23-05-2025
Lawmakers seek answers in faulty school funding estimates
Senate Finance Committee Chairman Sen. Lou DiPalma, a Middletown Democrat, holds his head during during a committee hearing on Thursday, May 22, 2025, during a presentation on a state enrollment data debacle that may leave Rhode Island public schools underfunded by about $24 million. (Photo by Alexander Castro/Rhode Island Current)
An outdated calculation by the state education department and Gov. Dan McKee's budget office last fall now leaves Rhode Island schools facing a $24 million budget shortfall. 'This is not your fault, but it is your problem,' Sen. Jonathon Acosta, a Central Falls Democrat, told Rhode Island Department of Education (RIDE) officials at a legislative hearing Thursday. 'It's our problem.'
The discrepancy was driven by the data, or lack thereof, on low-income and multilingual learner students in the state. Both populations factor in the statewide education funding formula that determines aid to local school districts.
The Rhode Island Department of Education (RIDE) generates enrollment numbers in March and October, using data provided by school districts. Typically, the governor's budget office uses the March data when preparing the education funding formula around August, ahead of the release of the governor's budget the following January.
But this time round, McKee's office used the October 2024 data collected by RIDE, which showed declining enrollment overall, and therefore fewer students in poverty. The new March numbers, according to RIDE, showed things swinging in the opposite direction, with more English learners and students living in poverty than accounted for in the fiscal 2026 budget McKee submitted months ago.
'The October data hasn't been great the last few years,' Mark Dunham, the education department's finance director, told senators. 'And then 2025 was the first year that October was used.'
The discrepancy includes roughly $12 million in basic education aid and another $12 million tied to the Student Success Factor, a weight in the state's school funding formula that gives additional support to districts with many students living in poverty.
For fiscal year 2025, the state began using October enrollment figures instead, and RIDE reported a total enrollment of 136,000 students, while the governor's budget used 134,000 for the number of students statewide. The March 2025 update later corrected the count to 135,600 — revealing a roughly 1,000-student gap between RIDE's projection and the updated total.
'OK, so the numbers in October were incomplete for your assessment, we [now] believe the numbers in March are complete,' said committee chair and Middletown Democratic Sen. Lou DiPalma. 'I'm trying to understand how we have a new set of data here. How do we believe what we have that this is correct? How do I know that the 39 cities and towns that provide the data are still not incomplete?'
'It looks to us that they did not completely update their poverty numbers,' Dunham said of local school districts who had to submit data.
The state currently uses food stamps and Temporary Assistance for Needy Families (TANF) enrollment to calculate student poverty, applying a 1.6 multiplier to estimate the real total need. RIDE has also considered matching students through Medicaid, but the state has not yet fully incorporated it into the formula.
'An overwhelming number of states in the country use Medicaid match as their proxy for poverty,' Dunham said, then described what that approach could mean to the state budget. 'At the time we suggested it, it was about a $20 million number. Now, with all the new data we have, the enrollment updates, it's a $40 million number.'
Victor Morente, a RIDE spokesperson, said in an email Thursday, that RIDE updates the data twice a year as part of its own preparation for submitting a budget request to the governor.
'At this time, research is ongoing to determine if there is an actual under identification,' Morente said.
Legislation in 2022 changed how students are counted, Morente said, which may have resulted in the undercount.
'We were probably under-counting the number of students in poverty in certain districts,' Office of Management and Budget Director Brian Daniels told lawmakers. 'And the broader way of fixing it…is changing your student success factor based on the wealth of each individual community.'
'But if you do that … are you setting 40% [aid] as the floor, or is that the starting point?…It gets very complicated, because in that case, you have winners and losers. So I think this is a longer term issue. We do need to fix this.'
Daniels said the budget office will be submitting a budget amendment which reflects the changes in enrollment from March.
Dunham said states like Massachusetts and Connecticut are facing similar data collection issues when it comes to low-income students.
'I think we'd have to really rebuild the whole formula to be the same as Massachusetts, because I think the core [funding amount] is a lot less, or at least less, than ours,' Dunham said. 'But we do wonder. We do understand that there are different levels of poverty that we should be able to address.'
Dunham ended his comments on a resigned note: 'Even if we match all the kids exactly, we still are probably going to undercount a lot of the kids that are eligible for different reasons.'
DiPalma shrugged.
'Until we change the system, that's what it is,' he said.
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