Ted Nesi is on assignment.

By Jason P. Becker

At the center of Woonsocket’s spiral into fiscal uncertainty is a massive deficit at its public schools that seemingly emerged from the ether this winter. The school system wound up short almost $10 million over the last two years despite having a business manager repeatedly declare that the schools were running a surplus.

Faced with a massive deficit and the demise of a supplemental tax increase at the hands of the city’s legislative delegation, an already underfunded school system is looking to cut even further. Some in Woonsocket have been asserting that a lack of state support for the Woonsocket Public Schools has led to its precarious budget situation. Indeed, the city has joined Pawtucket in a lawsuit seeking to force the state to accelerate the planned funding increases to Woonsocket as part of a new education aid funding formula enacted in June 2010.

Is it true that Woonsocket schools can blame a lack of state support for its insufficient revenues?

It is very challenging to pinpoint either the amount of state education aid or the ratio of state-to-local aid that should exist in an ideal funding system. A recent analysis of the impact that higher proportions of state funding ultimately has on school funding equity demonstrates little or no relationship. We can, however, ask a series of questions about changes in state and local education revenues over time to determine:

1. Has the state invested in Woonsocket schools? Has the state become more or less progressive (i.e., has funding been increased faster for communities with larger needs compared with more well-off communities)?
2. Has Woonsocket invested in local funding for education at a similar rate and level as other communities in Rhode Island?
3. What proportion of total education revenue in Woonsocket comes from the state? How have the patterns in 1. and 2. changed this proportion over time?

I examined state aid over the last 15 years to four communities – Pawtucket, Providence, West Warwick and Woonsocket – as well as the average statewide. I chose these communities because they are the four “distressed” communities that make a local contribution to education. (Central Falls has not contributed local dollars to general education revenue since the state takeover in the early 1990s.) Take a look:

It is clear that state funding for education has increased dramatically since 1994-95, averaging 92.5%.¹ Pawtucket, Providence and Woonsocket all saw increases that well outpaced the state average. This shows both a robust state commitment to Woonsocket schools and an increasingly progressive distribution of education dollars overall.

What about the changes in local funding for education over the last 15 years in these same communities? Here there is a shocking picture:

Over the 15-year period starting in 1994-95, both the state and municipalities in Rhode Island as a group doubled their investments in education. Had Woonsocket increased local education revenues at the same rate as Providence, the city would have spent $1,345.56 more per pupil, for a total increase of $8.01 million in 2008-09. It is beyond the scope of this analysis to determine if Woonsocket had equal capacity to raise revenues to the same extent as the state average or even Providence alone. However, it seems clear that a large portion of Woonsocket schools’ current budget deficit – if not all of it – could have been avoided through more adequate local increases in revenue over time.

Lastly, the changes in the ratio of education funding in each of these communities (net of federal dollars) follows an unsurprising pattern given the previous two graphs:

At the same time that local funding’s proportion of education spending was growing across Rhode Island, it was plummeting in both Pawtucket and Woonsocket. By 2009, Woonsocket’s local contribution had eroded to a mere 22.4% of combined state and local school spending. And this is likely an overstatement of Woonsocket’s contribution because state funded appears to be lower in 2008-09 due to the stimulus law, as seen in the first chart.

Thus, the answers to the three questions posed above appear to be:

1. In a period where schools became increasingly reliant on local funding across Rhode Island, the state managed to increase education aid to Pawtucket, Providence, and Woonsocket at a faster pace than it did across the state, indicating an increasingly progressive investment of state education dollars. Over the last 15 years, the state more than doubled education aid to Woonsocket.
2. In a period where local school spending more than doubled across Rhode Island, Woonsocket’s local education revenue grew by only 23.6%.
3. Woonsocket’s local share of education revenue has always been low. Due to the relative erosion of local support over the last 15 years, Woonsocket’s local share of education spending has decreased to a paltry 22.4% net of federal aid.

These three charts provide some succinct answers that collectively lead to a single conclusion. The lack of sufficient school revenue in Woonsocket is largely due to a failure of local leaders and the community to fund education, and not due to dwindling or insufficient state support. Woonsocket residents should ask themselves: “Where did we choose to put our tax dollars, and were those better investments than our schools?”

Jason P. Becker is a research specialist at the R.I. Department of Education and a graduate of Brown University. The opinions expressed here are his own. For more on this topic, read these follow-up posts.

¹ Federal education funding data is only available up until FY2009. Additionally, the drop in state education revenue reflects additional federal dollars from the American Recovery and Reinvestment Act (ARRA, also known as the stimulus package), which allowed states to use increased federal education dollars to temporarily decrease state aid without violating maintenance of effort provisions. Since Rhode Island lowered its state contributions by precisely the federal increase, the data for FY2009 would arguably be more accurately represented by simply copying the FY2008 numbers. This is especially true since the General Assembly has subsequently restored all ARRA funds to the state contribution.)