Cost Of Living Adjustment Raises The Ire Of School Officials

Aug 7, 2017
Originally published on August 7, 2017 1:15 pm

Some school districts are chafing under a provision meant to adjust funding based on cost of living.  They’re applauding an effort to study the system, but from different perspectives.

Last month two Republican northeast Florida senators asked for a study of the district cost differential, or DCD.  It’s a cost of living adjustment embedded in the state’s educational financing equation.  Lawmakers actually approved the study but it fell victim to Governor Rick Scott’s veto.  One of the Senators asking to revive it now, rather than wait until next session is St. Augustine Republican Travis Hutson.

“What we’ve found out that it’s doing, and we’re hearing from most districts, is it’s taking away—while it’s great to give to some districts—it’s taking away from others,” Hutson says.  “So it’s actually one of the only formulas where we take away from the FEFP for the district.”

The state funding model, known as the Florida education finance program or FEFP, is a complex function, and the district cost differential is one of a couple of multipliers that go into determining a district’s base funding.  It’s derived from the relative wages of a number of professions in each county.  Put simply, if a district’s DCD number is greater than one it receive extra money.  If it’s below one the district’s funding contracts.

“So you’re seeing a lot of these what we’re calling cash-wealthy bigger districts like Duval and Miami Dade and some of the other ones, they’re getting extra money,” Hutson says.  “And some of what we’ll call not cash-wealthy, the suburban areas around those are losing money—actually coming out of their FEFP formula.”

“So they’re sending money to the state and they’re not getting that dollar for dollar return.”

Volusia County School Board chair Melody Johnson echoes those concerns.

“So currently we send a dollar of our taxes to Tallahassee,” she says, “and through this formula in Volusia we only get 96 cents back.”

“Which doesn’t sound like a big deal, until you add it up,” Johnson continues, “We’ve lost $140 million since 2004, and we’re losing $11 million alone this year.”

Last year, she explains, a total of 55 counties had a DCD below one.  That means 55 of the state’s 67 counties saw their district’s base funding shrink. 

Johnson, like Hutson, says parents are commuting across county lines and their wages are factoring into a different district’s schools.

“You cross the bridge we call it—the bridge—and that goes into Seminole county,” she says.  “And as a result if our parents drive over to Seminole county and work, their tax dollars stay in Seminole county for their schools.”

Johnson is canvassing districts urging them to pass resolutions calling on state lawmakers to revise the DCD so districts don’t see their funding shrink. 

But those larger, so-called cash-wealthy districts are frustrated with the model as well.

“I am one hundred percent in favor of a study on the DCD,” Miami Dade County Schools CFO Ron Steiger says.

“In fact Miami Dade proposed the DCD study that was passed by Legislature this year and then vetoed by the governor.”

Steiger says the current DCD, which was the third highest in the state last year, isn’t able to keep up with the cost of living in Miami Dade.

“The average rent for Miami Dade for a one bedroom apartment right now is over $1,500,” he says.  “The average rent for a one bedroom apartment in Union County is probably less than $500.”

Steiger points out a calculation change in 2003 reduced the amount of extra funding Miami Dade receives to account for cost of living—and like Johnson he has a running tally for how much his district has lost: $1 billion. 

But when it comes to funding, Steiger believes a more fundamental fix might be needed.  He points out for two years running state lawmakers have reduced millage rates for local school taxes to keep the dollar figure steady as property values rise—this what’s known as the required local effort.  Meanwhile, the county is going to leave the millage rates steady.

“And by keeping the millage rate flat they’re going to accrue hundreds of millions of dollars in extra revenue,” he says.  “If the Legislature had taken that position with Miami Dade county public schools with districts all across the state, just in this year alone, Miami Dade county public schools would have received $106 million more.”

Steiger suggests that additional county money could go to raises for people like firefighters and police.  But not teachers.  Eventually much of the money will be pumped back into the local economy—pushing rents higher and raising the cost of living further.  

UPDATE 8/7/17: The Daytona Beach News Journal reports Senate President Joe Negron will allow a study of the district cost differential to go forward.

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