Equalization fund: Some schools more equal

than others
Posted: 12:00 a.m. Saturday, March 16, 2013
By James Salzer - The Atlanta Journal-Constitution
Gov. Nathan Deal won praise in January when he announced plans to plow an additional $40
million into struggling Georgia school districts that are having trouble raising enough money to
educate their children.
What neither the governor nor applauding lawmakers knew at the time was that virtually the
entire increase next year will flow to Gwinnett, Clayton and Paulding County schools.

Johnny Crawford, jcrawford@ajc.com

A Wilcox County school bus travels down a dirt road next to rows of cotton in Wilcox County on
Thursday, August ... read more
And many of the small-town systems that most Georgians would call poor are getting nothing.
Thats according to preliminary calculations the Georgia Department of Education recently made
using a new equalization funding formula legislators approved last year. About two-thirds of
districts get the money on top of their regular state allocation to help address the financial
disparity between wealthy and poor systems.
Gwinnett Countys equalization take alone next year will rise from $43.2 million to $65.6
million. Meanwhile, dozens of small, rural systems in Georgia and many of metro Atlantas
biggest systems will get no extra funding. It makes some superintendents wonder if politics
are involved in determining who gets how much.

Jonathan Phillips, Special

Amy McCurdy (center) greets students as they enter G.H. Hopkins Elementary School in Lilburn
on Monday, September 24, 2012. The teachers ... read more
I am not sure there is anything equal about it, said Cherokee County Superintendent Frank
Petruzielo. It seems to me that it is the most politically motivated component of education
funding in Georgia.
House Education Chairman Brooks Coleman, R-Duluth, who co-chaired an education funding
commission that recommended the changes to the equalization law, said politics has nothing to
do with it. Gwinnett, he said, is benefiting from the formula used to determine payouts because it
has a giant, growing student enrollment at the same time property values have tanked.
There was nothing done to specifically help Gwinnett, Coleman said. Its a function of the
numbers.

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Gwinnett gets the lions share

AJC

Brian Robinson, spokesman for Deal, said the governor didnt know where the extra money was
going when he proposed the increase.
The Legislature changed the way we calculate equalization last year. We fully funded the
formula that is now in the law, he said.
Using more up-to-date enrollment and financial data, the House slightly altered Deals original
request, approving $474.4 million in equalization funding for the upcoming school year, up from
$436.1 million this year. Excluding Gwinnett, Clayton and Paulding, the amount of equalization
funding would actually drop, slightly, next year. About half of all equalization funds go to
suburban or exurban metro Atlanta-area districts.
The equalization fund, set up in 1985, is supposed to provide greater equity in school funding for
systems with lower property tax bases. It was often thought of as a way to help poor, rural
districts that can raise little from property taxes. But the collapse of the real estate market in
metro Atlanta changed the equation, and the largest grants in recent years have gone to districts
that are neither rural nor comparatively poor.
The states formula for disbursing the money uses the number of students in the district, the
value of property and the property tax rate. A property wealth-to-student ratio qualifies some
suburban and urban districts to receive grants.
In the final hours of their 2012 session, state legislators passed a bill intended to slow the growth
of the equalization fund and get more money to poor rural districts. The changes reduced the
number of systems getting equalization weeding out some of those deemed too wealthy. In
some cases, rural districts got more. In others, they were left out completely.
Gwinnett has been getting an increased share of equalization money in recent years because it
has the right combination of rapid enrollment growth and eroded tax base.
Rick Cost, the school systems chief financial officer, noted that in 2007, Gwinnett schools
enrolled 9.1 percent of all students in Georgia. Its tax digest was 8.9 percent of the states total.
Next year, he said, Gwinnett will enroll 9.9 percent of all students in the state, but its tax digest
will amount to 8 percent of the states total.
In 2007, Gwinnett didnt qualify for equalization funding. Since then, it has been ranked poorer
and poorer by the state formula, and has collected an extra $186 million. That money goes to
help offset the systems loss in property tax money.
Since fiscal 2008 we have lost $143 million in annual local tax revenue and we have
26,000 more students, he said.
The tax base in many systems has plummeted since the recession, but enrollment in those
districts is not growing like Gwinnetts. Enrollment in DeKalb, Cobb and the city of Atlanta
systems, for instance, has remained about the same or fallen since the October 2007 count.
Enrollment in much of rural Georgia has been stable or fallen as well.

