What TISA Means for Stakeholders

In late February, Tennessee Governor Bill Lee and Education Commissioner Penny Schwinn unveiled their plan to reform the state’s Basic Education Program (BEP) funding formula. The new plan, called the Tennessee Investment in Student Achievement (TISA), represents a significant increase in funding for education at  the state level. Among its benefits is an increase of $1 billion in recurring funds from the state, as well as an intentional focus on the education of historically marginalized groups such as English learners (ELs) and students with disabilities. 

Currently, Tennessee is ranked 46th out of 51 states and D.C. in terms of public education spending per student. The additional $1 billion in state funding would take Tennessee above several regional neighbors and up to 37th in per pupil spending. This is before counting any increases in local education spending that may occur down the line. 

But perhaps the most significant change to the funding formula – and, subsequently, the one that has received the most questions – is that the state’s funding focus is no longer at the school or district level, but rather on each individual student and their needs

Tennessee's current education funding formula, the BEP, is a resource-based funding formula structured around enrollment. Because student enrollment is the primary determinant of funds generated by the BEP, districts must report enrollment numbers to the state throughout the year. The state funds approximately 70% of the instructional categories of expenses, 75% of the classroom category, and 50% of the non-classroom category. The remaining funding contributions come from local district property taxes, which often diminish funding for positions and services necessary for operating schools. Under the BEP, 46 components determine how much money school systems can receive from the state to pay for teacher salaries and resources. Allocating funding through these components gives every student a flat funding rate rather than providing additional funds for children who need them. Additionally, only 53% of operating expenditures under the BEP are spent on instruction in the classroom compared to the national average of 60%.

TISA would largely do away with this complicated formula (though all of the components are folded into TISA in one way or another). Instead, each public school or public charter school student would receive a base funding level of $6,860 each year. In addition, each student is eligible to receive additional weighted funding based on their individual Unique Learning Needs (ULNs), which range from an additional 15% of the base to an additional 150% of the base. 

Say, for instance, you have a child who is dyslexic and is a tier II English learner. The former category would result in an additional 20% funding bump, while the latter results in an additional 60% increase. This would bring the amount of funding this child would receive because of their ULNs to $12,354 – nearly double the amount of the base funding. But that is not even the full extent of the funding available to that child. 

  • If this student is economically disadvantaged, they will receive an extra 25% of the base. 

  • If they attend a Title I school, they will receive an extra 5%. 

  • If they attend a school district with fewer than 1,000 students, they will receive an additional 5%. 

  • If they live in a district with fewer than 25 students per square mile, they will receive an additional 5%. 

  • If they are a 3rd grade student, they will receive an additional $500 to aid literacy efforts. 

  • If they are a 4th grade student who requires additional literacy tutoring, they will receive $500. 

  • If they are enrolled in a qualified College, Career, and Technical Training (CCTE) course, they can receive an average of $5,000 extra. 

  • Additional outcomes-based funding will be provided if the student reaches proficiency levels in literacy or the ACT/industry credentials. Non-economically disadvantaged students will receive an additional 20% of the base if they reach proficiency in literacy, score a 21 or above on the ACT, or receive an industry credential. Economically disadvantaged students who reach these levels will receive an additional 40%.  

Below are additional implications of TISA for students, parents, teachers, and local government: 

Implications for Students: 

  1. TISA provides funding specifically to enhance 3rd grade literacy. Currently, only 34.7% of Tennessee 3rd graders read on grade level. With the Tennessee Department of Education aiming to get that rate up to 75%, these additional funds represent an important step in the process. 

  2. TISA provides increased funding for school nurses and counselors who can provide students with vital mental and physical health resources during the school day. When children receive these services in school, they have greater opportunities for personal growth and academic success throughout their educational career.

  3. The shift to a student based funding formula based on specific weights ensures that economically disadvantaged students, students with disabilities, and English-Language Learners receive additional funding. Thus, these students will receive additional resources and funding for their districts and school systems. 

  4. Increased funding for CCTE has the potential to create several new pathways for students, who often see traditional postsecondary education as the only option after high school. It could also lead to students graduating high school with career certifications in addition to their diploma, making them more marketable in the search for employment. 

Implications for Parents: 

  1. Not only does TISA simplify the funding formula (BEP has more than 40 different components), but it also makes it easier for parents to understand the exact extent of resources available for their specific child’s education. 

  2. Under the current formula, school districts have the flexibility to use funding for all students in ways they believe will meet the needs of the students they serve. Under TISA, funding for each individual student’s needs must be used to serve each individual student. 

  3. Currently, in school districts where high quality schools are scarce, parents must navigate school choice processes to secure a seat for their child in the highest quality school available to them. With increased funding for each child, typical public schools will have more resources to reach the quality metrics that parents are looking for. This has the potential to eliminate the need for school choice by providing more resources across the board, while also keeping the option of school choice in tact. 

  4. Similar to the expansion of career pathways for students, TISA provides the potential for parents to steer their children toward more opportunities for postgraduate success. More schools will have the financial resources to provide early college credits like Dual Enrollment and Advanced Placement, as well as career certifications and technical training. 

  5. New provisions in TISA provide parents with a better understanding of district requirements under the plan. Improved transparency and accountability measures give parents detailed information on academic analyses and budget reporting. These measures will provide a better understanding of what the district should be doing under this plan and hold districts and LEAs accountable to the communities they serve.

