Legislature changed the funding sources for public schools by shifting away from the property tax and to the General Fund (i.e., income and sales taxes). An equalized property tax levy of 0.3% was eliminated, and the Idaho sales tax was increased from 5% to 6% to bolster the General Fund. In theory, the state General Fund would now cover the entire cost of a “general, uniform and thorough system of public, free common schools.” Reality is turning out to be much different.

Since the 2006 funding swap, Idaho’s public school districts have dramatically increased their reliance on property taxes to supplement General Fund dollars. In just the past year the use of voter-approved supplemental levies by school districts has increased from $140 million to $169 million, a 20% increase. The problem is school property taxes are now entirely unequalized, meaning that each school district’s property tax capacity is all it has to work with. Property tax capacity per student varies widely across Idaho’s school districts.

At the extremes, in fiscal year 2010 property values varied from $4.696 million per student in the McCall-Donnelly school district, to just $153,437 per student in the Snake River school district. That’s a 30:1 variation in the property tax capacity between these two districts. A levy of 0.1% ($100 per $100,000 of taxable value) would raise $4,696 per student in the McCall-Donnelly school district, while the exact same levy would raise just $153 per student in the Snake River school district.

Small wonder, then, to find that Snake River had no property tax levy. It got by with strictly its state allocation of just $5,362 per student. McCall-Donnelly did have a property tax levy (of 0.142%) that produced an additional $6,657 per student, giving it a total of $13,208 to spend per student.

If we look at Idaho’s six largest school districts the variations are not as dramatic, but no less meaningful. Coeur d’Alene had $889,772 in taxable value per student versus just $261,037 per student in Pocatello – that’s more than a 3:1 ratio in property tax capacity. Coeur d’Alene actually levied 0.092% and raised $820 per student from the property tax. Pocatello actually levied at over twice the rate of Coeur d’Alene (0.199%), but raised less than two-thirds the revenue ($519 per student) from the property tax.

The widest funding disparity among Idaho’s six largest school districts in fiscal year 2010 comes more from the willingness of the district’s patrons to tax themselves. Boise had $713,400 in taxable value per student versus $284,477 in Nampa. Boise levied at a rate of 0.428%, while Nampa levied only 0.039%. Boise had $3,053 in additional funds per student from the property tax (over and above the $5,126 it got from the state), while Nampa had only $110 in additional funds per student from the property tax (over and above the $4,924 it got from the state).

These are just a few examples of the wide variations in resources available to Idaho school children depending on where they live. These examples are not exceptions, they are the rule. The details change from year to year, but the disparities don’t. They remain enormous.

So ask yourself this: If the Idaho Constitution places a duty on the legislature “…to establish and maintain a general, uniform and thorough system of public, free common schools” (and it does, in Article 9, Section 1), how’s that going? My answer is not so well.