Gwinnett is often considered an innovator in education. Even in tight times, it is making a digital
push to invest $54 million in technology improvements that, within a few years, will make
hardback textbooks obsolete, allow students 24/7 access to their schoolwork and give teachers
the ability to give tests and track student success all via the Internet.
By contrast, some of the small, rural systems missing out on equalization have one teacher per
subject in their high schools, few advanced courses or foreign language options, no financial
reserves to fall back on and no hope of raising serious money from property taxes.
Quitman Countys district, with 345 students, has a much smaller enrollment than most Gwinnett
elementary schools. Its superintendent, Allen Fort, worries about having to lay off one or two of
his 24 teachers because of limited funds.
But somehow were richer than Gwinnett County, said Fort, whose Southwest Georgia district
doesnt qualify for equalization funding. Dont call it equalization, because its not equal.
Fort said Quitman schools raise about $70,000 from a mill of property taxes. The systems
budget is $3 million.
One mill (of property taxes) in Gwinnett County could run my system for 10 years, he said. I
am not against Gwinnett getting money, I am just trying to figure out how we got none.
Sen. Freddie Powell Sims, D-Dawson, a member of the Senate education and appropriations
committees, represents much of Southwest Georgia. Several of her districts dont receive
equalization funding.
If you look at the financial challenges these districts continue to have, its not fair, she said.
There needs to be a concerted effort to take a long, hard look at how you define equalization.
Without proper funding, there is no way for our students to compete against students from other
parts of the state.
David L. Sjoquist, a state tax and funding expert at Georgia State Universitys Andrew Young
School of Policy Studies, noted that officials have made efforts in the past to lessen the amount
of equalization money going to districts like Gwinnett.
Everybody has looked at that and scratched their head. Everybody has looked at that and said,
Thats not fair, he said.
Sjoquist said there have been proposals in the past to incorporate some measure of personal
wealth into the equation, which would help places like Quitman County, where household
income is about half of Gwinnetts, and the poverty rate is twice Gwinnetts. But so far the idea
hasnt gone anywhere.
Coleman, the Gwinnett lawmaker, said counties like Gwinnett and Clayton get the equalization
money because they have earned it under a formula designed to help systems that need it the
most. Gwinnett is big, and its poor, he said.

But Gwinnett also has a strong legislative delegation, and the school system has its own lobbyist
at the Capitol. Fort has a hard time believing Gwinnetts political clout hasnt played a role in
developing and maintaining a system that benefits the local school system.
Clout, hell, theyve got a sledgehammer, he said. There are more senators and representatives
in Gwinnett County than there are in South Georgia. In the end, we dont matter.

A boost for rural schools?

The equalization funding for Gwinnett, Clayton and Paulding counties will increase dramatically
in the 2014 fiscal year, but equalization payments to the rest of the state will decline slightly.
This means that, even though the equalization fund has increased, three large districts have
soaked up so much of the fund that the share for others is falling.
Gwinnett
FY 2013: $43.2 million
FY 2014: $65.6 million
Clayton
FY 2013: $27.6 million
FY 2014: $36.4 million
Paulding
FY 2013: $26.1 million
FY 2014: $35 million
Rest of the state
FY 2013: $339.2 million
FY 2014: $337.4 million
2011 2012-13 2011 Poverty College degree Building 2012 gross Equalization Equalization
County population enrollment hh income rate 2011 or higher permits tax digest payment, 2013
payment, 2014
Gwinnett 824,941 164,976 $63,076 12.4% 34.7% 873 $28.2 billion $42.3 million $65.6 million

Clayton 249,423 51,757 $42,936 18.4% 17.8% 106 $7.0 billion $27.6 million $36.4 million
Paulding 142,324 28,406 $63,023 9.0% 22.3% 187 $3.0 billion $26.1 million $35 million
Washington 21,111 3,104 $31,784 25.2% 10.9% 13 $812.5 million 0 0
Hancock 9,400 1,091 $24,483 24.8% 13.8% 12 $464.1 million 0 0
Lincoln 7,994 10,190 $36,741 25.8% 10.2% 30 $318.7 million 0 0
Stewart 6,058 563 $30,417 23.4% 12.0% 0 $147.3 million 0 0
Warren 5,721 712 $33,330 25.3% 5.9% 0 $207.0 million 0 0
Clay 3,111 344 $24,750 43.1% 9.5% 9 $151.7 million 0 0
Quitman 2,464 345 $32,656 25.1% 7.6% 3 $112.3 million 0 0
Taliaferro 1,703 200 $24,125 30.6% 8.5% 2 $93.1 million 0 0
Sources: U.S. census, Georgia Department of Education, Georgia Department of Revenue,
legislative budget documents