Implications for Teachers: 

Under TISA, the state is allocating $125 million to increase teachers’ salaries in Fiscal Year 2023. This one-time investment will carry over into the pot for the base funding, which will sustain the higher level of teacher salaries past FY23. This will make the state minimum teaching salary from $38,000 in 2021 to $45,000 by 2026. Currently, Tennessee ranks 29th out of 51 states and D.C. in terms of starting teacher salary. At $45,000, Tennessee would rank 13th (assuming teacher salaries do not change in other states by 2026). Many school districts, such as Memphis-Shelby County Schools, already exceed this minimum salary. 

Increased funding for teacher salaries may help to incentivize teachers to remain in the profession. Over 22% of recently surveyed Tennessee teachers indicated that they will leave the profession and that inadequate pay is a main cause behind this decision.

  1. Increased funding for teacher salaries may help to incentivize teachers to remain in the profession. Over 22% of recently surveyed Tennessee teachers indicated that they will leave the profession and that inadequate pay is a main cause behind this decision.

  2. Increased funding for teacher salaries may incentivize Tennessee residents to enter the teaching profession. Fewer and fewer potential teachers in Tennessee are graduating every year from teacher training programs, creating an ever-widening teacher shortage. 

  3. Increased funding for teacher salaries will raise the state’s overall salary rank over neighboring states such as Virginia, Alabama, and Georgia, which may attract candidates from other states.

  4. Additional funding for student supports such as literacy tutoring may supplement teachers’ classroom lessons, enhancing lesson plans, classroom instruction, and overall outcomes. 

  5. A major challenge for teachers is connecting their students who have unique learning needs with the appropriate support they need to thrive academically, as there may be a lack of resources or awareness of resources. Providing more funding for students with unique learning needs may fill those gaps as teachers will likely have more resources to direct their students towards or to request the implementation of specific resources for their students.

  6. TISA includes a dedicated funding stream to hire more staff and administrators in schools, including nurses and counselors. The addition of these positions will help address the out-of-school factors that impact in-school success, allowing teachers to focus on what they were meant to do: teach children. 

  7. Streamlined reporting and accountability measures for school districts means that goals have to be communicated clearly and publicly. This will allow teachers to know exactly what their school district’s plan is for any given school year and how their teaching fits in.

Implications for Local Government: 

Tennessee’s increased investment has implications for each local school district, particularly when you consider the local contribution that must be made. Tennessee’s maintenance of effort (MOE) laws exist to ensure that local governments do not rely on additional funds from the state to decrease their own local contributions to governmental programs, also known as supplanting. Local governments are discouraged to view funds from the state as a way to replace their contributions or to use a state’s funds to replace another revenue source. Maintenance of effort laws in an educational context require the total amount budgeted for a local school district to equal at least the same amount in the previous fiscal year. 

  1. With the increased state funding, Memphis-Shelby County Schools is set to receive an additional $66 million in the next fiscal year. The year after, the district will receive $150 million in excess of the FY23 level. 

  2. For the vast majority of localities across Tennessee, the local contribution required will not exceed the current MOE levels for the next five fiscal years. That means that school districts will receive much needed additional state funding for education without local governments needing to raise taxes on its residents. See the chart below for expected local contribution levels for each school district in Shelby County: 

3. With the local contribution to education not expected to increase over current levels for the next few fiscal years (in most cases), the increased state investment presents an opportunity. For localities that planned to invest additional funding beyond current levels to fill gaps, they can instead reserve that money for other priorities such as housing, transportation, and economic development. In this way, local governments will have more money to address the out-of-school factors that affect academic outcomes, while the state foots much of the bill for additional educational investment. 

4. With increased transparency of funding and spending comes increased accountability. Detailed reporting on funding and spending will be publicly posted at the school and district levels, and districts must show how spending decisions align with academic goals and achievement. This will ensure that the proper return on investment is achieved for the increased spending. 

5. Fast-growing districts (with growth of 1.25% above the prior year) will receive same-year funding for additional students. Unlike the BEP, TISA is more adaptable to rapidly shifting situations, lowering the risk of districts having to bear the cost of these situations. This has the potential to apply to some of the municipal school districts in Shelby County. 

6. Better CCTE education will contribute to a stronger workforce, improving the marketability of the city and county in terms of recruiting and retaining employers. 

Implementation Success: 

Of course, not everything related to the future success of TISA is included in the legislation itself. In many aspects, the Tennessee State Board of Education will have the responsibility of regulation and oversight in implementing the new funding formula, if passed. This leaves a few open questions to consider: 

  1. How exactly will evidence-based strategy be utilized in terms of regulation and oversight of school district performance? 

  2. How reactive to shifting needs will the formula prove to be in its earliest stages? 

  3. How much leeway will districts have in setting goals that meet the individual needs of their local communities? 

Addressing these lingering questions will be crucial in determining how impactful the state’s increase in dedicated education funding will prove to be. 

Our Final Take: 

It has been decades since the state of Tennessee increased the level of state education funding on this kind of scale. While more money does not always mean more success, it certainly does not hurt when our state’s classrooms have fewer resources than 45 other states. The state and the Governor’s administration, in committing this level of new funding, are signaling a shift in the priority level of education in Tennessee. The benefits for students, parents, teachers, and local governments alike are promising and leave room for personal and community level growth. Though this funding formula is, by no means, absolutely perfect, it leaves enough room for regulatory remedies by the state board of education for success to be achieved down the line if not immediately.

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